SAP Sales and Distribution is one of the key components of SAP ERP system and is used to manage shipping, billing, selling and transportation of products and services in an organization.
SAP Sales and Distribution module is a part of SAP Logistics module that manages customer relationship starting from raising a quotation to sales order and billing of the product or service. This module is closely integrated with other modules like SAP Material Management and PP.
The key components in SAP Sales and Distribution module are −
SAP provides many components to complete SAP Sales and Distribution organizational structure like Sales Areas, Distribution Channels, Divisions, etc. The SAP SD organization structure majorly consists of two steps −
On top of this organization structure in the SD module, sales organization is at highest level and is responsible for distribution of goods and services. SAP recommends to keep the number of sales organization in an organizational structure to be minimum. This will help in making the reporting process easy and ideally it should have a single sales organization.
The next level is distribution channel, which tells the medium by which the products and services are distributed by an organization to its end users. Division in an organizational structure, which represents a product or service line in a single organization.
A sales area is known as entity, which is required to process an order in a company. It comprises of sales organization, distribution channel and a division.
In SAP SD organizational structure, each sales organization is assigned to a company code. Then the distribution channel and divisions are assigned to sales organization and all of these comprise to make a sales area.
In the first step of an SD organizational structure, sales organization is assigned to a company code and then is to define a distribution channel and then division to a sales organization.
The following diagram shows the organizational structure of a Sales and Distribution module −
Material Management is one of the key modules in SAP ERP System and covers the day to day business operations related to inventory and procurement. This module is closely integrated with other modules of R/3 systems like Finance Accounting and Controlling, Sales and Distribution, Quality Management, Product Planning.
Consider an example of creating a sales order in SAP SD, it involves copying the details of items from Material Management. Availability check of the item and price details are also taken from MM, but this can be controlled in the SD module. To create inbound and outbound delivery of goods for a sales order, shipping details, loading point etc. also comes from the Material Master.
The item that is placed using a Sales order must be extended to the sales area of an organization to sales order/customer, otherwise it won’t be possible to transact with this material. This confirms that there is a link between SAP SD and MM module, when a sales order is created and fulfilled. Similarly, there are many other links between two modules.
SAP FI stands for Financial Accounting and it is one of the important modules of SAP ERP. It is used to store the financial data of an organization. SAP FI helps to analyze the financial condition of a company in the market. It can integrate with other SAP modules like SD, PP, SAP MM, SAP SCM etc.
For SAP FI-MM, use T-code: OBYC
In case of a standard sales order, you create an outbound goods delivery to the customer. Here movement 601 takes place. This movement is configured in MM and movement of goods hit some G/L account in FI. This shows the integration between SAP SD, FI and MM module.
This shows how a transaction in one system effects the details in other systems of an SAP module.
Consider the following transaction −
For SAP FI-MM, use T-code: OBYC
Whenever there is a delivery created with reference to a sales order, goods movement takes place in the system.
In case of a standard sales order in the SD module, you create an outbound goods delivery to the customer. Availability check and retail price of that product is checked in the MM module. Here, movement 601 takes place. This movement is configured in the MM and movement of goods hit some G/L account in FI. Every such movement of goods hits General Ledger account in FI.
The accounts posting in FI is done with reference to the billing documents like credit and debit note, invoice etc. created in SD and hence this is the link between SD and FI. This shows the document flow between different modules.
SD module is closely integrated with other SAP modules. The following tables will give you a brief idea on how SD is linked with other modules −
|Link Points||Module Involved|
|Transfer of Requirements||PP/MM|
|Updates G/l (Tax,discounts,surcharges,etc)||FI/CO|
Master data is one of the key factors in Sales and Distribution module. There are two levels of masters in SD.
The first level master includes −
While, the second level master is −
The customer master data contains the information about business transaction and how transactions are recorded and executed by the system. A Master contains the information about the customers that an organization uses to do business with them.
|VCKUN||CCINS,CCNUM,KUNNR||Credit Card Assignment|
|S.No||Transaction Codes & Description|
XD01, XD02, XD03
Used to create/change/display customer centrally
Used to create/change/display customer sales area
Used to create/change/display customer company code
Display change documents
Used to block Customer − Global, order, delivery, billing, sales area, etc.
Used for deletion
Change Account Group
Create Contact Person
To create a customer master data, you need to use an Account group.
Note that if you use −
XD01 − This Includes sales area in the customer master and data is stored in tables KNA1, KNB1 and KNVV.
VD01 − This includes sales area & data, which will be stored in tables KNA1, KNB1 and KNVV and there is no company code data in this.
FD01 − This is company code level & data is stored in tables KNA1 and KNB1.
Then a new window will open. Enter the following details −
Then you can enter the Sales Area details like −
In case you want to take reference from an existing customer to create customer master, you can use the reference option.
Once all the details are selected, click the Tick mark.
A new window will open to enter the customer master data. This customer master data has 3 key sections −
Note that this region fields define the tax calculation like VAT, CST, etc. The next step is to go to Control Data and enter the following details.
Then you have to enter the particulars in Payment Transaction tab and enter the details of – Bank City, Bank Key, Bank Account and Account Holder Name. You can also add more details by clicking on the Bank data button.
The next step is to go to the Sales Area data and enter the details – Shipping Data, Customer Pricing and Partner Functions, etc.
Next is to click on the Save icon at the top and you will get a confirmation that the customer has been created with #.
If you have to make any further changes to the customer’s master data, you can use T-Code: XD02.
Partner function allows you to identify which functions a partner has to perform in any business process. Consider a simplest case, where all the customer functions are performed by the partner customer. As these are mandatory functions, they have to be defined as obligatory functions in a SD system.
These functions are categorized as per partner type in Sales and Distribution system. The below partner types are Customer, Vendor, Personnel, Contact Person and common partner functions as per these partner types are −
The following tables show the main partner types and their corresponding partner function in Sales and Distribution −
Note that if a partner belongs to a different partner type, in this case you need to create a master records for that partner.
|Partner Type||Partner Function||Entry from System||Master Record|
|Customer number||customer master record|
|Vendor(V)||Forwarding agent(fwdg agent)||Vendor number||Vendor master record|
|Personnel number||Personnel master record|
|Contact Person(CP)||Contact Person(CP)||Contact Partner number||(created in customer master record,no master record of its own)|
Use T-Code: VOPAN
A new window will open. Select the Partner Object and click the Change button.
