SAP R/3 Training

Sales to cash overview – from Contract to Invoice

Dilip Sadh

AGENDA
• Targets of the training • Organizational elements in sales • Master Data in sales

• The sales process - overview
• Contracts and sales orders • Deliveries, picking and goods issue

• Billing

Targets of the training

Dilip Sadh

• To show you how to work with SAP R/3. • To show you the most important, most need and basic functionalities of SAP R/3. • To show you how processes are represented in SAP R/3. • We are not going to show you special Q8 processes and functionalities.
• The training is set up on a general CGEY’s SAP Oil &Gas trainings system and therefore e.g. no Q8 specific customer or material mater data are used. • CGEY’s SAP Oil & Gas trainings system represents one possible but practice-proven solution how to run oil and gas business.

• Organizational elements in sales – Sales area

- Sales organization
- Distribution channel - Division

- The sales office organization
– Plant – Shipping point

Organizational elements in sales
Sales area

Dilip Sadh

•A combination of sales organization, distribution channel and division.
•All data relevant for sales can be defined per sales area, e.g. master data, sales documents,etc. •Generally analyses are carried out per sales area. They can be used as selection criteria. •Sales areas are adapted to company codes. A company code represents a legal entity for which internal and external reporting is carried out (a balance sheet and P&L are required). •Sales Areas can be defined for any combination of sales organization, distribution channel, and division.

Organizational elements in sales
Sales organization •The sales organization is the selling unit in the legal sense. •Responsible, e.g. for product liability and other recourse claims made by customers. •Regional subdividing of the market can also be carried out by means of sales organizations.

•Each business transaction is processed within it.
•It is assigned to a company code where sales revenues are recognized in the chart of account. •It is required to have at least one sales organization per company code. •It is the highest summation level for sales statistics.

Organizational elements in sales
Distribution channel •Distribution channel •Within a sales organization a customer can be supplied through several distribution channels. •The distribution channel is the unit through which saleable materials or services reach the customers. •Typical distribution channels are, for example, wholesale trade, retail trade, industrial customers or direct sales from plant. •The distribution channel is assigned to one or more sales organizations.

Organizational elements in sales
The Division •Division •The Division is used primarily to split the organization by product e.g. Fuel, Lubes. •Together with the sales organizations and Distribution Channel, the Division stores it’s own master data for customers, materials and pricing. •For every division you can make customer-specific agreements on, for example, partial deliveries, pricing and terms of payment. •Within a division you can carry out statistical analyses or set up separate marketing.

Organizational elements in sales
Overview

Company code
S A L E S
A R E A S

800 10 1000 20 01 10

Sales organization Sales channel Division
01 10 02

2000 10 01

3000

20 02 03

Organizational elements in sales
The sales office organization •The sales office structure reflects the organizational hierarchy responsible for sale and comprises of the following entities… •Sales office •Sales group •Sales employee

•The use of the sales office structure in SAP is optional.
•As oppose to the sales organizational structure, the sales office structure does not impact the structure of master data nor the pricing functionality.

Organizational elements in sales
The sales office / The sales group •The sales office
•A sales office typically has a physical address but can also be a logical unit. •The sales office is assigned to one or more sales areas. Sales employees are assigned to a sales office. •The sales office acts as a selection criterion for lists of sales documents. • The sales group •The sales group is a cross sales office subdivision of the sales office. •The sales group is assigned to one or more sales offices. •Sales employees are assigned to a sales group. •The sales group acts as a selection criterion for lists of sales documents.

Organizational elements in sales
The sales employee •The sales employee processes business transactions within the company. •The sales employee is assigned to a sales organization, a sales office and a sales group. •The sales employee can be linked to the customer master data and sales documents.

Organizational elements in sales
Plant and Shipping points
•Plant •Originally an organizational element out of Materials Management where materials are produced and / or are stored. •In customizing, plants are assessed to company code and to sales organization. •A plant can be assessed to more than one sales organization, but never can be assessed to more then one company code.

•Shipping point
•Is responsible for scheduling and processing deliveries to customers, as well as replenishment deliveries to your own warehouses.

•A delivery is always carried out by one shipping point only.
• Shipping points are defined dependant from: the delivering plant, the type of shipping (e.g. train, truck) and the loading equipment necessary.

