Overview of Sales Processes

Overview
• Looks at the system procedures involved in the sales and
distribution process
• This take the form of an initial overview
• Additional details can be covered in the units that follow

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Objectives
After completing this unit, you’ll be able to:
• Explain the process chain for sales order processing
• Create a sales order with reference to a quotation
• Create an outbound delivery with reference to a sales order
• Pick and post goods issue
• Invoice a customer for the delivery
• Enter an incoming payment in the system

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Contents
• Process Overview
• Sales Processing
• Shipping Processing
• Billing Document Processing

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Process Overview
Lesson Overview
• Provides an overview of sales and distribution processes

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Objectives
After completing this lesson, you’ll be able to:
• Explain the process chain for sales order processing

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 Fulfillment Process
• Fulfillment (sales) is concerned with efficiently processing
customer orders
• It is triggered by a customer purchase order that is received by the sales
department
• Sales then validates the order and creates a sales order
• The sales order communicates data related to the order to other parts of
the organization, and it tracks the progress of the order
• The warehouse prepares and sends the shipment to the customer
• Once accounting is notified of the shipment, it creates an invoice and
sends it to the customer
• The customer then makes a payment, which accounting records
• As this scenario illustrates, fulfillment triggers processes in IWM where
the materials are stored
• Of course, in many cases the ordered materials are not available in the
warehouse
• In such cases fulfillment will trigger external procurement and/or
production 8
Fulfillment Process

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 Fulfillment Process Steps
• The process begins with presales activities and concludes with
the receipt of payment from the customer
• Presales activities are optional and are designed to identify and develop
customer relationships
• Very often, the process begins with sales order processing, which is
triggered by the receipt of a customer’s purchase order
• As the name suggests, sales order processing involves creating a sales
order, which is an internal document used to manage and track the
order as it flows through the process
• After a company creates the sales order, it prepares a shipment and
sends it to the customer
• The next step is billing the customer for the materials shipped
• Finally, the company receives a payment from the customer
• Each step involves several tasks
• Further, depending on the circumstances, additional steps can be
necessary, including activities to be completed by other processes in the
organization 10
Fulfillment Process Steps
• A variety of documents are created during the
fulfillment process
• As previously discussed, documents are categorized as material
documents, financial accounting (FI) documents, management
accounting (CO) documents, and transaction documents
• Documents can be printed or can exist in electronic form
• The data contained in these documents are categorized as
organizational data, master data, and transaction data
• Some data are provided by the user, while other data are
automatically retrieved from the relevant master data and the
existing transaction documents

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Fulfillment Process Steps

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Presales Activities
• Specific marketing measures (direct mailing campaigns, Internet
campaigns, trade fair sales activities, or telephone campaigns,
for example) can trigger sales processes
• Possible sequences of such campaigns can be a non-binding
customer inquiry or a request for a quotation
• Inquiries and quotations help to determine important sales related data
and can be saved as documents
• If the customer then places an order, this data can be accessed
• Use this presales information to plan and evaluate marketing
and sales strategies and as a basis for establishing long term
business relationships with customers, for example by:
• tracking lost sales or forecast
• recording presales data to help negotiate large contracts
• selling goods and services to large organizations that require
documentation of the entire process

