Basic Rules in SD Configuration

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

Organizational structure
Sales Organization
Its 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, its 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:

Customer & its partners 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

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
like Transport.zone, tax info

Shipping details

Payment
like Terms of payment, auto payment details

Payment transaction
like bank details, payment cards

Billing details
like payment term, account details

Billing Correspondence
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

Views

Key Fields

Gross Weight & its unit

Net Weight
Volume & its unit
Size/dimensions
Languages Maintained

2. Sales Org 1
Sales unit
Division
Tax Data
Min.orderqty
Min. delyqty
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

Views

Key Fields

Batch
Transportation Group
Loading Group
MatlGrpPack.Matls
Profit Center
Negative Stock
Serial Number

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 =

Route

Plant

+ Shipping Condition
(Sold-to-Party)

+ Loading Group
(Material master Gen: Plant data)

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

Route =

Departure Zone
(from Shipping Point)

+ Shipping Condition
(from Sold-to-Party)

+ Transportation Group
(from Material master)

+ Transportation Zone
(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:

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
{Material master)

+ Item
Usage
(if any)

+ Item Category of Higher Level

Item
(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 =

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 category

+ MRP Type
(Material Master)

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
(Sales Organization +
Distribution Channel + Division)

Shipping
The basis for shipping is delivery.
Delivery document controls the following in deliveries

Number range

Item no increment

+ Customer Pricing
Procedure
(Customer MasterSales area data)

+ Document Pricing
Procedure
(Sales Document
Type)

Storage location rule

Route determination

Text determination

Delivery split

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

Stkdeterm.rule

Billing
1.
2.

Billing is sales process is of the critical integration point between SD and FI Module.
It has got the following structure:
Header
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
Accounts

+ Account
Assignment
Group for
Customer

+ Account
Assignment
Group for
Material

+ Account
Key

+ G/L
Account
on which
the postings
will take
place