Organizational elements in sales
Plant assingnment

Company code 1
plant 1
plant 2

Company Code 2
plant 4 plant 5

plant 3

SO 1

SO 2

SO SO 33

• Master data in sales – Overview customer and material master data

– Customer master data
- Customer partner functions - Account groups

- Organizational levels
– Material master data - General data - Sales data

Master data in sales
Overview customer and material master data I

Ship-to party
Bill-to party Customer

Sold-to party Payer

Material

Products Services

Master data in sales
Overview customer and material master data II •Master data are time-stably data. •The integration of all customer and material data in a single database objects eliminates redundant data storage. Areas such as order processing, delivery, invoicing, purchasing, inventory management, etc. can all use the same data. •A single, correct and complete customer master record reduces data entry and potential errors for order, delivery and invoice processing.

Master data in sales
Customer master data – partner functions I

Sold-to party Ship-to party Bill-to party

Business partners
Payer Others

Master data in sales
Customer master data – partner functions II •Have to be created for all business partners. Standard Business partners in sales and distribution are defined as sold to party, ship-to party, payer and bill-to party.
•Sold-to Party: For the sold-to party, data on sales is necessary. In many cases, the company which places an order for the delivery of goods or the rendering of services is at the same time ship-to party, payer and bill-to party. For this reason the function sold-to party includes all these other functions. •Ship-to Party: For the ship-to party only data required for shipping is necessary (for example, unloading point and goods receiving hours).

Master data in sales
Customer master data – partner functions III
•Payer: A payer is a company or person who settles the invoices for delivered goods or rendered services. For the payer data on billing schedules and bank data is necessary.
• Bill-to

Party:

For the bill-to party the address is required as well as data on output and possibly data on electronic communication. •Other: Other partners can be created e.g. one time customer, sales employee etc.

Master data in sales
Customer master data – account groups I

Possible partner functions
Others Payer Bill-to party Ship-to party Sold-to party

Account groups
Other (000X) Payer (0003) Bill-to party (0004) Ship-to party (0002) Sold-to party (0001)

Master data in sales
Customer master data – account groups II •The account group ensures that for the different partner functions of a customer only the necessary screens and fields are displayed for input in master data. •Therefore different partner functions can have different account groups, e.g. one account group for the sold-to party and one for the ship-to party. •The account group also controls which partner functions the customer can transfer into a document.

Master data in sales
Customer master data – organizational levels I
Finance module
Client Level General data: - address - marketing ..... Company Level

Financial data: - account mgmt - payment trans .....

Customer
Sales Area Level Sales and dist. data: - sales, shipping - billing, output ..... Credit control Area Credit mgnt: - credit status - credit limit .....

Master data in sales
Customer master data – organizational levels II •Customer data is important for both - accounting department and sales and distribution department. •To avoid data redundancy, accounting data and sales and distribution data is stored in one master record but at different organizational levels.
•Data at client level (general data) – General data, like address and telephone number, etc., is maintained for every customer. – General data are identified only by the customer number, not by company code or sales area.

Master data in sales
Customer master data – organizational levels III
• Data at sales area level – Sales and distribution data is of interest for the sales and distribution department, e.g. data on pricing or shipping. – Data only applies to one sales area, and therefore is dependent on the sales structure (sales organization, distribution channel and division). – One customer can be defined for more then one sales structure.

Master data in sales
Customer master data – organizational levels IV
• Company level – Company code data is of interest for the accounting department. It includes, for example, information on insurance or account management. – This data applies to only one company code. • Data at credit control area level

– Credit management data is maintained in a separate view of the customer master, at the credit control area level.
– A credit control area is defined for one or more company codes. Credit management data is important for credit limit checking in sales order processing.

Master data in sales
Material master data – general data and sales data I

General data Sales spec. data

Data depending on Sales area / organization

Plant specific

Master data in sales
Material master data – general data and sales data II •Some material data is valid at all organizational levels, while other data is valid only at certain levels. •In sales especially plant-specific material data and data on sales area and sales organization level is important.
•Data on plant level: All data that is valid for a particular plant, as well as for the storage locations. •Data on sales organization level: All material data relevant to sales is stored at sales organization level. This includes, for example, grouping terms such as account assignment group and pricing reference material.

