Transcript Sales Order Cycle in SAP - Oklahoma State University

Sales Order Management
in SAP R/3
The order to cash process
Adapted by Nik Dalal, OSU
from material created by Bret Wagner, WMU
And SAP America Plug-and-Play grant
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Sales Order Cycle
Pre-Sales Activities
Sales Order Processing
Inventory Sourcing
Payment
Billing
Delivery
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SAP R/3 SD module
 SD: Sales and Distribution
 Integrated with:
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Materials Management (MM)
Production Planning and Execution (PP)
Financial Accounting (FI)
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R/3 Organizational Elements
 Configurable structures within the software that
represent the legal and/or organizational views of an
enterprise
 Organizational elements form a framework supporting
all business activities in the manner desired and
selected for a given instance of the software
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SAP R/3
Organizational Elements
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Client
Company Code
Sales Organization
Distribution Channel
Sales Division
Sales Area
Plant
Storage Location
Shipping Point
“An essential characteristic of the SAP R/3 standard
business program is the strict adherence to a formal
structure of data. In no other way is it possible to build
and maintain the very large system of databases and
transactional processing routines that a modern integrated
system demands.
The structure of SAP R/3 is designed to be adaptable to the
structure of all common configurations of head office and
subsidiary operating units. The standard software is not
itself altered when it is implemented in a company: only
the tables of parameters that control it so as to make it fit
your specific organization and its data processing
requirements. There must be a set of definition of terms to
ensure that everyone understands what the titles of the
organizational units stand for.”
SAP R/3, page 530.
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Client
 The highest level in an SAP R/3 instance
 A self-contained unit with a separate set of master
records and its own set of configuration tables
 An instance can have more than one client
 Training Client
 Testing Client
 Production Client
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Company Code
 Represents an independent
legal accounting unit
 Balanced set of books, as
required by law, are prepared
at this level
 A client may have more than
one company code
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Assets
Liabilities &
Owners Equity
United States
Europe
India
China
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Sales Organization
 A sales organization is responsible for negotiating sales
conditions and distributing goods and services.
 It represents the top organizational level to which you sum sales
figures. There must be at least one sales organization defined
 A sales organization is assigned to only one company code.
 More than one sales organization can be assigned to a
company code.
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Distribution Channel
Sales
Organization
Distribution Channel
Wholesale
Retail
Direct
 A Distribution Channel is the way sales materials reach the
customer.
 A distribution channel can be assigned (serve) to more than one
sales organization.
 Distribution Channels allow for different conditions such as
minimum order quantities and pricing.
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Sales Division
Sales
Organization
Product
Line 1
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Divisions
Product
Line 2
Product
Line 3
Divisions are used to present product lines.
At least one division must be defined.
Divisions can be assigned to more than one sales organization.
Divisions restrict access to materials, so care should be
exercised in defining divisions.
 Examples
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Motorcycle
Accessories
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Sales Area
Sales Organization 1
Distribution Channel 1
Division 1
Division 2
Distribution Channel 2
Division 1
Sales Organization 2
Distribution Channel 1
Division 1
Division 2
 A Sales Area is a valid combination of Sales
organization, Distribution Channel and Division.
 Customer Master Data and Sales Documents are
linked to sales areas.
 Simple organizational structures are usually preferred
to complex ones.
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Fitter Snacker Sales
Organization
Fitter Sales (##FS)
Wholesale (WH)
Snackbar (SB)
Direct (DI)
Snackbar (SB)
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Plant
 A physical or logical site where value is added
 A plant can be a
 Production facility
 Warehouse
 Distribution vehicle
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Storage Location
 A subdivision of a plant where inventory is managed.
Storage Location 009
Storage location 0001
Storage location 0002
Storage location 0003
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Shipping Point
 A shipping point is a fixed location that carries out shipping
activities. It may be a loading dock, a mail room or a shipping
department. Each delivery is processed by only one shipping
point
 One plant can have multiple shipping points.
