SAP Sales And Distribution

Company Code

Legal entity and independent accounting unit

At company code level, you create:

- balance sheets required by law
- profit and loss statement

For a company code, a complete independent accounting unit can be represented as the smallest organizational unit
of external accounting.
This includes the entry of all accountable transactions and the creation of all proofs for a legally required individual
account closing, such as the balance sheets and the profit and loss statement.

Examples of a company code include a company within a corporate group, ora subsidiary.

Sales Organisation

Responsible for :

 distributing goods and services

 negotiating sales conditions
 product liability and rights of recourse

The sales organization is an organizational unit in Logistics which groups the enterprise according to the
requirements of sales and distribution.
A sales organization is responsible for sales and distribution of materials and services.
Therefore, it is also liable for the sold products and responsible for the customers' rights of recourse.

The sales organization is also used to take, for example, a regional, national or
international subdivision of the market into account.

A sales organization is uniquely assigned to a company code. More than one sales organization can be assigned to a
company code. To use the sales and distribution functions in the system, you need at least one sales organization.
In the sales statistics, the sales organization is the highest summation level.
All sales and distribution documents, that is, all orders, outbound deliveries, and billing documents, are assigned to
a sales organization.

Distribution Channel

is a means through which sales materials reach the customer

• represents your strategies to distribute goods and/or services to
your customers
• Examples: wholesale trade, retail trade, internet trade, and so on

The distribution channel characterizes the way in which goods and services are
distributed.
Several distribution channels can be assigned to sales organizations. To use the sales and distribution functions in
the system, you need at least one distribution channel.
For example, you can:
Detail responsibilities
Carry out flexible price structuring
Differentiate sales statistics

Division

You can group materials and services with the division. Several divisions can be assigned to a sales organization. To
use the sales and distribution functions in the system, you need at least one division.
A division can represent a certain product group, for example.
Therefore, you can for example, restrict price agreements with a customer to a certain division. In
addition, you can conduct statistical analysis by division.

Sales Area

A sales area is a combination of the sales organization, distribution channel, and division.
It defines the distribution channel a sales organization uses to sell products from a certain division.
Each sales and distribution document is assigned to exactly one sales area.
This assignment cannot be changed.
A sales area can belong to only one company code. This relationship is created by assigning the sales organization.
When processing sales and distribution documents, the system accesses various master data depending on the sales
area.
This master data includes, for example, customer master data, material master data, prices, and discounts. The
system also carries out a number of checks concerning the validity of certain entries according
to the sales area.

Plant

The plant a location where material stock is kept and could, for example, represent a production facility in the
system.
The plant and storage location are organizational units that can be used by all logistic areas of the system.
Materials management is primarily concerned with the material flow. From a materials management point of view, a
plant is, above all, a location where material stock is kept.
In production, a plant can represent a manufacturing facility.
In sales and distribution, a plant represents the location from which materials are distributed and services are
provided and corresponds to a distribution channnel. The relevant stocks are kept here.
The plant has a central function in sales and distribution:
To use the sales and distribution functions in the system, you need at least one plant.
Each plant is uniquely assigned to a company code.
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A plant can be assigned to several combinations of sales organizations/distribution channels, and vice versa.
The plant is essential for determining the shipping point.

Shipping Point

Shipping is an integrated module of sales and distribution processing. The

shipping point is the highest-level organizational unit of shipping that controls
your shipping activities. Each outbound delivery is processed by exactly one
shipping point.
The shipping point can be a loading ramp, a mail depot, or a rail depot. It can
also be, for example, a group of employees responsible (only) for organizing
very urgent deliveries.

To create sales order

Logistics--> Sales and Distribution -->Sales--> Order--> Create

Inquiry and Quotation

Inquiries and quotations help you to determine important

sales related data and can be saved as documents. lr-the customer then places an
order, this data can be accessed.

Use this presales information to plan and evaluate your marketing and sales
strategies and as a basis for establishing long-term business relationships with
your customers, for example by:

tracking lost sales

recording presales data to help negotiate large contracts
selling goods and services to large organizations that require documentation of the entire process.