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 Presales Activities
• Presales activity is often triggered by a communication from a customer
such as an inquiry or a request for quotation (RFQ)
• The outcome is a quotation that is sent to the customer making the
inquiry
• An inquiry is a request for information regarding a potential order
that the customer might place with the company
• Example, RMB inquires whether GBI can deliver 40 silver deluxe touring bikes
and 100 t-shirts by the specified dates
• If so, then RMB requests information on pricing, shipping costs, and
discounts
• In response, GBI creates a quotation and forwards it to RMB
• A quotation is a binding agreement to sell the customer specific
products under clearly defined delivery and pricing terms
• Because these terms can change, a quotation will typically include a validity
date, that is, a date up to which the quotation remains in effect
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 Presales Activities
• Besides sending quotations in response to inquiries, presales
activities can include managing customer contacts and
creating outline agreements
• SAP ERP provides some capabilities to track data pertaining to
established customers, such as their preferences and
purchasing history
• Companies can analyze these data to create marketing and sales
strategies designed to encourage customers to place additional orders
• In addition, the system can track potential customers
• ERP systems typically manage basic presales activities
• Companies utilize customer relationship management (CRM) systems
to manage very detailed presales, sales-pipeline, sales prospects, and
marketing activities that generate a quotation in the ERP system
• The handoff between the presales processes in a CRM system and the
quotation-to-cash process in the ERP system is a critical integration
point for most companies because failures, such as missed sales
opportunities, can significantly reduce sales revenues 15
 Presales Activities
• Just as quotations are binding agreements made by sellers,
outline agreements are binding agreements made by
customers to purchase specific quantities or values of
materials
• Example, GBI customer who enters into an outline agreement to purchase
1,000 standard touring bicycles over a six-month period for a specified
price
• Alternatively, the agreement may specify value instead of quantity
• In this case, the customer agrees to purchase bicycles valued at $30,000
over the next six months
• These types of outline agreements are called contracts
• Another form of outline agreement includes specific delivery
schedules
• Example, GBI customer could agree to purchase 1,200 bicycles over the
next six months and to accept delivery of these bicycles on a specific
schedule
• In this case, the agreement is called a scheduling agreement
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Presales Activities

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Elements of The Presales Activities

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Data in A Quotation
• Several types of organizational and master data are necessary to
process an inquiry and create a quotation
• Particularly important are data concerning the customer, the materials,
and pricing
• User input consists of the customer number, material numbers,
quantities, and dates
• The SAP ERP system uses these inputs to obtain the necessary
organizational data, such as sales area, from the various master
data in the system
• Material master and customer master are associated with specific
organizational elements
• SAP ERP also uses the customer number to obtain necessary customer
data, such as contact information, from the customer master
• Finally, the system uses material numbers to obtain availability and
pricing data from available pricing conditions or customer-material info
records

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Data in A Quotation
• If the inquiry is from a new customer, then the system will not
contain either master data or a customer-material info record
for that customer
• In such cases, the company must first create the customer master data
in the system
• The info record is not essential because pricing data are available via
pricing conditions
• The quotation can be created with or without reference to
existing documents
• If the quotation is created without reference, then all of the necessary
data must be provided when the quotation is created
• However, if a reference document—such as a previously created
inquiry, quotation, sales order, or an outline agreement—is used,
then data from these documents are automatically included in the
quotation
• These data are then updated as needed before the quotation is completed
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Data in A Quotation

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Reference Documents for A
Quotation

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Task of The Presales Activities
• The key tasks in the presales step are to receive inquiries and to
create quotations
• Additional tasks include tracking customers and their buying
patterns and creating long-term agreements with them

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Outcomes of The Presales Activities
• Presales activity frequently results in the creation of two
transaction documents: the inquiry and the quotation
• The inquiry document is simply a record of the customer’s inquiry
in the SAP ERP system
• Although creating an inquiry is not essential, it does provide certain
benefits
• For example, the company can use the inquiry as a reference document
when it creates a quotation
• Further, it can analyze inquiry data to identify lost potential sales and
then devise strategies to prevent similar losses in the future
• Presales activity can also generate contract and scheduling
agreement documents
• No material documents are created because there is no
movement of materials
• No accounting documents (FI or CO) are created because
presales activities have no impact on the company’s financial
position 24
Outcomes of The Presales Activities
• A final outcome of presales activity is the communication of the
quotation to the customer
• The manner in which the quotation is communicated is
determined by the output conditions associated with the
quotation
• The output conditions determine the following elements:
• The output medium by which the quotation is sent (e.g., print, fax, or
EDI)
• The recipient, meaning the company with the appropriate partner
function who receives the quotation
• The date on which the quotation is sent

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 Sales Order Processing
• One of the goals of the presales activities is to encourage customers
to place orders for materials or services
• These orders typically take the form of a purchase order (PO) sent by the
customer to the company
• A customer PO triggers the sales order processing step, which results in
the creation of a sales order in the SAP ERP system
• A sales order is an electronic document that captures and records
customer's request for goods or services
• The sales order contains all pertinent 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 previously put aside
• As a result, possible input errors occurring during sales order processing and
entering of redundant data is avoided
• User can enter a sales order with many items in a single screen
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Sales Order Processing

