MM definitions:

1.Plant
The fundamental explanation of Plant is as follows:

 Plant is an organizational unit within a company where activities take place. A plant
will produce goods and makes goods available for the company.

 It is unit having manufacturing facility, warehouse distribution center or a regional

sales office within logistic. It subdivides an enterprise in different aspects.

2.Division

A division is defined as a product line or grouping of services or

material. You can assign a division to one or more sales
organization. A product is always assigned to one division. You can
assign a Sales Office to a division. There are various organization
units like Sales Area, Warehouse, delivery point, shipping point etc.
that can be mapped to one or more SAP modules.

A division in SAP refers to the product division that exists in your organization. It
is a way to group similar products or product lines in SAP. ... This means that you
Division is
can assign the same division to multiple sales organizations.
products or range of products or group of products

3. Storage Location
The fundamental explanation of Storage Location is as follows:

 Storage location is an organizational unit which actually differentiates between

different material stocks in a Plant.

 Storage location is a place where stock is kept physically.

 Plant can be consisting of multiple storage location. All data is stored at storage
location level for a particular storage location.

4.Purchasing Organization
The fundamental explanation of Purchasing Organization is as follows:
  Purchasing Organization is an organizational unit under company or plant which is
responsible for procurement activities according to requirements. It is responsible for
external Procurement.

 Purchasing organization can be at client level i.e. centralized purchasing organization.

 Purchasing organization can be at company or plant level i.e. company specific or

plant specific

Different forms of purchasing can be described as follows:

Centralized Purchasing
Purchasing organization is not assigned to any company code it procures for all company
codes belonging to different client.

Company specific Purchasing

Purchasing organization is assigned to a company code only, Plant belonging to the company
code can purchase through this Purchasing organization.

Plant specific Purchasing

Purchasing organization is assigned to a Plant, only this specific Plant can purchase through
this Purchasing organization.

5.Material Groups
 Material group is a wider range of material type. Materials with some common
attributes are taken together and they are assigned to material group. For Example:
Suppose we have some materials which need packaging, so there material type can
be electrical or food products but we can group these material types and put them
in packaged material group.

6.Purchasing Group
The fundamental explanation of Purchasing Group is as follows:

 Purchasing group is an organizational unit which is responsible for everyday

procurement activities within an organization.

 It is a buyer or group of buyer responsible for procurement activities in a purchasing

organization.

7.Define Valuation Control

Valuation areas can be grouped together and can be assigned to one grouping code if they
belong to same G/L account. For example different plants under one company code can be
assigned same valuation grouping code and vice versa. Before this, valuation grouping code
must be activated and this can be done by following the below steps.

8.Group together Valuation Areas

In valuation grouping, valuation area and valuation grouping code are assigned to company
code. This can be done by following the below steps.

9.Define Valuation Classes

Valuation class categorizes the G/L account on the basis of material type. For example raw
material will have different G/L account than the finished material as the cost will be different
in both the cases. Account reference is also maintained along with valuation class. Account
reference and valuation class can be defined by following the below steps.

10.Material Types
 Materials with some common attributes are grouped together and they are assigned
to a material type. This will differentiate materials and allow organization to
manage different materials in systematic manner in accordance to company’s
requirement. For example: Raw Material, Finished Products are some of the
material types. Material type can be created by following the below steps.

11.Movement Type
Movement type describes the type of stock posting in inventory. It represents the posting in
stock is due to which type of order like whether stock is posted against goods receipt or goods
issue. The important movement types in sap mm are as follows:

 101 - Goods receipt for purchase order or order

 103 - Goods receipt for purchase order into GR blocked stock

 201 - Goods issue for a cost centre

 261 - Goods issue for an order

 301 - Transfer posting plant to plant in one step

 305 - Transfer posting plant to plant in two steps - placement in storage

 311 - Transfer posting storage location to storage location in one step

 313 - Stock transfer storage locations to storage location in two steps - removal from
storage.

