SAP Sales and Distribution

(SD) Bootcamp
Day 1
Copyright
Copyright
© 2007
© Accenture
2008 Accenture
All Rights
All rights
Reserved.
reserved.
Accenture,
Accenture,
its logo,
its logo,
and and
HighHigh
Performance
Performance
Delivered
Delivered
are trademarks
are trademarks
of Accenture.
of Accenture.
 Course Objectives
• At the end of the course, participants will be able to:
– Explain SAP Sales and Distribution (SD) functionality
and how the module integrates with other modules
– Describe the SD organization structure, master data,
and common business transactions
– Perform basic SD business transactions
– Perform basic SD configuration
– Manage SD Master Data

2
 Course Introduction
• Ground Rules
– Participate - Ask questions!
– Learn From Everyone’s Comments
– Please Turn Off Cellular Phones
– Honour Time Schedule
– Relax and Have Fun!
• Introduce Yourself
– Name, Operating Group, Location
– Your SAP SD Bootcamp Objective/s
3
Course Agenda
Order to Cash Process Flow Day 1
Organizational Structure and Master Data Day 1
Sales Orders, Sales Items, Schedule Lines Day 2
Special Flows, Claims Day 2
Pricing and Logistics Day 3
Billing, Revenue Account, Rebates, Output Day 4
Credit Management, Output, Text Day 5
Additional features Day 5
Closure Day 5

4
 Agenda – Day 1

• Order to Cash Process Flow

• Organizational Structure

• Master Data

5
How Businesses Work

Purchase to Pay Order to Cash

• Buy goods and services • Receive customer
• Receive those goods orders
and services • Deliver to customer
• Pay for what they have • Invoice the customer
received • Receive payment

Internal Functions
• Manufacturing
• Inventory Control
• Accounting functions
• Human Resources
6
How Businesses Work (cont.)
OTC
PTP
Sales
Purchase Order
Order
Processing Processing
Demand

Outboun
d delivery
Inbound Logistics Outbound Logistics
Internal Goods Outboun
Vendor Goods warehouse issue dshipmen Customer
receipt processes t

POD/BOL

Invoice
verification
Billing
General
ledger

7
 Order to Cash (OTC) Process
• The Order to Cash process is made up of four basic
process blocks:

Sales Order Delivery Billing Accounts

Receivable

Captures the Transition of Charging the Receiving

customer ownership customer for payment for
demand the goods or the goods or
services that services that
they have they have
received received

8
 Master Data Requirements
• The OTC process flow relies on Master Data:

Sales Order Delivery Billing Accounts

Receivable

– Customer Master
– Material Master
– Pricing Record This data is referred
to and used during
– Customer-Material Information Records the creation of a
– Product Proposals Sales Order
– Listings/Exclusions
– Contracts
9
 Sales Order – OTC Process

Sales Order Delivery Billing Accounts

Receivable

Captures the
customer
demand

• What does the customer want?

• Where does the customer want the goods/services to go?
• Input to the delivery process
• Input to the demand fulfillment process (do we buy or make it?)
• Pricing
• Credit Checking
• Availability Checking
• Output: Order Acknowledgment 10
 Sales Order – OTC Process
(cont.)

Sales Order Delivery Billing Accounts

Receivable

Transition of
ownership

• Many goods orders may be put on a single delivery

• A single order could be split into many deliveries
• When a delivery is completed, ownership is transferred to the customer
• Picking
• Packing
• Foreign Trade
• Shipping / Routes / Transportation
• Output: Delivery Docket / Manifest / Bill of Lading
• G/L Posting
11
 Billing – OTC Process

Sales Order Delivery Billing Accounts

Receivable

Charging the
customer for
goods or
services that
they have
received

• Typically the invoice is produced as the delivery has been completed

• Also periodic invoicing
• Pricing
• Credit Update
• Output: Billing Document / Invoice
• G/L Posting
• Transfer to CO-PA (Sales Reporting)
12
 Accounts Receivable – OTC
Process

Sales Order Delivery Billing Accounts

Receivable

Receiving
payment for
the goods or
services that
they have
received

• Customer pays in accordance with terms of payment

• Money can be received via cash, cheque, electronic funds
transfer (EFT)
• Credit Update
• G/L Posting
13
 Output View of the OTC Process
• There are a number of outputs that may be triggered during
the process:

