Introduction

to
SD(Sales&Distribution)
Module

1
Sales & Distribution (SD)

SD FI
Sales & Financial
Distribution Accounting
MM CO
Materials
Mgmt. Controlling
PP AM
Production Fixed Assets
Planning
R/3 Mgmt.

QM Client / Server PS
Quality Project
Manage
-ment PM
ABAP/4 System
WF
Plant Main Workflow
-tenance
HR IS
Human Industry
Resources Solutions

2
SD Module…..
Sales and Distribution (SD) module helps optimize the tasks
and activities carried out in quotations, sales, delivery, and
billing using the following key elements:

(The R/3 Sales and Distribution system is a complete solution for handling sales, shipping
and billing tasks in any industry, and is a fully integrated component of the R/3
System.)

 Sales Orders
Delivery
 Billing
 External Revenue Reporting

3
SAP R/3 - SD Sub- modules

SD
Components

4
 SD- Functionalities
Billing
Sales •Billing Processing
•Customer •Rebate Processing
•Account Recognition
Inquiry/Quotation •Accounting Integration
•Order processing •Inter company Processing
•Sales Agreement
•Complaint Processing
•Backorder Processing
•Special Sales Scenario Foreign Trade
•Third party Processing
•General Foreign Trade
Processing.
•Periodic Declaration
Shipping •Legal Control
•Delivery Processing •Documentary Payments
•Picking
•Packing Sales Information System
•Goods Issue •Standard Analysis.
Route •Flexible Analysis
•Planning
•Early Warning System
•
Basic Functions
•Pricing
•Tax Processing
•Credit Management
•Availability Check
•Risk Management
•Free Goods
•Material Determination
•Product Selection
•Output processing
•Text Determination
•Partner Determination
Transportation
•Transportation Planning
•Shipment Execution
•Monitoring Shipments
•Shipment Cost Processing
SD Functionality
Order Processing

SD SO Sales Order LF Delivery F2 Invoice

Ship-To Party: C2 Payer: C3 Bill-To Party: C3
Sold-To Party: C1 Ship-To Party: C2
Delivery Date: 29.08.99 Invoice Date: 22.08.99
Payer: C3 Bill-To Party: C3
Picking Date 20.08.99
Loading Date: 21.08.99
Release Date: 22.08.99 Pos. MatNo. Inv.Qty Net Value
Pos. MatNo. Qty Req.Date Net Value
10 M1 7 700.-
10 M1 15 20.08.99 1‘500.-
20 M2 5 250.-
[Unit Cost (VPRS) = 70.-/Pc ]
Pos. MatNo. Del.Qty Pick-Qty ---------------
10 M1 7 7 Total Net: 950.-
SL-No. SL-Date Order Qty Conf. Qty
+ Taxes 10% 95.-
1 20.08.99 15 0 20 M2 5 5
========
2 29.08.99 0 7
Total: 1’045.-
3 15.09.99 0 8

Pos. MatNo. Qty Req.Date Net Value

20 M2 5 20.08.99 250.-
[VPRS = 30.-/Stk ]

SL-No. SL-Date Order Qty Conf. Qty Transfer Order

1 20.08.99 5 0
2 29.08.99 0 5
MM-WM: Warehouse
Picking From: Storage 005 Management
To: Storage 916

MM
Goods-Issue.
Document
Goods-Issue MatNo Qty MvTyp
MM-IM: Inventory
M1 7 601 Management

FI
M2 5 601

BALANCE-SHEET
Assets Liabilities
Docmt Account Debit Credit Docmt Account Debit Credit Accnting Docmnt
Bank Accounts Payable WL Goods-Issue
2
1
Accounts Receivable
Inventories
1’045
640
2 Taxes Payable 10%
Stockholder Equity
95
1
PROFIT AND LOSS STATEMENT FI
Accnting Docmnt
Expenses Income RV Customer
Docmt Account Debit Credit Docmt Account Debit Credit Invoice
1 Inventory Change 640 2 Sales Rev. (Domestic)
Sales Rev. (Foreign)
950
2
Rebates
Rev. Freight Charges

 SAP AG 1999
Sales Overview

• Shipping Point and Route Determination

• Delivery scheduling 1997

• Pricing
• Credit Checking
• Output Creation • Availability
(order confirmation, etc.) Check
• Transfer of
Requirements
Shipping Overview

Sales Order

Picking Packing
• Picking
Shipping Point confirmation
• Create deliveries 1997
• Check availability Creating
• Monitor order Shipping
deadlines Papers

Transportation
Planning Point Goods Issue
• Planning dates • Transfer of
goods
• Group deliveries
for shipment
Billing Functions

1 2A 2B
Credit Memo Debit Memo
Order Request Request

Delivery

3
Cancellation
Invoice
Credit
Memo
Debit
Memo
X
Invoice Document

100.00 15.00 15.00 100.00

100.00 15.00 15.00 100.00

SAP R/3 - SD module components

Contact
Sales M
infor- A
mation Sales Inquiry T
System E
Quotation
Contract R
Delivery Subsequent I
free of delivery
Scheduling A
charge
free of
charge
Order Returns
agreement
L
Shipping Delivery M
G
Billing M
Debit memo Invoice Credit memo T

Financial accounting
10
Sales & Distribution
Sales Order
The Sales Order covers the process from quotation
through to the issuance of the sales order for
delivery of a product or service

 Monitors sales transactions

 Checks for availability
 Transfers requirements to materials planning (MRP)
 Schedules deliveries
 Calculates pricing and taxes
 Checks credit limits
 Creates relevant documents, quotations, sales invoices,
and picking lists
 Triggers the picking list in the MM module

11
Customer Order Management

Pre sales Sales order Inventory Customer

Delivery Billing
Activities Processing Sourcing Payment

Planning, Reporting and Analysis

12
Sales and Distribution Overview:
Order-to-Cash cycle ………

Process Order Stock Inventory Customer Customer

View receipt confirmatio analysis and Invoice account
n and adjustments adjustments
delivery
decisions

SAP Sales Delivery Goods Issue Customer Customer

View Order Document Document Invoice payment
Documen document
t

1.Price/Ta 1.Stock 1.Accounting 1.Price re- 1.Payment

Control
View
x Confirmation posting for determinatio allocation
2.Availabl 2.Serial inventory. n (FIFO/LIFO).
e stock number/Batch 2.COGS 2.Data for 2.Cash
3.Transportati calculation and customer discount
3.Credit on Scheduling posting A/R Posting calculation &
exposure control
Sales & Distribution
Shipping Function…..

 Shipping functions supported include:

Determination of picking location and route
Creating deliveries
Transportation planning
Picking/Packing
Goods issue
Cancellation of the goods issue
Creation of shipping papers

14
Sales & Distribution
Billing

Billing represents the final processing stage for a

business transaction in Sales and Distribution.
Billing documents are created along with invoices
and credit memos.

 Creates invoices based on deliveries of services, credit

memos, debit memos and pro forma invoices
 Handles the cancellation of billing transactions
 Performs comprehensive pricing functions
 Issues rebates
 Transfers billing data to Financial Accounting (FI) and to the
controlling modules that measure profitability

15
Sales & Distribution
Revenue Reporting

Collects, consolidates, and utilizes data from the

sales and distribution processes, and provides an
overview of the current business situation.