• The sales process – Overview

- Process sales out of own stock
- Process sales out of third-party stock – Sales documents

- Structure of sales document
- Views in sales document - Sources of data in sales document – Document flow

The sales process
Overview I – own stock

customer md

material md
SAP
Delivery condition transpotation

Shipment planning

Shipment planning

Contract

Standard Order creation

Delivery Creation

Delivery condition pick up

Goods issue

FI

Invoice
CO

Reschedule delivery date and change sales order

Availability check

Rescheduling

The sales process
Overview II – third-party stock

customer md

material md

SAP

Contract

Standard Order creation

FI

Billing Release

Billing
CO

MM

Purchase Requisition

Purchase Order

Invoice Verification

Invoice

Goods Receipt

The sales process
Sales document – structure of sales document
Data valid for the whole document, e.g. Sales data, conditions Data just valid for the item, e.g. Sales data, conditions

Head Item 1

Schedule line 1
Item 2 Schedule line 1 Schedule line 2
Data relevante for shipping and supply (delivery time and delivery quantity)

The sales process
Sales document – view of sales document

Overview
Head Item Schedule line

Details
On header level On item level

The sales process
Sales document – sources of data in sales document

Data out of Master data
By system determined data Data out of Former documents

Head Item 1 Scedule line 1 Item 2

Scedule line 2

The sales process
Sales document – document flow I

Contract

Sales order

Delivery

Invoice

Retoure

Delivery

Credit note

Documentflow in sales order
Contract . Sales order .. Delivery ... Invoice .. Retoure ... Retoure delivery .... Credit note

The sales process
Sales document – document flow II •A business process is an order of process steps. In SAP each step is represented in a document. Process chains are described in the document flows. •Document flows exist on document level and on item level. •In document flow for each document a status is listed, e.g. for sales orders the delivery status; for deliveries the picking status and invoice status.

• Contract and sales order entry – Contract and sales order document types

– The Contract
– The sales order – Data in contract and sales order

- Determination of plant
- Determination of shipping point - Availability check

Contract and sales order entry
Contract and sales order document types – overview I •Several standard SAP document types exist. These document types can be completed by defining special document types. •Via the document type several functions can be activated, e.g. price calculation, availability check, credit limit check, etc. •Document types have to be linked to sales areas.

Contract and sales order entry
Contract and sales order document types – overview II •Mainly two kinds of standard SAP contracts exist. •Quantity contracts:
– Defined quantity in a defined period of time. – No special defined order and delivery dates or quantities.

•Scheduling assignments:
– Clearly defined order quantity and time.

•EXTRA: Special Oil contracts are Spot and Term contracts. •Spot contract: generally short period of validity (one month) •Term contract: generally long period of validity (one year) •In addition to standard contract an oil contract has an quantity schedule. Call-off quantities are checked against quantity schedule lines in contract.

Contract and sales order entry
Contract and sales order document types – overview III •Mainly three kinds of standard SAP sales order types exist
• Standard order: – Typical document with data coming out of master data or former documents. • Rush order:

– Pick up or delivery of material directly.
– Billing later on.

•Cash sales
• Sold-to party receives the material directly.

• Material has to be paid when placing the order.

Contract and sales order entry
Contract and sales order document types – overview IV •EXTRA: Special oil sales orders are call-offs referring to contracts. These call-offs – as well as oil contracts – has quantity schedules. • Automatic call-off: via interface to stock system automatically created call-off generally referring to term contract. •Nomination: manually created call-off referring to a term or spot contract.

Contract and sales order entry
The contract I

Contract

Sales Sales order Sales order Sales order order

Sales Sales order Sales order order Delivery

update

KM – standard contract ZKM1 – special oil term contract ZKM2 – special oil spot contract

Contract and sales order entry
The contract II •A contract is a general agreement between vendor and customer valid within a defined period of time. •In a contract a special price for a defined quantity of a defined material is confirmed. •No special defined points of time for delivery.

•Call-offs on contract which update it.
•In contracts the same functionalities like in sales order are possible. •EXTRA: In oil contracts the total quantity is divided into subsets in quantity schedule.

Contract and sales order entry
The Sales order

Sales Creation without Sales order reference to contract order

delivery

Creation with reference to contract

Contract

Sales order
update

delivery

OR – standard Order ZAB1 – automatic call-off without transportation (oil) ZAB2 – automatic call-off with transportation (oil) ZAB3 – Nomination, i.e. Manual call-off (oil)

Contract and sales order entry
Data in contract and sales order – determination of plant I

Customermaterial information record

Plant defined

Sales order

Not defined
Master data Ship-to party

Item 10
Plant defined

Item 20

Not defined
Material master data

Item 30
Item 40
Plant defined

Contract and sales order entry
Data in contract and sales order – determination of plant II •First system checks if a plant is determined in customer-material information record. If there is one this plant is proposed in contract / sales order. If not … •System checks if a plant is determined in mater data of ship-to party. If there is one this plant is proposed in contract / sales order. If not … •System proposes the plant which is determined in material mater.

