What is outward processing in SAP SD-FT - Foreign Trade?

SAP Term: outward processing

• Component: SD-FT

• Component Name: Foreign Trade

• Description: A customs procedure to reduce import costs. In this procedure, domestic goods are temporarily transferred out of a customs territory while respecting local customs regulations and restrictions.Improvements or manufacturing processes are performed outside of the customs territory. Then the assembled or improved goods are returned to the customs territory. This reduces overall duty costs.

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• Key Concepts: 
  Outward processing is a process in SAP Foreign Trade (SD-FT) that allows a company to send goods to an external processor for further processing. The external processor then returns the goods to the company, which can then be sold or used in further production. This process is used when a company does not have the necessary resources or capabilities to process the goods itself. 
  
  How to use it: 
  In SAP Foreign Trade, outward processing is set up as a special procurement type. The company must first create an outward processing agreement with the external processor, which includes details such as the type of processing, the cost of processing, and the delivery date of the processed goods. Once this agreement is in place, the company can create an outward processing order in SAP and assign it to the external processor. The order will include details such as the quantity of goods to be processed and any special instructions for the processor. 
  
  Tips & Tricks: 
  When creating an outward processing order in SAP, it is important to ensure that all relevant information is included in the order. This includes details such as the type of processing required, any special instructions for the processor, and any additional costs associated with the processing. Additionally, it is important to ensure that all relevant documents are attached to the order before it is sent to the external processor. 
  
  Related Information: 
  For more information on outward processing in SAP Foreign Trade (SD-FT), please refer to SAP Help documentation or contact your local SAP support team. Additionally, there are many online resources available that provide detailed information on how to set up and use outward processing in SAP.