 Identifies which conditions were used in pricing

 Finds deliveries still requiring invoicing
 Identifies documents blocked due to credit reasons
 Determines which customers have ordered the most products
 Branches directly to related documents

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Key Data Elements of SD Module

 Sales Organization
 Division
 Distribution Channel
 Sales Area
 Customer Master
 Account Group
 Trading Partner
 Customer Classification
 Incoterms
 Terms of Payment

17
SAP R/3 - SD module prerequisites

• Organization structure should be defined

• Availability of master data
– Customer master
– Material master
– Price master
– Credit Master

18
SAP R/3 - SD module
Some Features

¤ Customer Master and Grouping

¤ Customer - material information
¤ Item proposals
¤ Material listing / exclusion
¤ Free goods
¤ Texts
¤ Partners
¤ Rebate Processing
¤ Stock Transfers
¤ Risk Management

19
SAP R/3 - SD module
Features

¤ Outputs
¤ Availability check
¤ Pricing
¤ Prices
¤ Discounts
¤ Rebates
¤ Surcharges
¤ Credit management
¤ SIS(Sales Information System)

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SAP R/3 - SD module
Features….Documents
¤ Sales documents
¤ Inquiries
¤ Quotations
¤ Orders
¤ Shipping documents
¤ Deliveries
¤ Packing list
¤ Picking list
¤ Billing documents
¤ Invoice
¤ Performa Invoice
¤ Credit Note/Debit Note
¤ Invoice Cancellation

21
SAP R/3 - SD module
Features

¤ Integration with other modules

¤ Transfer of requirements- SD/PP
¤ Inventory sourcing SD/MM
¤ Accounts receivable SD/FI
¤ Credit management SD/FI

22
SAP R/3 - SD module
Features

¤ Sales information system

¤ Standard analyses
¤ Flexible analyses

23
Sales & Distribution
View of organizational elements

FI CO

Company Code Controlling Area

SD
SD CO

Sales Org. Cost Center

Sales Area EC
SD
Profit Center
Distribution
Channel FI

SD Business Area

Division

24
SAP R/3 - SD module Organization structure

C
l
i
ent

S
a
l
esO
r
g S
a
l
esO
r
g

D
i
st
ri
but
i
on D
i
st
ri
but
i
on D
i
st
ri
but
i
on D
i
st
ri
but
i
on
Cha
nnel Cha
nnel Cha
nnel Cha
nnel

Sales area
D
i
vi
si
on D
i
vi
si
on D
i
vi
si
on D
i
vi
si
on D
i
vi
si
on D
i
vi
si
on

25
 SD Organisational Structure

External Internal

26
Organizational Levels in SD

Sales Organization

•Selling Unit responsible for Sales / Service

•Has a meaning in legal sense
•Has an address of its own
•Terms of sale are defined at this level
•Sales information is reported at this level

27
Organizational Levels in SD

Distribution Channel
•Means of Distribution
•One or more plants can be allocated to this unit
•Master Data such as Material and customer is defined for D Chnl
•Transaction data can be captured at this level
•No Address

28
Organizational Levels in SD

Division

•Group of products / Services

•A material can belong to exactly one division
•Transaction data can be captured at this level
•Used in worklists

29
Organizational Levels in SD

Sales Area
• Combination of Sales Org, DChnl and Div

• Master Data is defined at this level

• Pricing procedures are determined at this level
• Transaction data can be captured at this level
• Used in worklists

30
Assignments of Org units

Company Company
Code 1 Code 2

Plant 1 Plant 2 Plant 1 Plant 2

Plants are assigned to company codes. Multiple plants can be assigned to a

company code. One plant can belong to only one company code.

31
Assignments of Org units

Company Company
Code 1 Code 2

Sales Org 1 Sales Org 2 Sales Org 1 Sales Org 2

Sales Orgs are assigned to company codes. Multiple Sales Orgs can be
assigned to a company code. One Sales Org can belong to only one company
code.

32
Assignments of Org units

Sales Org 1 Sales Org 2

DChnl 1 DChnl 2 DChnl 1 DChnl 2

DChnls are assigned to Sales Orgs. Multiple DChnls can be assigned to a Sales
Org.

33
Assignments of Org units

Sales Org 1 Sales Org 2

DChnl 1 DChnl 2 DChnl 1 DChnl 2

Div Div Div Div

Divs are assigned to combinations of Sales Orgs and DChnls. Multiple Divs
can be assigned to a Sales Orgs and DChnls combination.
34
Assignments of Org units

Sales Org 1 DChnl 1 Div 1 Sales Area 1

Sales Org 1 DChnl 1 Div 2 Sales Area 2

Sales Org 1 DChnl 2 Div 1 Sales Area 3

Sales Area is a Combination of sales org, DChnl and Div

35
Assignments of Org units

Sales Org 1 Sales Org 2

D Chnl 1 D Chnl 2 D Chnl 1 D Chnl 2

Plant 1 Plant 2 Plant 1 Plant 2

Plants are assigned to sales organizations. One plant can be assigned to

multiples sales organizations or multiple plants can be assigned to one Sales
org.
36
Organisational Structure in Shipping

Shanghai

Plant

Shipping point 1 Shipping point 2

Shipping
Points

Ramp 1 Ramp 1
Loading
Points
Summary of Organization Structure

Client
1:n
Company Code
1:n
1:n

n:n Distribution n:n Sales n:n Division

Plant
Channel Org.

1:n Sales Area

Shipping n:n
Point Sales
Office
1:n
1:n
Loading
Point Sales
Group

38
Whirlpool China Organization structure

WOC Corporate

North East Central West South Regions

Branch Branch Branch Branch Branch

Sales office - 27
Sales Region- 8

39
Whirlpool China Organization structure

Sales ORG-
SH01(Shanghai).

IC/General Export Spare Parts

1.FG 1.FG SP
2.SP 2.SP

40
Data in SAP

Customer Price Credit

Tax Data
Data Data Data

Transactions
Placing Orders, Material Receipts / Issues, Creating
Production Orders, Booking Customer Invoices

Sales Material
Order
Delivery
Movements Invoice

41
Data in SAP (cont.…)

Master Data
Central Repository, used by various departments.
Created once and changed if required.
Transactions use these data repeatedly.
Examples :Material Master, Customer Master
Transaction Data
Created when a transaction is carried out.
Record of the details of a transaction.
Reports use the transaction data.
Examples : Sales Orders, Delivery, Material Receipts.
System Data
Data calculated by system like,, Price,tax etc

42
Master Data

What is Master Data ?

• Records that remain in the database over an extended

period of time

• Master Data is centrally stored and processed to eliminate

data redundancy

43
Master Data in Sales & Distribution
• Master Data is centrally stored (shared across application modules)
and processed to eliminate data redundancy.
• These three master data are critical to sales order processing:
– Customer
– Material
– Pricing

44
Customer Master

• The customer master contains all customer-related data

necessary for processing orders, deliveries, invoices, and
customer payments.
• Customer master information is shared between the
accounting and sales and distribution departments.
• The customer master groups data into categories: general
data, sales and distribution data, and company code data.

General data
Sales & Distribution data
Company code data

45
Business Partners
Customer master records can be defined as business partners. The following
four partners are mandatory in the sales order:

Sold-to party Ship-to party

Customer
Master

Bill-to party Payer

46
Customer Master Record

Client General data

General data Bank details

Company code - 0020

Company code data Sales data

Reconciliation acct nnnnnn Sales district NORD001

Payment terms NB01 Sales office B001
Sort key 0005 Price group 01

Accounting data Sales area data

47
Customer Master from Sales Viewpoint

Customer: C1
Sales organization: 1000
Distribution channel: 01
Division: 01

General data
Address
Control data Valid for both
Marketing accounting and sales
Unloading points
Contact person

Sales area data

Sales Dependent on:
Shipping • sales organization
Billing • distribution channel
Output • division
Partner functions

48
Customer Master - Views

• Sales Data
• Customer Group
• Sales • Pricing Group
• Pricing Procedure
• Shipping
• Tax Classification
• Billing • Account Assignment Group
• Payment Terms
• Partners
• Credit Control Area
• Delivering Plant
• Shipping Condition
• Rebates indicator

49
Customer Master ….

•Business Partners
• Sold-to-Party
• Ship-to-Party
• Bill-to-Party

• Payer

• Account Groups •Domestic ( 1000-3999)

• Number Ranges •Exports (4000-4999)
•Service (5000-6999)
• Field Selection
•Ship-to (7000-9999)

50
Customer Master…..Decision Points

• Central and Decentralized maintenance

• One-time Customers
• Blocking Customer Master

Action Points
• Decide on Account Groups and Number Ranges
• Decide on Reconciliation Accounts
• Decide on Central / De-central Maintenance
• Decide on One-time Customer Accounts

51
Definition of Business Partners
in a Sold-to Party Master Record

Sold-to party : 6
Sales organization : ESUS
Distribution channel : DR
Division : EL

Contact Mrs. B. Jones

Ship-to-party 6
Carrier Fast Ship, Inc.
Sales representative Ms. C. Lewis

52
Options for Customer Data

Customer

Create Display Change

Create Display Change

Create Display Change
Centrally Centrally Centrally

53
Options for Customer Data (Continued)

Customer

Mark Change
Block/ Display
for Account
Unblock Changes
Deletion Group

54
Customer Master …..Acts As Vendor

• Clearing Between Customer and Vendor

• If a customer is also a vendor, or vice versa, you can have the payment
program and the dunning program clear the customer and vendor open
items against each other. You can also select the vendor line items,
when you display the customer line items for this account.