Sales Order Delivery Billing Accounts

Receivable

Order Delivery docket Invoice

acknowledgement (bill of lading)
Customs documents
Shipping documents 14
 Timing View of the OTC Process
• There are a number of dates that are important to the
process:

Sales Order Delivery Billing Accounts

Receivable

• Order • Delivery • Billing • G/L

creation creation document creation
date date creation date
• Pricing • Goods date • Posting
date Issue • Pricing date
• Material date date
availability • Many • Baseline
date others date
15
 Accounting View of the OTC
Process
• The OTC process flow triggers G/L postings:

Sales Order Delivery Billing Accounts

Receivable

No posting! DR COGS DR A/R Cust. DR Cash at Bank

CR Inventory CR Revenue CR A/R Cust.

 COGS  A/R Cust.  Cash at Bank

 Inventory  Revenue  A/R Cust.

• When the delivery is Post Goods Issued (i.e., transfer of ownership)

• When the billing document is produced
• When customer payment is received
16
Completing the Accounting Flow
for OTC Process

Sales Order Delivery Billing Accounts

Receivable

No posting! DR COGS DR A/R Cust. DR Cash at Bank

CR Inventory CR Revenue CR A/R Cust.

 COGS  A/R Cust.  Cash at Bank

 Inventory  Revenue  A/R Cust.

• Increasing COGS • Increasing • Increasing Cash at

(COGS is an A/R Customer Bank (Cash is an
Expense account) (A/R is an Asset account)
Asset
• Decreasing account) • Decreasing A/R
inventory (Inventory Customer
is an Asset account) • Increasing
Revenue
17
 Order to Cash (OTC) Process –
Review
• The Order to Cash process is made up of four basic
process blocks:

Sales Order Delivery Billing Accounts

Receivable

Captures the Transition of Charging the Receiving

customer ownership customer for payment for
demand the goods or the goods or
services that services that
they have they have
received received

18
 OTC – Example Customer #1
• Packaging Business
– Makes and sells cans and bottles

Sales Order Delivery Billing Accounts

Receivable

• Joint planning with • Deliveries • Some customers • Payment

customer to forecast are batched are invoiced with received in
demand the delivery accordance
• Order from customer docket (2-part with terms of
filled from available document) payment
inventory • Other customers
• When stock is low are invoiced on a
production tops up periodic basis
(to stock business) 19
 OTC – Example Customer #2
• Mining Business
– Blows up ground, crushes remainder, ships minerals to
international customers

Sales Order Delivery Billing Accounts

Receivable

• Each order is • One deliver per • Pro forma • Payment

for a shipload of sales order invoice on sales received in
iron ore • Complex order accordance
(thousands of shipment • Final invoice with terms of
tons) schedule to after the ship payment
minimize time sails (post
at the wharf goods issue)
20
 OTC – Example Customer #3
• Consulting Business
– Sells services

Sales Order Delivery Billing Accounts

Receivable

• Customer • Services are • Invoice • Payment

requests provided customer based received in
services • Service on timesheets accordance
• If insufficient consumption is with terms of
available tracked by payment
consultants, timesheet entry
may purchase
contracting help
21
 OTC – Example Customer #4
• Vending Machine Look
– Sells candy bars and soft drinks carefully

Order/ Accounts Delivery

Billing Receivable

• Decide what items • Machine • Goods provided

you wish to buy accepts to hungry user
• Machine shows payment
how much is owed
• Press button to
order
• Has he/she put
sufficient funds in
the machine? 22
 Overview of SAP
• Key modules that you will encounter during this course:
Sales and Distribution (SD): sales,
SD
pricing, billing, sales reporting
FI
Sales &
Distribution
Financial
Accounting
Key
MM
Materials
CO Logistics Execution (LE): Outbound
Controlling
PP
Mgmt. and inbound logistics (shipping)
TR
Production
Planning
R/3 Treasury
EC Material Management (MM): manage
Enterprise
Controlling logistic processes such as purchasing
QM Client / Server PS IM
and warehouse/ inventory management
Quality Project Investment
Manage- ABAP/4 System Management
ment PM WF
Plant Workflow
Maintenance
PD IS Finance (FI): Manage all financial
Personnel Industry
Development Solutions accounting activities
PA
Personnel
Administration
Controlling (CO): Internal control for
managerial accounting
Source: SAP AC010: Financial Accounting & Reporting
23
Questions

24
 Agenda – Day 1

• Order To Cash Process Flow

• Organizational Structure

• Master Data

25
 Sales and Distribution
Organizational Structure (1 of 6)
• An organizational structure provides the foundations
for an organization to complete its business.
– Organizational structure is a framework within which all
the business transactions can be processed.
– Organizational structures in SD are linked with those in
Financial Accounting and Materials Management.
– Organizational units are defined and assigned in
Customizing.

