SAP SD Process Flow

SAP SD Flow represents Sales and Distribution, constituting a key

module in the SAP ERP (Enterprise Resource Planning) system,
dedicated to orchestrating sales and distribution operations. Renowned
for its widespread adoption, SAP SD Flow finds application across
industries and organizations of all scales. This article delves into the
realm of SAP SD Flow, shedding light on its functionalities and
significance.
SAP SD Flow, short for Sales and Distribution, forms a vital module
within the SAP ERP ecosystem. Focused on seamless sales operations, it
empowers organizations to oversee the entire sales life cycle – from
crafting orders to final delivery and invoicing. With SAP SD Flow,
businesses can effortlessly configure pricing and discounts, tailoring them
to customer profiles, products, and geographic regions. Additionally, SAP
SD Flow offers tools to monitor inventory and oversee stock movements,
enhancing overall operational efficiency.
SAP SD Flow is a strategic compass for businesses aiming to optimize
their sales processes. Integrating order management, delivery tracking,
and invoicing into a unified platform streamlines operations and
minimizes complexities. This module empowers organizations to tailor
pricing strategies to specific market segments, facilitating dynamic
adjustments and promoting competitiveness.
Moreover, SAP SD Flow goes beyond sales to encompass the entire
distribution landscape. It enables real-time monitoring of inventory
levels, ensuring timely replenishment and preventing stock outs. The
module's comprehensive reporting and analytics capabilities offer insights
into sales performance, customer preferences, and market trends, aiding
informed decision-making. With its user-friendly interface and seamless
integration, SAP SD Flow is a cornerstone in enhancing sales and
distribution operations, driving growth and customer satisfaction.

SAP SD Flow - Table of Contents

 What is SAP SD?

 Introduction to SAP Sales and Distribution
 What is the Process of SD?
 SAP SD Process Flow
 SAP SD Flow with Examples
 FAQs

What is SAP SD?

 SAP SD was designed to handle all a company's sales and distribution
processes daily. A business can plan and carry out the steps required in
receiving sales orders, executing availability checks, and so on; supplying
the supply chain with the requirements, including those derived from
sales predictions; and then converting them to expertise production
planning, scheduling, production, production scheduling, and purchasing.
Apart from being a sales order management system, SAP SD includes
features for managing shipping and transportation, including packing,
labelling, and shipping documents.
SAP SD provides various tools for managing customer information, such
as customer master data, sales history, and credit management. SAP SD
allows organizations to create invoices and billing documents based on
sales orders and other relevant data.
SAP SD also includes various reporting and analytics tools that allow
organizations to gain insights into their sales and distribution processes
and make data-driven decisions. The SAP SD module is the most vital
ERP module developed by SAP. It helps better manage sales and
customer distribution data and processes in organizations. The essential
components of the SAP Sales and Distribution module are master Data,
sales, shipping of material, billing-related, sales support, transportation of
products, and foreign trade
Some essential features of SAP SD module include -
 Price and Taxation: It helps you to evaluate the cost of goods and
services under various conditions like rebate or discount, which is granted
to a customer.
 Availability Check: Check a product's availability in an organization's
warehouse.
 Billing & Invoice: Helps you to generate bills or invoices.
 Material Determination: This helps you to determine the details of
materials based on a specific condition.
 Credit Management: It is a method of managing customers' credit
limits. It can be figured in two different ways simple credit check and
automatic credit check.
 Account Determination: This helps you determine customer details
based on a given condition type.

Introduction to SAP Sales and Distribution

SAP Sales and Distribution or SD is an essential module of SAP ERP

consisting of business processes required for selling, shipping, and billing
a product. The module is tightly integrated with SAP MM & SAP PP.
Key sub-modules of SAP SD are Customer and Vendor Master Data,
Sales, Delivery, Billing, Pricing, and Credit Management.

What is the Process of Sales and Distribution (SD)?

1. Activity of Presales
In real-life scenarios, before the sale takes place, the business needs to
collect primary data and create master records in the system for either
existing or potential customers or create data for people, sales prospects,
and existing customers.
Once this has been completed, the actual contact or sales deal with the
sales prospects is made and can be recorded as an SAP ERP SD
document in the form of an inquiry or quotation. We can also specify
important sales-related data that can be accessed for reporting purposes,
evaluate sales activities, manage marketing funds, and convert sales
orders. All those activities fall under the Presales activity in SAP SD.
2. Processing of Sales Order
Order processing starts with recording the actual sales order or sales
request; Sales orders are recorded either by back-office staff or the sales
team or directly. It could be by the customer via a web application or
electronic data interchange (EDI). Or XML interface.
The sales order contains the customer, partner (sold-to, ship-to, bill-to,
payment terms), material, quantity, pricing, delivery date, and shipping
and transportation information required for delivery. Material/ Product
availability check is performed when the order creation triggers the
potential procurement requests as needed. The requirements created by
the sales order can be filled from available in-house stock inventories
procured by the replenishment team.
3. Processing of Deliveries
On the shipping due date, the delivery documents are created, and the
route is determined & the process of picking. Packing. Staging. And
loading started in Warehouse Management. The transfer order includes
data copied from the delivery document. Standard SAP functionality
provides grouped deliveries, wave picking, and two-step. Transfer orders
can be processed as printed pick tickets or in electronic form using radio
frequency (RF) devices on the warehouse floor with confirmation of the
transfer order completing the picking activities in the warehouse.
If transportation management functionality is activated, we can start
collaborating with freight service providers, begin the tendering process,
and finish by creating the shipment cost document, which captures the
payable activities related to the delivery of goods to your customers.
Delivery packing list and bill of lading output are initiated picking.
Posting the goods issue completes the process and results in stock
movement or a confirmation of service that changes your on-hand
inventory balance, reducing it and updating the balance sheet accounts in
SAP ERP Financials (SAP ERP FI).
4. Invoicing and Revenue Identification, Reporting
The last step before collecting a customer's payment is creating a billing
document or invoice sent to the customer's bill-to-party for the payment
request. As with the delivery document, data is copied from either the
sales or delivery documents and other billing documents, creating credit
or debit memos. When we create the billing document, account
determination is performed, and appropriate SAP General Ledger (G/L)
account postings have been executed that debit the customer's receivables
and credit the revenue account.
The material documents recorded when the goods issue was posted, and a
subsequent accounting document stored the stock movement data. The
transportation service provider purchase order ended up as an account
payable entry, and the customer's incoming payment was also posted
against the invoice or billing document.