Contract and sales order entry
Data in contract and sales order – determination of shipping point I

Shipping condition

Loading group

Plant

Shipping point (proposed)

possible Shipping point

01

crane

0001

0002

0003 0004

Ship-to party/ sales order

Material

Sales order item

Contract and sales order entry
Data in contract and sales order – determination of shipping point II •Shipping point is determined pro-item. •System proposes a shipping point via
• Shipping condition (out of sales order / contract) • Loading group (out of material maser data) • Plant (out of sales order)

•Therefore in customizing one or more shipping points have to be determined for each combination of these data.
•Shipping point is relevant for delivery. A delivery is always carried out by one shipping point.

•In delivery a shipping point can not be changed anymore.

Contract and sales order entry
Data in contract and sales order – pricing conditions I
Displayed in system

Price elements

Condition types -Price list -Material price -Customer specific price -To customer -To material -... -Incoterm part 1 -Incoterm part 1+2

Prices Discounts and surcharges Fright

PR00 . . KF07 KF04 . . KF00

Taxes

Contract and sales order entry
Data in contract and sales order – pricing conditions II •Condition types are stored in condition records. •Condition records allow you to store and retrieve pricing data in the system. •All condition types you want to use for automatic pricing must be stored in the system as condition records. •Condition records are defined as a function of a combination of fields.

Contract and sales order entry
Data in contract and sales order – pricing conditions III

Condition type PR00 0001 01 1500066 40303384

value

200 EUR per pc

Key Combination Sales Organization Distribution Channel Customer Material

Contract and sales order entry
Data in contract and sales order – availability check I

1
Sales or. date
Mat. Availab

7
Req. del. date Mat. Availab

Entry

Incoming order

Backward scheduling

Req. Del. date Forward scheduling

100 + 50 + 40

60 +

delay

No Availability!! 100

20 pc quantity; Complete delivery

Confirmed delivery date

Issue

Contract and sales order entry
Data in contract and sales order – availability check II •Availability check without taken replenishment lead time into account
•Incoming order today with a requested delivery date at 7th. •When carrying out a backward scheduling, at systems determined date, no goods are available. •Because the customer wants a complete delivery, a quantity of 20 pc becomes available at stock shortly before requested delivery date, when 60 pc are incoming. •When carrying out forward scheduling the system determines a confirmed delivery date later than requested.

Contract and sales order entry
Data in contract and sales order – availability check III

1
Sales or. date
Mat. Availab

7
Req. del. date Mat. Availab

Entry

Incoming order

Backward scheduling

Req. Del. date

100 +

Forward scheduling
Replenishment lead time 20 + 20 No Availability!! 100

delay
20 pc quantity; Complete delivery

Confirmed delivery date

Issue

Contract and sales order entry
Data in contract and sales order – availability check IV •Availability check with taken replenishment lead time into account
•Incoming order today with a requested delivery date at 7th. •When carrying out a backward scheduling, at systems determined date, no goods are available. •So at same time when order comes new goods are ordered. •Because of taking replenishment lead time into account, the 20 pc can be delivered earlier compared to the case when availability is checked without observing replenishment lead time.

• Delivery, picking and goods issue – Ways of delivery creation

– Document structure
- Header data / Item data

– Relation between sales order and delivery – Delivery scheduling
- Complete delivery / Partial delivery / Order combination

– Picking

– Goods issue

Delivery, picking and goods issue
Ways of delivery creation
1

Creation of a delivery with direct reference to a sales order in system

Sales order

Delivery

2

Creation of delivery by means of delivery due list
Delivery due list

Sales Sales order Sales order Sales Sales order Sales order order Sales order Sales order order

Delivery

Delivery

Delivery, picking and goods issue
Document structure - Header data / Item data
•Shipping point •Data about delivery scheduling and transportation scheduling (e.g. Goods issue date) •Weights and volumes of the entire outbound delivery •Sold-to party and the ship-to party numbers •Route

Header Item 1 Item 2 Item 3

•Material number •Delivery quantity •Plant and storage location specifications •Picking date •Weights and volumes of the individual items

Delivery, picking and goods issue
Delivery scheduling I

Date of order

Material availability date

Transportation planning

Loading

Goods issue

Delivery date

Transit time Loading time Lead time for transportation planning Pick / pack time

Delivery, picking and goods issue
Delivery scheduling II • You must start picking and packing activities on the material availability deadline. This deadline must be selected early enough in advance so that the goods are ready by the given loading deadline. •The transportation scheduling deadline is the date on which you must start to organize the transportation of the goods. This deadline must be selected early enough to ensure that the means of transport is available by the loading deadline. •The loading deadline is the date on which the goods must be available for loading and on which all vehicles that are required to ship these goods must be ready for loading. After the time required for loading the goods (loading time) has expired, goods issue can be carried out. • The goods issue deadline is the date on which the goods leave the company in order to arrive punctually at the customer location. •The delivery deadline is the date on which the goods are to arrive at the customer location. The difference between the goods issue deadline and the delivery deadline is calculated from the transit time required for the route between the delivering plant and the customer.