26
 Sales and Distribution
Organizational Structure (2 of 6)
• Organizational structure provides the structure for:
– Performing business functions, e.g., create sales
orders
– Reporting, e.g., stock listing by warehouse
– Legal requirements
– Financial requirements
– Managing controlling
– Physical facilities
– Supply chain of products from warehouse to customer
– Integration with other modules in SAP
27
 Sales and Distribution
Organisational Structure (3 of 6)
• When designing the organisation structure for a business,
ultimately, all legal and statutory requirements must be met. In
addition, some guiding principles should be adhered to:
– Standardisation, creating uniform structures and standards across
business units
– Simplicity, representing the business with a structure which is simple.
Adding unnecessary complexity will drive issues including maintenance
and user error.
– Flexibility, the structure should have the ability to handle future growth
such as new products, new warehouses or even acquisition of new
businesses.
– Optimization, ensuring that the structure will allow for simplified
transaction flow.
28
 Sales and Distribution
Organizational Structure (4 of 6)
• In SAP, the following configurable objects are used to
create the organization structure:
– Company Code
– Sales Organization
– Distribution Channel
– Division
– Sales Area, Sales Office, Sales Group
– Plant, Storage Location
– Shipping Points, Loading Points
– Integration with FI (Credit Control Area and Business Area)
29
 Sales and Distribution
Organizational Structure (5 of 6)

• Within the IMG, all

organisational
objects are
created under
Definition

30
 Sales and Distribution
Organizational Structure (6 of 6)

• The organisational
structure is then
created via
Assignment in the
IMG

31
 Component Creation in SD
Company

Company Code(s)

Sales Organisation
Plant Credit Control Area
• Storage Location
• Shipping Point Distribution Channel Division
* Linked to FI
Sales Organisation
• Loading Point SALES AREA Responsible for
selling goods and
* Linked to MM/PP Sales Office
Distribution Channel services to customers
Channel through
which goods and Division
services reach Product Groups
Sales Group customers responsible for sales
and profits of products
Sales People 32
 Company Code
• Company Code represents a legal entity of the organization (as defined per
the legal requirements of that country). It is the organization unit that needs
relevant financial statements such as balance sheets and profit and loss
statements as a result of business transactions.
• A company code will be configured for each legal entity.
• Company codes can be used to differentiate credit limits and receivables
for customers, separate inventory valuations in plants owned by different
legal entities, or drive intercompany sales processes.
• SAP configuration includes:
– Defining the company code, an alphanumeric field of 4 characters, e.g., A001,
0700
– Assigning the sales organization, plants, customers, and credit control areas to
the company code

33
 Company Code – Configuration
• IMG  Enterprise Structure  Definition  Financial Accounting  Edit,
copy, delete, check company code  Copy, delete, check company code

From Company Code

To Company Code

34
 Company Code – Configuration
(cont.)
• Edit Company code

35
 Sales Organization
• Sales organization is responsible for the sale of certain products or services
• Responsibility of a sales organization may include legal liability for products
and customer claims
• A sales organization cannot share any master data with other sales
organizations
• Sales organisations are primarily used to drive customer segmentation for
reporting and pricing
• Sales organisation is assigned to the company code
– One company can have more than one sales organisation, but one sales
organisation can only be assigned to one company
• Due to the impact on master data setup, the number of sales organisations
should be kept to a minimum Company ABC

Sales Org 1000 Sales Org 2000

(e.g., Singapore) (e.g., Australia)
36
 Sales Organisation –
Configuration
• IMG Enterprise Structure  Definition  Sales and Distribution 
Define, copy, delete, check sales Organisation Define Sales Organisation

Copy

37
Sales Organisation –
Configuration (cont.)

38
Assignment of Sales
Organisation to Company Code

39
 Distribution Channel
• Distribution Channel represents the channel through which materials or services are
provided to the customers.
• Defined as 2-character alphanumeric.
• Within a distribution channel, you can define your own master data for customers or
materials, conditions and pricing, and sales document types.
• The distribution channel is assigned to the sales organisation.
– One distribution channel can be assigned to more than one sales organisation and sales
organisations generally have multiple divisions.
• Due to the impact on master data setup, the number of distribution channels should be
kept to a minimum
Company ABC

