Basic Rules in SAP-Sales and Distribution Module

Basic Rules in SAP-Sales and
Distribution Module
Basic Rules in SAP-Sales and Distribution Module
SaIes Organization :
ResponsibIe for:
• Distribution of goods and services
• Negotiating Sales Conditions
• Product Liability and rights of recourse
• A sales organization is uniquely assigned to a company code
• Master data's are separately maintained for a sales organization
• All items in the Sales and Distribution document belong to a sales organization
Distribution ChanneI:
Means through which products and services reach the customer
A distribution channeI:
• Defines responsibilities
• Helps in achieve flexible pricing
• Differentiate Sales statistics
• A division is used to group products and services.
• A division represents a product line.
SaIes Area:
A Sales area is a combination of
• Sales organization
• Distribution Channel
• Division
Each Sales and distribution document is assigned exactly to one sales area.
A sales area can belong to only one company code.
Sales Organization
Distribution Channel

Sales Area
PIant and Storage Location:
Basic Rules in SAP-Sales and Distribution Module
• A Plant is a location where stock is maintained
• Plant and storage location are used by all logistic area of R/3 System
• A Plant is uniquely assigned to a company code
Shipping point:
• Shipping point is the highest level of organizational unit in shipping
• Each outbound delivery is processed by one shipping point
• Shipping points are assigned to a plant
• More than one shipping point can be assigned to a plant
Sales and Distribution is SAP begins with establishing customer relationship and ends with
invoicing for the delivery of goods or service provided to the customer .
A Standard sales transaction has the following flow:
The customer order management cycle begins with pre-sales activities.
A standard order in SAP contains:
• Customer and material info
• Pricing conditions
• Delivery dates and quantities
• Shipping info
• Billing Ìnfo
Inventory sourcing in SAP is taken care by
• Availability check
Shipping in SAP supports
• Outbound delivery creation
• Picking
• Packing
• Post Goods Ìssue
Basic Rules in SAP-Sales and Distribution Module
BiIIing in SAP supports
• Creating invoices for products and services
• Creating credit and debit memo
• Cancel previously posted billing documents
• Automatically transferring billing documents to accounting
When a billing document is created for a sales order we
• Credit the sales revenue account
• Debit the customer receivables account
SaIes Document
A sales document is grouped into three structures
• Header
• Ìtem
• Schedule Line
Outbound deIivery
A delivery document is grouped into two structures
• Header
• Ìtem
Several orders can be grouped into same outbound delivery if they have same
• Shipping point
• Delivery date
• Ship-to- address
• A transfer order is created for an outbound delivery
• A transfer order is created for a warehouse number
Basic Rules in SAP-Sales and Distribution Module
Post Goods Issue
When PGÌ is done the system
• Updates the quantity in inventory management and delivery requirements in materials
• Generates additional documents for accounting
• Adds the delivery to the billing due list
• Updates status in sales documents
We can group deliveries into single billing document if the deliveries have same
• Billing date
• Payer
• Destination Country
The effects of billing are
• Debit on the customer receivables account and credit on sales revenue account is
• Sales information system
• Sales statistics is updated
Master data in SAP
SAP SD has got the following main masters:
• Customer master
• Material master
• Condition master
• Output master
• Customer material information master
Customer master
Basic Rules in SAP-Sales and Distribution Module
GeneraI Data SaIes Area Data Company Code data
Tab pages Tab pages Tab pages
Address Order Accounting
Control data Shipping Payment
Payment terms Billing Correspondence
Marketing Partner functions Ìnsurance
Unloading points
Export data
Contact persons
The chart above shows detail on three main areas of customer master and the tab pages found
under each area.