Delivery, picking and goods issue
Relation between sales order and delivery I
1

Complete delivery
Sales order 10 pc Del.date 15.09. Delivery 10 pc Del.date 18.09.

2

Partial deliveries
Sales order 10 pc Del.date 15.09. Delivery 4 pc Del.date 15.09.

Delivery, picking and goods issue
Relation between sales order and delivery II

3

Sales order combination
Sales order 10 pc Del.date 15.09. Sales order 16 pc Del.date 15.09.

Delivery 26 pc Del.date 15.09.

Assumption: a) ship-to party is marked in master data for order collection. b) Same ship-to party in sales order one and two. c) Same delivery date and material availability date in sales order one and two.

Delivery, picking and goods issue
Picking I

Stock

Shiping point

Delivery creation Pick list

Delivery Del.quantity : 10 Pick quantity: 10

Pick quantity Feedback from picking

Delivery, picking and goods issue
Picking II • The picking process involves taking goods from a storage location and staging the right quantity in a picking area where the goods will be prepared for shipping. • Three ways of carrying out picking
• Automatically during outbound delivery creation • Routinely at certain times • Manually according to overviews of the day's workload.

Delivery, picking and goods issue
Goods issue

Store

Shipping point

Account 1

Inventory

Delivery 11 Goods issue

X

X

• Billing – Ways of invoice creation

– Billing document types
– Document structure - Header data / Item data

- Pricing conditions
– Billing methods - Individual billing / Invoice split / Collective billing

– Interface to FI / CO

Billing
Ways of invoice creation I (basic notes)
1

Sales order-related billing

Sales Sales order order

delivery

invoice

2

Delivery-related billing

Sales Sales order order

delivery

invoice

Billing
Ways of invoice creation II
1

Manual billing

Sales order

Delivery

Invoice

2

Creation of delivery by means of billing due list
Billing due list

Sales Sales order Sales order Sales Sales order Sales order order Sales order order Delivery

Invoice Invoice

Billing
Billing document types
Sales order Delivery Invoice

F1/F2

Order / Delivery related invoice

Credit memo request

Credit memo

RE/G2

Credit memo/credit memo for returns

Debit memo request

Debit memo

L2

Debit memo

Cancellation invoice

S1/S2

Cancellation invoice /credit memo

Sales order Delivery

Pro forma invoice

F5/F8

Pro forma invoice for sales order and delivery

Billing
Document structure - Header data / Item data
•Identification number of the payer •Billing date •Net value of the entire billing document •Document currency •Terms of payment and Incoterms •Partner numbers, such as the identification number of the sold-to party •Pricing elements

Header Item 1 Item 2 Item 3

•Material number •Billing quantity •Net value of the individual items •Weight and volume •Number of the reference document for the billing document •Pricing elements relevant for the individual items

Billing
Billing methods I
1. Individual billing
Delivery Sales order Delivery Invoice Sales order Delivery Invoice

3. Collective billing

Delivery

Invoice

2. Invoice split
Invoice Sales order Delivery Invoice Sales order Delivery

Billing
Billing methods II • Assumptions for invoice split
• In Customizing for copying control, you can specify requirements for splitting to prevent sales orders or deliveries from being combined into a collective billing document, e.g. Bill-to party.

•Assumptions for collective billing
• the header data appearing in the billing document must agree . • the split conditions specified do not apply.

Billing
Integration with Fi / Co I
Financial accounting (FI) • Ballance demands to debtors • General ledger • Gains • Losses • Accruals Invoice
Account determination

Controlling (CO)
• Profit center • Cost center • Extended general ledger • Projects • Make-to-order sales orders • Plant maintenance orders • Profitability analysis (COPA) • Cost collector

Billing
Integration with Fi / Co II – account assignment • The system can post entries in the billing documents automatically to the relevant accounts. To do this, it must first carry out account assignment. •Elements for account assignment:
• Chart of accounts of the company code • Sales organization • Account assignment group of the customer (from the customer master record, Billing screen, Account group field) • Account assignment group of the material (from the material master record, Sales 2 screen, Account assignment group field)

• Account key (from the pricing procedure)

•The system carries out account assignment using the condition technique.

Thank you for your kind attention!

Dilip Sadh