12.What is meant by valuation area in SAP?

In Simple,valuation area is used for valuating the material and valuation can take
place at plant or at company code level.

Valuation level as plant is must if you wanna go for MRP, PP, Product costing etc.
So only, when you enter some data like Purchasing, MRP etc system will ask you
to enter the plant so that all those data will be saved at plant level in the material
master record(MM01).

Valuation area is the organizational level at which the material is valuated. Once
it is defined, you will not be able to change it later.

When the valuation is at the Company Code level, then the valuation of a material
is uniform across the plants attached to that Company Code. On the other hand, if
the valuation is at the plant level, then the value of the material is plant specific
and will vary from one plant to another

SD DEFINITIONS:
1.Sales Organization
A Sales organization is used to distribute products and services.
You can assign a single or multiple sales organization to a company
code. You can assign one or more Plant to Sales organization and it
is not unique, so you can have one plant assigned to multiple Sales
organizations. Sales organizations can be used to perform search
criteria to list sales documents and to create deliveries and billing
worklist. You can mention different output types for sales and
billing document for each sales organization.

2.Distribution Channel
It is defined as a medium, which is used to send goods and
services to the customer. You can assign a distribution channel to a
single or many Sales Organizations. You can set distribution
channel as per company’s market policy or as per an internal
organization. You can use master data in one distribution channel
to other distribution channel. You can assign a sales office to a
distribution channel.

3.Division
A division is defined as a product line or grouping of services or
material. You can assign a division to one or more sales
organization. A product is always assigned to one division. You can
assign a Sales Office to a division. There are various organization
units like Sales Area, Warehouse, delivery point, shipping point etc.
that can be mapped to one or more SAP modules.

4.SALES AREA

Creating a sales area allows you to exclude certain combinations of the different
organizational areas
Organizational element comprised of:
Sales Organization + Distribution Channel + Division
Will be used to link together the organizational aspects of sales to customers

5.SHIPPING POINT:
Shipping Point Determination. Shipping points are independent
organizational entities within which processing and monitoring of the deliveries
as well as goods issue is carried out. A delivery is processed by
one shipping point only.

SAP SD Pricing Procedure is determined (T.Code: OVKK) based on Sales Area

(Sales Organization + Distribution Centre + Division) + Customer Pricing Procedure
+ Document Pricing Procedure. Sales Area is determined in Sales Order Header
Level. Customer Pricing Procedure is determined from Customer Master.
Document Pricing Procedure is determined from Sales Document Type / Billing
Type (if configured). Once the pricing procedure is determined, Condition records are
fetched. If appropriate condition records are found, the price is determined. If
Mandatory pricing condition is missing, system will through an error message.

Definitions of Fields in Pricing Procedure,

SAP SD Pricing Procedure Step by Step Guide
Step : This indicates the number of step-in the procedure.
Counter: This is used to show a second ministep
Condition Type : This is the most important component in the pricing procedure. The
rates are picked up from this element, on the basis of the properties described.
Description: This forms the description of the condition type.
Form: This is used to define the progression of the calculation and range of subtotals
To: This is used to define the progression of the calculation and range of subtotals
Manual: This function enables to allow the condition type to be entered manually
also apart from automatic pickup.
Mandatory: This function identifies the conditions that are mandatory in the pricing
procedure. The sales price is a mandatory condition type.
Statistics: This can be used to represent the cost price of the material sold, generally
used for study statistical impacts of price.
Print: The activation of this function will enable the printing of the values and
conditions to the document.
Subtotal: A key is assigned from the drop down menu; this can be used by the system
in other area like Sis for reporting purpose also.
Requirement Key: This function is used to assign a requirement to the condition
type. This requirement can be used to exclude the system from accessing the
condition type and trying to determine the value. This can be used to specify that the
condition type should only be accessed if the customer has a low risk credit.
Alternate Calculation Type: This function allows you use a formula as an
alternative in finding the value of the condition type, instead of standard condition
technique. this can be used to calculate complex tax structures.
Alternate Condition Base Value: The alternative condition base value is a formula
assigned to a condition type in order to promote an alternative base value for the
calculation of a value.
Accounts Key: The account keys form part of account determination. These keys are
used here to define the posting of the revenue generated to respective account heads&
to subsequent assignment to GL accounts.