55
Head Office/Branch Office Relationship

• Head Office and Branch Accounts

• You can enter an invoice for goods delivered to a branch, but have the
system automatically post the debits and credits to the head office
account.
• To link a branch account to the head office account, enter the account
number of the head office account in the Head office field in the
customer master record of the branch account

56
Head Office - Branch

57
One-Time Accounts

• For all customers who you only supply once or rarely, you
can create a special customer master record, the master
record for ‘one-time accounts’. In contrast to other master
records, no data specific to a single customer is stored in
the one-time master record, since this account is used for
more than one customer.

58
Blocking a Customer Account

• Within Accounts Receivable, you can block a customer

account from posting. You have to block a customer
account before you mark a customer master record for
deletion.
• SD Posting block
 Order block
 Delivery block
 Invoicing block

59
Terms of Payment (AR)

• The payment terms key can determine :

 The valid cash discount rate for an individual payment
with a maximum of 3 payment terms (first cash
discount period, second cash discount period and due
date for net payment) and also a baseline date for the
payment or

60
Terms of Payment (AR)

61
Material Master
• The material master contains all data required to define
and manage material. It integrates data from
engineering, manufacturing, sales and distribution,
purchasing, accounting, and other departments.
• The material master is used as a source of data for sales
order processing throughout the customer order
management cycle.

General data
Purchasing data
Accounting data
Sales data
Manufacturing data
(etc.)
62
Material Master:
Central Master Record for Logistics

Sales &
Distribution Inventory
Production Management
Planning on a Quantity &
Value Basis

Purchasing
Production
Invoice
Material Verification

Product Material
Costing Requirements
Planning

Quality Plant
Management Maintenance

63
Material Master Structure

Production
Stores
Sales Various departments use the material
Planning master for their day to day activities.
Various departments need different data
Purchase for the same material.

64
Org. Levels in Material Master

Material is In-house
Stock transfer
manufactured at
from Plant 1 to Plant 2
Plant 1

Lead time for Plant 1 Lead time for Plant 2

is for e.g 10 days is for e.g 8 days

Moving average price Moving average price

of say Rs 230.00 of say Rs 234.50

For the same material, different data is to be maintained, depending on

organizational levels

65
Org. Levels (contd…)

Material master data is organized at various Organizational levels.

Material
Master

Client Level Plant Level Sales Org Level

Data Data Data

•Basic Data •Purchasing •Sales Gen. Data

•Purchase Text •Planning (MRP) •Sales Org Data
•Sales Text •Work Scheduling

66
Material Master : Views

Basic
Data

Costing Sales
Data Data

Accounting Material Purchasing

Data Data
Master

Storage Planning
Data Data

Scheduling
Data

67
 Levels of Data for Material
General Data Plant Data Storage
Location Data
• Description • MRP profile
• Units of measure • Manufacturing costs • Stocks
• Transportation group • Loading group • Storage bin
• Weight
• Volume
• Division

Sales Data Dependent upon

sales organization
• Delivering plant and distribution channel
• Minimum order quantity
• Sales text
• Product hierarchy
Views in a Material Master Record

Work Scheduling
Basic Data Production
Resources/Tools

Classification Storage
A
B Warehouse
Mgmt.
Sales
Quality
Material Management
Purchasing
Master
Record Accounting

MRP Costing

Plant Stock
Forecast

Storage loc. Stock

Screen Sequence

1
Material

Industry Sector 2
Material Type Views
Reference
Purchasing 3
MRP Organisational Levels
Accounting
Plant
Storage Location 4
Valuation Type Data Screens

70
Data Screens

Additional Data
Initial Level Main Work Level Level

Document Data
Purchasing Units of Measure
Planning Admin. Data
Work Scheduling Consumption
Sales Texts
Storage
Accounting
Material Costing
Quality Mgmt

71
Material Type

Operating
Raw Materials
Supplies

Semi-finished
Spare Parts
Products
Finished
Non-Valuated
Products

Trading Goods Others

72
Control using Material Type

Material
Type

73
Material Types (contd…)

Some typical examples of control functions:

74
Few Important Fields related to Sales...

•Material Group
Groups the materials as per some common defined criteria. Some typical examples are Plastic
Components, Rubber Components, Iron & Steel.
Can be used for analysis / reporting /Price maintenance etc.
•Material Tax classification
•Product Hierarchy
•Item category group
•Account assignment Group
•Division
•Distribution channel
•Price group
•Scope of check
•Profit center
•Serial number profile

75
Units of Measure

Stock Unit Purchase

(Base Unit) Unit

Units of
Measure

Sales Unit Issue Unit

76
 Units of Measure...

For example:
Minimum order quantity 64 PC
Examples of alternative
units of measure

Piece Carton Pallet

(Base unit) (Sales unit) (Delivery unit)

1 piece 8 pieces 72 pieces

Material Listing
To ensure that your customer only receives CERTAIN MATERIALS

Material Listing

Payer P1

Sold-to party S1 Sold-to party S2 Order

Sold-to party: S1
Master Payer: R1
Master records
records for
for
Material
Material Listing
Listing Item Material
10 4711
Customer: 20 4713
S1 30 4714
material:
4711 Order
4712
Sold-to party: S2
Customer: R1 Payer: R1
material: Item Material
4711 10 4711
4713
20 4712
30 4713
Material Exclusion:
To ensure that the customer does NOT receive certain materials

Payer P1

Sold-to party S1 Sold-to party S2 Order

Sold-to party: S1
Payer: R1
Master
Master records
records for
for
material
material exclusion
exclusion Item Material
10 4711
Customer: 20 4713
S1 30 4714
material:
4711 Order
4712 Sold-to party: S2
Customer: R1 Payer: R1
material: Item Material
4711 10 4711
4713
20 4712
30 4713
Material Determination
Tool for automatically exchanging materials in the sales document.