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Elements of A Sales Order

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Data in A Sales Order
• Much of the data contained in the sales order is also found in the
quotation
• In addition, the sales order includes data related to shipping, billing,
partner functions, and, if relevant, data from contracts with customers
• Shipping and billing data are obtained from the customer master
or the customer-material info record
• Partner functions are obtained from the customer master based on
the specified sold-to party
• Contracts are agreements made by customers to purchase a
specified quantity or value of materials over a certain time period
• Therefore, data regarding quantities, prices, and delivery dates are obtained
from contracts
• In addition, the delivery plant is obtained from the customer
material info record, the customer master, or the material master, in
that order

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Data in A Sales Order

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Task of The Sales Order Processing
• The key task in this step is to create a sales order
• Like a quotation, a sales order can be created using one of several
reference documents
• Thus, a sales order can be created with reference to a customer inquiry,
a quotation, an agreement, or a previously created sales order
• Data from multiple reference documents can be combined to create
one sales order
• Conversely, a single reference document can generate several sales
orders
• During order processing, user will be using some of the following
function:
• Pricing
• Availability check
• Transferring requirements to MRP (material requirement planning)
• Delivery scheduling
• Shipping point and route determination
• Checking credit limits
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Relationship Between Quotations
and Sales Orders

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Outcomes of The Sales Order
Processing
• A sales order is the only transaction document generated by
this step
• No material or accounting documents are created
• If a contract is associated with the sales order, then it is updated to
include the quantity or amount of the sale
• There are four additional consequences—availability check,
delivery scheduling, and transfer of requirements

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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 can, 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)

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Procurement

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 Shipping
• The shipping step is triggered when orders become due for delivery
• Shipping processing in Sales and Distribution begins when user
creates the delivery document
• The delivery document controls, supports, and monitors numerous sub
processes 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)
• To create a delivery, the system performs the following checks to make
sure the information is complete and the delivery can be created:
• Possible delivery blocks (sales order blocks due to credit or other manual
blocks set by the Sales and Finance areas)
• Sales orders incompleteness
• Material availability
• Picking date
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Shipping
• 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 warehouse
• It is based on a simple principle: where the goods are taken from and
brought to within the 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
• Changes based on a value basis are made on the relevant balance sheet
accounts in financial accounting

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Shipping

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Elements of The Shipping Step

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Data in A Delivery Document
• The central document in shipping is the delivery document, which
identifies which materials are to be shipped to which partner
(ship-to party) and from which plant
• The delivery document further identifies the storage locations
for these materials
• The data in the delivery document are compiled from multiple
sources
• Because shipping is triggered when a sales order becomes due for
delivery, sales orders—particularly the schedule lines—are
one source of data
• Shipping-related data are the most relevant
• In contrast, pricing data typically are not relevant during the
shipping step

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Data in A Delivery Document

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Relationship Between Schedule
Lines and Delivery Items

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 Tasks of The Shipping Step
• The specific tasks completed during the shipping step are (1) creating a
delivery document, (2) picking, (3) packing, and (4) post goods issue
• Creating a delivery document serves as an authorization for delivery
• Schedule lines from multiple sales orders with similar characteristics
can be combined into one shipment or delivery
• Specifically, the sales orders must have the same ship-to address,
shipping point, and due date
• Conversely, items in one order can be split into more than one shipment
• The picking step is optional and is part of the warehouse management
process
• However, although picking is a part of the warehouse management process, it is
triggered during the shipping step when a delivery document is created
• The delivery document serves as a request for picking
• The delivery document is converted into a transfer order in warehouse
management, and the transfer order is then used to complete the physical
movement of the materials needed for the shipment
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 Tasks of The Shipping Step
• Items from multiple delivery documents can be included in a single
transfer order
• This approach can optimize the work of the pickers in the warehouse by grouping
requests for materials that are located in the same area
• Alternatively, a delivery document can generate multiple transfer orders
• Data from the delivery documents are copied to the transfer order
• The delivery quantity from the delivery document becomes the pick quantity,
which is the quantity needed to be picked from storage
• Once the picking is completed, the quantity picked is automatically transferred
back into the delivery document
• After picking has been completed, the materials are placed in a staging area
where they are packed appropriately
• Materials are packed using a variety of shipping units such as cartons, pallets,
and containers
• Each shipping unit can be packed into another shipping unit to consolidate the
shipment
• The final task in shipping is to post goods issue in the ERP system
• The goods issue indicates that the shipment has left the facility
• It also results in several outcomes 44
Relationship Between Delivery
Documents and Transfer Order