It will open a new window with the name Partner Determination Procedures. Go to New Entries.
Enter the name and partner determination procedure and double click on Partner Function in left pane.
Click the New Entries button.
Enter the Partner function details − Name, Type, etc. KU- stands for Customer.
Next is to click on the Partner Function under Partner Determination Procedure node and enter the details Partner Det. Procedure, Name, Partner Function.
Then, we need to assign this partner determination procedure to the Partner Object. The Partner Object would be a Customer for this example. Then Click on Account Groups and Select the Account group name from the list. Once it is done, Click Save, it will save the partner function.
Suppose you have implemented SAP in your company and now you want to put all your stocks in the SD system. For this, use T-Code: MB1C Movement Type: 561 this is for Good receipts without reference.
Movement Type: 501 − this is used for receiving goods with a Purchase Order.
A new window will open. Enter the document date, Plant and storage location, Movement type, etc.
Select the Movement type from the list and Press Enter after selecting all the details.
A new window will open. Enter the material code and quantity for which stock needs to be created and then click Save.
Document 300045646 posted will be displayed.
A Material Master is created in SAP SD system by the material department. Once it is created, the person who manages sales related material has to extend sales views.
Use T-Code: MM01 to create material master for different views. To check the changes, use T-Code: MM04
A new window will open. Enter the Industry Sector and Material Type. Click Select View(s).
Select Sales Org Data 1, Sales Org Data 2, Sales: General/Plant Data and click the Green tick mark below.
Then a new window will open. Enter the Plant, Sales Organization and Distribution Channel for which the material is to be extended. Repeated entries have to be made for various materials with the above selections.
A new window will open, then you can enter the following details −
Then, go to Sales Org 2 tab. This information is required for analysis.
Material Statistics Group − Value should be ‘1’ always. Value in this field with Customer Statistical Group maintained in customer master will update the information system.
Gen Item Category Group and Item Category Group − Generally for Finished Products value NORM will default in both the fields.
Go to Sales − General/Plant tab. Enter the value of Availability check, Transport group and loading group, SerialNoProfile (managed if base unit of measure is discrete, not required here) and Press Enter → Yes
You will get a confirmation message.
There are different types of customer account groups that can be created.
|X003||One Time Customers|
Go to SPRO → SAP Reference IMG → Financial Accounting → AR and AP → Customer Accounts → Master Data → Preparations for creating customer master data → Define Account Groups with screen layout (Customers) → Execute
A new window will open → click New entries.
Then again a new window will open. Enter the following details in it.
Customer Account Group − Enter a 4-digit account group.
Name − Enter a name under the General data field.
Field Status − Click on the Company code data.
Once you select the field status, a new window will open. Then, select Account Management from the selected group and the click Reconciliation account ‘Req. Entry’
Once this is done, click Save to save this configuration. Similarly, you can also create X002, X003 for other customers.
All Sales activities in this SAP SD system can be divided into presales and post sales activities. Pre-sales activities are classified as activities that take place before a product is sold to the customer. In contrast, post-sales activities are those that take place after a product is sold.
There are two types of pre-sales activities in Sales and Distribution −
Inquiries are the inquiries received from customers like, if a product is available, costing of product, delivery of a product, etc.
VA11 − Create Inquiry Logistics → Sales and Distribution → Sales → Inquiry → Create.
VA12 − Change Inquiry
VA13 − Display/Search Inquiry
A quotation is a legal document to the customer for delivery of goods and services.
VA21 − Create Quotation
VA22 − Change Quotation
VA23 − Display/Search Quotation
In this chapter, we will see how to create inquiries in SAP SD.
An Inquiry is not a legal document and is used to record the information about delivery or services from customers. The information that is captured using an inquiry is related to materials and quality of goods.
Menu Path: Logistics → Sales and Distribution → Sales → Inquiry → Create T-Code: VA11
When you run this T-code, you need to fill the below information to create an inquiry.
|Inquiry type||ZEC 1 (IECPP inquiry)|
Enter Inquiry Type as IN and Organizational Data as below and then click Sales.
The Sales Office is an optional entry, which helps in reporting. Then a new window will open. Enter Partner Function (Sold-To-Party/Ship-To-Party). Enter the material code and quantity and then Click Save.
A Message − Inquiry 10000037 has been saved will be displayed.
A quotation is a legal document to the customer for delivery of goods and services. This is normally issued after an inquiry from the customer or without an inquiry.
SAP R/3 Menu − Logistics → Sales and Distribution → Sales → Quotation → Create T-Code: VA21
Enter the Quotation Type, then you can enter the Sales Organization, Distribution Channel, Division and then click Create with Reference.
A new window will open, then enter the Inquiry number and click Copy. It will fetch all the details from that Inquiry document.
Then another new window will open. Enter the following details −
After this, click save. A Message will be displayed
Quotation 40000047 has been saved.
Sales support is one of the key components in Sales and Distribution module. It is also called computer Aided Selling, SD-CAS. This module helps organizations to create new sales, tracking of existing sales, and performance as well, which eventually helps in improving the marketing and sales of an organization.
This SAP SD Sales support module provides an option of creating an email list of the customers and directly sending mails for new leads. The sales support stores all the data pertaining to the sales and distribution related to customers, products, materials, competitor products, etc.
There are various modules which are helpful in creating, processing, as well as controlling the sales and distribution operations. These include −
In this chapter, we will discuss how to process sales orders in SAP SD.
Sales order processing describes a function related to the wholesale part of an organizational business.
The most common functions under the sales order processing are −
All these functions can be configured automatically or manually as per the system configuration. The data from these functions is stored in a sales document and can be changed manually during the processing. A sales document can be a single document or can be part of a series consisting of interrelated documents.