Determining materials
Determining materials

Substitute
Order
Material entered Item Material
material
10 4711
4711 M1
M1
Product Hierarchies

Fasteners
00025

Screws Bolts
0002500001 0002500002

MHEX Screws Flathead Screws Hexagonal Cylindrical

000250000100000001 000250000100000002 000250000200000001 000250000200000002

81
Product Hierarchies

The Product Hierarchy is used to group materials by combining

different features. It is used for analyses and pricing. A Product
Hierarchy can consist of up to eighteen characters. Its features can
be combined in various ways. The following figure gives an
example of how materials can be grouped using….Product
Hierarchy

82
Product Hierarchies

In This example:Dishwasher can be described by product

hierarchy 00010000200000002
83
84
 Sales From Stock
Sales

Customer

Process Partners

Quantity Flow
Logistic Documents 1 2 3
Sales Delivery Billing
SD Order1 1 Document

85
Sales From Stock-Postings
Sales from Stock: Postings

Sold qty +
Revenue +
CO-
Rebates +
PA
Valuation at COGS +
Good Issue
CO-
var.PC +
CO-PA Postings PC
date fixed PC +
(costing-based)

Revenue
COGS X
FI
X Rebates
Inventory X
FI Postings / X Customer
(CO-PA account-based) X

Quantity Flow
Logistic Documents 1 2 3
Sales Delivery Billing
SD Order1 1 Document

86
Sales From Stock-Postings
Sales from Stock: Postings

Sold qty +
Revenue +
CO- Condition Rebates +
PA SD Type COGS +
VPRS var.PC +
CO-PA Postings fixed PC +
(costing-based)

Revenue
COGS X
FI X Rebates
Inventory X
FI Postings / X Customer
(CO-PA account-based) X

Quantity Flow
Logistic Documents 1 2 3
Sales Delivery Billing
SD Order1 1 Document

87
Complaint Processing

Example 1: The customerBusiness Scenario

returns the goods. You create a return to
process the transaction.
 If the customer wants a refund for the amount, enter a credit memo with
reference to the return.
 If the customer wants a replacement product, enter a free-of-charge
subsequent delivery with reference to the return.
Example 2: The customer does not send the goods back.
 If the customer wants a refund, you enter a credit memo request with
reference to the sales order or the invoice.
 If the customer wants a replacement product, you create a free of
charge subsequent delivery with reference to the sales order.

Example 3: The price is wrong.

For example, the discount was forgotten or the scaled prices were
miscalculated. You then enter an invoice correction request with reference
to the invoice.

88
Complaint Processing

Processes in ComplaintsBusiness Scenario

Processing

Sales order Outbound Billing doc.

delivery

Returns Credit memo Debit memo Invoice

request request correction
request

89
Sales Return

Business Scenario

l Damaged goods or incorrect invoices lead to

complaints.
l If the complaint concerns valuable goods, the
goods must be sent back.The damaged material
must first of all be checked. To do this, it is stored
in a specific place.
l Customers receive a credit memo when they have
had just reason to complain.You must ensure that
the correct amount is credited to the customer
account. Before a credit memo is issued, approval
from an authorized person is required.

90
Sales Return
Returns: Business Background

Customer

Process Partners

Customer
complaint

Delivery Transfer
Billing to to
MM Document restricted unrestricted
stock stock
Delivery
Quantity Flow
RE
Logistic Documents Sales Credit
Scrap
Billing
Order Memo
SD Request
1
1

91
Sales Return(Restricted Stock Posting)
Return into Restricted Stock: Postings
Sold qty - For update of
Revenue - account -based
CO- Rebates - CO-PA
PA Check note 75653
COGS -
var.PC -
CO-PA Postings fixed PC -
(costing-based)

Revenue Inventory
FI No posting X X
Acct Receiv. COGS
X X
FI Postings / Movement
651
Movement
453
(CO-PA account-based) Transfer
Delivery
Billing to to
MM Document restricted normal
stock stock
Delivery
Quantity Flow
RE Scrap
Logistic Documents Credit Billing
Sales Memo
SD Request
1
Order1

92
Sales Return(Un-Restricted Stock Posting)
Return to Unrestricted Stock: Postings

Sold qty -
Revenue -
CO- Rebates -
PA
COGS -
var.PC -
CO-PA Postings fixed PC -
(costing-based)

Inventory Revenue
X X
FI
COGS Acct Receiv.
X X
FI Postings / Movement
653
(CO-PA account-based) Delivery
Billing to un-
MM Document restricted
Stock
Delivery
Quantity Flow
RE
Logistic Documents Sales Credit Billing
Order Memo
SD Request
1
1

93
Free Delivery (Subsequent Delivery)
Subsequent delivery free-of-charge document, for example, when you need to
deliver material for an order due to a complaint (Subsequent Delivery):
Business Background
Customer

Process Partners

Customer complaint

Billing
Document
Delivery
Quantity Flow
CD
Logistic Documents
Delivery Billing
Sales Sales
SD Order Order 1

94
Free Delivery (Subsequent Delivery)

Deliveries Free of Charge and Subsequent

Deliveries

DF Delivery LF Del ivery

free-of-charge

M1 10 PC KLN M1 10 PC

RE Returns SDF LF Del ivery

Subs. delivery
Reason for free-of-charge
rejection 11
M1 10 PC REN M1 10 PC KLN M1 10 PC

95
Scenarios: Free Deliveries
You can create free of charge deliveries for sending samples of your products to
the customer

Basic Process
l Customer order > Delivery > Billing without revenues
and no posting to FI
OR
l Customer order > Delivery > Billing including revenues and
100 % rebate

Variations
l Free deliveries / delivery of samples
l Delivery of marketing brochure posted to cost centers
l Replacement of broken products (guarantee, good will)
l Free extras (see under free goods)

96
Free Delivery: Postings - Scenario 1

Sold qty +

CO-
PA
COGS +
var.PC +
CO-PA Postings Valuation
fixed PC +
(costing-based)

COGS
FI X

Inventory
FI Postings / X
(CO-PA account-based)

Quantity Flow KL
Logistic Documents Sales Billing
Delivery
Order
SD 1 1

97
Free Delivery: Postings - Scenario 2

Sold qty +
Revenue +
CO- Rebates -
PA
COGS +
var.PC +
CO-PA Postings Valuation
fixed PC +
(costing-based)

COGS Revenue
FI X Y
Inventory Rebates
Y
FI Postings / X
(CO-PA account-based)

Quantity Flow KL
Logistic Documents Sales Delivery Billing
SD Order
1 1

98
Free Delivery: Postings-with Order Reason

CO-
PA
Marketing

CO-PA Postings
(costing-based)

CO- Cost-Center COGS

CCA

COGS
X
FI Inventory
X

Quantity Flow KL
Logistic Documents Sales Delivery Billing
SD Order
1 1

99
Credit Notes

Credit Notes: Business Background

Customer

Process Partners

Billing
Document
Delivery
Quantity Flow G2
Logistic Documents Sales Credit Credit
Order Memo Memo
SD 1 Request1

100
Credit Notes
Sales from Stock: Value Credit Note

Revenue -
CO-
PA
No quantity
No valuation
CO-PA Postings
(costing-based)

Revenue
FI
X

Customer
FI Postings / X
(CO-PA account-based)

Billing
Document
Quantity Flow Delivery
Logistic Documents G2
Credit Credit
Sales Memo Memo
SD Order1 Request
1

101
Third-Party Processing

• In third-party processing, your company takes a sales order

from a customer to be forwarded as a purchase order to an
external vendor. This vendor will then deliver the goods
directly to the customer. The vendor then invoices you for
the delivery, and in turn, you bill the customer.
• Purchase Requisitions are created automatically upon
creation of a sales order with a third-party specified item
category.
• Third-party processing can be done with or without a
monitoring of goods receipt, indicated in the purchase
requisition.
Third-Party Processing

Company

1 4
Sales Order Vendor Invoice
5 2
Invoice Purchase Order

Customer Vendor

3
Delivery
Third-Party Processing:
Delivery with GR Indicator Off

Company

Billing Invoice
Document

Third-Party
Order

 GR
Customer -----
Vendor

Goods
Third-Party Processing:
Delivery with GR Indicator On

Company

Reconcile
Goods Received
with Order

GR Posting
Billing Invoice
Document
Third-Party
Order

 GR
Customer -----
Vendor

Goods
Third-Party Processing
Third-Party Business: Business Background

Customer Vendor

Process Partners

2 3 4 5
MM
Purchase Purchase Goods Invoice
Requisition Order Receipt Receipt
Quantity Flow
Logistic Documents 1 6
Sales Billing
SD Order1 Document