Standard orders normally contain:

- Customer and material information
- Price information for all financial statement items
- Information about delivery dates and delivery quantities
- Information about shipping processing
- Information about Billing

Sales Order

A sales order is an electronic document that captures and records your customer's
request for goods or services.

The sales order contains all necessary information to process the customer's request throughout the whole process
cycle. The sales component thus automatically suggests data from master records and control tables that you
previously put aside.
As a result, possible input errors occurring during sales order processing and entering of redundant data is avoided.

In this process step in Sales and Distribution, you

can
check the availability of the ordered goods and
11 transfer the requirements to materials planning.
Materials planning (MM) organizes and monitors the
actual procurement process.
This can include
Inhouse Produced and/or
External purchased

Procurement
The way in which a material is obtained for a customer order can depend on the material itself as well as on the sales
transaction. The procurement (oan, for example: result from available stock
be guaranteed by replenishment (purchase requisition or purchase order, planned order or production order, for
example) trigger a make-to-order production order the outbound delivery via external suppliers (third-party business
transaction) organize the outbound delivery via another warehouse (stock transfer).

Shipping

Shipping processing in Sales and Distribution begins when you create the delivery document. The delivery
document controls, supports and monitors numerous subprocesses for shipping processing, such as:
(Optional) picking and confirming (transfer orders)
(Optional) packing
(Optional) planning and monitoring of transport (shipment document)
Posting the goods issue (goods issue documents)

Creating a delivery document includes copying information from the sales order,
such as the materials and quantities. onto the delivery document.
Creating a transfer order includes copying data from the delivery document to the
transfer order for processing within the warehouse. The transfer order is essential
for controlling the movement of goods within your warehouse. The transfer order
is based on a simple principle: where you are taking goods from and to, within
your warehouse.
The posting of the goods issue can bring about a change based on a quantity basis
as well as on a value basis in stock. Value-based changes are made to the relevant
balance sheet accounts in financial accounting.

Billing

Billing
Creating a billing document includes copying information from the sales order and
the delivery document onto the billing document As a result, delivery items and
order items (services, for example) can be models for the billing document.
The billing document serves several important functions:
It is the sales and distribution document that acts as the basis for creating
invoices.
The billing document serves as a data source for financial accounting to help
you to monitor and process customer payments.
When you create a billing document, the G/L accounts are nonnally determined
automatically and the relevant data is posted.
The system carries out the following:
with
a debit posting on the customers receivables account
a credit posting on the revenue account.

A sales document is always created within a sales area.

one or more inquiries and/or quotations can be reference documents.
a quotation can lead to several sales orders.

Sales Document Structure

Sales Document Structure

A sales document is divided into three levels: header, item, and schedule line.
The data is distributed across these levels as follows:
Sales document header
The data for the document header is valid for the entire document. This
includes, for example, customer-related data.
Items of the sales document
Each item in the sales document contains its own data. This includes, for
example, data about materials and quantities ordered.
Each sales document can contain several items whereas the individual items
can be controlled differently. Examples include material item, service item,
free-of-charge item or text item.
Schedule lines of document items
Schedule lines contain delivery quantities and delivery dates. They clearly
belong to an item. Every item that is to include an outbound delivery in the
further sales and distribution process must possess at least a schedule line.
The item can have several schedule lines, for example when the quantity
ordered is to be delivered in several partial deliveries at different times.

Structure of Delivery Document

A delivery document is grouped into two levels: header and item. The data is
distributed across these levels as follows:
Delivery document header
The data for the document header is valid for the entire document. This
includes, for example, data for the ship-to party and deadlines for shipping
processing.
Delivery document item
Each item in the delivery document contains its own data. This includes, for
example, data about the material, quantities, weights, and stock information.
Each delivery document can contain several items whereas the individual
items can be controlled differently. Examples include material items,
free-of-charge items, or text items.

Picking
Warehouse
number?

You create a transfer order for an outbound delivery.