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Delivery Quantity vs Pick Quantity

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Packing Options

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 Outcomes of The Shipping Step
• The shipping step, which ends with the goods issue, has numerous
outcomes
• These outcomes fall into three broad categories: (1) accounting impacts, (2)
creation of documents to record transaction data, and (3) updates to master
data and previously created documents
• Shipping is the first step in the fulfillment process that has an impact
on financials
• Specifically, the inventory accounts of the materials shipped are credited,
and the cost of goods sold account is debited
• These amounts are based on the cost of making or buying the materials
• In the case of trading goods, the amount is based on the moving average
price of the material
• In the case of finished goods, the amount is based on the standard price
which takes into account production costs such as material, labor, and
overhead
• An FI document is created to record these data
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Outcomes of The Shipping Step
• In addition, a controlling document may be created if a
management accounting (controlling) relevant activity, such as
profitability analysis is in use
• Shipping involves a movement of materials that reduces the
quantity of those materials in inventory
• Therefore, in addition to the reduction of inventory value in the general
ledger, the inventory quantity is also reduced in the material master for
the delivering plant
• A material document is created to record this movement
• Relevant sales documents, such as quotations and sales orders,
are updated with the details of the shipment
• Finally, the billing due list is updated
• The billing due list is a list of deliveries for which the billing step can be
executed

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Outcomes of The Shipping Step

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 Billing
• The purpose of the billing step is to create a variety of documents such as
invoices for products or services as well as credit and debit memos
• The billing step is also used to cancel previously created documents
• 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
user to monitor and process customer payments.
• When user creates a billing document, the G/L accounts are normally
determined automatically and the relevant data is posted
• The system carries out the following:
• a debit posting on the customer's receivables account
• a credit posting on the revenue account.
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Billing

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Elements of The Billing Step

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Data in A Billing Document
• Billing, with reference to delivery documents, utilizes data from
the delivery document and the sales order, such as material
number and quantities
• Master data, such as customer master and pricing conditions, are
the source of pricing data and partner function (bill-to party)
• In addition, billing utilizes organizational data relevant to the
fulfillment process, client, company code, and sales area

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Data in A Billing Document

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 Tasks of The Billing Step
• The key task in the billing step is to generate a billing
document, typically an invoice for materials or services
• The invoice can be created on the basis of either a delivery or a sales
order
• However, if the company wishes to be paid before it ships the
materials—which is frequently the case when the customer is new or
has a poor payment history—then the process can be modified so
that billing will take place prior to shipment
• Other billing documents that are sometimes created are
credit and debit memos
• A credit memo is a refund the company issues if the customer
returns the materials or if the initial invoice overcharged the
customer
• The company uses a debit memo when the customer was
undercharged in the original invoice
• A debit memo increases the amount owed by the customer
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Tasks of The Billing Step
• Multiple deliveries can be combined to create one billing
document
• This process can be employed only when the deliveries share the
same characteristics with respect to payer (partner function), billing
date, and country of destination
• Conversely, one delivery can result in multiple invoices
• This is the case when the terms of payment for the items in the delivery are
different
• In these cases, a different billing document must be created for each term of
payment
• Note that when deliveries are combined, the partner
function payer is relevant, not who placed the order (sold-to
party) or who received the shipment (ship-to party)

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 Outcomes of The Billing Step
• Like shipping, billing has several outcomes related to accounting, creating
documents, and updating master data and documents
• When the billing step is completed, accounts receivable reconciliation and
sales revenue accounts in the general ledger are updated
• The accounts receivable account is debited by the amount of the invoice, which is
the amount the customer owes, and the sales revenue account is credited by the
same amount
• However, that because accounts receivable is a reconciliation account, the
amount of the invoice cannot be posted directly to the accounts receivable
account
• Instead, the amount is posted through the corresponding subledger account, in
this case, the customer account
• An open item is created in the customer’s account via a debit entry, which
automatically creates an entry in the accounts receivable account
• In addition to postings to the general ledger, an FI document is created to record
these data
• Finally, because the billing step increases the amount receivable from the
customer, the available credit decreases by a corresponding amount 58
Outcomes of The Billing Step
• Billing has potential consequences in management accounting
or controlling
• For example, profitability analysis uses revenue data from the billing
step that are recorded via a controlling document
• Finally, billing generates updates to several sales documents, such as
sales orders and deliveries, the customer’s credit account, and
statistics (information structures) in the sales information system