Sales Org 1000 Sales Org 2000

Distribution Channel 01 Distribution Channel 02 Distribution Channel 03

(e.g., Wholesale) (e.g., Retail) (e.g., Direct Sales)
40
 Distribution Channel –
Configuration
• IMG Enterprise Structure  Definition  Sales and Distribution  Define, copy,
delete, check distribution channel  Define Distribution Channel

41
 Distribution Channel –
Configuration (cont.)
• IMG Enterprise Structure  Assignment  Sales and Distribution  Define,
copy, delete, check distribution channel  Assign Distribution Channel to Sales
Organisation

42
 Division
• Division distinguishes between business segments and is used to track sales,
profitability, and statistical analysis.
• For example, a division may be used to represent product group or any other
grouping in the sales organisation structure.
• For every division, you can make customer-specific agreements on partial
deliveries, pricing, and terms of payment.
• Material is always assigned to one division only.
• Division is assigned to the sales organisation.
– One division can be assigned to more than one sales organisations.

Company ABC

Sales Org 1000 Sales Org 2000

Division 11 Division 12
(e.g. Product A) (e.g. Product B)
43
 Division – Configuration
• IMG  Enterprise Structure  Definition  Logistics – General  Define,
copy, delete, check division Define Division

44
 Division – Configuration (cont.)
• IMG  Enterprise Structure  Assignment  Sales and Distribution 
Assign Division to Sales Organisation

45
 Sales Area
• In SAP, the Sales Area is created using the combination of:
– Sales organisation
– Distribution channel
– Division
• The Sales Area is used to used to organize master data and validate
sales order creation.
• Sales Area is assigned to Credit Control Area to activate credit
management system for the area.
• Before the Sales Area is set up, the following assignments needs to
be made in customization:
– Assign Distribution Channel to Sales organisation
– Assign Division to Sales organisation

46
Sales Area (cont.)
Company ABC

Sales Org 1000 Sales Org 2000

(e.g. Singapore) (e.g. Australia)

Distribution Channel 01 Distribution Channel 02 Distribution Channel 03

(e.g. Wholesale) (e.g. Retail) (e.g. Direct Sales)

Division 11 Division 12
(e.g. Product A) (e.g. Product B)

Sales Area 1000 – 01 - 11

Sales Area 2000 – 01 - 11
Sales Area 2000 – 02 - 12
Sales Area 2000 – 03 - 12
47
 Sales Area – Configuration
• IMG Enterprise Structure  Assignment  Sales and Distribution  Set
up sales area

48
 Sales Office and Sales Group
• Sales Offices are assigned to Sales Area.
– Sales Office is a physical location (e.g., a branch office) that
is responsible for the sale of certain products or services
within a given geographical area.
– Sales office has many-to-many relationship with sales area.
• Sales Group is assigned to Sales Office, e.g., to represent
the vendor group. Sales group can be assigned to more
than one sales office.
• Sales Person is the sales representative/staff who
belongs to the Sales Group.

49
 Materials Management: Plant
• A Plant is the primary organisational tool for managing inventory
volumes. It typically represents a physical location such as a factory or
warehouse where inventory is stored and dispatched from. It may also
represent a logical location. Each item on a “sales order” can be
delivered from different plants, but each “Delivery” is created for a single
plant. It is also known as Delivering Plant from the SD point of view.
– Plant is assigned to a company code and a company code can have more than
one plant.
– Shipping points are assigned to a plant (shipping points represent dispatch
points from a physical location).
– A plant can be assigned to several combinations of sales organisations and
distribution channels.
– It is recommended to create a company code for each country in which a plant is
situated.

50
 Materials Management: Storage
Location
• A Storage Location is the physical location within the
plant where the material is stored such as a floor
space, racking, or picking area. It can also be a
logical location.
– There can be more than one storage location within a
plant.
– Physical inventories are carried out at the storage
location level.

51
Plant – Configuration

Copy

52
Plant – Configuration (cont.)

53
 Shipping and Loading Points
• Shipping Point represents a fixed/physical location that is
responsible for processing and monitoring deliveries as well as
goods issue. It is also responsible for the replenishment deliveries
between warehouses.
– Shipping point is assigned to the Plant.
– A delivery can only be shipped from one shipping point.
– Shipping points can be allocated to several plants.

