Basic Rules in SAP-Sales and Distribution Module
Sales Organization :
- Distribution of goods and services
- Negotiating Sales Conditions
- Product Liability and rights of recourse
- A sales organization is uniquely assigned to a company code
- Master data’s are separately maintained for a sales organization
- All items in the Sales and Distribution document belong to a sales organization
Means through which products and services reach the customer
A distribution channel:
- Defines responsibilities
- Helps in achieve flexible pricing
- Differentiate Sales statistics
- A division is used to group products and services.
- A division represents a product line.
A Sales area is a combination of
- Sales organization
- Distribution Channel
Each Sales and distribution document is assigned exactly to one sales area.
A sales area can belong to only one company code.
Plant and Storage Location:
- A Plant is a location where stock is maintained
- Plant and storage location are used by all logistic area of R/3 System
- A Plant is uniquely assigned to a company code
- Shipping point is the highest level of organizational unit in shipping
- Each outbound delivery is processed by one shipping point
- Shipping points are assigned to a plant
- More than one shipping point can be assigned to a plant
Sales and Distribution is SAP begins with establishing customer relationship and ends with invoicing for the delivery of goods or service provided to the customer .
A Standard sales transaction has the following flow:
The customer order management cycle begins with pre-sales activities.
A standard order in SAP contains:
- Customer and material info
- Pricing conditions
- Delivery dates and quantities
- Shipping info
- Billing Info
Inventory sourcing in SAP is taken care by
- Availability check
Shipping in SAP supports
- Outbound delivery creation
- Post Goods Issue
Billing in SAP supports
- Creating invoices for products and services
- Creating credit and debit memo
- Cancel previously posted billing documents
- Automatically transferring billing documents to accounting
When a billing document is created for a sales order we
- Credit the sales revenue account
- Debit the customer receivables account
A sales document is grouped into three structures
- Schedule Line
A delivery document is grouped into two structures
Several orders can be grouped into same outbound delivery if they have same
- Shipping point
- Delivery date
- Ship-to- address
- A transfer order is created for an outbound delivery
- A transfer order is created for a warehouse number
Post Goods Issue
When PGI is done the system
- Updates the quantity in inventory management and delivery requirements in materials planning
- Generates additional documents for accounting
- Adds the delivery to the billing due list
- Updates status in sales documents
We can group deliveries into single billing document if the deliveries have same
- Billing date
- Destination Country
The effects of billing are
- Debit on the customer receivables account and credit on sales revenue account is created
- Sales information system
- Sales statistics is updated
Master data in SAP
- Customer master
- Material master
- Condition master
- Output master
- Customer material information master
General Data Sales Area Data Company Code data
Tab pages Tab pages Tab pages
Address Order Accounting
Control data Shipping Payment
Payment terms Billing Correspondence
Marketing Partner functions Insurance
The chart above shows detail on three main areas of customer master and the tab pages found under each area.
Material Master is maintained in different views and important views of sales and distribution are
- Basic data 1
- Sales Org 1
- Sales Org 2
- Sales : Gen/Plant
- Foreign Trade
- Sales text
Sales document in Sales and distribution mainly controls:
- Number range
- Item No increment
- Reference mandatory
- Item division
- Read info record
- Document pricing procedure
- Incomplete messages
- Alternative sales documents
- Delivery block
- Billing block
- Immediate delivery
- Delivery type
- Billing type
- Proposed delivery date
- Lead time for delivery
- Proposed pricing date
Plant determination in Sales and distribution:
To determine the plant in an order the system checks the master in the following order:
a) Customer material info. record of the sold-to –party
b) Customer master record of the ship-to-party
c) Material master record of the material
Shipping point determination
The following rule is used in determining shipping point in a sales order :
Plant + Shipping condition (Sold-to-Party) + Loading group Shipping point
Maintained in Material master Gen: Plant data
Route determined using the following rule in Sales and Distribution (SAP)
Departure Zone of Shipping Point
Shipping condition (Sold-to-Party)
Transportation Group (Material master)
Transportation Zone (Ship-to-Party)
As name denotes delivery scheduling is scheduling delivery for an order and it carries the following important dates:
- Material availability date
- Transportation planning date
- Loading date
- Goods Issue date
- Delivery date
Availability Check in SAP:
- Availability check is carried out at item level for a plant
- Availability check is done on the material availability date
- If material availability date is in the past the forward scheduling is done, if not backward scheduling is done.
Item category determination in the order:
Item category denotes the category to which the item belongs and the following rule is used for determination of item category. Item category controls the way in which item behaves in a sales document.
Sales document type
Item category group (Material master)
Item category of higher level item
Item category of the item
Item category in a sales document mainly controls the following
- Relevance for billing of an item
- Billing block
- Pricing relevance
- Business data relevance item
- Schedule line allowed
- Item relevant for delivery
- Determine cost
- Credit active
- Incompletion procedure
- Partner determination procedure
- Structure scope (relevant for bill of material explosion)
- Value contract material
- Contract release control
Schedule line category:
Every item which has a delivery will have a schedule line and the schedule line category is determined with the following rule:
Item category + MRP type(Material Master) Schedule line category
Schedule line category mainly controls:
- Delivery Block
- Movement type
- Item relevant for delivery
- Product Allocation
Copy control is normally set for
- Schedule line levels
To control copying procedure we have
- Data transfer routines
- Copying requirements
Pricing Procedure determination:
Pricing is an important component in SAP-SD. Once an order is entered taking into consideration some major factors, the pricing procedure for the particular order is determined.