There is a customer telephone inquiry in the system. Then the customer requests a quotation, which can be created by referring to the same inquiry. Next, assume that the customer places an order on the basis of that quotation and a sales order is created by copying the information from this quotation and if at all there are any modifications that are required. The merchandise is then shipped and the bill is sent to this customer. After the delivery of goods, this customer raises a claim of damaged articles. Then a delivery can be created free of charge with reference to the sales order.
All these sales documents − starting with the inquiry, quotation, raising a sales order, delivery of goods, billing document to customer and the free of charge delivery forms a document flow. The data flow from one document to another removes or decreases the practice of manual processing and helps in simpler problem resolution.
A Sales order is a request made by a customer to the company for delivery of some defined quantity of goods or a service in a specific time period.
An inquiry from a customer consists of one or more items that contains the quantity of a material or service entered in the order. The quantity in a sales order is further divided into business lines and comprises of various subsets and delivering dates. The items mentioned in the Sales order are combined in a hierarchy and allows to differentiate between batches or to use combinations of materials. All the valid conditions on these items are mentioned in item conditions. These conditions for an item can be derived via a full condition and can be valid for the entire sales order.
You can divide an item to multiple billing plan deadlines and each of them will tell you the time, when a fixed amount of the item is to be billed.
VA02 − Edit a Sales Order.
VA03 − Display a Sales Order.
T-Code − VA01 Create a Sales Order
A new window will open, then you can enter the below details −
Enter the Order Type, below order types are available. Enter the sales organization, distribution channel and division. You can also click on Create with Reference option to open a Sales order with reference to an inquiry or even a quotation.
|FD||Delivery free of charge|
|SD||Subsequent Del. Free of charge|
|DR||Debit memo request|
|RK||Invoice correction request|
|RZ||Returns scheduling agreement|
Once you click on Create with Reference, a new window will open. Enter the Quotation number and click on Copy.
It will open a new window. Enter the following details −
In VA01, it allows you to enter header data and item data. Then to enter Header data, click on Goto Tab → Header and select header data. The next step is to click on the Goto tab → Item → select item data and once done click on OK.
After this you can click on the save icon at the top. You will get a confirmation message −
There are different types of sales documents that can be defined in a SAP system. These include −
To define a Sales Document − Enter T-Code: VOV8 or SPRO → IMG → Sales and Distribution → Sales → Sales Document → Sales Document Header → Define Sales Document Type.
A new window will open, go to New entries.
Then you can enter the mandatory fields in this new window.
Click the save icon at the top.
An item category is used to define if an item is suitable for billing or pricing. It defines the additional control functions for a sales document.
Example − A standard item function is totally different from the function of a free of charge item or a text item.
As per the sales document type, you can define different types of item categories. If required, you can also modify the existing item categories or can also define new item categories. An item category can be defined on the basis of the following questions −
An item refers to a material or a text item?
Whether pricing has to be carried out for an item?
Are schedule lines allowed for an item?
When the item has to be considered as completed?
If an item cannot be fully delivered, a message will appear in the system or not?
Which partner functions are allowed for an item?
Which output is allowed for business transactions?
Is the volume and weight of an item determined?
Whether this Item is relevant for a delivery or not?
Is the item suitable for billing?
Should the cost of this item be determined?
Is it a return item?
Whether it is a statistical item?
|Categorization||Description of an Item|
|TAB||Individual Purchase Order|
|TAS||Third Party Item|
|TANN||Free of charge item|
To create an Item − T-Code: VOV4
The list of all existing items will be displayed. Then you can click on New Entries to create a new item.
A new window will now open, then you can enter the below details −
Sales Document Type → Item cat.group → Item Category (This will be default as per the Sales Document Type. You can change it with a manual item category.) → Manual item category (You can use manual item category in place of default item category)
Once all the details are mentioned, click on the save icon.
In a sales document, items are divided into one or more schedule lines. These lines vary as per the date and quantity. You can define multiple control elements for these schedule lines. Items with schedule lines are only copied to the SAP system. These schedule lines contain important information like delivery dates and quantity, available inventory, etc.
You can define different schedule line categories as per the sales document type and item category. The various control elements related to general data and shipping data are used for categorizing schedule lines. You can also define new schedule lines and the system administrator manages data related to control elements.
The categorization of schedule line majorly varies as per the item category of a corresponding item and the material requirement planning MRP. This is defined in the material master record. The categories for a schedule line are defined automatically as per their values in the corresponding table. In case if it is required, you can do some manual changes to the values in the sales document, but can’t change all the values.
It can be defined in the following ways −
You can copy an existing schedule line category and make changes as per the requirement.
Changes can be made to the existing schedule line category.
Creation of a new schedule line category.
Defining a Schedule line Category −
A new window will open, then you can click on New Entries.
Once the details are entered, then click on the save icon at the top.
Copy Control is defined as a process in which important transactions in a sales document are copied from one document to other. It consists of routines, which determine the system on how the data is to be copied from a source document to a target document. A SAP system contains a number of these routines and you can also create additional routines to meet the business requirements. To create a new routine, you can use an existing sales document as a reference.
These controls are created and configured under IMG and can be found at the following menu path −
SPRO → IMG → Sales and Distribution → Sales → Maintain copy control for sales documents.
SPRO → IMG → Sales and Distribution → Shipping → Specify copy control for deliveries.
SPRO → IMG → Sales and Distribution → Billing → Billing Documents → Maintain copy control for billing.
You can also use the following T-Codes to find copy controls in a system −
VTAA − This control is used for copying from sales order to sales order
VTLA − This control is used control for copying from sales order to delivery
VTFL − This control is used control for copying from delivery to billing doc
VTFF − This control is used control for copying from billing doc to billing doc
VTAF − This control is used control for copying from billing doc to sales order
VTFA − This control is used control for copying from sales order to billing doc
You can setup Copy controls in a system at three different levels in a Sales Order −
Schedule line level (Only relevant, when you copy from a sales order to sales order or from billing doc to sales order).
The Header Copy Control routine is required when you copy data from header of a source document to the header of a target document.
T-Code: VTLA to check copy control between sales order and delivery.