• Loading Point is the subdivision of a shipping point and is the exact

physical location where the loading of the delivery items takes place.
– There can be more than one loading point per shipping point.
– For example: Loading Bay 123, Loading Bay 222.

54
 Shipping and Loading Points
(cont.)
• The organisational units relevant with respect to shipping
are plant and shipping point
Company

Plant

Shipping points Truck Rail depot Ship depot

Loading points
Ramp A Ramp B

55
 Shipping Points– Configuration
(1 of 3)
• IMG Enterprise Structure Definition  Logistics Execution  Define,
copy, delete, check shipping point  Define Shipping Point

56
Shipping Points– Configuration
(2 of 3)

57
 Shipping Points– Configuration
(3 of 3)
• IMG Enterprise Structure Assignment  Logistics Execution  Assign
Shipping Point to Plant

58
 Loading Points – Configuration
• IMG Enterprise Structure  Definition  Logistics Execution 
Maintain Loading Point

59
Questions

60
 Agenda – Day 1

• Order To Cash Process Flow

• Organizational Structure

• Master Data

61
 Master Data in Sales and
Distribution
• Master records containing all data necessary for processing business
transactions are known as Master Data.
• Maintaining the master data reduces business transaction processing time
as the system proposes the relevant master data in the business
transaction.
• For example, when creating a Sales Order for a Customer, the address
details are copied from the Customer Master record, rather than having to
key in the address details each time a Customer places an order.
• General data and data relevant for both Accounting and Sales are stored in
the one master data record to avoid duplication.
• There are various types of Master data that exist in the standard SAP
system. For example: Customer, Material, Customer-Material Info Records,
Output Condition Records, and Pricing Condition Records.

62
 Customer Master Data
• The Customer Master data record stores all the information
necessary for carrying out business transactions for a
particular customer. The Customer Master Data Record will
support the Sales, Delivery, and Billing processes.
• The Customer Master record contains three levels:
1. General Data – General information relating to a
Customer, e.g., address details
2. Company Code Data – Information specific to a
Company Code, e.g., accounting and payment details
3. Sales Area Data – Information specific to a Sales Area,
e.g., sales, shipping, and billing details
63
Customer Master Data (cont.)

General data

 Customer number
 Address
 Transportation Zone

Sales area data Company code data

Sales Area A Company code 1000

Sales area data
Sales Area B Company code data
Reconciliation
Sales area data account
Company code 1002
Sales Area C
 Customer group Reconciliation
account
 Shipping conditions
 Incoterms
 Terms of payment
64
Create: Customer Master

Note: Transaction code

XD01 is used to create
a customer master
record for both
Financial Accounting
and Sales and
Distribution (SD) at the
same time. While VD01
is used to create
customer master for
Sold to Party for SD
only.

65
 Customer Create: Initial Screen
• SAP Easy Access  Logistics  Sales and Distribution  Master Data 
Business Partner  Customer  Create  Sales and Distribution (VD01) /
Complete(XD01)

66
 Customer Master: General Data
• General Data is independent of Company Code and Sales Area Data.
• General Data for the Customer is identified only by the Customer Number,
not by Company Code or Sales Area.

NOTE: The “Company code

data and Sales area data”
are visible while ‘General
Data’ tab is now not visible,
indicating you are in the
General Data section.

67
Customer Master: General Data
(cont.)

Address Tab Control Tab Marketing Tab Contact Persons Tab

• Name • Vendor Number • Customer Class • Additional contact

• Street • Transportation • Industry details can also be set
• City Zone • Regional market such as home address,
• Postcodes • Tax Number visiting hours, etc.
• Telephone numbers • VAT number (ABN)
• Fax numbers
• Internet address

68
 Customer Master: Company Code
Data
• Company Code data applies to only one Company Code and is relevant only for
Financial Accounting.
• Customer Number and Company Code are required in change mode to edit the
data.
NOTE: The
General Data
and Sales area
data are visible
while Company
code data tab
is now not
visible,
indicating you
are in the
Company
Code Data
section.

69
Customer Master: Company Code
Data (cont.)

Account Payment Correspondence Tab Insurance Tab

Management Tab Transactions Tab
• Account-related • Data related to
• Reconciliation • Payment terms information Export credit
Account • Payment methods insurance. For
example, Policy
number, Amount
insured, validity
period, etc.

