SAP SD Notes

Wednesday, January 05, 2011

10:43 AM

Business Process Overview

• SD is about selling, shipping and billing a product and/or service to a business.

• SD has five (5) different processes:
1. Pre-sales activities
 Inquiries (eg. Asking for prices, description)
 Quotations (eg. With time limit/validity date, 5000 until Dec. 10)
2. Sales order processing
 Sales order
 Data validation and processing
3. Inventory Sourcing
 Availability check
4. Delivery
 Delivery document
 Picking - is the process of getting the specified finished goods off the storage locations
in preparation for being shipped to the customer
 Packing - is the process of placing the goods into packaging materials or combining
them in preparation for being shipped to the customer
 Goods issue - records that the products have been literally issued out of the warehouse
5. Billing
 Invoice
 Transfer data to accounting
6. Payment (under SAP FI)

SAP SD Notes Page 1

 SAP SD Notes
Thursday, January 06, 2011
12:39 PM

SAP Enterprise Structure

• SD is about selling, shipping and billing a product and/or service to a business.

• Organizational Units - Represent the structure, legal, and organizational views of an enterprise.
There are different organizational units in SAP:
○ Client
 Highest – level element of all organizational elements
 Represents the enterprise/headquarters group
 Typically a corporation
○ Company Code
 Legal entity and independent accounting unit (this is because each country has a
different rule regarding taxes)
 A company code could be:
- Company within a corporate group
- Subsidiary
- A branch of a corporation in different countries
 There can be several company codes within a client
○ Sales Organization
 Represents the selling arm of your enterprise
 Could be assigned to only one company code
○ Distribution Channel
 A means through which saleable materials or services reach the customer (ex. Retail,
Wholesale, Direct Sales)
○ Division
 Represents a product line (ex. Phones, Pagers)
○ Sales Area
 It is the single point of contact of the customer with the company’s selling arm
 Composed of: Sales organization, Distribution Channel, and Division
○ Plant
 A facility where the products are distributed from
 Assigned to only one company code for inventory and accounting purposes
 A company code can have many plants
○ Sales Organization
 A sales organization can sell goods from several plants (can be said as the "seller")
 Plant can be assigned to different sales orgs.
○ Storage Location
 An organizational unit allowing differentiation between the various stocks of a
material inside a plant
○ Shipping Point
 Represents the highest organizational level for shipping
 Could be:
- Location where the deliveries are processed
- Group of employees who process the deliveries
 A delivery always leaves one (1) shipping point only
Could be subdivided into several loading points

SAP SD Notes Page 2

  Could be subdivided into several loading points
○ Credit Control Area
 Specifies and controls customer credit limits and risk categories
 A company code could only belong to one CCA.
○ Transportation Planning Point
 Highest organizational unit for transportation planning (typically a group of employees
responsible for organizing transportation
 Can be said as the "shipping partner"

Organizational Units in SD SD + Other Modules

 Sales Organization (Sales Area  Storage Location
 Distribution Channel (Sales Area)  Company Code
 Division (Sales Area)  Plant
 Shipping Point

SAP SD Notes Page 3

 SAP SD Notes
Thursday, January 06, 2011
1:13 PM

Master Data

• Master Data is the repository for data commonly used in order processing. It is available to all
applications and authorized users, and is created manually.
• A master data is a prerequisite for any order processing in SAP. The master data commonly used
for SD are:
○ Customer Master Data → Who are we selling to?
○ Material Master Data → What is being sold?
○ Customer-Material Info Records →
If we sell a certain product to a certain customer, what are the details specific to this setup?
(ex. If we sell at least 100 pagers to Ian in particular, he can get 20% off the total price)
○ Pricing Conditions → How do we determine how much a certain product is sold for? The
system automatically determines which gross price the customer should be charged and
which discounts and surcharges are relevant given the conditions that apply. See: Pricing
Condition Techniques

Customer Master Data Material Master Data

• Common views for Customer Master Data in SD are:
○ Accounting Data (unique to Company Code)
○ General Data
○ Sales Data (unique to a Sales Area)
• Partner Functions are terms that describe the people
and organizations with whom you do business, and
who are therefore involved in transactions. The different
partner functions available for SD are:
○ Sold-to-Party → Places an order
○ Ship-to-Party → Where goods are delivered
○ Bill-to-Party → Where the invoice is sent
○ Payer → Settles the invoice (payment)
• Account group is a classification in the customer master
record. It determines which entries are required and
optional (ex. Sold-to-Party)
• Common views for Material Master Data in SD are:
○ Sales Organization Data 1 and 2
○ General / Plant Data
○ Sales Text
• Material Type are similar to account groups. It
determines what screen can be viewed.
• For example, raw materials (material type ROH) do
not require a sales view because raw materials are
not intended for resale.