 A shipping point can serve multiple plants.
 Lead times for determining delivery dates are associated with
shipping points.
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Customer Order Cycle
Pre-Sales Activities
Sales Order Processing
Inventory Sourcing
Payment
Billing
Delivery
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Pre-Sales Activities
 There are two categories of presales activity: Sales Support
and Pre-sales Documents.
 Sales Support allows for tracking of customer contacts by
including sales visits, phone calls, letters and direct mailings.
Mailing lists can be generated based on specific customer
characteristics. Basically an Integrated CRM system.
 Pre-sales contacts include inquiries and quotes.
 Inquiries document customer requests for information (“how
much is . . .”, “is the product in stock . . .”)
 Quotes are binding documents to a customer offering a
specific quantity of material at a specific price if accepted
within a specific period.
 Both Inquiries and Quotes can be used as a starting point to
create a customer order.
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Sales Order Processing
 Customers place orders with a customer service
representative who create a document* with
information on:
 Customer
 Material Ordered - material and quantity
 Pricing conditions for each item
 Schedule lines - delivery dates and quantities
 Delivery Information
 Billing information
 Information is pulled from master data on customers
and materials to minimize data entry errors.
*Electronic Capture of a Business Event
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Inventory Sourcing
 Inventory Sourcing determines:
 If a product is available (availability check).
 How the product will be supplied:
 From stock on hand.
 From production or purchase orders that should
be available.
 From make-to-order production.
 Shipped from an external supplier.
 Shipped from another plant or warehouse.
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Inventory Sourcing
 Inventory sourcing occurs when:
 An order is created.
 An order is changed.
 When the delivery document is created.
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Delivery
 Delivery activities include:
 Creating delivery documents
 Creating transfer orders for material
picking
 Provide packing information (if required)
 Goods issue (updating accounting and
inventory data)
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Billing
 A Billing Document is created by copying information
for the sales order and delivery document into the
billing document which is used to create the invoice.
 Creating a Billing Document will automatically debit
the customer’s accounts receivable account and
credits the revenue account. Postings may also be
made to other accounts.
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Payment
 Payment is the final step in the customer order
management cycle.
 Final payment includes:
 Posting payments against invoices.
 Reconciling differences, if necessary.
 The Cycle may not always go as planned (material
not in stock, defective material returned for credit,
etc.). SAP has procedures to deal with these
possibilities.
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Order Management Process
Pre-Sales
Contact
Inquiry
Quotation
Order
Inventory Sourcing
Delivery/
Transportation
Billing
Payment/
Accounting
Delivery
Goods issue
Transfer Order Shipment
Invoice
Accounts Receivable
Production Planning
Sales Information System
Sales Order
Processing
Materials Management
Contract
Scheduling
agreement
Material Stock
Account
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Document Flow
Order
Delivery
Invoice
Accounting
Document Flow of a Sales Order
Order 900
. Delivery 50000672
. . WMS transfer order 100000828
. . GD goods issue: delivery 40000184
. . Invoice 90000376
. . . Accounting document 100000269
 The sales order management process consists of a chain of
steps. Each step in the process causes the creation of a
document which can be used to track the progress of the sales
order. All changes to documents (sales orders, delivery, etc.)
creates a document to keep track of the changes.
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Document Flow
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Master Data
Customer
Master
Pricing
Master
Material
Master
 Master Data is centrally stored (shared across application
modules) and is processed to eliminate data redundancy.
 When creating business transactions (like a sales order) the R/3
system copies information from master data.