You can check the source of a routing by selecting the routine and press F4. To open it in the ABAP editor, you can press F5. Copy controls for an item can be checked by a double click on the item folder and choosing an item category and then clicking on the Display view item overview screen. You can then use the F1 key to find out how each routine is employed. The target documents will be assigned an updated reference status in the copied item.
The following types of status can be possible for an item −
Not relevant − it tells if an item is not relevant for copying.
Not referenced − it tells an item has not been copied.
Partially referenced − it tells if an item quantity is fully copied.
Fully referenced − It tells if an entire item quantity has been copied or not and an item cannot be referenced further.
You can also display reference status for a copy control −
Select the Header → Status for the status of the entire document. This field is used − Field VBUK-RFSTK.
Select an Item → To find the status of the line item. This field is used − VBUP-RFSTA.
You can also define a sales activity or a sales document as incomplete. How the system behaves when you create such document in system is shown below.
The following entries can be made to the system for incomplete data −
Use T-Code: OVA2 or the below menu path to display the incomplete group −
SPRO → IMG → Sales and Distribution → Basic Functions → log of incomplete item → Define Incompleteness Procedure → Execute
A new window will now open and you can check the list of this incomplete group.
To assign incompletion procedures to each document type. You can use T-Code: VUA2 or SPRO → IMG → Sales and Distribution → Basic Functions → log of incomplete item → Assign Incompleteness procedure.
Then a new window will open. Please select Assign procedures to Sales Document Type.
You can now view document configuration using a VOV8, but it can only be changed here. If you don’t want to populate a procedure cos of an incomplete field, you can select IC check box.
OVA2 − To define incompletion procedure.
VUA4 − To assign incompletion procedure to delivery type.
VUPA − To assign incompletion procedure to Partner functions.
VUC2 − To assign incompletion procedure to Sales Activities.
OVA0 − To define Status groups.
VUA2 − To assign incompletion procedure to Sales Document Header.
V.02 − Execute to get a checklist of incomplete sales orders.
VUA2 − To set a warning or error message on document save.
VUP2 − To assign incompletion procedure to Sales item category.
VUE2 − To assign incompletion procedure to Schedule line category.
VBUV − Incompletion log - Sales documents
VBUK − Header incompletion
TVUVG − Groups
V50UC − Incompletion log − Deliveries
V50UC_USER − Incompletion log − Deliveries − Enhancements
TVUV − Procedures
TVUVF − Fields
TVUVS − Status groups
VBUP − Item incompletion
TVUVFC − Fcodes
FMII1 − Funds Management Account Assignment Data
Pricing in Sales and Distribution is used to define the calculation of prices for external vendors or customers and cost. This condition is defined as a set of conditions when a price is calculated.
Consider a case when customer orders specific quantity of a product on a particular day. Various factors like customer, product, order quantity and date tells the final price to that customer. This information is stored in the system as master data in the form of condition records.
There are various pricing elements like prices, surcharges, discounts, and taxes, which are defined in SAP system as condition types. To manage pricing information for a pricing element in a system, you have to create condition records.
While processing a sales order, you can also manipulate the pricing at the item as well as the header level. Manual processing of a price screen is dependent on individual condition types. During a Sales Order processing using manual processing for a condition type, you can perform the below activities −
If you want to add customer discount manually in the pricing screen of a sales order, click on Add line. In Data screen, you can enter additional conditions like – customer discount in the condition type field. Enter a percentage range and then press ENTER. You can also delete pricing elements in item pricing and header screens. To do this, select the particular condition by positioning the cursor and click on delete line.
Note that all header conditions defined at header level cannot be changed at the item level, and conditions defined at this level cannot be changed at the header level. Only the Conditions that you define at both header and item conditions can only be edited at both levels.
A Condition table is defined as a combination of keys to identify an individual condition record. A condition record is defined as how system stores the specific condition.
Example of a Condition Record − Entering the price of a product or to specify the discount for a privileged customer.
Example of a Condition Table − Condition records for a customer specific material prices are stored by a sales department. SAP system contains a conditional table 005 for this purpose. Key of table 005 includes the following field −
In the first two fields, the customer and material determines the relationship between customers and specific materials. The last two fields are used to identify organization data in a SAP system. Now, if sales department in an organization enters a condition record for discount to one privileged customer, the system will automatically make use of the condition table 005 to store the record and define a key. Any standard SAP system contains predefined condition tables and specifies for each access in a predefined access sequence.
In a SAP system, you can create or change existing condition tables. As per the new business requirement in an organization, you can create new condition tables.
Go to SPRO → IMG → Sales and Distribution → Basic Functions → Pricing → Pricing Control → Define Conditional Tables
A new window will open and then you can select from create, change or display field as per the requirement. To create a new table, you have to select create and click on Choose.
Enter condition table in table field and then you can enter the existing table to copy the condition.
Once data is copied, you can modify the table as per the business requirement.
Condition type is defined as specific features of daily pricing activities in a SAP system. Using the condition type, you can also put different condition types for each pricing, discounts on goods, tax and surcharge that occurs in business transactions.
Condition type allows you to define the discount for special material. This can be specified in the system to calculate discount as an amount or it can calculate discount in terms of percentage. In case you have to use both discount types, two separate condition types have to be defined in the system.
There are predefined condition types in a standard system −
|S.No||Condition Type & Description|
Customer-specific material discount
Price group discount
Freight surcharge(by item)
You can change or maintain existing condition type in a standard system. You can also create a new condition types as per business requirements in your organization.
Go to SPRO → IMG → Sales and Distribution → Basic Functions → Pricing → Pricing Control → Define Condition Types
A new window will open. Select maintain and then change as per the requirement and click on Choose.
Once you select Maintain Condition Types and click on Choose, a new window will open. Select a condition type and click on copy.
Enter the name of condition type. Fill the details for Control Data −
Once all the details are entered, click on the save icon at the top.
This is the search strategy, which is used by the system to find valid data for a particular condition type. It tells about the order in which a system searches for the data. An access sequence consists of one or more access sequences. It helps the system to search first, second and so on until it finds a valid record. An access sequence is defined for each condition type where a condition record is created.