SAP SD Notes Page 4

 SAP SD Notes
Wednesday, January 12, 2011
2:13 PM

Sales Order Processing

• Order Creation
○ Order Types
 OR Standard Order
 SO Rush Order
 FD Delivery Free of Charge
○ Sold-to-Party/ Ship-to-Party
○ Material
○ Order Quantity
○ Sales Area (Optional)
• Sales Document Structure
○ Header - Applicable to entire order
○ Item - Applicable to 1 item only
○ Schedule Line - Applicable to 1 line item each
contains a date and quantity
(For Tables) By filling up the Sold-to-Party field, the delivery and billing
Sold to: Pedro information can already be determined, as well as the Shipping Point
Sales area: and Route through the Material field.
Header Luzon / Direct Sales / C ell phones

Item / M aterial: ULA1000 • Order Processing: Incompletion Check

Item 1 Q uantity: 1 piece ○ Incompletion Checks helps in determining what required fields were
left blank.
Schedule line 1
D elivery date: D ec. 1, 2010
C onfirm ed quantity: 1 pc
Item 2 D elivered quantity:

Schedule line 1

Schedule line 2

• In the order creation, only a number of fields are needed (ex.Item,

Quantity, Sold-to-Party). Now, the population of the rest of the
document comes from the Master Data and Tables. Here's how:

Incompletion Checks can be triggered when the document is saved, or by

using the menu bar > edit > incompletion log or ctrl+F8

(For Master Data) Other data are extracted from the Customer Master
and Material Master like payment terms, plant, pricing, etc.

SAP SD Notes Page 5

 SAP SD Notes
Thursday, January 13, 2011
11:15 AM

Pricing

• SAP computes the final price of an order based on a Pricing Procedure which is a series
of arithmetic operations from base price to final price. It is generally computed in this
manner:
○ Condition Table (Accesses) - defines the combination of fields for which
condition records can be created. It defines the structure of condition record
keys and gives the link to the rate (condition amount or percentage).
Condition Tables can be found on an Access Sequence that is why they can
be called “accesses”.
 Condition Record - It is the record itself or data in the condition table.
It also allows to store and retrieve pricing data in the systems.

Note: Price calculation is done at order entry time so that we can inform the customer when
the order is taken how much he will be charged. Recalculation of taxes is done at billing
time.

• Condition Technique in Pricing refers to the method by which the system determines prices
from information stored in condition records. It has the following elements:
○ Pricing Procedure - specifies the allowed price elements (condition types) for a
document, defines their sequence, and calculation scheme ("calculation formula").
Following below is an example of a pricing procedure:
With the example above, the condition types are the Price, Output Tax,
Discounts, while the pricing procedure is the specific sequence of the
condition types (ex. price comes first before output tax) and the allowed
price elements/condition types. The Access Sequence is the order on which
the system should work through the condition tables when searching for
particular condition records. If a certain record is not met in a condition
table, it will move to the next condition table until it satisfies all the records
inside it.

Note: The System determines the pricing procedure according to information

defined inside the sales order

Say, in our payslips, we can categorize Basic Income, Pag -Ibig Premium, Philhealth
Premium, Withholding Tax, etc as condition types.

In the above example of a Sales Order, the condition types are: PR00 or Price, AZWR or
Down Pay./Settlement, MWST or Output Tax, SKT0 or Cash Discount and VPRS or Cost.

○ Condition Types - is used to differentiate between different kinds of price elements

(prices, discounts/surcharges, freight and taxes) and defines their characteristics (%-or
absolute discount). It can be applied as a Header Condition, Item Condition, or both.

○ Access Sequence - is the criteria that is used by SAP when searching for values
maintained for a specific condition type. These values are known as condition
records. You assign an access sequence to a condition type although there are some
condition types that do not require access sequences.

SAP SD Notes Page 6

 SAP SD Notes
Thursday, January 13, 2011
2:22 PM

Material Determination

• Material Determination allows the substitution of one material for another in the sales document.
Just like Price Determination, it uses a condition technique.

Let's say, material ULA 1000 is not available for purchase due to some reasons (could be out of
stock). With Material Determination, the system automatically substitutes it with ULA 1001. Let's
assume that they have the same features, and price. What happens in the background is this:

The Sales Document determines what procedure is used. The procedure decides what condition
types are used. The condition type decides the access sequence. The access sequence specifies
the strategy for data records. *****

In order to visualize the change, below is an example of a graphical representation.

Material determination

Material Substitute
entered material Sales order

82050011 82050211
Item Material
10 82050011
82050211

Example usage: Product Selection

Since Item 82050011 is not available, it is automatically replaced with 82050211 with
accordance to the Material Determination. Let's assume that both items have the same features
and price except for the packaging where the latter item has an additional ribbon (or added
feature).

SAP SD Notes Page 7

SAP SD Notes Page 8