Project Enterprise

SAP Basics for Order to Cash

1
Objective

This document’s objective is to provide you an overview of:

 Procure to Pay (PTP) Core Processes.

PTP Foundational Elements:
 PTP related SAP Organization Structures
 PTP related SAP Master Data Records
 Key Interrelationship between SAP Organization
Structures, Master Data Records and PTP Core process
 SAP Document Types, Structure and Flow

2
Agenda

 Order to Cash Overview

 PTP Foundational Elements:

 SAP Organization Structure
 SAP Master Data
 SAP PTP –Document Types, Structure and Flow
 ABC of PTP Summary

3
Order To Cash - an Overview
Order to Cash (PTP) is a fully integrated PROCESS AREA encompassing the following PROCESSES:

 Sales Order Processing

 Outbound Delivery & Shipment processing
 Billing

The above PROCESSES are handled within the fully integration SAP system across various SAP
system modules. When working within SAP it is important to always bear in mind the strong “integrated
nature “ of SAP and how certain processes may or may not impact each other.

Key Characteristics:

 All processes occur within common Company SAP Organizational Structures - predefined for all
sites.
 Accuracy of master data set-up in advance of processing greatly impacts the efficiency of PTP
processes.
 Key integration points are between Order to Cash and Manufacturing, Procurement and Operational
Planning.

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Order To Cash - An Overview
Master Data
Customers Materials Prices

Core Processes
Sales Order Delivery & Shipment
Processing Processing Billing

Key Processing Activity

Capture the Customer’s Delivery of goods or
Charge the
demand for goods or services from
Company to Customer for the
services. goods or services
Customer.
received.

SAP Document Flow – document types created with reference to one another.

Sales Delivery Billing

Order Invoice
Shipment
5
Agenda

• Order to Cash Overview

• PTP Foundational Elements:

• SAP Organization Structure
• SAP Master Data
• SAP PTP –Document Types, Structure and Flow
• ABC of PTP Summary

6
SAP Organisation Structures – an Overview
SAP Organization Structures set the framework in which Company PTP processes
are to carried out. Company SAP organization structure definitions and concepts
have been defined specific to Company operational requirements.

The following “Company SAP Organizational Structure Concepts” have been

considered:

 Sales Area Concept

 Plant Concept
 Warehouse Concept

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Company SAP Organisation Structure – Sales Area
Concept
The structure below reflects the SAP organizational elements and relationships as they relate to the Company Sales Area Concept.

Organizational Element Description

Client
Client The highest organizational level. Commonly the name of
the SAP system on which the business is running.
Company Code Independent accounting unit with SAP. Commonly equates
Company
to a single legal entity.
Code
Sales Organization The selling unit in the legal sense. Within Company there
is a one-to-one relationship between Sales Organization
and Company Code.
Sales
Organization
Distribution Channel Typically defined to represent markets. Company will
operate using only one Distribution Channel for all Sales
Organization.
Distribution
Channel
Division Commonly used to represent product groups. Company
will operate using only one Division for all Sales
Organization.
Division
Sales Area Sales Organization/Distribution Channel/Division are
collectively known as “Sales Area”

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Company SAP Organisation Structure – Plant
Concept
The structure below reflects the SAP organizational elements and relationships as they relate to the Company Plant Concept.

Organizational Description
Element
Client Client The highest organizational level. Commonly the
name of the SAP system on which the business is
running.

Company Company Code Independent accounting unit with SAP. Commonly

Code equates to a single legal entity.
Plant The location where materials are produced, or
goods and services are provided. This location
can be a physical or virtual location.
Plant Shipping Point The physical location responsible for scheduling
Transportation
and processing deliveries to internal and external
planning
customers.
point
Transportation Planning Used to represent a group of people responsible
Point for planning and processing transportation
Shipping activities.
point

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Company SAP Organisation Structure- Warehouse Concept
The structure below reflects the SAP organizational elements and relationships as they relate to the Company Warehouse Concept

Organizational Description
Client Element
Client The highest organizational level. Commonly the name
of the SAP system on which the business is running.
Company
Code

Company Code Independent accounting unit with SAP. Commonly

equates to a single legal entity.
Plant
Plant The location where materials are produced, or goods
and services are provided. Many be a physical or
virtual location.
Storage Storage Storage Location The organizational element allowing differentiation
location location between the various stocks of a material in a plant.
e.g. Finished Goods vs Returns Goods.

Warehouse The complete physical warehouse used to manage

one or more individual warehouse buildings that,
Warehouse together, form a complete warehouse complex.

Storage Type A physical or logical subdivision of a warehouse

complex that is characterized by its warehouse
Storage Storage technique, the space used, its organizational form, or
type type its function.