You can create or maintain access sequence in customizing −
Go to SPRO → IMG → Sales and Distribution → Basic Functions → Pricing → Pricing Control → Define Access Sequences.
It is not necessary that all the items are suitable for pricing or not. If an item is not relevant for pricing, then line item will be blank for that item. An Item category is used to control the pricing of an item.
Enter Pricing flag in pricing field.
Enter Statistical value as − Blank, X, Y. Statistical value flag control an item in sales document as shown below.
Click the save button.
In a standard SAP system, price is defined as gross price of a material. Below are the predefined price types in a system −
By default, the system takes gross price in the automatic pricing for a business transaction. In a standard SAP system, system takes customer specific price. If no such price exists, system checks for a valid price list type. If this is also not present in the system, it takes the material price.
When material price is created, it means – the price for a specific material or pricing for a specific material type. A combination of sales organization and distribution channel for which material price is valid.
As per your business requirement in an organization, you can define your own price list.
Example − Price list can be created as per the customer type like Retail, Wholesale customer and so on. Price list can also be created as per currency type.
Customer Specific Prices − You can also create pricing records for specific customers. You can assign pricing record for specific combination of customers and material type.
A standard SAP system includes a variety of common discount types. You can also define or customize discounts and surcharges as per the business requirement.
A Standard SAP system includes the below mentioned discount types −
|Discount(Key)||Kind of Discount|
|Material group(K029)||Absolute discount by weight|
|Price group/material group(K030)||Percentage|
|Rebate processing(BO01)||Group rebate(%)|
|Rebate processing(BO02)||Material rebate(fixed)|
|Rebate processing(BO03)||Customer rebate(%)|
|Inter-company processing(PI01)||Intercompany discount(fixed)|
|Inter-company processing(PI02)||Intercompany discount(%)|
|Invoice lists(RL00)||Factoring discount|
|Invoice lists(MW15)||Factoring discount tax|
While creating a condition record, you can use any of above standard discount types. While doing automatic pricing, system checks for the discount that satisfies a certain condition and it checks for a valid condition record. If a discount refers to a group like a material group or price groups, that particular group must be assigned to a relevant customer or material master record before automatic pricing is done in the system.
A Product Proposal helps an organization to increase the sales by recommending other products to the already added products or by replacing the one already added. The products recommended can be cheaper, expensive or similar to the product that are requested by the customer.
An Automatic Product Proposal is one of the most powerful tool used in online marketing of products. Product Proposals can be mapped to specific requirement of business partners to match their market requirement. You can use Top n Product list to provide the list of products proposed. The data in a product proposal is integrated with SAP CRM module to get product master data.
A Product proposal also supports features like cross selling, up selling and down selling, Top N Product list, proposing accessories for specific products and generating product proposals with respect to specific promotions.
Cross Selling − The product association rules are defined for products and relationship between different products. Each rule contains a leading product and the dependent products to be suggested with these products. This allows you to offer other products with the one already added by a customer.
Up-Selling and Down Selling − If you are selling a specific product you can define other products to be proposed. These proposed products are defined using down selling and up selling rules.
Top N Product Lists − With the use of SAP NetWeaver BI component, you can define a list of top products for a target group.
Proposing Accessories − This is maintained in the product master data and with already added products. It suggests suitable accessories that can be added.
Generating Product Proposal w.r.t specific promotions − You can assign a specific product to a promotion for a customer.
Listing, Determination and material exclusion is a key feature provided by SAP SD that allows the sale of materials to allowed/disallowed customers.
Listing − You can create a material list for specific customers, which allows those customers to order only those materials which are maintained in the list.
Exclusion − You can also maintain an exclusion record for specific customers and this doesn’t allow that customer to order those materials.
To display Material listing and exclusion, go to SPRO → Sales and Distribution → Basic functions → Listing/Exclusion.
A new window will open, then you can Activate Listing/Exclusion as shown in the following image and then click choose.
It will show you the existing material listing and exclusion as per the selection.
Use T-Code: VB01
Select Exclusion Type: B001 and click Key combination to select material and customer.
Click on the save icon and a confirmation message will be displayed.
In a SAP system, you define different sales document types according to different business transactions. Business transactions are recorded in a system as sales documents and are grouped into the below mentioned categories −
Inquiries and Quotations come under pre-sales documents.
Sales Orders − that are placed by customers.
Outline agreement − includes contracts and scheduling documents.
Post sales documents − includes customer feedbacks on delivered products and complaints, free replacements and return products, etc.
This is defined as an order type, where the customer places an order, picks up the order and pays for the goods. In this order type, delivery of the order is executed immediately, when the order has been entered. Cash invoice and billing can be printed immediately from the order. No receivables are entered for customer as invoice amount is paid in cash and directly entered to a cash account.
In this order type, delivery of goods is picked by the customer or you deliver the goods on the same day, when the order is placed.
A scheduling agreement is defined as an external agreement with the customer having details of quantity of goods and delivery dates. This information is mentioned as schedule lines in a standard system. These schedule lines can be created with the scheduling agreement or you can also create these at a later stage. The deliveries are processed for a scheduling agreement in similar way it is processed for a normal delivery. Once the delivery is done, system updates the delivered quantity in the scheduling agreement.
In this sales order type, goods are produced and moved to a warehouse or provided to an agent to deliver to end customer.
In this order type, whenever there is requirement from a customer, he will move to the warehouse or contact the agent and this will be treated as a sale.
In a third-party order type, products are not delivered to the customer and then you have to handover the order to a third-party vendor, who is responsible to deliver the items to the customer and generate the bill.
Free of charge delivery or subsequent delivery is made, when a customer is not satisfied with the products or the quantity of good is lesser when delivered. The company has to initiate a return as per the customer’s request. In this delivery, customer is not charged for shipping of goods.
Credit Memo − This is done when the customer wants a refund for the delivered goods. The system creates a credit memo sales document for the customer with reference to the sales order.
