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Basic Rules in SD Configuration

Created by Prashanth Goud, last modified by Jyoti Prakash on Nov 09, 2012

Purpose
This wiki page will discuss the basic rule / principle / information pertaining to SAP Sales and Distribution.

Organizational structure
Sales Organization
It’s responsible for:

• 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

Distribution Channel:
This is the means through which products and services reach the customer. So, it’s responsible for:

• Defines responsibilities
• Helps in achieve flexible pricing
• Differentiate Sales statistics

Division:
• A division is used to group products and services.
• A division represents a product line.

Sales Area:
A Sales area is a combination of

• Sales organization
• Distribution Channel
• Division

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:
• 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

Process
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 process flow for sales transaction has the following flow:

1. Inquiry
2. Quotation
3. Sales Order
4. Delivery Document
5. Invoice

The customer order management cycle begins with pre-sales activities.

Sales Order
A standard sales order in SAP contains:

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• Customer & its partner’s details

• Material information
• Pricing conditions
• Delivery dates and quantities
• Shipping/Transportation information
• Billing information
• Accounting Interface information
• Required Output Details
• Document Status

Inventory sourcing at Sales Order & Delivery

It is handled through:

• Availability check

Shipping
SAP supports following shipping process:

• Outbound delivery creation

• Picking
• Packing
• Post Goods Issue

Billing
SAP supports following billing process:

• 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

Sales Documents - Structure & related information

Sales Order
A sales order is grouped into three structures

1. Header
2. Item
3. Schedule Line

Outbound delivery
A delivery document is grouped into two structures

1. Header
2. Item

In standard system, several orders can be grouped into single outbound delivery, provided the referenced orders have same

1. Shipping point
2. Delivery date
3. Ship-to address

Picking List or Transfer Order

• created for an outbound delivery
• 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

Billing
A billing document is grouped into two structures

1. Header
2. Item

In standard system, several orders/deliveries can be grouped into single billing document, provided the orders/deliveries have same

1. Billing date

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2. Payer
3. Billing address

The effects of billing are

• Debit on the customer receivables account

• Credit on sales revenue account
• System updates

- Sales information system

- Sales statistics

Master data in SAP

In sales and distribution, the following main master dates:

1. Customer master
2. Material master
3. Condition master
4. Output master
5. Customer material information master

Customer master
The master data for customer is maintain in 3 major area

1. General Data
2. Company Code data
3. Sales Area Data

Following is the table which shows detail on three main areas of customer master and the tab pages & details found under each area:

General Data Sales Area Data Company Code data

Address Sales Details Account info

like Reconciliation account

Control data Shipping details Payment

like Transport.zone, tax info like Terms of payment, auto payment details

Payment transaction Billing details Billing Correspondence

like bank details, payment cards like payment term, account details like Dunning Procedure, payment notice

Marketing Partner functions Insurance

Export data

Contact Person details

Material Master
It is maintained in different views. Following are the important views maintained for material master in sales and distribution:

Views Key Fields

1. Basic data 1 • Base Unit of Measure

• Material Group
• Gross Weight & its unit
• Net Weight
• Volume & its unit
• Size/dimensions
• Languages Maintained

2. Sales Org 1 • Sales unit

• Division
• Tax Data
• Min.order qty
• Min. dely qty
• Rounding Profile

3. Sales Org 2 • Matl statistics grp

• Material pricing grp
• Acct assignment grp
• Item category group
• Product hierarchy
• Material groups
• Product attributes

4. Sales : Gen/Plant • Availability check

• Batch
• Transportation Group
• Loading Group
• Matl Grp Pack.Matls
• Profit Center
• Negative Stock
• Serial Number

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Views Key Fields

5. Foreign Trade Export • Comm./imp. code no.

• Export/import group
• Control code
• Legal Control

6. Sales text

7. Accounting 1 • Valuation Class

• Material Price Determination
• Price Control & Moving price or Standard price

Sales Document Type

Sales document type like OR 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
• Subsequent Delivery type
• Subsequent Billing type
• Proposed delivery date
• Lead time for delivery
• Proposed pricing date