PR00- ERL

K007/KA00- ERS.

KF00- ERF………….& so On.

Accrual Key: The accrual keys form part of account determination. These keys are
used here to define the posting of the revenue generated to respective account heads&
to subsequent assignment to GL accounts and payment to respective parties.

How To Add New Fields To Field Catalog

For adding field into Field catalog:

I shall give an example. But you should first identify the field for ProfitCenter
(Design ID) and then do as follows:

For example if you want to use field PSTYV (‘Sales document item category’) that is
included in structure KOMP (‘Pricing Communication Item’) as a key for a condition
table.

When you create a condition table (Transaction V/03), however, the system does not
propose the field in the field catalog.

Prerequisites:
For technical reasons, field PSTYV was included in structure KOMP, however, not in
structure KOMG (‘Allowed Fields for Condition Structures’).

To solve the problem, proceed as follows:

1. Call up the ABAP Dictionary (Transaction SE11) and create data type ZZPSTYV.
Choose PSTYV as a domain.As a short text, you can use, for example, ‘ZZ – sales
document item category’ and as a field label, you can use the field labels of
PSTYV.Save, check and activate your entries.

2. Call up structure KOMPAZ in the ABAP Dictionary (Transaction SE11) in the

change mode and make the following entry:

Component Component type

ZZPSTYV ZZPSTYV

Save, check and activate the change you made.

3. Note:Because of the change in structure KOMPAZ, field ZZPSTYV is now known

in structures KOMG and KOMP because structure KOMPAZ is included in both
structures.

4. Call up Transaction SPRO. Navigate to ‘Sales and Distribution -> Basic Functions
-> Pricing -> Pricing Control’ and execute ‘Define Condition Tables’. Choose
‘Conditions: Allowed fields’ and include ZZPSTYV as a new entry.

5. Note:Now you can use field ZZPSTYV as a key field when you create a condition
table Axxx.

6. Supply the new field you defined by including the following source code line in
USEREXIT_PRICING_PREPARE_TKOMP:

MOVE xxxx-PSTYV TO TKOMP-ZZPSTYV.

In order processing you find the user exit in Include MV45AFZZ, and in billing
document processing you find it in Include RV60AFZZ.

Consider that you can also use this note as a help if you want to use other customer-
specific fields as key fields in a condition table.For header fields, use structure.

KOMKAZ instead of structure KOMPAZ and

USEREXIT_PRICING_PREPARE_TKOMK instead of
USEREXIT_PRICING_PREPARE_TKOMP.

For more information, see Transaction SPRO via the path ‘Sales and Distribution ->
System Modifications -> Create New Fields (Using Condition
Technique) -> New Fields for Pricing’ and Note 21040.

For creating a condition Table:

1) There are almost all the regularly used Conditon Table predefined in the system
from 001 to 500. See what best you can use the Standard Tables to avoid further
errors.

2) In case you should define the new condtion Table,

a) Goto TCode: V/03

b) Give a Table any number from 501-999

Press executes and reach to next screen.

c) Check up whether the field you are looking is already added in Field catalogue.

d) Double click on the fields you want to make a Table. one by one. Note that the
sequence here is important in higher hierarchical to lower..

Example: Sales Org, DC, Division, Customer and then Material etc..,

e) After selecting, click on the Technical View buttin (redone) and reach to next
screen.

7) Check which key should be in header and which key should be footer. Use check
and uncheck functionalities there.

8) Once you are through with all the above steps..click on generate button.

Check the Table is generated or not.

