Components Issue to Vendor

Hello All,

I want to understand the process of Issuing components to Vendor. I have gone through different links, threads. Still I want to understand what would be the appropriate process flow for this.

Issue to Vendor can be handled in many ways.

1. Using Normal Sales Process
2. Issuing components to Internal Order & passing some manual accounting entries to create Vendor Liabilities

Normal Sales Process:

• Vendor will be created as Customer
• Customer will be assigned in Vendor master
• Then Sales Process can be followed
• While making payment, Vendor Liabilities & Customer Receivables can be cleared.

But, Business wants to have some process through Procurement process itself, which will have the same effect as Sales process.

The cost of component will be 10. They will keep margin of 10 to 15 % above that cost. Say, PO qty is 10. As per the business requirement, Inventory should be reduced by 100 (10 qty * 10 price / qty). Profit of 10 should be posted to some other account. GR/ IR & Vendor liability should be created as 110.

Is there any process that can be mapped through Procurement process??

I want to understand all the possible solutions so that better one can be proposed to business.

Thanks in advance..