Plant Determination in sales order

To determine the plant in a sales order the system checks the master in the following sequence:

Sequence Master Data

01 Customer material info. record of the sold-to Party

02 Customer master record of the Ship-to Party

03 Material master record of the material

Shipping Point
The following is combination with which shipping point gets determined automatically in a sales order:

Shipping point = Plant + Shipping Condition + Loading Group

(Sold-to-Party) (Material master Gen: Plant data)

Route
Route automatically gets determined in sales order based on following combination:

Route = Departure Zone + Shipping Condition + Transportation Group + Transportation Zone

(from Shipping Point) (from Sold-to-Party) (from Material master) (from Ship-to-Party)

Delivery Scheduling
As name denotes delivery scheduling is scheduling delivery for an order, which carries out through the following important dates:

1. Material availability date

2. Transportation planning date
3. Loading date
4. Goods Issue date
5. Delivery date

Availability Check
Following are features of availability check:

• It is carried out at item level for a plant

• It 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
Item category controls behavior of material in sales order. In a sales document, it mainly controls the following:

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• Relevance for billing of an item

• Billing block
• Pricing relevance
• Business data relevance item
• Schedule line allowed
• Item relevant for delivery
• Returns
• Determine cost
• Credit active
• Incompletion procedure
• Partner determination procedure
• Structure scope (relevant for bill of material explosion)
• Value contract material
• Contract release control

The following is combination by which Item Category automatically gets determined in sales order.

Item Category = Sales Document Type + Item Category Group + Item Usage + Item Category of Higher Level Item
{Material master) (if any) (if any)

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:

Schedule Line Category = Item category + MRP Type

(Material Master)

It mainly controls:

• Delivery Block
• Movement type
• Item relevant for delivery
• Req/Assembly
• Availability
• Product Allocation

Copy Control
It is normally set for

• Header
• Item
• Schedule line levels

To control copying procedure we have

• Data transfer routines

• Copying requirements
• Switches

Types of copying control:

S. No Transaction Code Source Document Target Document

1. VTAA Sales Order Sales Order

2. VTLA Sales Order Delivery Document

3. VTFA Sales Order Billing Document

4. VTLF Delivery Document Billing Document

5. VTAF Billing Document Sales Order

6. VTFF Billing Document Billing Document

Pricing Procedure
Pricing is an important component in SAP Sales and Distribution. Once an order is entered taking into consideration some major factors, the pricing procedure for the particular order is determined.

The major factors or combination is taken into consideration for pricing procedure determination in sales order:

Pricing Procedure Determination = Sales Area + Customer Pricing Procedure + Document Pricing Procedure
(Sales Organization + Distribution Channel + Division) (Customer Master-Sales area data) (Sales Document Type)

Shipping
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

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• Gen. packing material / item

• Order required

Item category for delivery controls:

• Check minimum delivery

• Availability check
• Relevant for picking
• Storage location required
• Determine storage location
• Automatic batch determination
• Text determination procedure
• Packing control
• Stk determ.rule

Billing
Billing is sales process is of the critical integration point between SD and FI Module.

It has got the following structure:

1. Header
2. Item

It mainly controls:

• No. range
• Posting block (to controls posting of invoice to accounting)
• Relevance for rebate
• Account determination procedure
• Account determination recon account
• Account determination pay.cards
• Output determination procedure
• Cancellation billing type

Account Determination
Automatic account determination in SAP Sales and Distribution sales order & billing documents take place based on following combination

Account Determination = Sales Organization + Chart of + Account Assignment + Account Assignment + Account Key + G/L Account
Accounts Group for Customer Group for Material on which the postings
will take place

sap_sd basics configuration config determination rules information info sales_and_distribution

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