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SAP Order to Cash Business Process

Introduction

Agenda
- Integrated view of SAP
- High Level Business Process Break up
- Overview of O2C Process
- Organizational Structure in O2C
- Appendix

Integrated overview of SAP

Various modules available in SAP R/3 to map a enterprise business process

High Level Business Process Break up


We can break up various business functions which any
organization employs ideally into 4 major components
Production Planning (P2P)- Production planning is the planning of
production and manufacturing processes in a company or industry. It utilizes the
resource allocation of activities of employees, materials and production capacity, in
order to serve different customers

Material Management (MM) - Materials Management can be defined


as an integrated approach to manage the entire need, flow and cost related to
materials by any firm

Order to Cash (O2C) Mechanisms to execute the business processes


used in the selling, shipping and billing of products and services

Finance (FI) - FI deals in managing financial transactions within enterprises.

Overview of O2C Process

High Level view of Order to Cash Processing

Pre-sales
Activities

Sales Order
Entry

Shipping
Payment

Invoice
Customer

O2C Process : Pre-Sales Activities


Pre-sales documents need to be managed within the presales activities:
Inquiries and Quotations. These documents help identify possible sales
related activity and determine sales probability.
An inquiry is a customers request to a company for information or quotation in
respect to their products or services without obligation to purchase.
How much will it cost
Material/Service availability
May contain specific quantities and dates

The inquiry is maintained in the system and a quotation is created to address


questions for the potential customer
The quotation presents the customer with a legally binding offer to deliver
specific products or a selection of a certain amount of products in a specified
timeframe at a pre-defined price.

O2C Process Sales Order Entry


A Sales Order is a record of your customers request for Goods / Services
The sales order contains all of the information needed to process your
customers request, the following information is determined for each sales
order:

Master Data Customer and Material


Delivering Schedule
Shipping point and route determination
Availability Check
Transfer of requirements to MRP
Pricing
Credit limit check

Various types of Sales Order are

Rush Order
Cash Sales
Consignment Sales
Returns
Debit and Credit memo

O2C Process :Shipping


The shipping process begins when we create the delivery document for the sales order.
Delivery Document checks order and materials to determine if a delivery is possible
delivery block (hold), completeness
This document controls, supports, and monitors numerous sub-processes for shipping
processing:
Picking
Packing
Post Goods Issue
Integrated with the Material Management (MM) and Finance (FI) modules
Updates the Inventory
Updates G/L accounts
Cost of goods sold
Inventory

Copyright 2011 Deloitte Development LLC. All rights reserved.

O2C Process : Billing


The billing process is used to generate the customer invoice.
The billing document is created by coping data from the sales order and/or
delivery document.
Order-based billing
Delivery-based billing

The billing document will automatically create a debit posting to the customer
sub-ledger account and credit company revenue account
It is at this point that the sales process is passed over to Financial Accounting
to await payment.

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Copyright 2011 Deloitte Development LLC. All rights reserved.