The major factors taken into consideration for pricing procedure determination is:
Customer Pricing procedure(Customer Master –Sales area data)
Document Pricing Procedure(Sales Document Type)
What are the components of pricing procedure?
How is that a person should work on Pricing Procedure?
To start with first
Define a Condition table:
What is a condition table?
A table where the key fields are data combinations for which messages are triggered (and offered for processing).
For each data combination, there is a condition record in the table. The data part contains the actual message.
As mentioned above a condition table is a table which carries key fields for picking up the prices.
Define Access Sequences
The access sequence is a search strategy which the SAP System uses to search for condition records valid for a condition type.
For example, you can define for a price that the SAP System first searches for a customer-specific price and then for a price list price.
· If you define your own access sequences, the key should start with the letter Z since SAP reserves this letter for the standard system.
· Do not change access sequences contained in the standard SAP R/3 System.
1. Check to what extent you can use the access sequences contained in the standard SAP R/3 System.
2. Create new access sequences by copying a similar access sequence and changing it according to your needs. Specify an alphanumeric key which may have up to 4 digits and a textual description.
3. Maintain the accesses for the access sequence by specifying the condition tables in the desired sequence. With the sequence, you define the priority of the accesses. You can display combinations of key fields using possible entries.
4. Generating the accesses is no longer necessary as of 3.0, as this is carried out automatically. You can generate the accesses manually, if required, by choosing "Utilities".
In pricing, you use a customer-material discount. The condition records you create are based on customer data from the document header and material data from each document item. The discount is only valid for 2% of your customers, however. Normally, this would mean that the system would needlessly search through every available item for 98% of your customers. In this case, pre step would improve system performance.
Define Condition Type
A characteristic of a condition. For example, in pricing, different condition types are used to distinguish between a discount that refers to a net price and a discount that refers to a gross price.
Price elements are represented in the SAP system by condition types. Price elements can be, for example, prices, surcharges, discounts, taxes or, freight, and are stored in the system in condition records.
You can, for example, define whether a discount is calculated as a percentage or a fixed amount using the condition type.
You specify an access sequence in every condition type. Thus, you define which fields the SAP system checks when searching for a valid condition record.
- The pricing procedure groups all condition types together which the SAP system is to automatically take into account during pricing for a business transaction (see the section "Define and assign pricing procedures").
Remember that you can only specify manually in a document those condition types which are contained in the pricing procedure.
- You can change the outcome of pricing in the sales document manually. You can limit options for changing a condition type in this IMG step.
- If you define your own condition types, the key should start with the letter Z since SAP reserves these letters for that purpose in the standard system.
- Do not change the condition types which are contained in the standard SAP R/3 System.
1. Check to what extent you can use the condition types contained in the standard SAP R/3 System.
2. Create new condition types by copying a similar conditions type and changing it according to your requirements. One reason for creating a new condition type is you may require a calculation rule for a discount which is not available in the standard system.
Specify an alphanumeric key which can have up to 4 digits, and a textual description.
Specify an access sequence for the condition types. You do not need to specify an access sequence for header conditions.
3. Maintain the detail screen of the condition type.
You can also assign a reference condition type if the condition types you are working with are similar. Then you will only have to maintain condition records for the reference condition type.
In addition, you can define the upper and lower limits for the value of a condition at condition type level. This way, you limit the amounts or the scale values in the corresponding condition records.
Define Pricing Procedures
The pricing procedure defines the conditions permitted for a document and the sequence in which the system takes these conditions into account during pricing.
A standard pricing procedure is defined in the standard SAP system. It contains conditions most commonly used. These include material prices, discounts, and surcharges, such as freight, or tax.
· Define your own pricing procedures which contain only those condition types which you use. Otherwise, the system makes un neccessary accesses to conditions.
· Do not change the pricing procedures contained in the standard SAP R/3 System.
1. Create new pricing procedures by copying a similar pricing procedure.
- Specify a key with up to 6 characters and a description.
- For a procedure, specify the condition types in the sequence of their usage.
Maintain the lines of the pricing procedure
2. Afterwards define the customer determination procedures for determining the procedure.
3. Define the document pricing procedures for determining the procedure.
4. Assign the procedure to the sales document types and billing types.
5. To determine the procedure, define the allowed combinations of:
- Sales area
- Customer pricing procedure
- Document pricing procedure
- Pricing procedure
The basis for shipping is delivery.
Delivery document controls the following in deliveries
- Number range
- Item no increment
- Storage location rule
- Route determination
- Text determination
- Delivery split
- Gen. packing material / item
- Order required
Delivery item category controls:
- Check min delivery
- Availability check
- Relevant for picking
- Storage location required
- Determine storage location
- Automatic batch determination
- Text determination procedure
Billing is the last phase in the SD process .Billing is the phase where the major integration of SD and FI Module happens.
Billing document has got the following structure:
Billing documents mainly control:
- No. range
- Posting block (Controls posting to accounting)
- Relevant for rebate
- Account determination procedure
- Account determination recon account
- Account determination pay.cards
- Output determination procedure
Account Determination in SAP
Account determination in SAP-SD happens with the following rule
Chart of Accounts
Account assignment group –Customer
Account assignment group-Material
G/L account on which the postings has to happen.