MateriaI Master is maintained in different views and important views of sales and distribution are
• Basic data 1
• Sales Org 1
• Sales Org 2
• Sales : Gen/Plant
• Foreign Trade
• Sales text
SaIes document in SaIes and distribution mainIy controIs:
• Number range
• Ìtem No increment
• Reference mandatory
• Ìtem division
• Read info record
Basic Rules in SAP-Sales and Distribution Module
• Document pricing procedure
• Ìncomplete messages
• Alternative sales documents
• Delivery block
• Billing block
• Ìmmediate delivery
• Delivery type
• Billing type
• Proposed delivery date
• Lead time for delivery
• Proposed pricing date
PIant determination in SaIes and distribution:
To determine the plant in an order the system checks the master in the following order:
a) Customer material info. record of the sold-to ÷party
b) Customer master record of the ship-to-party
c) Material master record of the material
Shipping point determination
The following rule is used in determining shipping point in a sales order :
Plant + Shipping condition (Sold-to-Party) + Loading group Shipping point
Maintained in Material master Gen: Plant data
Route determination
Route determined using the following rule in Sales and Distribution (SAP)
Departure Zone of Shipping Point
Shipping condition (SoId-to-Party)
Basic Rules in SAP-Sales and Distribution Module
Transportation Group (MateriaI master)
Transportation Zone (Ship-to-Party)
DeIivery scheduIing:
As name denotes delivery scheduling is scheduling delivery for an order and it carries the
following important dates:
• Material availability date
• Transportation planning date
• Loading date
• Goods Ìssue date
• Delivery date
AvaiIabiIity Check in SAP:
• Availability check is carried out at item level for a plant
• Availability check is done on the material availability date
• Ìf material availability date is in the past the forward scheduling is done, if not backward
scheduling is done.
Item category determination in the order:
Ìtem category denotes the category to which the item belongs and the following rule is used for
determination of item category. Ìtem category controls the way in which item behaves in a sales
SaIes document type
Item category group (MateriaI master)
Item usage
Item category of higher IeveI item
Item category of the item
Item category in a saIes document mainIy controIs the foIIowing
Basic Rules in SAP-Sales and Distribution Module
• Relevance for billing of an item
• Billing block
• Pricing relevance
• Business data relevance item
• Schedule line allowed
• Ìtem relevant for delivery
• Returns
• Determine cost
• Credit active
• Ìncompletion procedure
• Partner determination procedure
• Structure scope (relevant for bill of material explosion)
• Value contract material
• Contract release control
ScheduIe Iine category:
Every item which has a delivery will have a schedule line and the schedule line category is
determined with the following rule:
Ìtem category + MRP type(Material Master) Schedule line category
ScheduIe Iine category mainIy controIs:
• Delivery Block
• Movement type
• Ìtem relevant for delivery
• Req/Assembly
• Availability
• Product Allocation
Copy ControI:
Copy control is normally set for
• Header
• Ìtem
• Schedule line levels
To control copying procedure we have
• Data transfer routines
• Copying requirements
• Switches
Pricing Procedure determination:
Pricing is an important component in SAP-SD. Once an order is entered taking into consideration
some major factors, the pricing procedure for the particular order is determined.
The major factors taken into consideration for pricing procedure determination is:
Basic Rules in SAP-Sales and Distribution Module
SaIes area
Customer Pricing procedure(Customer Master -SaIes area data)
Document Pricing Procedure(SaIes Document Type)
Pricing Procedure
What are the components of pricing procedure?
How is that a person shouId work on Pricing Procedure?
To start with first
Define a Condition tabIe:
What is a condition table?
A table where the key fields are data combinations for which messages are triggered (and offered
for processing).
For each data combination, there is a condition record in the table. The data part contains the
actual message.
As mentioned above a condition table is a table which carries key fields for picking up the prices.
Define Access Sequences
The access sequence is a search strategy which the SAP System uses to search for condition
records valid for a condition type.
For example, you can define for a price that the SAP System first searches for a customer-
specific price and then for a price list price.
• Ìf you define your own access sequences, the key should start with the letter Z since SAP
reserves this letter for the standard system.
• Do not change access sequences contained in the standard SAP R/3 System.
1. Check to what extent you can use the access sequences contained in the standard
SAP R/3 System.
2. Create new access sequences by copying a similar access sequence and changing it
according to your needs. Specify an alphanumeric key which may have up to 4 digits and
a textual description.
3. Maintain the accesses for the access sequence by specifying the condition tables in
the desired sequence. With the sequence, you define the priority of the accesses. You
can display combinations of key fields using possible entries.