106
Third-Party Order Processing: Procedure

l Create sales order with a third-party item

n The system automatically generates the purchase requisition
(PReq) and writes it back to the order when you save (Item ->
Schedule Lines -> Procurement)
l In purchasing, create a purchase order from the purchase
requisition
l Invoice receipt from the supplier in purchasing
n Invoice receipt can occur before and after billing document issue
l Create customer billing document

107
Scenarios

Basic Process
l Cust. Order > Goods Rec. > Invoice Receipt > Customer Billing

Variations
l Cust. Order > Goods Rec. > Customer Billing > Invoice Receipt
l Cust. Order > Customer Billing > Invoice Receipt
l Cust. Order > Invoice Receipt > Customer Billing

108
Third-Party Business: Postings

Sold qty +
Revenue +
CO- Rebates
PA Condition +
VPRS COGS +
var.PC +
CO-PA Postings fixed PC +
(costing-based)
COGS GR/IR Revenue
X X X
FI Rebates
GR/IR Supplier X
FI Postings / X X Customer
X
(CO-PA account-based)

2 3 4 5
MM
Purchase Purchase Goods Invoice
Requisition Order Receipt Receipt
Quantity Flow
Logistic Documents 1 6
Sales Billing
SD Order1 Document

109
Free Goods Inclusive

Customer Order Delivery Billing

Firma
Firma
Firma Firma
Firma
Firma

Bestellung
Rechnun
Rechnun
M Rechnung
Rechnun
Rechnun
xyz

gg gg

10 Pieces 10 Pieces 8 Pieces

110
Free Goods Exclusive

Customer order Delivery Billing

Firma
Firma
Firma Firma
Firma
Firma

Bestellung
Rechnun
Rechnun
M Rechnung
Rechnun
Rechnun
xyz

gg gg

4 Packages 4 Packages+
1 Coffee- 1 Coffee- 4 Packages
maschine maschine

Kaffee Kaffee Kaffee

Kaffee Kaffee Kaffee

111
Free Goods Transfer to CO-PA (examples)

1 2 3
MI SI MI SI MI SI

Quantity 10 1 10 1 10 1
Price 100 100 20 100
Discount -20
Cost 40 5 40 5 40 5
Revenue 100 100 20 100
Deduction -20
Costs 40 5 40 5 45
TANN LF  F1
SAP • Pricing: B TANN
standard • Cond. type • No
with req. 55 pricing

112
Consignment Processing

n In consignment processing, goods are

delivered to the customer but remain the
property of the company until they are
actually used.
n An invoice is not created until the customer
withdraws the goods from the consignment
stock.
The customer has the right to return
consignment goods up until that point.

113
Consignment Processing

Customer
Special
Stock

Goods Customer Goods

Fill-Up Delivery Issue Delivery Invoice
Issue 1 Issue

Company
Stock
Goods
Return Delivery
Issue
Goods Unre-
Pick-Up Delivery
Issue stricted

Credit
Memo

114
Consignment Fill-Up

Customer
Special
Stock

Consignment Delivery Goods Issue Customer: 1

Fill-Up
(KB)

115
Consignment Issue

Customer
Special Stock

Consignment Delivery Goods Issue Customer: 1

Fill-Up

Consignment Delivery Goods Issue Invoice

Issue
(KE)
116
Consignment Return

Consignment
Delivery Goods Issue Invoice
Issue

Consignment Return Goods Issue

Return Delivery
(KR)

Credit Memo

117
•Rebate is a special discount which is paid retroactively to a customer.
•This discount is based on the customer's sales volume over a
specified time period.
•Within the rebate agreement you create separate condition records for
each product the customer buys. These records specify the rebate
amount or percentage for each product
•Rebate agreement is finally settled when you issue a credit memo to
the customer for the accumulated rebate total.
•Rebates differ from other kinds of discounts in that they are based on
sales volume over time and are paid retroactively

118
 Process in General / Document Flow with Rebates

Customer Plant

Process Partners

MM
Sales 2 Goods 3 Billing 4
Sales
Sales Goods
Goods Billing
Billing
Order
Order Issue
Issue Document
Document
Quantity Flow SD 1 Order Issue Document 5
Logistic Documents Rebate Rebate
agreement credit memo

119
Value Flows with Rebates One Value -
field
Sold qty +
Revenue +
CO-
PA
Copy +/- Accr. Rebts. - Accr. Rebts. +
sign
COGS + Act. Rebates -
var.PC
CO-PA Postings +
fixed PC
(costing-based) +
Revenue
COGS X Act. Rebate
FI X Customer Y Customer
Accr.Reb. X Accr.Reb. Y
Inventory X X
X Reserves Reserves
FI Postings / X X
(CO-PA account-based)

MM Sales
Sales
2 Goods
Goods
3 Billing
Billing
4
Sales
Order Goods
Issue Billing
Document
1 Order
Order Issue
Issue Document
Document
Quantity Flow Rebate
5
Rebate
Logistic Documents agreement credit memo
SD

120
Processing Rebates

Rebate agreement Start

settlement run

Customer 1
from 10000 1- %

Accumulated sales vol.

12000

Credit memo
request
120
Billing doc. 1 Billing doc. 2 Billing doc. 3
3000 3000 6000

121
Prerequisites for Rebate Processing

Sales
Sales organization
organization
Payer
Payer

 Rebate active

Billing
Billing type
type

122
 Introduction
to
Pricing &Credit Management

123
Objective

To show how SAP handles varied pricing scenarios.

So that you take advantage of R/3’s strengths in structuring your
pricing procedures and Credit Management.

124
Pricing

• Price is the economic sacrifice a customer makes to acquire a

product or a service - Mac K Hannan

• Your product’s price is cost to your customer

• Price is customer’s perception of the product’s value

125
 Pricing

What effect would a 1% improvement in price realization have on net

income ?

Company Improvement in
net income
Coca-cola 6.4%

FujiPhoto 16.7%

Nestle 17.5%

Ford 26%

Philips 28.7%

Source: “Price Wars” The McKinsey Quarterly

126
Pricing

What makes pricing difficult?

• Interdependence of products
• Information
• Competitive Diversity

127
Example : Consumer Electronics

Scenarios:
• Make-to-Stock
• Institutional Sales
Channels:
• OEM sales
• Dealers
• Trading
• Distributors
• Direct sales
• Power Retailers

128
Case 3: Consumer Electronics

Pricing

• Prices to trade are MRP driven. MRP is fixed across the

country for a product.

• Fixed Margins product based / product group based /

percentage

• Discounts – Turnover based/ promotional / given on

primary sale and on invoice( Except turnover administered
thru credit notes).

• Free goods

129
Case 3: Consumer Electronics
How SAP helped manage the pricing ?

• Price Lists
• Discounts: Distribution channel specific /
customer specific / material specific/ product
group specific / customer group specific
• Rebates for T/O incentives. Can be administered
retrospectively.
• Scales / Condition Exclusions

• Free Goods

130
Case 3: Consumer Electronics

Typical SAP Pricing Procedure:

Step Price element Description From To
001 ZMRP MRP
002 ZDLR Dealer Margin 001
003 Dealer Price
004 ZDST Distributor Margin 003
005 Distributor Price 003 004
006 Net Price
007 ZMAN Manual Discount
008 ZVAL Value Discounts
009 Net Price After 006 008
Discounts
010 JIN1 LST 009
011 JIN2 CST 009
012 JIN4 LST Surcharge 010
013 JIN5 CST Surcharge 011
014 Company Price 009 013
015 VPRS Cost
016 Profit Margin 014 015

131
Opportunity

Typical SAP Pricing Procedure:

Step Price element Description From To
001 ZMRP MRP
002 ZDLR Dealer Margin 001
003 Dealer Price
004 ZDST Distributor Margin 003
005 Distributor Price 003 004
006 Net Price
Current starting
007 ZMAN Manual Discount
008 ZVAL Value Discounts
point at branch
009 Net Price After 006 008 level
Discounts
010 JIN1 LST 009
011 JIN2 CST 009
012 JIN4 LST Surcharge 010
013 JIN5 CST Surcharge 011
014 Company Price 009 013
015 VPRS Cost
016 Profit Margin 014 015