You can check it at V/04 or V/05 or in SE11.

Can Sales Order and Billing Have Different Pricing

Yes, can have 2 different pricing procedures

1. One for Sales Order

2. Another at the Billing
Let us take an example:
Generally in the Parma industry this procedure is adopted becuase all the goods are
batch price based.

1. In the Pharma Industry whenever the goods are manufactured it will done in a batch
to keep track and price is fixed, I mean there will be a Batch Master which has a
certain price fixed for it. This Batch Master will have certain number of batches .
These batches will have the number series generated wither by internal or external
generation depending upon the client requirement.

2. So till all the batches are produced as per that particular Batch Master will have the
same price. Like that there will n number of batches will different different prices.

3. So when you are preapring Sales Order you be only putting the tenative price for
the goods that are sold.

4. Then at the time of delivery we will be picking up the goods from different batches
basing on the required delivery quantity and finally we do the PGI.

5. This is called Delivery Based Pricing becuase your price for the goods will be
determined at the time of the delivery as the goods picked up from the different
batches which have different prices. ( Mind it there will very less difference in the
prices).

6. So at the time of Billing the Pricing Procedure behaves differently depending upon
the differnent batches that are picked basing on the batch determination.

7. So the prices which are detemined from different batches will be the actual prices at
which the goods are billed to the customer along with other condition that are applied
as required.

Reasons For Making Any Pricing Procedure in SAP.

1. Why we are maintaining separate pricing procedure for inter company sales and
business process.
2. What is the different between standard and inter company pricing procedure and
what type condition type we are using in this intercompany.

There are two simple reasons for making any Pricing Procedure in SAP SD Modules.

1) Business Reason. What are the pricing aspects or strategies you want to apply for
the client requirement in order to sell their goods or render services, is all about the
reason for various pricing procedures.

Eg: Domestic sales pricing procedure,

– Export Pricing Procedure,
– A rebate pricing procedure or
– A High Discount oriented pricing Procedures.
– A repair pricing procedures.

You have your own conditions intended to few transactions only. Put all this
conditions as a set defining your own Procedures. It may even include special
requirements and formulas applied for such Pricing Procedures.
2) A special pricing procedures, in order to facilitate added functionality of SAP
pricing architecture, we must define new pricing procedure. SAP Standard
programmer checks these special Indicators in-order to do some required functions.

As a example 1, you need to have a Pricing procedure for condition supplement in

order to use the condition supplements. The condition supplement pricing procedure
must be given in the condition type definitions (v/06) of the Pricing Condition where
you need to supplement, without which SAP SD Condition Supplements functionality
doesn’t work.

As a example 2, you need to have a Pricing procedure for Inter Company Billing
Conditions (IV01 & IV02) in order to be active for Inter Company Billing specific
transactions. Thus make sure that, the procedure wouldn’t apply for non-Inter
company transactions.

Eg: KA0000 for Condition Supplement for KA00

– PR0000 for Condition Supplement for PR00
– ICAA01 for Inter-Company Billing

Here I would like to remind about a important field in pricing.

In V/08 of defining a new Pricing Procedure, in main screen, you have a field called
TSPP (Transaction Specific Pricing Procedure). This has to be ticked on for Inter
company Billings.

The SAP help reads for this field as Under:

Transaction-specific pricing procedure

Pricing procedure transaction-specific indicator

Before Release 4.0A, no special pricing procedures were used for inter company
billing and rebate credit memos, programs were just set accordingly to deal with these
situations. As of Release 4.0A you are offered greater flexibility in the form of the
option to define special pricing procedures for inter company billing and rebate credit
memos. For reasons of future compatibility, you will still be able to use the old
program specifications. For this reason, you must set this indicator if you want to
create a special pricing procedure. This is to prevent the program settings being used.

This indicator is also used as of Release 4.0A to predetermine the condition class and
the statistical condition indicator when copying from a reference document.