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Outcomes of The Billing Step

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Payment
• The final step in the fulfillment process is the receipt of payment
from the customer
• The payment is applied to the appropriate open items—that is, items
that have not yet been paid—in the customer’s account
• When user posts an incoming payment, the data on the relevant
G/L accounts is posted automatically
• The system carries out the following:
• a debit posting on the cash account
• a credit memo on the customer's receivables account

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Payment

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Elements of The Payment Step

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Data in A Payment Document
• When a company receives payment from a customer, it retrieves
the customer account to identify the open items
• It then applies the payment to these items
• Therefore, the payment step involves customer master data as
well as organizational data

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Data in A Payment Document

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Tasks of The Payment Step
• The tasks in the payment step are to identify the open items and
to apply the payment to these items
• Customers make payment based on terms that were previously
agreed upon
• Further, customers can pay multiple invoices at once, or,
conversely, can divide a single invoice into multiple payments

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Outcomes of The Payment Step
• When a customer payment is recorded, relevant general ledger
accounts are updated, and a corresponding FI document is
created
• This transaction clears the open item in the customer’s account
that was created during the billing step
• Because the customer account is a subledger account, the
corresponding reconciliation account, accounts receivable, is also
automatically credited
• Finally, because the payment reduced the amount receivable from
the customer, the customer’s credit limit increases by a
corresponding amount

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 Master Data in Sales and Distribution
• The figure in the next slide represents the link between the sub processes in
Customer Order Management within the system
• The structure of the blocks from top to bottom represents the normal sequence
of events in the sales and distribution process
• The boxes within the various blocks represent sales and financial accounting
documents
• Sales activities and promotions are documents for sales support within presales
• Sales documents are documents that are entered during presales and sales order
processing. Inquiries, quotations, sales activities, scheduling agreements and
standard orders are examples of sales document types
• Outbound deliveries, transfer requests and transfers are documents within
shipping processing.
• The goods issue document contains changes involving stock and is the basis for
the relevant accounting documents.
• The billing document is a document in the invoicing area and is the basis of the
relevant accounting documents
• The left and right sections of the figure in the next slide represent key
interfaces between Sales and Distribution and the Sales Information System,
Materials Management, and Production Planning 68
Master Data in Sales and
Distribution

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Lesson Summary
You should now be able to:
• Explain the process chai for sales order processing

70
Sales Processing
Lesson Overview
• Introduces the sales documents used in standard sales and
distribution processes

72
Objectives
After completing this lesson, you’ll be able to:
• Create a sales order with reference to a quotation

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Creating an Order
• A sales document is always created within a sales area
• A sales order can, therefore, apply to a transaction that already
exists
• For example, one or more inquiries and/or quotations can be
reference documents
• In this case, the system copies the relevant data to the sales order
• Similarly, a quotation can lead to several sales orders

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Creating an Order

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 Sales Document Structure
• A sales document is divided into three levels: header,
item, and schedule line.
• The data is distributed across these levels accordingly
• Sales document header
• The data for the document header is valid for the entire document
• This includes, for example, customer-related data such as partner functions
and customer PO number, dates, and order total
• Items in the sales document
• Each item in the sales document has separate data
• This includes, for example, data about materials (material number, description)
and quantities ordered
• Each sales document can contain several items, whereby the individual
items can be controlled differently
• Each item can be associated with a different item category
• Examples include material item, service item, free-of-charge item, or text item,
item, which determines how the item is handled with regard to pricing, billing,
and shipping.
• For example, there is no charge for free-of-charge items 76
 Sales Document Structure
• The data is distributed across these levels accordingly
(cont.)
• Schedule lines for line 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

• In order that the sales documents are processed efficiently,

the data can be read and processed in different views
• The views are grouped into overview, header, and item screens
• As a rule, a new sales document is entered on an overview screen

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Sales Document Structure

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Sales Document Structure

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Lesson Summary
You should now be able to
• Create a sales order with reference to a quatation

80
Shipping Processing
Lesson Overview
• Introduces the shipping documents used in standard sales and
distribution processes