132
Opportunity with flexibility and Autonomy

Typical SAP Pricing Procedure:

Step Price element Description From To
Managed at
001 ZMRP MRP
002 ZDLR Dealer Margin 001
HO
003 Dealer Price
004 ZDST Distributor Margin 003 Managed at
005 Distributor Price 003 004 Zone or branch
006 Net Price
007 ZMAN Manual Discount
008 ZVAL Value Discounts
009 Net Price After 006 008
Discounts
010 JIN1 LST 009
011 JIN2 CST 009
012 JIN4 LST Surcharge 010
013 JIN5 CST Surcharge 011
014 Company Price 009 013
015 VPRS Cost
016 Profit Margin 014 015

133
Summary

Price Customization

• By Product Line / Product Group

For Example: All Washers or all 165 ltr refrigerators

• By Transaction Types
For Example: OEM Sale and Trade Sale

• By Distribution Channel
For Example: Distributors and Dealers

• By Buyer Characteristics
For Example: An Upcountry Dealer and Local Dealer
134
Summary

• Decide pricing procedures

• Decide elements in pricing procedures
• Decide parameters for pricing procedures
• Decide value limits and conditions for pricing elements

135
Settings in Price Procedure

Relevant Setting in SD - Pricing Procedure

Pricing
Procedure
Statistical Account key

Condition
type

136
Condition Groups

Pricing

Prices Discounts/surcharges
l Customer
l Price list
l Material
l Material price
l Price group
l Customer-specific
l Material pricing group
l Others
l Customer/Material
pricing group
l Customer/Material
l Price group/Material
pricing group
l Others

137
Condition Records

Condition type : KA00 Special offer discount

Level at which
Sales organization : 1000
the condition Distribution channel : 01
is defined
Customer : C1
Material : M1

Period 1 Period 2
01 Mar - 30 Apr 01 May - 30 May

$ 1000 1- % $ 1000 2- %
$ 2000 2- % $ 2000 3- %
$ 3000 3- % $ 3000 4- %

Lower limit: 5- % Lower limit : 5- %

Upper limit: 0 % Upper limit : 0 %

138
Access Sequences

Condition type

PR00 Price Access sequence PR00

K007 Discount % Access sequence K007

K020 Major
Major customer
customer disc.
disc. Access sequence K020

Access seq. Condition tables

Specific
PR00 1. Customer/Material

2. Price list/Currency/Material

General
3. Material

139
Condition Types - Pricing Procedure

Sales Order Type

Sales Order
Condition Type
PR00 - Price 500 Pricing Procedure
KA00 - Customer Discount 50 PR00 - Price
VPRS - COGS 300 KA00 - Customer Discount
… VPRS - COGS
...

140
Pricing: Overview

Pricing procedure Document

Item 10 120 pc
1. Price PR00
PR00 Price $ 99
2. Discount 1 KA00
KA00 Disc. $ 1-
3. Discount 2 RA01 RA01 Disc. 2- %

Condition type: PR00

Access sequence: PR00
Access sequence: PR00
Condition tables:
1. Customer / Material
2. Price list / Currency / Material
3. Material

Records for cond. type PR00

from 1 pc 100
$
No valid record exists from 100 pc $99
Valid record exists from 200 pc $98

141
Condition Types

Key Description Controlling

PR00 Price

Calculation type: Percentage

K007 Discount %
Scale basis : Value scale

Calculation type: Amount/weight

K029 Discount/weight
Scale basis : Weight scale

Examples

Scale basis Calculation type Scale basis Calculation type

$ 100 1- % 100 kg $ 1- per 1 kg

$ 1000 2- % 1000 kg $ 3-
$ 10000 4- % 10000 kg $ 5-

142
Sales Tax

• During automatic calculation of sales taxes, the following

factors are taken into account:
– Whether business transaction is domestic or foreign
– Tax classification of customer’s ship-to party
– Tax classification of material

143
Sales Tax

• Tax determination is carried out using the condition technique.

Condition types relevant for taxes are included in the pricing
procedure.
• The following elements are important in tax calculation:
– Type of transaction: domestic or foreign
– Ship-to customer tax classification
– Material tax classification
• Tax procedure is determined by country.
• Tax Determination is an important cross-functional issue. It crosses
the SD, MM, and FI modules.
Sales Tax
Tax classification
Liable to tax
Exempt from taxes
.
. Document
Sold-to party: C1
Customer master Ship-to party: C1 Sales tax: 15%: 16.50
Sales tax: 7%: 21.00

Item 10
M1 100.00
Sales tax 15% 15.00

Item 20
Material master M2 10.00
Sales tax 15% 1.50
Full tax
Reduced tax Item 30
No tax M3 300.00
Sales tax 7% 21.00
Tax classification 145
Sales Tax
Pricing procedure

Price PR00
.
.
Sales tax UTXJ
.
.

Condition type UTXJ

Access sequence UTX1

Access sequence UTX1

Requirement
1. Country/State/Customer classif. 1/Material classif.

Records for condition type UTXJ Indicator

US / CA / Exempt / Exempt 15 %
O1
US / CA / Taxable / Taxable

Accounting
146
Sales Tax

Customer Master Material Master

Customer 60 Product 1 Full tax
Address
State Product 2 Reduced tax
Country
Liable for Taxes Product 3 No tax

Tax Sales Order Tax

Classification Ship to Customer 60 Classification
Item 10 Price 100.00
Tax 6% 6.00
Item 20 Price 150.00
Tax 4% 6.00

Item 30 Price 200.00

Tax 0% 0.00
Tax - Calculation Procedure

Pricing Procedure Cond. Type

Price PR00
Discount KA05
Net value Access Sequence MWST
Sales tax(state) UTX1
1. Country/State/
Customer classification/
Material classification
Condition Records Tax Code
US/CA/1/1 08
US/FL/1/1 04
Accounting
US/PA/1/1 06 08 = 8%
04 = 4%
06 = 6%
Credit Management

The Message…

• R/3 is NOT your legacy system

• Understand how R/3 works
• Analyze the differences between R/3 and your legacy system
• Take advantage of R/3’s strengths

149
CREDIT MANAGEMENT
R/3 Credit Organization
Credit master data
– Risk categories
– Reports
Credit Checking
– When is credit checked
– Block vs warning
– What happens if an order is blocked
– When should credit be checked
– Credit checks and how they work
Tools to manage blocked documents
Summary
150
Credit Control Area as an Organizational Object

• Credit Control Area (CCA) relates to organization of the

credit function

• Credit Control Area allows centralized or regional credit

management

151
Customer Functions from SD Perspective

Credit Credit Control Information

Account

•A/R Data
Payer •Payment Terms

SD •Sold-to
•Ship-to
Functions
•Bill-to

During order entry, SD reads the customer master records that fulfill each
of these functions: Sold-to, Ship-to, Bill-to, Payer and Credit Account.

