Enterprise Structure

Sales & Distribution

Company
LOGO
 Topics

1. Introduction

2. Sales Organization

3. Distribution Channel

4. Division

5. Sales Area

6. Sales Office & Sales Group

7. Integration
 Introduction
 Enterprise structure is a representation of Legal and
Organizational structure of the company.

 It helps to set up the structure for all business functions

like

Finance and Controlling(FI-CO)

Sales & Distribution (SD)

Materials Management (MM)

Logistics General (LO) and Logistics Execution (LE).

 It allows necessary integration among these functions

(SAP calls these as Modules) within enterprise structure
to manage transaction processing.
 Introduction

 Enterprise structure of sales and

distribution has the following basic
organizational elements. –

 Sales organization

Distribution channel
 Sales office
 Sales group
 Introduction

 Graphic representation of Sales enterprise structure

 Sales Organization
 Sales Organization
 Definition of Sales organization is basic and

mandatory in SD configuration.

 It is used for creation and processing of sales

documents from sales to cash.


Need for different sales organization can be based on
geography or type of sale (domestic or export) or
different businesses of the company.


Sales Organization can have its own customer and
material master data in system.
 Sales Organization

 Sales Organization
 Example - A company wants to divide its sales

organization structure separately for North America,

rest of the US, Europe and Asia-pacific, then it can
have 4 different sales organizations.


This will help to have sales to cash cycle run
separately for each of this region.

 Statistical sales reporting can be managed per sales

organization.
 Distribution Channel
 Distribution channel

Distribution channel is an organization element, which
represents the way goods or services are distributed to the
customers.


A sales organization can have more than 1 distribution channel.
These distribution channels must be assigned to sales
organization in enterprise structure.
Example - A computer manufacturer can sell computers through
channel partners or can sell to the corporate clients directly.

 A distribution channel can be used by more than 1 sales

organization.
Example - Distribution channel like “Direct sale” can be used by
North American as well as European sales organizations of a
company as a channel for selling.
 Division

 Division

It is necessary to understand the concept division before we
learn about setup of Sales area.
 Generally “division” is used to classify products into certain
product groups or families.
Example - A consumer and electronic goods company can have
divisions as
 Consumer electronic – TVs, DVD players

 Home Appliances – Washing machines, Refrigerators

 Company can sell bulk TVs to corporate client directly; therefore

sales organization can use distribution channel as “direct sale”
and division as “Consumer electronics”
 Sales Area
 Sales Area
 It is used to control which distribution channel is used

to sell products belonging to a division in a sales

organization. Therefore, all sales documents are
created and processed in a sales area.
 It is a combination of Sales organization, Distribution

channel and Division.

 Use of sales area allows different business control or

parameters to be set for the same customers like

 Customer’s currency
 Partial delivery agreement
 Payment terms
 Taxes
 Sales Office & Sales Group
 Sales office and Sales group
 Sales office – It represents a sales office / branch of

the company. Different sales areas can use one sales

office
 Example – When the sales organization and distribution
channel are same but division is different (e.g. Home
Appliances and Consumer electronics), the sales areas are
different but still sales group associated with these divisions
can use the same sales office.
 Note - Use of sales office in SAP is optional unlike sales area.

 Sales group – This is the grouping of sales persons.

One sales group can be associated with different
sales offices as in business a sales group taking care
of one product family can work for different sales
office.
 Integration

 Integration with other modules

 Assigning of sales organization to company

code (Integration with FI)

 In Business, all sales transactions need to be
posted in Finance; therefore it is necessary that
sales organization should be assigned to company
code, which is the legal entity.


Use of division in sales area setup
(Integration with Logistics general)
 Integration
 Integration with other modules
 Assigning of plant to sales organization and

distribution channel (Integration with MM)

For delivery of material from a plant, that plant has to
be assigned to the sales organization and distribution
channel in which order is created.
 Example - If for all orders of distribution channel, “direct
sales” should be delivered through factory then it must be
assigned to the combination of the sales organization and
distribution channel, “direct sales”, otherwise system will not
allow delivery from the factory plant.
 Pre-requisite – Definition / Assignments in enterprise
structure
 Define Company code (FI accounting)
 Define Plant and assign to company code (LG)
 Define Division (LG)