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Agenda

• Order to Cash Overview

• PTP Foundational Elements

• SAP Organization Structure
• SAP Master Data
• SAP PTP –Document Types, Structure and Flow
• ABC of PTP Summary

11
SAP Master Data
SAP Master Data records refer to centralized information that may be
shared during SAP processing.

Key PTP related master data records include:

 Customer Master Data

 Material Material Data Record(this record could refer to services or
products as well)
 Pricing

 Each of these master records stores different kinds of data relevant to

specific SAP processes.

 PTP related master records as well as the documents used in processing

are entered in dependency with the organizational structures.

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PTP Organization Structure Dependencies
A COMPANY’s SALES ORGANIZATION processes
Client a specific SALES ORDER DOCUMENT TYPE for a
specific CUSTOMER requiring a specific MATERIAL
or
Company SERVICE at a specific PRICE - all happening within
Code a specific
SALES AREA (area shade in grey).

Sales
Organization
Customer Material
Master
Record

Distribution
Channel

Sales
Order
Division Document
Type

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PTP Master Data Records
SAP Client

Customer Material Prices

Customer Master Records Material Master Record Price Master records

stores information on stores information Store information on:
Business Partners: related to materials or • Prices
• SOLD TO PARTY – to whom we services:
sell • Discounts
• SHIP TO PARTY – to whom we • Purchased
deliver
• Freight cost
• Produced
• BILL TO PARTY – to whom we • other charges that
send the invoice • Stored might appear on an
• PAYER - who pays the invoice
• Sold invoice.
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 PTP Master Data Records
PTP processes are driven by data from PTP Master Data Records

Master Data:
• SOLD TO PARTY • Delivery Priority • BILL TO PARTY
address data • Number of deliveries address details
allowed • Customer tax liability
Customer • Payment Terms • Terms of payment
• Currency

• Material Number • Base unit of • Material tax liability

Material • Material measure • Payment Terms
Description • Commodity Code

• List prices • Freight surcharges • Sales tax %

Prices • Sales unit of • Accruals
measure

Delivery
Sales Order & Shipment
Processing Billing
Processing
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Agenda

• Order to Cash Overview

PTP Foundational Elements

• SAP Organization Structure
• SAP Master Data
• SAP PTP –Document Types, Structure and Flow
• ABC of PTP Summary

16
 SAP PTP - Document Types Structure and Flow
PTP document types created with reference to one another are collectively know as
“DOCUMENT FLOW”. This flow offers the user a full audit trail of process steps executed.

Sales Delivery Billing

Order Document Type Document Type
Document type (Invoice)

Shipment

A SALES ORDER is A DELIVERY is A SHIPMENT is An INVOICE is created with

a contractual agreement
between a Sales Organization
and a customer.
Details include :
– Products or services to
be sold
– Sales quantities
– Selling prices and
– Delivery times
created with reference created for different reference to processed
to a SALES ORDER types of transport e.g. DELIVERY.
A delivery can take air, sea and land. Pricing information contained in
place in: one A shipment can contain the invoice are defaulted from
complete delivery or multiple deliveries. the SALES ORDER.
multiple partial
deliveries.
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Sub-Process – Additional material
SAP Document Structure
SAP follows a standard document structure which includes a
HEADER and ITEM level data.
Document Header
The benefits of this document structure are:

 Changes made at header level affect the entire document at

Item #1
the time of saving. Item #2
 Changes made at item level are independent of changes
made at header level
Item #3
Item #4

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Sub-Process – Additional material
Sales Order Document Structure
Sales Order Document: Structure

Standard Order Delivery

Header Ship-to-party
Sold-to-party Item Material Qty
Ship-to-party
Item 1
10 XXXXX 25kg
Schedule line 1 Item Material Qty

10 XXXXX 25kg 20 XXXXX 25kg

Item 2 1 01 Nov 25kg

Schedule line 1
20 XXXXX 100kg
Delivery
Schedule line 2 Ship-to-party
1 01 Nov 50kg

2 01 Jan 50kg 30 XXXXX 25kg

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Agenda

 Order to Cash Overview

 PTP Foundational Elements

 SAP Organization Structure
 SAP Master Data
 SAP PTP –Document Types, Structure and Flow
 ABC of PTP Summary

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 ABC of PTP Summary
SAP PTP FOUNDATIONAL ELEMENTS to remember:
 SAP ORGANISATION STRUCTURES are the framework in which PTP processes are carried out .
 PTP MASTER DATA records refer to centralized information that may be shared during SAP processing.
 PTP DOCUMENT TYPES created with reference to one another are collectively know as “DOCUMENT FLOW”. This flow offers the user a full audit trail
of process steps executed.

Client A COMPANY’s SALES ORGANISATION processes

a specific SALES ORDER DOCUMENT TYPE for a
specific CUSTOMER requiring a specific MATERIAL or
Company
Code SERVICE at a specific PRICE - all happening within a specific
SALES AREA (area shade in grey).

Sales
Organization Customer
Material/
Master Price
Record Service

Distribution
Channel
PTP core processes

Division Sales Billing

Delivery
Order Invoice
Document
Type Shipment

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SAP DOCUMENT FLOW