SAP SD Tutorial

SAP Sales and Distribution is one of the key components of SAP ERP
system and is used to manage shipping, billing, selling and
transportation of products and services in an organization.
SAP Sales and Distribution module is a part of SAP Logistics module
that manages customer relationship starting from raising a quotation to
sales order and billing of the product or service. This module is closely
integrated with other modules like SAP Material Management and PP.

Key Components in SAP SD

The key components in SAP Sales and Distribution module are

Customer and Vendor Master Data

Sales Support

Shipping of Material

Sales Activities

Billing related

Transportation of products

Credit Management

Contract Handling and Management

Foreign Trade

Information System

SAP Sales and Distribution Cycle

SAP SD - Organizational Structure

SAP provides many components to complete SAP Sales and Distribution
organizational structure like Sales Areas, Distribution Channels,
Divisions, etc. The SAP SD organization structure majorly consists of
two steps

Creation of Organization elements in SAP system, and

second is to link each element as per requirement.

On top of this organization structure in the SD module, sales

organization is at highest level and is responsible for distribution of
goods and services. SAP recommends to keep the number of sales
organization in an organizational structure to be minimum. This will
help in making the reporting process easy and ideally it should have a
single sales organization.

The next level is distribution channel, which tells the medium by which
the products and services are distributed by an organization to its end
users. Division in an organizational structure, which represents a
product or service line in a single organization.
A sales area is known as entity, which is required to process an order in
a company. It comprises of sales organization, distribution channel and
a division.
In SAP SD organizational structure, each sales organization is assigned
to a company code. Then the distribution channel and divisions are
assigned to sales organization and all of these comprise to make a sales
area.
In the first step of an SD organizational structure, sales organization is
assigned to a company code and then is to define a distribution channel
and then division to a sales organization.
The following diagram shows the organizational structure of a Sales and
Distribution module

Material management
Material Management is one of the key modules in SAP ERP System and
covers the day to day business operations related to inventory and

procurement. This module is closely integrated with other modules of

R/3 systems like Finance Accounting and Controlling, Sales and
Distribution, Quality Management, Product Planning.

Integration with Sales and Distribution SD Module

Consider an example of creating a sales order in SAP SD, it involves
copying the details of items from Material Management. Availability
check of the item and price details are also taken from MM, but this can
be controlled in the SD module. To create inbound and outbound
delivery of goods for a sales order, shipping details, loading point etc.
also comes from the Material Master.
The item that is placed using a Sales order must be extended to the
sales area of an organization to sales order/customer, otherwise it
wont be possible to transact with this material. This confirms that there
is a link between SAP SD and MM module, when a sales order is created
and fulfilled. Similarly, there are many other links between two
modules.

Finance and Accounting

SAP FI stands for Financial Accounting and it is one of the important
modules of SAP ERP. It is used to store the financial data of an
organization. SAP FI helps to analyze the financial condition of a
company in the market. It can integrate with other SAP modules like
SD, PP, SAP MM, SAP SCM etc.
For SAP FI-MM, use T-code: OBYC

In case of a standard sales order, you create an outbound goods

delivery to the customer. Here movement 601 takes place. This
movement is configured in MM and movement of goods hit some G/L
account in FI. This shows the integration between SAP SD, FI and MM
module.

Document Flow
This shows how a transaction in one system effects the details in other
systems of an SAP module.
Consider the following transaction

For SAP FI-MM, use T-code: OBYC

Whenever there is a delivery created with reference to a sales order,
goods movement takes place in the system.

Example
In case of a standard sales order in the SD module, you create an
outbound goods delivery to the customer. Availability check and retail
price of that product is checked in the MM module. Here, movement
601 takes place. This movement is configured in the MM and movement
of goods hit some G/L account in FI. Every such movement of goods
hits General Ledger account in FI.

The accounts posting in FI is done with reference to the billing

documents like credit and debit note, invoice etc. created in SD and
hence this is the link between SD and FI. This shows the document flow
between different modules.

Process Chain
SD module is closely integrated with other SAP modules. The following
tables will give you a brief idea on how SD is linked with other modules

Sales Order
Link Points

Module Involved

Availability Check

MM

Credit Check

FI

Costing

CO/MM

Tax Determination

FI

Transfer of Requirements

PP/MM

Billing
Integration Point

Module

Debit A/R

FI/CO

Credit Revenue

FI/CO

Updates G/l (Tax,discounts,surcharges,etc)

FI/CO

Milestone Billing

PS

Goods Delivery and Issue of goods

Integration

Module

Availability Check

MM

Credit Check

FI

Reduces Stock

MM

Reduces Inventory

FI/CO

Reduces Eliminated

PP/MM

Master data is one of the key factors in Sales and Distribution module.
There are two levels of masters in SD.
The first level master includes

Customer Master

Material Master

Pricing Conditions

While, the second level master is

Output condition

Create a Customer Master Record

The customer master data contains the information about business
transaction and how transactions are recorded and executed by the

system. A Master contains the information about the customers that an

organization uses to do business with them.