 Three kinds of master data are critical to sales order processing:
 Customer - Shared with FI/CO
 Material - Shared with MM and PP
 General Ledger
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 Pricing
Customer Master
 Contains all the customer related data necessary for
processing orders, deliveries, invoices and customer
payments
 Customer Master contains all relevant data regarding
business partners
 Sold-to party
 Ship-to party
 Bill-to party
 Payer
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Material Master
 Contains all data required to define and manage a
specific item of material
 Integrates data from
 Inventory Control (MM)
 Manufacturing (PP)
 Sales and Distribution (SD)
 Accounting (FI and CO)
 And other departments
 Each user has a unique view
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General Ledger
 A book of accounts and their respective balances
 The primary information record for Financial
Accounting (FI)
 Contains the information required to prepare financial
statements
 The General Ledger provides a complete record of all
acceptable business transactions
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Pricing
 Pricing is carried out automatically based on
predefined prices, discounts, and surcharges
 Highly customizable within SAP R/3
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Creating an Order
Customer Master
Sold-to party 2540-00
Material Master
Item Material
1 1400-500-00
2 1400-100-00
Quantity
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 When a sales order is created in R/3, data is copied from:
 Customer Master
 Material Master
 Condition Records for Pricing
 Tables in Configuration for shipping point and route.
 Data can also be copied from an inquiry or quote.
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Shipping Point and Route
SP 1
SP 2
SP 3
Plant Shipping Point
Route
Customer
 The Shipping Point is the logical or physical location where
deliveries are created and managed (see Organizational
Elements).
 The Route is the path that the delivery follows from the plant to
the customer site.
 Delivery dates are determined based on lead times associated
with the shipping point (picking and packing time) and route
(transportation lead times and transit times)
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Stock Available: Backward Scheduling
Order Date
Material
Transportation
Availability Date Planning Date
Loading
Date
Goods
issue date
Loading Time
Pick Pack and Stage
Transportation
Lead Time
Requested
Delivery
Date
Transit Time
The R/3 System uses the
longer of these two times in
calculating delivery scheduling.
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Stock Unavailable: Forward Scheduling
Order Date
New Material Transportation
Availability Date Planning Date
Loading
Date
Goods
issue date
Loading Time
Pick Pack and Stage
Transportation
Lead Time
Confirmed
Delivery
Date
Transit Time
The confirmed delivery date
is derived by the R/3 System
using forward scheduling based
on the new material availability date
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Delivery
Complete
Delivery
Sales Order
Partial
Delivery
Delivery
Delivery
Sales Order
Delivery
Delivery
Order
Combination
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Sales Order
Sales Order
Delivery
A delivery can be created for each sales order.
Sales orders may split into multiple deliveries (availability).
A delivery may combine a number of sales orders for efficiency.
Combined sales orders must have something in common like
shipping point, delivery processing date, ship-to party or route.
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Picking Process
Delivery
Transfer Order
Print Transfer Order
Confirm Transfer Order*
* not mandatory
Delivery Items Complete
Process differences
Copy picked quantity
Create a new transfer order
for variance quantity
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Billing
Invoice
Split
Sales Order
Delivery
Invoice
Invoice
Separate Sales Order
Invoice
per delivery
Delivery
Invoice
Delivery
Invoice
Collective Sales Order
Invoice
Delivery
Sales Order
Delivery
Delivery
Invoice
 Invoice splits can be used to bill for different items
like materials and services.
 Collective invoices can be used to consolidate
deliveries onto one invoice to minimize paperwork.
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Posting Payments
Invoice 1
Invoice 2
Acme Corp.
Pay to
Invoice 3
Invoice 4
4325
$
Dollars
First National Bank
2132 123123 54545 345 34
 Customers may send one check to cover multiple invoices. They
may also send checks for less than the full amount due. SAP
allows for partial payments to be applied to invoices.
 Payment posting is performed by the accounts receivable
department.
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Fitter Snacker Exercise
West Hills
Athletic Club
Sales and
Distribution
Sales
Order
Inquiry
1
Pricing
2
Availability
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Fitter Snacker Exercise
Goods Issue
Pick
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5
Materials
Management
Sales
Order
Delivery
Delivery
Delivery
3
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Fitter Snacker Exercise
Invoice
West Hills
Athletic Club
Sales and
Distribution
Delivery
6
Accounts
Receivagle
Post
Receivable
7
Receivable
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