152
Consolidated Credit Management

Acme Credit Account

•Credit Control Information
Machinery

Acme HiTek Acme Payer

Automotive Computer Machinery •A/R Data
•Pay Terms

Acme Acme HiTek Acme Sold-to

•Business Data
Purchasing Plant 5 Purchasing Plant 3

153
How Many Risk Categories are Needed?

• 000 - New Customers - block order on entry

• 001 - Blue Chip/Internal customers - no checking
• 002 - Block all orders on entry
• 003 - Low risk - automatic credit check
• 004 - Medium risk - automatic credit check
• 005 - High risk - automatic credit check

154
Credit Checking in SD

Sales Delivery Billing A/R

Order Document Open Item

155
Credit Checks

• When document is created

• When document is changed
• In background
– ‘X’ days before delivery
– When Credit Horizon is
reached

156
When to Check Credit

Recommendation: Rationale:
• Check credit in sales orders • A blocked delivery will
• Schedule recheck near either be delayed or will
delivery cause Credit to operate in
• Do not check deliveries ‘crisis’ mode
• Allow sufficient time so
that most credit failures can
be resolved routinely

157
System Reaction on Credit Check Failure

• Error - Order cannot be saved

• Warning with Block - Order can be saved but is blocked
from further activity (configureable)
• Warning without Block - Not recommended
Warning is only seen by Sales Dept, not Credit Dept
Confusing to Sales Dept if some failures cause block and others
don’t as message is the same

158
Default Effects of Blocked Documents

• Orders
– Stock not committed (reserved for order)
– No requirements passed to Purchasing
– Does not create assembly order
– Not included in delivery due list
• Deliveries
– No picking list
– No packing
– No goods issue
• These are defaults but can be changed in customizing

159
Do You Refuse Orders Because of Credit Problems?

• Consider allowing stock to be committed to blocked sales

order
– Block prevents creation of delivery
– Order can remain blocked until you resolve credit problem with
customer

160
Understand the Credit Checks

• 7 SAP-defined checks
– Credit Limit Checks
– Payment Behavior Checks
• 3 user-defined checks via user exits
• Control by Risk Category, Credit Control Area and
document type
– What checks are done
– Tolerances
– System response

161
Credit Limit Checks

Credit Limit Formula

Open orders
– Based on confirmed quantity in orders
– Static - all orders
– Dynamic - only quantities to be shipped in horizon
+ Open deliveries and invoices
+ Open receivables balance
– Value of disputed items subtracted from open A/R
balance
+ Special G/L accounts
– Down payments, bills of exchange, etc.

162
Review Credit Limits Before Implementation

• What is included in credit limit check in legacy system?

• Are credit limits high enough?

163
Credit Checks - Payment Behavior

• Oldest Open Item

Any open item past due by >‘X ‘days
• Past Dues
Value of all open items past due by >‘X’ days divided by value
of all open items. Expressed as a percentage.
• Maximum allowable dunning level
Considers dunning level in Customer Master and in open items
• Open items with disputed reason code are not considered

164
Other Credit Checks

• Maximum document value, in currency of Credit Control

Area.
Not dependent on confirmed quantities.
• Changes to Payment Terms fields (Critical Fields)
Terms
Base Date for Payment
Additional Value Days
• Days past next review date
– If next scheduled review date is missed by more than ‘X’ days
– Suggestion: Intentionally miss review of low activity accounts. Let
blocked order be trigger for credit review.

165
Other Credit Check Control Parameters

• Seasonal Factor - Can be used to temporarily increase credit

limit. Can also be used as an ‘over limit tolerance’.
• Payer - If there are multiple payers related to a credit
account, this allows the payment behavior checks to be
restricted to current payer. Can be used in system
performance tuning.

166
Notification to Credit Manager

• Credit Manager runs report to list blocked documents

167
Blocked Document Report

• Can release, recheck, reassign or reject selected documents

• Documents can be forwarded to another credit rep.
• Line layout is customizeable; any header field can be
displayed
• Training note: selecting large numbers of blocked
documents is very time consuming. Credit Reps should use
selection criteria to minimize number of orders displayed.

168
Reports

169
Understanding SAP Reporting

• SAP reports are designed to be viewed interactively

• Key information is displayed on scrollable screen
• Via menu options, you can drill down into detailed
operational data
– A/R data
– SD documents
– Customer Master Data

170
Reports for Credit Manager

• Credit Master Sheet is for one customer

– Summarizes account status and payment history
– Access to open items, master data, and texts
• Credit Overview is for one or more customers
– Information similar to Credit Master Sheet
– Flexible selection criteria
– Primary report to select customers for review

171
Reports for Credit Manager

• Financial Information System Evaluations

– Due Date Analysis
– Payment History
– Currency Analysis
– Overdue Items
– DSO Analysis
• Credit Limit Overview
– Review credit limits for a range of customers

172
Summary

• Review Customer Master Maintenance process

• Review risk categories. Don’t automatically copy risk
categories from legacy system without evaluating
differences.
• Review report requirements
• Review credit limits. Compare how credit exposure is
calculated in legacy system to SAP formula.
• Don’t assume an order must be released from block as soon
as possible. It is possible to reserve inventory or schedule
production on a blocked order while still preventing
delivery.

173
Maintaining Credit Limits Per Customer

Customer 6 Central Data View

Current Credit Limits Assigned
Total amount $8,000
Largest individual limit $ 5,000 (CCArea CCCS)

Maximum Permitted Credit Limits

1
Total amount $ 10,000
Individual limit $ 6,000 2
(any credit control area)
Currency USD

Customer 6 Status View

Credit Control Area CCCS
Credit Limit Data
3 $5,000
Credit Limit
(for a particular control area)
Monitoring Credit Limits for Customer

Receivables
Special G/L from sales
transactions such
as down payment

Open orders,
deliveries and
billing docs. Total receivables,
special G/L trans.
and outstanding
order value
Postings: Increase these amounts
Clearings: Decrease these amounts
Automatic Credit Control

Credit Department SD/Financial Accounting

Define credit data Enter Sales Order

for customer (payer)
Customer : 6 Sales Order : 201
Risk : High Customer : 6
Credit Limit : 20,000 USD Net Value : 29,000 USD

Blocked Orders
#201 29,000 USD Credit limit exceeded
#224 16,000 USD Email sent to credit
#238 7,500 USD representative
Credit block blocks order

Create Material Requirements

Delivery Due List
Review &
Release
Shipping and Billing

Release Order Incoming Payments

Credit Blocks

Shipping

Credit Limit Check

= Block

Availability Check +
Transfer of Requirements
Delivery Due Goods
List Picking Issue
Credit Limit Check
= Block

Confirmed Purchase Requisition

Quantities from Sales Order
Reviewing and Releasing
Credit Holds

Credit Control Area CCXX

Blocked SD Orders
Credit Rep Group US

Credit Account Order Credit Value Risk Status

Customer A 351 1000.00 Medium Dynamic Chk

Customer X 567 200.00 High Dynamic Chk
Customer Y 595 50000.00 Low Static Chk

Release the order(s)

Sales :Stock Availability and Transfer of
Requirements

Availability Check

• Check Against ATP

• Check Against Planning

Availability Check with or without Replenishment Lead Time

179
Sales Stock Availability and Transfer of
Requirements

What is ATP ?
• ATP stands for Available-to-Promise
• ATP Calculation
• Plant Stock
• + Planned Inward Movements ( Prod Orders, PO, Planned Orders)
• - Planned Outward movements ( Sales Orders, Deliveries, Reservations )
• Scope of Check
• Checking Group
• Checking Rule

180
Sales Stock Availability and Transfer of
Requirements

Availability check including

RLT
• Backward Scheduling
Requested Delivery Date
minus Transit Time
minus Loading Time
Loading Date
minus ( Transport Schd Time / Pick Pack Time)

Material Availability Date

181
Sales Stock Availability and Transfer of
Requirements

Availability check including RLT

182
Sales Stock Availability and Transfer of
Requirements
Availability check excluding RLT

183
Sales Stock Availability and Transfer of
Requirements
Reactions to Availability
check
• One-Time Delivery
• Complete Delivery
• Delivery Proposal
Availability Across Plants

• Availability can be checked across plants

184
Scope of Availability Check

Inward
Movements
Purchase Purchase
Order Requisition

Unrestricted Planned
Stock Order

Sales/Delivery
Reservation
Requirements

Outward
Movements
First Case: Total Order
Quantity on the Requested Date

Material Availability
Inward June 4 Requested Delivery Date
Movements 2 Delivery Scheduling June 8
June 1
3
Order Quantity: 10 1

100 60
50
Time
40 50
100

4 5

Outward Material Availability Confirmation Date

Movements June 4 June 8
Second Case: Total Order
Quantity at a Later Date
Material Requested
Inward Availability Delivery Date
Movements June 4 June 8
June 1
2 Backward Scheduling
3
Order Quantity: 20 1