Subsequent Delivery − This includes free of charge delivery of disputed goods to the customer. This is required when incorrect quantity of goods are delivered to the customer.
Creating a return request in the system: T-Code: VA01. Then enter the details as shown below −
Enter Sale Order number and click Copy.
Then you can enter the following details −
For creating a Return Delivery Document, use T-Code: VL01N.
Enter the Shipping Point and then Delivery Date as Return Delivery and then press ENTER.
You can then enter Quantity of goods and click save.
For creating Free of Charge Delivery, use T-Code: VA01
Order Type: Delivery free of charge
Enter the PO number and click Copy.
Enter Order Reason and Quantity.
Click the save button.
The vendor selection is an important process in the procurement cycle. Vendors can be selected by a quotation process. Once these vendors are shortlisted by an organization. They enter into an agreement with a certain vendor to supply specific items with certain conditions. This happens when an agreement is reached or a formal contract is signed with the vendor. So, this outline agreement is a long term purchasing agreement with the vendor. The key points about an outline agreement are as follows −
An outline agreement is a long term purchasing agreement with the vendor. It contains the terms and conditions regarding the material that is to be supplied by the vendor.
These outline agreements are valid up to a certain period of time and cover a certain predefined quantity or value.
An Outline agreement is of two types, which includes − Contract and a Scheduling Agreement.
A Contract is basically a long term outline agreement between the vendor and the ordering party. It is made on predefined material or services to be given over a certain framework of time.
There are two types of contract −
Quantity Contract − In this type of contract, the overall value is specified in terms of total quantity of material to be supplied by vendor.
Value Contract − In this contract type, the overall value is specified in terms of total amount to be paid for that material to the vendor.
A Contract can be created by following the steps shown below −
Logistics → Materials Management → Purchasing → Outline Agreement → Contract → Create.
On the SAP Menu screen, select Create execute icon by following the above path.
Then, provide the name of vendor, type of contract, purchasing organization, purchasing group and plant along with the agreement date.
Fill in all the necessary details like agreement validity start date, end date, and pay terms (i.e. terms of payment).
Then provide the material number along with target quantity. If the quantity contract or net price of value contract and material group. Click save. A new Contract will be created.
A Scheduling Agreement is a long term outline agreement between the vendor and the ordering party. This is done over a predefined material or service, which are procured on predetermined dates over an already agreed framework of time. A Scheduling agreement can be created by the following two steps −
This can be created by following the steps shown below.
The path to create a Scheduling Agreement − Logistics → Materials Management → Purchasing → Outline Agreement → Scheduling Agreement → Create → Vendor Known.
On the SAP Menu screen, select Create execute icon by following the above step.
Provide the name of that vendor, agreement type (LP for scheduling agreement), purchasing organization, purchasing group, plant along with agreement date.
Fill in all the necessary details like agreement validity start date, end date, payment terms.
Provide material number along with target quantity, net price, currency and material group. Click save. A new Scheduling Agreement will be created.
These schedule lines can be maintained for scheduling agreement by following these steps −
Path to maintain Schedule Lines − Logistics → Materials Management → Purchasing → Outline Agreement → Scheduling Agreement → Delivery Schedule → Maintain.
On a SAP Menu screen, select Maintain execute icon by following the above step.
Provide a Scheduling Agreement number. Select line item. Go to the Item tab at the top → Select Delivery schedule.
Provide a delivery schedule date and target quantity. Click save. The schedule lines are now maintained for the scheduling agreement.
A particular material can be procured from different vendors depending on the customer requirement. So, the total requirement of a material is distributed to different vendor’s i.e. quota is assigned to each source of supply. This is known as quota arrangement.
The key points about quota arrangement are as follows −
Quota arrangement divides the total requirement of material among certain sources of supply, i.e. vendors and then assigns quota to each source. This particular quota specifies the portion of material that is to be procured from this assigned vendor or source. Quota rating is used to determine the amount of material that is to be assigned to a particular source or vendor. The source with lowest quota rating represents the valid source.
Quota rating can be calculated by the following formula −
Quota rating = (Quota Allocated Quantity + Quota Base Quantity)/Quota
Where the Quota Allocated Quantity is the total quantity from all orders that are procured from a particular source. Quota Base Quantity is the quantity from a new source of supply. Quota is the total requirement of material that is given to a particular source of supply.
The mandatory setting before creating quota is – information record and source list should be maintained for the particular material. Also, in the material master, the source list and quota arrangement usage check box should be checked. This setting can be made in the material master by going to T-Code MM03. In the purchasing view, check the quota arrangement usage and source list. Setting is now maintained for quota arrangement.
Quota arrangement divides the total requirement of a material among certain sources of supply i.e. vendors. Quota arrangement can be created by following the steps shown below.
Path to create Quota Arrangement − Logistics → Materials Management → Purchasing → Master Data → Quota Arrangement → Maintain.
On the Sap Menu screen, select Maintain execute icon by following the above step.
Enter the material number and plant for which quota arrangement needs to be maintained.
Enter the names of the vendor’s along with all the assigned and allocated quantity to them. Click save. Quota arrangement is now maintained for this particular material.
In SAP Sales and Distribution module, along with the processing of normal sales orders, you can also create special business processes like configurable products, items manufactured on order, etc.
Consignments are known as products, which are owned by your company and are located at the client location. It is not required for the customer to pay for these goods, until they are moved from the consignment stock. The customers can also return the products in consignment stock, which are not required.
The goods in a consignment stock can be accessed by the customer at any time.
Consignment goods are stored by the customers at their warehouse.
Customer has to only pay for goods, which are removed from the stock and only for the quantity taken.
As the consignment stock is still a part of company’s valuable stock, so there is a need to manage this in the system. You must manage the consignment stock separately, so that company should be aware, which stock is available at the customer location. This should be managed separately for each customer.
For an organization, consignment stock is managed as a special stock in inventory and this helps you to track returnable goods from the customer. Consignment stock management includes four key activities in the system, which are −
In this, stock is stored at the customer location and owned by the company. This is called Consignment fill up (CF) and sales order –KB is used for this.