70
 Customer Master: Sales Area
Data
• Sales Area is the combination of:
– Sales organisation
– Distribution channel
– Division
• A single Customer can have
multiple Sales Area Data records
containing different details
relevant to that specific Sales
Area.
• Sales Area data must to be
maintained for a Customer in
order to create a Sales Order.

NOTE: The General Data and Company code data are visible
while Sales Area tab is not visible, indicating you are in the
Sales Area data section.

71
Customer Master: Sales Area
Data (cont.)

Sales Tab Shipping Tab Billing Tab Partner Function Tab

• Carriers
• Sales Office • Payments terms • Ship-to party
• Currency • Plant • Bill-to party
• Shipping conditions • Taxes
• Pricing group • Payer party
• Partial deliveries

72
 Customer Account Group
• Account Groups are used to define and create Partner Functions.
• Each partner is created as a Customer Master record using the pre-defined
Account Groups.
Transaction Code:
OBD2

SP – Sold To Party
SH – Ship To Party
PY – Payer
BP – Bill To Party

Creating a
Customer record
with this Account
Group provides
Account Group the Partner
Functionality

73
 Customer Account Group: Field
Control
• An Account Group controls the number range and properties of different fields
(including mandatory, optional, display) in the customer master.
• This is managed via configuration in the IMG  Logistics General  Business
Partner  Customer  Control  Define Account Group and Fields Selection for
Customers
Transaction Code:
OBD2

74
 Customer Master: Customer
Texts
• Text within the Customer Master exists at three levels
and can be managed by using menu path shown on
the next slide. For example, different texts can be
configured for different views:
– Head Office text displays when in the General tab
– Accounting text displays when in the Company Code
Data tab
– Shipping Text displays when in the Sales Area Data
tab

75
 Customer Master: Customer
Texts (cont.)
• Example: Shipping Text  “all deliveries must be registered with gatehouse
before they are delivered to the loading dock.”
• It will be copied from the Customer Master to the sales order, then to the
delivery document and then printed on the delivery note output.

76
 Customer Hierarchy (1 of 4)
• Customer hierarchy is a flexible structure consisting of
customers. Each customer – with the exception of the
uppermost customer – refers to another customer at a
higher level in the hierarchy.
• Customers that are assigned to higher-level
customers are known as dependent customers.
• Hierarchies can be defined with as many levels as
required. However, it is best to keep the hierarchy
simple due to maintenance of the structure.

77
 Customer Hierarchy (2 of 4)
• Customer hierarchies reflect the structure of the
customer’s organisations. This is useful if the
customer has multi-level buying groups, cooperatives,
or chains of retail outlets.
• Customer hierarchies are used in order and billing
documents to facilitate processing for partner and
pricing determination (including rebate determination).
• Hierarchies also support reporting and, therefore, can
be interfaced to external systems and Business
Warehouse (BW) for creating statistics.
78
Customer Hierarchy (3 of 4)
Hierarchy
Customer
Level 1 1ooo
Hierarchy Nodes

Hierarchy Links
Customer Customer
Hierarchy 1o20 1o30
Level 2

Customer Customer Customer Customer

1o22 1o25 1o28 1o29

Sold To

79
 Customer Hierarchy (4 of 4)
• Use a different account group to create customer hierarchy:
– Hierarchy Level 2
– Hierarchy Level 1
• There are two steps to create a Customer Hierarchy:
1.Create the Hierarchy Node  V-12
2.Create the Hierarchy Links  VDH1N
• When designing customer hierarchies, the business needs to
analyse its customer base and design the best structure. They
need to ask how they want to represent their customers, how
can this be used to facilitate pricing, and how should these
customers be represented in reporting?

80
 Customer Hierarchy – Examples
• Below is a list of examples of how the business may structure their hierarchies. For
example, the structure on the left is at the global level whereas the structure on the
right is a more defined level grouping by country and state.
customers represented
by hierarchy records
Logical grouping of

Global National

National National State State

Customer Records

Sold-To Sold-To Sold-To Sold-To Sold-To Sold-To Sold-To Sold-To

81
 Material Master Data
• The Material Master is a master data object in SAP where the
details of the products or services are stored.
• There are different kinds of materials. For example, finished
product, semi finished products, trading goods, raw materials.
In SAP, material types are configured to differentiate these
kinds of materials.
• Material types govern which fields are relevant for the material
and controls how the material behaves.
• Materials with the same basic attributes are grouped together
and assigned to a material type.

