Efficient stock movement is critical for seamless supply chain operations, and Stock Transport Orders (STO) in SAP play a key role in ensuring smooth intercompany and plant-to-plant transfers. This makes Mastering Stock Transport Orders (STO) in SAP along with it’s Process, Configuration & Best Practices are even more desired.
Whether we are managing internal stock transfers, intercompany logistics, or cross-plant replenishment, a well-configured STO process can reduce costs, improve inventory visibility, and streamline procurement workflows.
In this post, we will explore mastering end-to-end Stock Transport Orders (STO) in SAP S/4HANA and SAP ECC., it’s Process, key Configuration steps & Best Practices.
Table of Contents
1. Stock Transfer in SAP
As we have already described in the below post there are two types of stock transfer in SAP.
- Stock Transfer with MIGO (Without STO, Delivery & Billing)
- Stock Transfer With Stock Transport Order, Purchase Order (STO/PO)
Please see the below post to check the “Stock Transfer with MIGO (Without STO, Delivery & Billing)”
STO in SAP: The Best Guide with All Scenarios Explained
Here in the post , we will see the below part in detail
2. Stock Transfer With Stock Transport Order/Purchase Order (STO/PO)
Stock Transport Orders (STO) in SAP play a crucial role in inventory management, procurement, and intercompany logistics. Whether you’re transferring stock between plants, company codes, or warehouses, understanding the different types of STO orders is essential for optimizing supply chain efficiency and cost control.
There are total 3 types of the Stock Transfer With Stock Transport Order, Purchase Order (STO/PO)
- Stock Transfer with STO but without Delivery & Billing
- Stock Transfer with STO & Delivery but Without Billing
- Stock Transfer with STO, Delivery & Billing
We will look into all the three method of stock transfer with STO/PO one by one in detail
2.1 Stock Transfer with STO but without Delivery & Billing
This type of STO is used when transferring stock between two plants within the same company code. It ensures better inventory tracking and valuation compared to a standard transfer posting.
Below is the pictorial representation of this type of STO
2.1.1 Key Features
To simplify the process for internal stock transfers, businesses may choose to use STO without delivery and billing,
–> STO is a specialized purchase order used for stock movement between two plants, allowing the receiving plant to place an order for stock from the supplying plant.
–> STO enables smooth inventory management and tracks the movement of stock.
–> STO without delivery is used when there is no need to track the logistical steps involved in physically shipping the goods.
–> STO without delivery reduces the administrative workload associated with generating and managing delivery documentation.
–> Stock’s value between the plants is accounted via internal material valuation rather than through external invoicing or billing.
–> Uses a purchase order (PO) document type UB.
--> Stock Transfer with STO but without Delivery & Billing can not be executed in 1-step i.e.2-steps only.
--> If any of the supplier plant or customer plant belongs to the different company code then STO process becomes intercompany STO process.
--> If supplier plant & customer plant belongs to the same company code then STO process becomes intra-company STO process.
--> This process uses movement type 351
2.1.2 Advantage of Using STO Without Delivery & Billing
A manufacturing company transfers raw materials from Plant A (Production Plant) to Plant B (Distribution Center) under the same company code.
Below are the main Advantage of Using STO Without Delivery & Billing
- Efficiency in Stock Movements: By skipping the delivery and billing steps, stock transfers are more quickly, especially for frequent internal movements.
- Simplified Documentation: Reducing extensive documentation such as billing and delivery notes helps in streamlining internal operations and save time.
- Cost Reduction: Delivery and billing elimination in intra-company transfers reduces administrative and logistical costs.
- Ideal for Intra-company Movements: STO Without Delivery & Billing is best suited for the organizations that frequently move stock between plants without needing to generate financial documents between company codes.
2.1.3 Business Scenarios of STO without Delivery & Billing
Below are the main business Scenarios of the STO without Delivery & Billing
- Plant-to-Plant Transfers: Stock movement for production needs or inventory balancing can be done using STO without delivery or billing.
- Distribution Center Replenishment: Companies with multiple storage locations can use Stock Transfer with STO but without Delivery & Billing to replenish stock without the need for complex documentation
2.1.4 Configuration & Testing of STO without Delivery & Billing
Please see the below post for the details of configuration & testing of STO without Delivery & Billing
SAP Stock Transport Order Without Delivery: Process, Configuration & Guide
2.2 Stock Transport Order with Delivery (STO with SD Delivery Process)
This STO type is used when stock transfers require a delivery document generated via SAP SD (Sales & Distribution Module). This is common when warehouse teams handle goods movement through outbound deliveries.
This setup is particularly useful for intra-company transfers where financial transactions are not required
Please see the below picture to see the pictorial representation of this stock transfer method
2.2.1 Key Features of Stock Transport Order with Delivery but Without Billing
- STO with delivery uses delivery document to track the logistics of stock movement.
- The delivery is essential to monitor goods physically leaving one plant and being received by another.
- Since this process is usually used in intra-company STO process, billing is not required to allow for smoother internal movements of stock without generating invoices or financial documents.
- In the case of “Stock Transfer with STO & Delivery but Without Billing”, the cost and inventory valuation are adjusted internally, without the need for billing documentation.
- “Stock Transfer with STO & Delivery but Without Billing” can include shipping cost determination
2.2.2 Business Scenario for Stock Transport Order with Delivery but Without Billing
Below are the main Business Scenarios for Stock Transport Order with Delivery but Without Billing
- Internal Plant-to-Plant Transfers: The scenario of regularly move stock between plants within the same company code like Distribution Center, production center etc. , STO with delivery but no billing simplifies this move.
- Replenishing Inventory Between Storage Locations: Stock movements is easily managed without billing complexity with delivery tracking for the distribution centers or warehouses under the same legal entity.
2.2.3 Advantage of Stock Transport Order with Delivery but Without Billing
Below are the main advantage of using STO & Delivery Without Billing
- Efficiency in Intra-company Stock Movements: Stock Transfer using STO & Delivery Without Billing Eliminates the billing step which reduces complexity and speeds up the stock transfer.
- Simplified Documentation: In this process business can focus on tracking deliveries and managing inventory as there is no need to generate financial documents.
- Cost Control: Elimination of billing process saves administrative and financial costs.
- Enhanced Inventory Tracking: This process uses delivery. Delivery documents allows to maintain a clear record of stock movements without the need for complex financial reconciliation.
2.2.4 Configuration & Testing of STO with Delivery but Without Billing
Please see the below post for the details of configuration & testing of STO without Delivery & Billing
SAP Stock Transport Order with Delivery: Setup, Execution & Key Insights
2.2.5 Special Scenario
We have configured a Special Scenario for Stock Transfer with STO/PO – STO with delivery – Configuring 1-step & 2-step between the same plants
Please see the details of this scenario in the below post
2.3 Inter-Company STO with Delivery & Billing
Intercompany STO is used when transferring stock between plants in different company codes. It requires a more complex process as it involves intercompany billing and affects financial accounting entries.
Please see below the pictorial representation of this method of stock transfer
2.3.1 Key Features
- Uses a purchase order (PO) document type NB
- Requires billing document
- Includes intercompany invoice posting
- Can involve profit center accounting
2.3.2 Business Scenario
A company transfers finished goods from Plant X (Company Code 1000) to Plant Y (Company Code 2000), where Company Code 1000 issues an invoice to Company Code 2000 for the stock transfer.
2.3.3 Configuration & testing of Intercompany Stock Transport Order (Inter-Company STO)
Please see the below post for the details of configuration & testing of SAP Intercompany STO Process with Delivery & Billing
How to Configure SAP Intercompany STO Process with Delivery & Billing