A transfer order is generated for a warehouse number. During this process, only
the deliveries that are necessary for picking are taken into account. The system
copies the relevant data from the delivery.
The system can combine more than one outbound delivery in a group of transfer
orders provided that the same warehouse number is used. Selection of outbound
deliveries can be further restricted via the picking date and the choice of certain
shipping points, for example.
To optimize picking, you can create picking lists that contain materials from
multiple outbound deliveries. To relieve the work for the picker, you can sort
the list according to storage bin and material and also calculate the quantities
per material.
The system can create transfer orders either on-line or as a background job to be
executed during off-peak hours.

Posting Goods Issue

Valuated
stock
When the goods issue is posted, the following is carried out automatically:
The quantity in inventory management and the delivery requirements in
materials planning are updated.
The value change in the balance sheet accounts for inventory accounting is
posted (the postings from the relevant accounting document are based on the
cost of the material).
The system creates further documents for Financial Accounting.
The billing due list is generated.
The status in all associated sales documents is updated.

Creating a Billing Document

You can create an invoice for a single delivery or sales order.

The system can combine a number of outbound deliveries in one billing document
provided that they have the same characteristics, such as:
Payer
Billing date
Destination country

Effects of Billing Document

When you save the billing document, the system automatically generates all
the required documents for accounting. The system carries out a debit posting
in accounting on the customer receivables account and a credit posting on the
revenue account.
The accounting document identifies all the subsequent postings in financial
accounting that refer back to pricing in SD, such as the receivable on customer
accounts or the obtained net sales and taxes on the relevant G/L accounts.
When you save the billing document, the system can automatically generate
further documents for Financial Accounting (for the Controlling components as
well as for profitability analysis, for example).
The following also occurs when the billing document is posted:
The status in all related sales, delivery, and billing documents is updated
The sales statistics in the sales information system are updated
The data regarding the consumption of the customer's credit limit is updated

For sales order processing, you require the mandatmy partner functions sold-to
party, ship-to party, payer, and bill-to party. In the course of processing a sales
order, they can differ from each other or can be identical.
Sold-to pmiy: places the order.
Ship-to party: receives goods or services.
Bill-to party: receives the invoice for goods or services.
Payer: is responsible for paying the invoice.

Shipping point

The shipping point is the organizational unit in the system that is responsible
for processing shipping.
To be able to give the customer a delivery date for an ordered item, the system
must take into account all the required lead times for the different shipping and
transportation subprocesses.
For the shipping point, you can define the times required for preparing and
packing the goods.

The system tries to determine a shipping point for every item to be delivered.
The system uses three fields as search keys for determining the shipping point
automatically. This data is normally defined in the following master records:
Shipping condition from the sold-to party (view: Shipping)
Loading group in the sales-specific material data (view: Sales: General/Plant
Data)
Delivering plant- see the slide Determining Delivering Plant Automatically
Hint: The shipping conditions can be used to define in the system the
delivery type requested by the customer.
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Determining the Route Automatically

The system tries to determine a route for every item to be delivered.
The system uses four fields as search keys for determining the route automatically.
This data is normally defined in master records and in Customizing:
Departure zone in Customizing for the shipping point
Shipping condition from the sold-to party (view: Shipping)
Transportation group in the sales-specific material data (view: Sales:
General/Plant Data)
Transportation zone in the general data for the ship-to par(y

The following data is used in shipment scheduling:

Order date: date on which the order is placed
Material availability date: date by which a sufficient quantity of goods must
be available for picking and packing
Loading date: date on which the goods picking and packing process is
completed (and the mode of transport is available) so that loading can begin
on time
Goods issue date: the date on which the goods must leave the delivering
plant so that they reach the customer on the agreed date
Delivery date: date on which the goods arrive at the customer. A
differentiation is made between:
Requested delivery date: date on which the customer would like the
goods to arrive
Confirmed delivery date: date on which the goods receipt is confirmed
for the customer