Enter Order Type and then enter Organization Data −
A new window will open, then you can enter the following details −
Once these details are entered, click Save.
This is for the goods that are issued to the customer from a warehouse.
Order Type: CI
Sales Order Type: KE
This is done for the goods returned from the customer.
Order Type: CONR
Sales Order Type: KA
Click save, once all the details are entered.
When a customer requests return of a product to the company, this is known as a consignment pick up.
Order Type: CP
Sales Order Type: KR
Once these details are entered, click save.
Shipping is defined as a very important activity in the sales process. It comes under the logistics chain and guarantees customer service and distribution of goods. It is a significant component of Sales and Distribution module. It is used to perform outbound delivery and other shipping activities like picking and packing of the goods.
In the shipping process, there are a few key sub processes, which include −
In shipping the stock of goods is managed at Storage Locations.
The shipping point key characteristics include −
You can also assign several shipping points to one plant, but each point should have a different loading equipment or a different processing time.
Other Organization units are warehouse#, type of storage, etc.
There is a warehouse# that is assigned to a plant and storage location. There can be multiple storage locations in a plant and they can point to one warehouse.
Route determination is done based on the target country and transportation zone along with the shipping point. If you have the same shipping points for two deliveries to the same country and same transportation zone, then the same route determination is applied to both.
While creating a delivery document, its route is determined based on the shipping party and ship to party information.
Go to: SPRO → IMG → Logistics Execution → Transportation → Basic Transportation Function → Routes → Define Routes → Define modes of transport → Execute.
A new window will open, Click New Entries.
Enter the following details −
Go to: SPRO → IMG → Logistics Execution → Transportation → Basic Transportation Function → Routes → Define Routes → Define Routes and Stages → Execute
A new window will open and it will show the list of existing routes, Click New Entries.
Enter the details in new window along with route stages and define. Once these details are entered click save.
Go to: SPRO → IMG → Logistics Execution → Transportation → Basic Transportation Function → Routes → Define Routes → Maintain Stages for all routes.
Enter the following details −
With the availability of material or transport scheduling date, outbound delivery is required for due shipping lines. It involves shipping activities like picking of goods, transportation scheduling, etc. An outbound delivery is done with the shipping points and is determined at the time of placing the order. You can also define a shipping point manually at a later stage.
Following are some checklist points to be carried out when a delivery is created −
To check the material and order to ensure if the outbound delivery of goods is possible.
Defining the quantity of goods and its availability.
Packing the outbound delivery.
Calculating weight or volume of delivery.
Find out the delivery situation and the delivery agreement.
Defining the route.
Finding the pickup location.
Quality check of material to be delivered.
Updating and changing the status of the sales order.
If there is a change in a delivery situation, you can change the delivery after it is created.
If you know the order number, you can create one outbound delivery for a single order. You can change the shipping data at any point, if required.
Use T-Code: VL10B
Enter the Shipping Point from shipping data. In the Purchase Order tab, enter PO number due for delivery and quantity.
To create an outbound delivery with Order Ref or W/O Order Reference, use T-Code: VL01N
To change the outbound delivery, Use T-Code: VL02N
There are various functions in delivery processing like −
You can post quantity difference in the inbound delivery for outbound delivery to post change in delivery. Using text management, you can make the following changes to the delivery document like −
If you want to create and save new texts for a particular delivery, this can also be done.
Printing is done in EWM to print delivery notes. You can create an outbound delivery order or an outbound delivery. Validation in EWM is used to verify the delivery document, if it is complete and can be further processed in the system.
Picking of goods is done in SAP warehouse management system. It is done via a transfer order, which is used for picking list and to withdraw the goods from the stock.
There are three types of Picking −
Packing of goods is done with the packing material and to be created as material type −
VERP. This can be done in two ways −
The Post Good Issue (PGI) is the last step in delivery processing and in this goods ownership is moved to the customer and stock is updated as per delivery.
These functions can be performed in the system using the following steps −
Use T-Code: VL01N
Use T-Code: LT03
Use T-Code: VL02N
Enter Outbound Delivery and click Pack.
Select Pack Material and Enter Packaging Material details.
Click Post Good Issue and a message will appear − Replenishment Delivery has been saved.
PGI creates two documents −
In SAP Sales and Distribution module, billing is known as the final stage for executing business transactions. When an order is processed and delivery is made, billing information is available at each stage of this order processing.
Billing contains the following components −
Billing is closely integrated with organization structure and it can be assigned to Sales Organization, a Distribution Channel, and a division.
Key functions in Billing −
A billing document is created for a credit memo, debit memo, an invoice or a cancelled transaction. Each billing document has a header and list of items under it. Billing documents are normally controlled by the billing type.
In a billing document header, it contains general data like −
In the list of items, you should maintain the following data −
While doing the billing processing, you create, change and delete the billing documents like − invoices, credit memos, debit memos, etc.
Billing Processing also includes creation of billing documents as per the below reference −
You can refer to an entire document, individual items or partial quantities of items.
A Billing document can be created in the following ways −
When a system processes a billing due list automatically as a background task.
By manually processing from a worklist.
You can also create a billing document explicitly
Use T-Code: VF01
Go to Logistics → Sales and Distribution → Billing → Billing Document → Create.
A new window will open, then you can enter the Billing Type, Date and enter the document number you want to create. Click save.
VF02 − To change the Billing Document
VF03 − Display Billing Document
VF11 − Cancel a Billing Document
VF05 − List Billing Document
A billing method determines whether you have to create an invoice for every delivery or you want to send an invoice to the customer each month.
You can use the following billing method types −
In Individual Billing method, you can make the setting in system to create single billing document for each sales document. Example: One invoice per delivery.
In Collective Billing, it allows you to combine different documents like sales orders and/or deliveries either partially or fully in a common billing document.
Invoice Splits allow you to create invoices as per the specific criteria.
A billing plan in SAP SD is defined as a plan with individual billing dates for goods and services and it doesn’t depend on the delivery of goods. Using this bill plan, you can bill for a service or product at regular time intervals or at specific dates defined in the system in advance.