Basic Rules in SAP-Sales and Distribution Module
4. Generating the accesses is no longer necessary as of 3.0, as this is carried out
automatically. You can generate the accesses manually, if required, by choosing
Ìn pricing, you use a customer-material discount. The condition records you create are based on
customer data from the document header and material data from each document item. The
discount is only valid for 2% of your customers, however. Normally, this would mean that the
system would needlessly search through every available item for 98% of your customers. Ìn this
case, pre step would improve system performance.
Define Condition Type
A characteristic of a condition. For example, in pricing, different condition types are used to
distinguish between a discount that refers to a net price and a discount that refers to a gross
Price elements are represented in the SAP system by condition types. Price elements can be, for
example, prices, surcharges, discounts, taxes or, freight, and are stored in the system in condition
You can, for example, define whether a discount is calculated as a percentage or a fixed amount
using the condition type.
You specify an access sequence in every condition type. Thus, you define which fields the SAP
system checks when searching for a valid condition record.
• The pricing procedure groups all condition types together which the SAP system is to
automatically take into account during pricing for a business transaction (see the section
"Define and assign pricing procedures").
Remember that you can only specify manually in a document those condition types which
are contained in the pricing procedure.
• You can change the outcome of pricing in the sales document manually. You can limit
options for changing a condition type in this ÌMG step.
• Ìf you define your own condition types, the key should start with the letter Z since SAP
reserves these letters for that purpose in the standard system.
• Do not change the condition types which are contained in the standard SAP R/3 System.
1. Check to what extent you can use the condition types contained in the standard SAP
R/3 System.
Basic Rules in SAP-Sales and Distribution Module
2. Create new condition types by copying a similar conditions type and changing it
according to your requirements. One reason for creating a new condition type is you may
require a calculation rule for a discount which is not available in the standard system.
Specify an alphanumeric key which can have up to 4 digits, and a textual description.
Specify an access sequence for the condition types. You do not need to specify an
access sequence for header conditions.
3. Maintain the detail screen of the condition type.
You can also assign a reference condition type if the condition types you are working with
are similar. Then you will only have to maintain condition records for the reference
condition type.
Ìn addition, you can define the upper and lower limits for the value of a condition at condition type
level. This way, you limit the amounts or the scale values in the corresponding condition records.
Define Pricing Procedures
The pricing procedure defines the conditions permitted for a document and the sequence in which
the system takes these conditions into account during pricing.
A standard pricing procedure is defined in the standard SAP system. Ìt contains conditions most
commonly used. These include material prices, discounts, and surcharges, such as freight, or
SAP Recommendation
• Define your own pricing procedures which contain only those condition types which you use.
Otherwise, the system makes un neccessary accesses to conditions.
• Do not change the pricing procedures contained in the standard SAP R/3 System.
1. Create new pricing procedures by copying a similar pricing procedure.
! Specify a key with up to 6 characters and a description.
! For a procedure, specify the condition types in the sequence of their usage.
Maintain the lines of the pricing procedure
2. Afterwards define the customer determination procedures for determining the
3. Define the document pricing procedures for determining the procedure.
4. Assign the procedure to the sales document types and billing types.
5. To determine the procedure, define the allowed combinations of:
! Sales area
! Customer pricing procedure
! Document pricing procedure
! Pricing procedure
Basic Rules in SAP-Sales and Distribution Module
The basis for shipping is delivery.
DeIivery document controIs the foIIowing in deIiveries
• Number range
• Ìtem no increment
• Storage location rule
• Route determination
• Text determination
• Delivery split
• Gen. packing material / item
• Order required
DeIivery item category controIs:
• Check min delivery
• Availability check
• Relevant for picking
• Storage location required
• Determine storage location
• Automatic batch determination
• Text determination procedure
Billing is the last phase in the SD process .Billing is the phase where the major integration of SD
and FÌ Module happens.
Billing document has got the following structure:
• Header
• Ìtem
BiIIing documents mainIy controI:
• No. range
• Posting block (Controls posting to accounting)
• Relevant for rebate
• Account determination procedure
• Account determination recon account
• Account determination
• Output determination procedure
Account Determination in SAP
Account determination in SAP-SD happens with the following rule
SaIes Organization
Chart of Accounts
Account assignment group -Customer
Account assignment group-MateriaI
Basic Rules in SAP-Sales and Distribution Module
Account Key
G/L account on which the postings has to happen.