82
Material Master: Sales Org Data 1
View

83
Material Master: Sales Org Data 2
View

84
Material Master: General Plant
Data View

85
Material Master: Sales –
General/Plant View

86
Material Master: Sales Text View

87
 Item/Product Proposal: VA51
(1 of 4)
• Item Proposals are created if certain materials are ordered with the same
quantity on a regular basis (also known as a shopping list).
• Item Proposals reduce order entry time by customer service.
• When creating item proposals, different materials with proposed quantities
can be entered.
• Bills of material (e.g., configurable materials) can also be adopted into an
item proposal.
• However, it is NOT possible to explode or configure a bill of material in an
item proposal. You can only carry this out when you are copying it into a
sales order.
• During sales order creation, the Item Proposal is made available and either
one or all items from the Item Proposal can be copied into the sales order. It
is also possible to change the quantity that was copied from the Item
Proposal.

88
Item/Product Proposal: VA51
(2 of 4)

89
 Item/Product Proposal: VA51
(3 of 4)
• The Product Proposal
is then recorded
against the Customer
Master on the Orders
tab of the Sales Area.
• It is stored using the
Item Proposal field.

90
 Item/Product Proposal: VA51
(4 of 4)
• With the Product Proposal number stored against the Customer, the Product
Proposal will prompt the user with the screen below when creating the sales order.
• There are three options during the
Product Proposal:
1. Default without quantity
 copies only the material
2. Default with quantity
 copies material and proposed
quantities
3. Selection List
 provides the list of items in
product proposal to select only
those materials required

91
Questions

92
 End of Day 1 Lessons Learned
• The following topics were covered today:

• Order to Cash Process Flow

• Organizational Structure

• Master Data

93
 End of Day 1 Lessons Learned
(1 of 3)

Purchase to Pay
Company X
Order to Cash

Internal Functions

94
End of Day 1 Lessons Learned
(2 of 3)
Master
Customer Data Data
Master
Order Management Logistics Billing AR

Pre
-Sales Sales and, Inbound Ware Outbound Billing
Billing Accounts
Sales Sales Order housing
Logistics Logistics Receivable
Exceptions

Pricing & Rebates

Credit Management
Enquiry Management
Reporting 95
 End of Day 1 Lessons Learned
(3 of 3)
• The relationship between sales organisations and company codes is many-
to-one.
• The relationship between sales organisations and plants is many-to-many.
• Relationship between sales organisations, plants and company codes is
many-to-many-to-one.
• Two different sales organisations can be assigned to the same company
code.
• Distribution channels and divisions are assigned to sales organisations.
• Highest organisational units in SD, MM, PP, FI, CO are:
– SD: Sales organisations
– MM: Plant 
– PP: Plant
– FI: Company Code 
– CO: Controlling Area

96
End of Day 1 Q & A

97
 Knowledge Check (1 of 5)
1. Why do the payment terms exist on both the
Company Code and Sales Data sections?
2. ________ Data is independent of Company Code
and Sales Area data.
3. Account Groups are used to define and create
________ Functions.
4. A single Customer can have multiple Sales Area
data records containing different details relevant to
that specific Sales Area. (Yes/No)

98
 Knowledge Check (2 of 5)
5. What are the organisation elements used in
creating the Sales and Distribution Organisational
Structure?
6. How is the sales area created?
7. A company has 2 sales organisations, 3 distribution
channels and 4 divisions. How many possible sales
areas can be created?
8. To what do you assign distribution channels and
divisions?
9. Sales Offices are assigned to __________.
99
Knowledge Check (3 of 5)
10. ________________ is the central organisational
element in Sales.
11. Sales organisation, __________, and _________
make up a Sales Area.
12. Can you assign shipping points to a sales
organisation?

100
 Knowledge Check (4 of 5)
13. A material is always assigned to more than one
division. (Yes/No)
14. How many shipping points can you assign to a
sales organisation? One/Two/Many/None
15. The ___________ is a Master Data object in SAP
where the details of the products or services are
stored.
16. When creating Item Proposals, only one material
with proposed quantity can be entered. (Yes/No)

101
 Knowledge Check (5 of 5)

17. Material type for trading goods is ________.

18. Material type for finished goods is__________.
19. Where has shipping condition been assigned in
Customer Master Data?

102