As per the business transactions, a system allows you to process any of the billing plan type. There are two types of billing plan −
Milestone billing includes dividing the total billed amount in multiple billing dates that are defined in a billing plan. When there is a milestone reached as per defined in the system, customer is charged as per the project cost or a predefined amount as per the bill plan. Milestone billing is normally used for long term projects.
Periodic billing includes charging of bill amount at a regular interval of time. Example: Suppose you have to pay a rental amount monthly as per the contract. The system can process monthly payment as per the schedule. Periodic billing plan is normally used in the following categories −
In SAP system, you can mention if one billing plan is applicable for all the products in a business transaction or you can define separate bill plans for each transaction goods as per the requirement.
Note that you can define a billing plan in SAP CRM system − Customer Relationship Management → Transactions → Basic Settings → Billing Plan
You cannot use billing plans created in SAP CRM system in SAP ERP system.
Revenue account is used for revenue recognition and is used for integrating SAP SD module and Finance Accounting module. As per the billing document to account, system determines the correct G/L account for posting the revenue as per the revenue account determination.
To configure Revenue Account Determination: Use T-Code: OVK5
Go to SPRO → IMG → Sales and Distribution → Basic Function → Account Assignment/Costing → Revenue Account Determination → Check Master data relevant for Determination.
Using this, you can define −
Select any one of them and click Choose.
Materials − Account Assignment Groups − Using this option, you can divide materials into different groups, services and retails groups. You maintain this in Material Master MM01/MM02 under Sales → Sales Org 2 view.
Customers − Account Assignment Groups − Using this option, you can divide customer into different groups. Example: You can divide customers into domestic customers and non-domestic or overseas. You maintain this in Payer Customer Master using VD01/XD01/VD02/XD02 under billing document tab of Sales Area Data.
To create and display the condition table for revenue account determination −
Go to SPRO → IMG → SD → Basic Function → Account Assignment → Account Assignment/Costing → Revenue Account Determination → Define dependency of Revenue Account Determination → Execute.
A new window will open, then you can select the relevant option related to the condition table and click Choose.
The following T-Codes can be used for managing condition tables
|S.No.||TCode & Description|
Account Determination : Create tables
Account Determination : Change table
Account determination : display tables
Field catalog : Allowed fields for the tables
The next step is to define access sequence and account determination type.
Define and Assign Account Determination Procedure −
|S.No||Structure & Description|
Account Determination Communication Header
Account Determination Communication Item
Credit management deals with selling of goods and collecting money at a later stage. The credit limit for a customer depends on the payment method and customer payment history. The payment for the goods is based on payment conditions based on the business transaction.
A customer’s credit limit is set as 10000 and he makes an order worth 6000 and payment term of 30 days at 4%. Now if payment is made within 30 days, customer will get 4% discount on the payment.
Why do we need Credit Management?
Credit management allows you to reduce the credit risk by setting up the credit limit for the customers. You can get warning alerts for a customer or a group of customers.
As per your credit needs, you can define your various credit policies as per different criteria. This also allows you to define key points in Sales and Distribution system, where the system checks are performed.
While processing an order, the system allows a representative to get the information about customer’s credit details. When a customer is about to reach his credit limit. An electronic email can be sent to the customer automatically. The credit representative in your company has an option to review the credit situation of a customer quickly and accurately and to decide if to extend the credit limit or not.
There are two types of credit management −
Simple credit check involves comparing customer credit limit to the total of all items and open item values in the order.
Credit Limit = Open item values + Value of current Sales Order
Open items are defined as the products that are invoiced to the customer, but payment has not been received yet. You can configure the system in such a way that it sends a warning message to the customer, when their credit limit is exceeded.
Automatic Credit Check involves checking open items and open deliveries of goods as well. If the credit limit is crossed, a customer can still make the order because of a good payment history with the company. This can be defined as − Static and dynamic credit check.
Types of checking groups − Sales, Delivery and Good Issue. You can block the order at all these levels.
Risk Category − It is used to determine how much credit has to be given to the customer.
High Risk − Low Credit
Low Risk − More Credit
Medium Risk − Average Credit
It is used to determine the credit limit of their customer by considering a horizon period −
Now if the horizon period is defined as 4 months, the system will not consider these documents for 4 months.
SPRO → IMG → Enterprise Structure → Assignment → Financial Accounting → Assign company code to credit control area
A new window will open, then you can set the automatic credit check.
Go to: SPRO → IMG → Sales and Distribution → Basic Functions → Credit Management/Risk Management → Define Credit Groups
The following credit groups are defined in a SAP system −
The enterprise structure represents the business structure in the real world. You can map various organizational units to enterprise structure as per the requirement like – Client, Distribution channel, division, company code, Sales office, Shipping Point, Loading point, etc. You can assign an organization unit to a single module (Example- A company code can be assigned to Sales and Distribution module) or to multiple modules.
A client is an independent organizational unit and legal unit. Generic data and multiple tables are saved at client level for multiple organizational structure. Client is known at the top level in an enterprise structure. You can assign multiple company codes to a client.
A company code is defined as an independent legal unit in an organization. Company code is an organizational unit created in Finance Accounting. At the company code level, you can create P/L statements and Balance sheets. You can assign multiple company codes to a client.
A Sales organization is used to distribute products and services. You can assign a single or multiple sales organization to a company code. You can assign one or more Plant to Sales organization and it is not unique, so you can have one plant assigned to multiple Sales organizations. Sales organizations can be used to perform search criteria to list sales documents and to create deliveries and billing worklist. You can mention different output types for sales and billing document for each sales organization.
It is defined as a medium, which is used to send goods and services to the customer. You can assign a distribution channel to a single or many Sales Organizations. You can set distribution channel as per company’s market policy or as per an internal organization. You can use master data in one distribution channel to other distribution channel. You can assign a sales office to a distribution channel.
A division is defined as a product line or grouping of services or material. You can assign a division to one or more sales organization. A product is always assigned to one division. You can assign a Sales Office to a division. There are various organization units like Sales Area, Warehouse, delivery point, shipping point etc. that can be mapped to one or more SAP modules.