100 60
50

5 Time
40 50
100 6
4
Forward Scheduling

New Material Confirmed

Availability Delivery Date
Outward June 8 June 12
Movements
• Customer requires complete delivery
Third Case: Partial Deliveries
Material Requested
Inward Availability Delivery Date
Movements June 4 June 8
June 1
Order Quantity: 30

100
50 60
1

Time
40 50
90
2

Material Confirmed
Availability Delivery Date - June 9
3
June 5
Material Confirmed
Availability - June 8 Delivery Date - June 12
Outward • Customer requires delivery as soon as possible
Movements • Customer allows partial deliveries
Availability Check: Taking Replenishment Lead Time into Account

Material Requested
Inward Availability - June 4 Delivery Date - June 8
Movements
June 1
Order Quantity: 20

100 60
50
Time
40 50
100

Replenishment
Lead Time - 5 days
Material availability, taking replenishment
lead time into account - June 5
Outward
Movements Customer requires complete delivery
Delivery Possibilities When There Is Not Enough Stock Available

10 10 10
30
4/22 5/19 6/12 7/17
One-time delivery at requested date Not possible
Date: 4/22 Confirmed quantity: 0

Complete delivery
Date: 7/17

Delivery proposal for partial deliveries

Date: 5/19 Confirmed quantity: 10

6/12 10
7/17 10
Transfer of Requirements

• Requirements from Sales Doc are transferred to Planning

• Requirement Type

•Requirement Class

191
Transfer of Requirements
•Requirement Type
•Strategy Group in Material Master
•MRP Group
•Material Type
•Item Category
•Requirement Class
•Costing
•Valuation
•Consumption

192
Transfer of Requirements and Availability Check

Sold-to Party: 6
Item Material Required Order
Delivery Date Quantity
10 XYZ 10/31 50
Delivery Date Confirmed Quantity
10/31 30
11/08 10
Availability Check Warehouse Purchase Order
30 10
10/31

30
Confirmed Quantity
Warehouse Purchase
10 Order
30 10 Confirmed Quantity
10/31

Transfer of Requirements 50
Order Quantity
Rescheduling Backorders

 
Backorder List Updating Backorders

Sales Order List

Sales Order Delivery Priority

549 1
567 2
582 3

Availability Check

Backorder List Updating Backorders

Orders are not Orders are updated

updated if necessary
SIS(Sales Information System)
MIS Reporting

195
You Will Have an Idea of….. . . .

• How to run reports in SAP

• Overview of SIS menus
• How SAP generates reports
• How to access info structures
• How to choose and reorder drilldown and key figures
• How to resort data

196
Focus/Route

• Sales Information System (SIS) Basics:

– Standard Analyses
– Drilldown Methods

• Changing User Settings in SIS:

– Drill down through characteristics
– Key figures

197
How Do You get Information Today?

• What kind of information do you require?

• How often do you receive report information?
• How up-to-date and accurate is your information?

198
How SAP Will Be Different

• Replaces mainframe reporting systems

• Data is available for anyone to review at any time (subject
to security profiles)
• Offers many ways to sort, display, graph, and export data
• See information online instead of on paper

199
SIS New Terms Vs. Old Terms

• Sales Organization = One for Each Company code of Greater China

• Sales Office = Sales Division (District/Zone)
• Sales Employee = Territory
• Material = Product
• Sold-to = Ship-to (Customer)
• Sales Group = Sales Division (Market)
• Division = Product Line (Ex: Washer/Ref)

200
New SAP Terms

• Info structures

• Characteristics

• Key figures

201
Info Structure

• Info structure is a database table from which

queries are run. Each info structure is made up of:
– Characteristics
– Key figures
– Time period
• Sales info structures are standard SAP info
structures

202
Sales Info Structures

• Sales organization
• Sales office
• Customer
• Sales Employee
• Material

203
Characteristics

• Characteristics are items you select to be reported on, for

example sales group, material, and sold-to customer
• Each unique combination of characteristic values
represents rows in a table
• Each info structure or query displays the details of a set of
characteristics
• Drilldown path directs you through all the characteristics
of an info structure in a preset order

204
Key Figures

• Key figures are values that measure some activity,

for example: volumes, revenues, and invoiced
sales
• Each unique combination of key figure values
represents columns in a table
• Can display as many or as few key figures as you
require

205
Query Field Locations

Characteristic
Key Figure

Key Figure
Value

Characteristic
Value
206
Using Sales Organization Info Structure

• Select analysis type

• Narrow search with characteristic ranges
• Drill down through characteristics
• Key figures
• Saving reports
• Accessing saved reports (general or user overview)

207
SD/FI Interface

Sales & Distribution Financial Accounting

Billing Document Accounting Document

F2 RV
G2 DR
L2 DG

208
Revenue Account Determination

Billing
Document

Customer Receivables Revenue Tax

Pays:
114 100 14
$114
Account Assignment Criteria in the Billing Document

Billing Document
Chart of Accounts Company Code
Sales Organisation Assigned to
Customer Account Payer Master Record
Assignment Group
Material Account Material Master Record
Assignment Group
Pricing Procedure
Account Key
Price 100.00 ERL
Discount 10.00 ERS

G/L Account
Account Key
ERL = Revenue
ERS = Sales Deduction
Revenue Account Determination

Acct. Determination Proc. Billing Document

KOFI00 Acct. Determination Item 10 Sales
Condition Type: KOFI Deduction
Price $10
Access Sequence: KOFI Discount (10%) $1 1
Access Sequence: KOFI
1. Charts of Sales Account Key Customer Material
Specific Accounts Organisation Acct. Group Acct. Group
2. Charts of Sales Account Key Customer
Accounts Organisation Acct. Group
3. Charts of Sales Account Key Material
Accounts Organisation Acct. Group
4. Charts of Sales Account Key
Accounts Organisation
5. Charts of Sales
Accounts Organisation

Records for Condition Type KOFI Account

No valid record exists Sales Deduction
General Valid record exists (search ends)
Business Area

• A business area is an internal accounting unit for which internal

balance sheets and profit & loss statements can be created.
• A company code can be divided into several business areas. A
business area can span across company codes.
• You specify by sales area whether the business area will be determined
based on:
– Plant and division
– Sales area
– Sales organization, distribution channel and item division.
Business Areas

Business Business
Area 1 Area 2

Company Code
Business Business
Area 3 Area 4

Revenue Account
400.00
Business Area 1
50.00

500.00
Business Area 2
700.00
90.00
Business Area 3
45.00

Business Area 4 600.00

Business Area Rules

RULE
Sales Area
Sales Distribution
Organisation Channel Division
0001 01 01 by Plant/Division
0001 01 02
by Sales Area
0002 01 01

Sales Area
Sales Distribution
Organisation Channel Division Plant/Division
Business Area 1 Business Area 1
0001 01 01 0001 01
0001 01 02 Business Area 2 0001 02 Business Area 2
0002 01 01
Business Area 3
Pro Forma Invoices

Pro Forma Pro Forma

Invoice (F5) Invoice (F8)

Sales Order Delivery Invoice

#3008 #80002911 #90000269

215
Cancellation Document

Order Delivery Billing

#4059 #80003913 #90002093 $2,500

Incorrect Price

1
Cancellation
Cancel #90002094
$2,500
Billing Status
2

Billing $2,050
#90002095

Correct Price
216
Billing

• Pro forma invoices are created with reference to an order or delivery

and are not passed on to the accounting department. When a pro-forma
invoice is created, the invoiced quantity in the order is not updated.
• Pro-forma invoices are always created using either the full order
quantity (type F5) or the full delivery quantity (type F8).
• A cancellation document copies data from the reference document and
passes an offsetting entry to the
accounting department.

217
Finally………Are U feeling.???.

218