Let’s review the SAP S4 HANA concept of business partners. S4 business partner is a key master data object used throughout business transactions modelled in SAP such as sales orders purchase orders etc. We will be learning what a business partner is within SAP S4 HANA and the components that make up that business partner. In order to really understand the business partner customer & vendor concept you will need to have a fundamental understanding of SAP organizational structures and how that relates to master data management (MDM). For an in depth look at SAP organizational structures and how they relate to SAP MDM check out my blog post below:
https://techconsultinghub.com/2022/02/18/sap-s4-hana-organization-structure-overview-for-mdm/
In this article we will be exploring the following topics:
In order to understand business partners in SAP S4 HANA it’s easier to first understand the classical ECC customer & vendor model first since this was the progression of the software
SAP Customer & Vendor Background
Prior to SAP creating the business partner concept there were two similar but different data structures called customer master and vendor master data. It was straightforward but had its limitations and a lot of overlap in design between the two structures. As the name suggest customers are business entities that purchase your products. Since SAP is designed more towards manufacturers, customers are typically wholesalers that purchase your goods. The customer master data generally does not store end consumers who buy products through ecommerce or in a retail store. The Vendor master represents the business entities in which you purchase products that either go directly into manufacturing your end product (direct suppliers) or purchasing goods or services that help the overall business function like paper or consulting services (indirect suppliers)
Customer Master Data
The visual example above shows customer data broken down according to general data, customer financial data (company code) & customer sales data (sales area). Let’s take a look at these three levels and some of the key data elements in each
- Customer General Data (Data that is the same across all company codes/sales areas). Examples of the key data fields are provided below
- Name
- Address
- Bank
- Tax
- Email Address
- Account Group
- Customer Sales Data (Data that is unique to each sales area, so there can be different data per sales area which consists of sales organization, distribution Channel & division combination). Examples of key data fields are provided below
- Pricing Procedure
- Price Group
- Customer Group
- Delivery Priority
- Shipping Conditions
- Partner Functions
- Billing Data
- Customer Financial Data (Data that is unique to each company code, so there can be different data per company code). Example of key data fields are provided below
- Reconciliation Account
- Payment Terms
- Payment Methods
- House Bank
- Withholding Tax
Customer Master Recap & Visual
As a recap a customer has a single name/address/bank that is valid for every sales area and company code. However, there is data that can be different for each sales area. For example, the shipping condition could be ground for one sales area but air for another sales area. The visual below shows an example of a one to many relationship similar to the sales area example:
On the left you can see how there is a single name and address for this customer but there is a one to many relationship with sales data & financial data. There can be data stored that is different for each sales area or company code that is available for that customer. This process in SAP is called extending a customer since once a customer is extended to a company code there is additional data that can be stored for each company code
Vendor Master Data
As shown in the visual example above vendor is broken down according to general data, vendor financial data (company code) & vendor Purchasing Data (Purchasing Organization). Let’s take a look at these three levels and some of the key data elements in each
- Vendor General Data (Data that is the same across all company codes/Purchasing Organizations). Examples of the key data fields are provided below
- Name
- Address
- Bank
- Tax
- Email Address
- Account Group
- Vendor Purchasing Data (Data that is unique to each Purchasing Organization, so there can be different data per purchase org). Examples of key data fields are provided below
- Order Currency
- Payment Terms
- Incoterms
- Shipping Conditions
- Schema Group
- Partner Functions
- Vendor Financial Data (Data that is unique to each company code, so there can be different data per company code). Example of key data fields are provided below
- Reconciliation Account
- Payment Terms
- Payment Methods
- House Bank
- Withholding Tax
Vendor Master Recap & Visual
As a recap a vendor has a single name/address/bank that is valid for every purchase org and company code. However there is data that can be different for each purchase org, for example for one purchase org the shipping condition could be ground but for another purchase org the shipping condition could be air. A visual example of this one to many relationship is shown below
On the left you can see how there is a single name and address for this vendor but there is a one to many relationship with purchasing data & financial data. There can be data stored that is different for each purchase org or company code that is available for that customer. This process in SAP is called extending a vendor since once a customer is extended to a company code there is additional data that can be stored for each company code
SAP Business Partner Concept
SAP Business Partner History
SAP business partner is a term that has been around in the SAP landscape for while. Most notably it was the concept that their CRM (customer relationship management) product uses to classify contacts that can then become customers. The concept initially behind business partner was very similar to the classical customer & vendor concept. As SAP evolved and started to expand the functionality provided they decided business partner that was developed under a different product would be the overall best method of storing enterprise relationships. Let’s first take a look at how business partner maps with the classical customer & vendor and why they decided to move forward with this approach. If you’re interested in the underlying tables that make up business partner customer & vendor in SAP S4 HANA, check out this article below:
https://techconsultinghub.com/2022/09/09/sap-s4-master-data-key-objects-tables/
SAP Business Partner Structure
As you can see below, business partner is supposed to be a flexible storage of an enterprise relationship that can expand based on it’s usage. It can be both a customer or a vendor. In that case there is now data that relates to the business partner such as the name & address data and the business partner can be expanded to include customer & vendor data
Let’s break down the above image, a business partner is now the overarching structure of any business relationship. Business partners can have “roles” each role that is assigned will allow the business partner to act in different functions. Additionally, there are often additional fields that come available on the business partner whenever a new role is available. In the example above a business partner included the customer & vendor related roles. There is the same data & data structure that was available in the classical customer & vendor data included in each of these additional roles.