82
Objectives
After completing this lesson, you’ll be able to:
• Create an outbound delivery with reference to a sales order
• Pick and post goods issue

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 Creating An Outbound Delivery
• Outbound deliveries are created for orders that are ready to
be shipped
• The system copies the relevant data from the order to the
outbound delivery
• User can create one or more outbound deliveries from
the order
• User can also combine items from more than one order in an
outbound delivery
• To combine them successfully, the orders must correspond with the
characteristics that are essential for the shipping process, for
example:
• Shipping point
• Due date
• Ship-to address

• The system can create deliveries either on-line or as a

background job to be executed during off-peak hours 84
Creating An Outbound Delivery

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Structure of Delivery Document
• A delivery document is grouped into two levels: header
and item
• The data is distributed across these levels accordingly
• 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, shipping address,
deadlines for shipping processing, and totals (weight, number of items)
• Delivery document item
• Each item in the delivery document contains its own data
• This includes, for example, data about materials, quantities, and weights, as
well as stock information
• Each delivery document can contain several items, whereby the individual
items can be controlled differently
• Examples include material items, free-of-charge items, or text items

86
Structure of Delivery Document
• Unlike sales documents, delivery documents do not contain
schedule lines
• A schedule line in the sales document can become an item in the
delivery document
• To ensure that the delivery documents are processed efficiently,
the data can be read and processed in different views
• The views are grouped into overview, header and item screens.

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Structure of Delivery Document

88
Structure of Delivery Document

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Picking
• User creates 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 for outbound delivery can be further restricted via the picking
date or the choice of certain shipping points, for example
• To optimize picking, user can create picking lists that contain
materials from different outbound deliveries
• In order to relieve the work for the picker, user 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 90
Picking

91
Posting Goods Issue
• 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 relevant sales documents is updated

92
Posting Goods Issue

93
Lesson Summary
You should now be able to:
• Create an outbound delivery with reference to a sales order
• Pick and post goods issue

94
Billing Document Processing
Lesson Overview
• Explains the function and use of billing documents within the
standard sales and distribution process

96
Objectives
After completing this lesson, you’ll be able to:
• Invoice a customer for the delivery
• Enter an incoming payment in the system

97
Creating A Billing Document
• User 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
• The system can create invoices either on-line or as a background
job to be executed during off-peak hours
• User can create invoice for customer immediately upon delivery,
on order completion, or at a specific time interval:
• Periodically (e.g., weekly or monthly)
• Time-specific (e.g., at a particular day and hour of the week)

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Creating A Billing Document

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 Billing Document Structure
• A billing document is grouped into two levels: header and
item
• The data is distributed across these levels accordingly
• Billing document header
• The data for the document header is valid for the entire document
• This includes, for example, partner identification such as the sold-to party and
payer, billing date, document currency, payment terms, and the total
• Billing document item
• Each item in the billing document contains its own data
• This includes, for example, details about the material, billing quantities, and net
values for the items
• Each billing document can have several items

• To ensure that the billing documents are processed

efficiently, the data can be read and processed in different
views
• The views are grouped into overview, header, and item screens 100
Billing Document Structure

101
Billing Document Structure

102
 Effects of Billing Document
• When user saves 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 user saves 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
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Effects of Billing Document

104
Document Flow in The System
• The documents within a sales and distribution process are linked
to each other via the document flow
• This enables user to access the history and current status of his sales
and distribution processes at any time
• User can display the document flow as a list with the linked
documents
• Depending on the document from which he calls up the list, all the
relevant preceding and subsequent documents are displayed
• From this list, user can display the relevant documents or call up
status overviews for the documents
• This provides a quick overview of the progress of user’s sales
processes at any time and can be used to answer customer
questions quickly and reliably

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Document Flow in The System

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Document Flow At Item Level
• The document flow is updated at the document header and
line item level
• Schedule lines are only in sales documents
• Since each schedule line contains its own delivery date, each
deliverable schedule line becomes an individual item in a delivery
document

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Document Flow At Item Level

108
Lesson Summary
You should now be able to:
• Invoice a customer for the delivery
• Enter an incoming payment in the system

109
Unit Summary
You should now be able to:
• Explain the process chain for sales order processing
• Create a sales order with reference to a quotation
• Create an outbound delivery with reference to a sales order
• Pick and post goods issue
• Enter an incoming payment in the system

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