Example:

You copy prices from a shipment document to the billing document. The prices
should lead to a surcharge in the billing document. This is guaranteed by the re
determination of the condition class in the pricing procedure.

Same case with Standard Pricing procedure or Inter Company Pricing Procedure.

This configuration is done when user request for new pricing condition type other
than the standard ones provided by the system.
Screen to tcode VA01 – Create New Sales Order for customers
– Double Click the Item
– Then Click the Conditions Tabstrips

Define Condition types

V/05 – Condition Table for V/07

e.g. a business may no longer wants to have a sales discount based on the sales
organization, customer group, and material, but decided that the discount should be
based on the sales organization, customer group and material group.

V/06 – Create new condition types by copying a similar conditions type and changing
it according to your needs.

 Double click on the condition type to change the control options

V/07 – Access Sequences for condition type

V/08 – Pricing Procedures for condition types.

The pricing procedure is also used in the account determination. This determines the
general ledger accounts to which prices, discounts and taxes must be posted.

 Click on the Pricing Procedures e.g. PR0000 – Condition Supplements for

PR00
 Click Control – e.g. Tick Mdt if you want the condition type to be mandatory
 OV34 – Define account key
 OV35 – Assign account key
 Actky – Revenue account
 Accrls – Accruals account

OVKK – Determine which Pricing Procedures to use for which Condition Type.

Price with additional decimals

You can add additional decimals for a currency through a work around method.

Set up a currency let’s say instead of USD call it US$ ( OY03 ) and define the number
of decimal places ( OY04 ) to be 3 or more depending on your requirement.

Maintain the exchange rate for between US$ and USD to be 1 to 1

( OBBS and OB08 ).

Create pricing condition records for those customers requiring 3 decimal places using
Current US$ instead of USD.

That will give you 3 decimal places for your prices. However, one thing you will have
to watch out for is rounding.
You can try transaction OB90, define rounding rule for currency. Here you define the
rounding rule for your customer’s currency.
Control Pricing Conditions based on Order Type

4.6x

e.g. You create an order type ZP00 for QT – Quotation and does not wish it to be used
in OR – Standard Order.

Follows this steps :-

IMG – Sales and Distribution -> Basic Functions -> Pricing Control -> Define and
Assign Pricing Procedures

Define document pricing procedure

e.g. Q – Quotation

Assign document pricing procedures to order types

e.g. Assign Q to Order Type QT – Quotation

Maintain pricing procedures

e.g. Copy Standard Pricing Procedure to e.g. ZQT (all the pricing conditions list will
only be allowed in order type QT – Quotation

Define Pricing Procedure Determination

e.g. Copy and assign Document Pricing Q and Pricing Procedure ZQT accordingly

Users will receive Message no. V1 206 “Condition ZP00 is missing in pricing
procedure A V ZQT“.

Create a New Pricing Conditions Key Combination

4.6x

In VK12, click the Key Combination button. You can see a list of available key
combination for your price master.

Now, let create a new key combination e.g. Customer + Sales Document + Material

IMG – Sales and Distribution -> Basic Functions -> Pricing Control -> Define
Condition Tables -> Create condition tables

e.g. 900
Selected fields
Sales organization
Distribution channel
Customer
Sales document
Material

Click Generate to activate it

IMG – Sales and Distribution -> Basic Functions -> Pricing Control -> Define
Condition Tables -> Define Access Sequences -> Maintain Access Sequences
Select PR00 – Price
Click Accesses
Click New entries

AcNo Tab Exclusive

50 90 X – Tick

Save your entries

IMG – Sales and Distribution -> Basic Functions -> Pricing Control -> Define
Condition Tables -> Defince Access Sequences -> Optimize accesses

Copy an existing PR00 and substitute the AcNo with 50

Finally, goto VK12 and key in the new price master for PR00.

Next, goto VA02 and test out the material. If it didn’t work check the pricing date in
the header details. Is the pricing date within the validity period?