For collective Delivering

There are fields in master data and in the sales document where you can store
customer defaults for processing deliveries.
If the customer requires complete delivery, the order should be delivered in
one single delivery. All items should be delivered at the same time. When
creating an outbound delivery, if all of the order items cannot be shipped
with the full order quantity, you receive a warning that the customer requires
complete delivery.
If the customer does not require complete delivety, you can define a partial
delivery agreement with the customer.
If the customer allows orders to be combined, orders are combined in
outbound deliveries when using the delivery due Jist. Combining items from
different sales orders is only possible if the items have several common
characteristics, for example:
Shipping point (goods issue from the same place in your enterprise)
Date that delivery is due (date on which shipping processing should
l:iegin, either materials availability date or transportation planning date)
Ship-to party (outbound deliveries have the same destination)
Route (same method oftransp01t and route)
Incoterms ("International Chamber of Commerce" terms of liability
for freight in-transit).

Picking

Picking is carried out when transfer orders for triggering and monitoring stock
movements are generated. The items in the transfer orders contain the materials
and quantities to be picked, which correspond to the delivery quantities.
From the transfer order, you can print the pick list for use in the warehouse.
Picking can be confirmed automatically or in a separate processing step.

The system controls the creation of transfer orders via the shipping point, the
selection data (picking date) and other criteria. You receive a list of the deliveries
that meet your selection criteria. In this list, you can make your selection more
precise using sorting and filtering.

Availability Check in the Sales Order

On the Sales and Distribution tab page in the material master you can: enter in
Gen./Plant in the availability check field, which and/or what type of availability
check should be carried out for this material during order processing.

The material availability date is determined from delivery scheduling. On this

date, enough material has to be available in time for delivery to the customer for
their requested delivery date.
The system calculates this date, working backwards from the customer's required
delivery date.
The system calculates the time required for picking, packing, loading and
transporting the goods.

Tha availability check is carried out in plant at item level.

The system accesses information in the following order to propose the standard
delivering plant:
1. Customer-material information
2. Ship-to pm1y customer master record
3. Material master record

The availability check includes:

Current stock
Planned inward movements (such as purchase orders, purchase requisitions,
planned orders)
Forecast outward movements (such as existing sales orders, deliveries)

The replenishment lead time can be specified for each material.

Trading goods: planned delivery time+ goods receipt processing time .
Finished goods: in-house production time.

An item category can influence, for example:

Whether the system runs automatic pricing
Whether the item appears on an invoice
Which fields are recorded in the incompletion log if they were not entered
in the order
Which partner functions belong to the item
Which text types belong to the item
Whether the item appears on a delivery
Whether you can create schedule lines for the item

Item Category Determination Normal Item

The item category in the sales document is found using the sales document type
and the item category group from the material master, for example.
The item category group is maintained in the material master on the Sales: sales
org. 2 tab page.
Another item category from the one in the standard order is found for a material
with the item category group NORM.

Scheduling Agreements
A scheduling agreement is an outline agreement between you and a sold-to party
that is valid for a certain period oftime. The scheduling agreement contains fixed
delivery dates and quantities.

When you enter schedule lines for an item in the scheduling agreement, the system
adds up the quantities that have already been entered and compares them to both
the target quantity and the quantity already shipped. This gives you an overview
of all the open quantities.
If the quantity in the schedule lines exceeds the target quantity, the system issues a
warning message.
If the customer requires it, you can process invoices periodically- for example,
once a month. All deliveries due for the billing document are combined in a
collective invoice

Quantity Contracts
A contract is an outline agreement between you and your customer that is valid for
a certain time period. The contract does ~n.tain_any scheduleJillS'.~_<Ie_livery
qyaQ!iti!'~,.!'r c!elivery dates. The same functions are available in contracts as in
orders. You can also agree on special price agreements or delivery times.
The customer fulfills the contract with individual releases. Schedule lines are
created in the release order when it is placed. The release order is then processed
like a standard order. Any special agreements regarding prices or delivery
deadlines are copied from the contract.
Release orders are created with reference to a contract. This generates a document
flow record that allows you to update released quantities and values in the contract.
In copying control, you decide which types of sales documents can be used as
release orders from a contract.