Key SAP S4 Business Partner Fields
As we can see above business partner is an expanded version of the classical customer & vendor concept allowing roles to be played. There are also more roles available in S4 HANA so the same business entity can play multiple additional functions. Before we get into the additional functions a business partner can now play let’s look at the difference in the key fields of a business partners structure vs classical customer & Vendor.
Business partner gets created as the following categorization
- Person (this is an individual like you or me)
- Organization (if it’s not a person it’s an organization, think of any business such as staples, walmart etc.)
- Group (Only used in niche concepts such as the outdated and no longer supported business partner hierarchy, or in credit/collections where you need a group of businesses categorized together)
The buttons at the top of the screen Person, Organization & Group are what allow initial creation of the business partner since this is a mandatory distinction. Be very cautious in creating this categorization. Once created in SAP S4 this categorization can not be changed.
After creating the business partner there is a general role that is assumed that allows you to add details of the key business partner fields. This information will be shared by all roles within the business partner
- Business Partner Category – This is the person, organization, group distinction
- Business Partner Grouping – This is similar to account group in customer & vendor, it determines the number range & required fields. It can’t be changed and will have direct relationship often with the customer & vendor related account groups
- Business Partner Roles – Once added these roles can not be removed. They are what determines the usage of business partner such as customer, vendor, customer for financial usage, vendor for final usage, credit & collections
- Business Partner Name
- Business Partner Address
- Business Partner Bank
- Business Partner Email Address
SAP S4 Business Partner Roles
Next lets take a look at the key roles that are relevant when creating a business partner
| Business Partner Role | Description |
|---|---|
| FLVN00 | FI Vendor – This role allows the vendor general data to be available as well as the company code data |
| FLVN01 | Vendor – This role allows the vendor general data to be available as well as the purchasing organization data |
| FLCU00 | FI Customer – This role allows the customer general data to be available as well as the company code data |
| FLCU01 | Customer – This role allows the customer general data to be available as well as the sales area data |
| UKM000 | SAP Credit Management – This role allows the customer to have the S4 HANA credit functions & data to be available |
| UDM000 | SAP Collections Management – This role allows the customer to have the S4 HANA collections functions & data to be available |
As you can see above the roles can cover the main areas of a customer or vendor along with the credit & collections functions all on the same business partner. Historical ECC had separate transactions to manage the credit area of customers but now in S4 HANA there is a unified business partner that stores the data for both credit & collections functions. This business partner is the same entity that also manages the classical customer roles that enable the sales & company code data to be available. The visual below describes this expanded capability of the business partner
Advantages of S4 HANA Business Partner
As you can see now there is an expanded concept of roles that is meant to allow business partners to be more flexible and take on an increasing number of roles as the software expands to include more functionality. Let’s take a quick look at some of the advantages of the SAP business partner model
- Increased information on the business partner general data – In additional to the general information such as name & address with business partner there are a few improved functions such as multiple address assignment, identification numbers, role assignments, business partner relationships, & improved tax number storage
- Single business partner for Customer & Vendor – Business partner considers customer & vendor a role of a larger business partner, this allows for a single business partner number to represent both a customer & vendor that share name & address information to reduce data redundancies and maintenance
- Role based approach for business partner – Business partners can be assigned many roles beyond customer & vendor specific roles, this allows a business partner to be utilized across multiple functional areas such as credit, collections & treasury. This allows for SAP to continue to provide additional functionality for a business partner and adding new roles to store data specifically for that intended purpose while sharing general data
- Single entry point for all Business Partner Management – S4 centralizes the functions of creating customers, vendors and any other entities (contacts, etc.) that can be created in a single business partner transaction
Now that you understand the overall concept of a business partner and it’s relationship to customer & vendor data in SAP S4 HANA consider subscribing below. Future blog posts will showcase how the business partner customer/vendor integration works, what are the key configuration aspects behind business partner & a walk through of creation in SAP S4 HANA. Hope this helped you in your journey to learn SAP S4 HANA Master Data!