Key tables in Customer Master

Table Name

Key

Description

KNA1

KUNNR

General Information

KNB1

KUNNR,BUKRS

Company Code

KNVV

VKOGRG,VTWEG,SPART,KUNNR

Sales Area

KNBK

KUNNR,BANKS,BANKL,BANKN

Bank Data

VCNUM

CCINS,CCNUM

Credit Card

VCKUN

CCINS,CCNUM,KUNNR

Credit Card Assignment

KNVK

PARNR

Contact Person

KNVP

VKORG,VTWEG,SPART,PARVW,KUNNR

Partner Functions

Main Transaction Codes in a Customer Master

S.No

Transaction Codes & Description

1
XD01, XD02, XD03
Used to create/change/display customer centrally

2
VD01,VD02,VD03

Used to create/change/display customer sales area

3
FD01,FD02,FD03
Used to create/change/display customer company code

4
XD04
Display change documents

5
XD05
Display change documentsUsed to block Customer Global, order,
delivery, billing, sales area, etc.

6
XD06
Used for deletion

7
XD07
Change Account Group

8
VAP1

Create Contact Person

Creating a Customer Master Data

To create a customer master data, you need to use an Account group.

T-Code: XD01/VD01/FD01
Note that if you use

XD01 This Includes sales area in the customer master and data is stored
in tables KNA1, KNB1 and KNVV.

VD01 This includes sales area & data, which will be stored in tables
KNA1, KNB1 and KNVV and there is no company code data in this.

FD01 This is company code level & data is stored in tables KNA1 and
KNB1.

Then a new window will open. Enter the following details

Select the Account Group from the list.

Enter the customer number and select the company code.

Then you can enter the Sales Area details like

Sales Organization

Distribution Channel

Division

In case you want to take reference from an existing customer to create

customer master, you can use the reference option.
Once all the details are selected, click the Tick mark.

A new window will open to enter the customer master data. This
customer master data has 3 key sections

General Data like Title, Name, Address, etc.

Company Code Data and

Sales Area Data.

Note that this region fields define the tax calculation like VAT, CST, etc.
The next step is to go to Control Data and enter the following details.

Then you have to enter the particulars in Payment Transaction tab and
enter the details of Bank City, Bank Key, Bank Account and Account

Holder Name. You can also add more details by clicking on the Bank
data button.

The next step is to go to the Sales Area data and enter the details
Shipping Data, Customer Pricing and Partner Functions, etc.

Next is to click on the Save icon at the top and you will get a
confirmation that the customer has been created with #.

If you have to make any further changes to the customers master

data, you can use T-Code: XD02.
Partner function allows you to identify which functions a partner has to
perform in any business process. Consider a simplest case, where all
the customer functions are performed by the partner customer. As
these are mandatory functions, they have to be defined as obligatory
functions in a SD system.
These functions are categorized as per partner type in Sales and
Distribution system. The below partner types are Customer, Vendor,
Personnel, Contact Person and common partner functions as per these
partner types are

Partner Type Customer

o

Sold-To-Party

Ship-To Party

Bill-To-Party

Payer

Partner Type Contact Person

Partner Type Vendor

Forwarding Agent

Partner Type Personnel

Employee Responsible

Sales Personnel

The following tables show the main partner types

corresponding partner function in Sales and Distribution

and

their

Note that if a partner belongs to a different partner type, in this case

you need to create a master records for that partner.
Partner
Type

Partner Function

Entry from System

Master Record

Customer number

customer master
record

Sold-to Party(SP)
Customer(CU
)

Ship-to Party(SH)
Bill-to Party(BP)
Payer(PY)

Vendor(V)

Human
Resource(HR)

Forwarding
agent(fwdg agent)

Vendor number

Employee
responsible(ER)

Personnel number

Vendor master
record

Personnel master
record

Sales Personnel(SP)

Contact
Person(CP)

Contact Person(CP)

Contact Partner
number

Creating a Partner Function

Use T-Code: VOPAN

(created in
customer master
record,no master
record of its own)

A new window will open. Select the Partner Object and click the Change
button.

It will open a new window with the name Partner Determination

Procedures. Go to New Entries.

Enter the name and partner determination procedure and double click
on Partner Function in left pane.

Click the New Entries button.

Enter the Partner function details Name, Type, etc. KU- stands for
Customer.

Next is to click on the Partner Function under Partner Determination

Procedure node and enter the details Partner Det. Procedure, Name,
Partner Function.
Then, we need to assign this partner determination procedure to the
Partner Object. The Partner Object would be a Customer for this
example. Then Click on Account Groups and Select the Account group
name from the list. Once it is done, Click Save, it will save the partner
function.
Suppose you have implemented SAP in your company and now you
want to put all your stocks in the SD system. For this, use T-Code:
MB1C Movement Type: 561 this is for Good receipts without
reference.
Movement Type: 501 this is used for receiving goods with a
Purchase Order.

A new window will open. Enter the document date, Plant and storage
location, Movement type, etc.

Select the Movement type from the list and Press Enter after selecting
all the details.

A new window will open. Enter the material code and quantity for which
stock needs to be created and then click Save.

A message Document 300045646 posted will be displayed.

A Material Master is created in SAP SD system by the material
department. Once it is created, the person who manages sales related
material has to extend sales views.
Use T-Code: MM01 to create material master for different views. To
check the changes, use T-Code: MM04

A new window will open. Enter the Industry Sector and Material Type.
Click Select View(s).

Select Sales Org Data 1, Sales Org Data 2, Sales: General/Plant Data
and click the Green tick mark below.

Then a new window will open. Enter the Plant, Sales Organization and
Distribution Channel for which the material is to be extended. Repeated
entries have to be made for various materials with the above
selections.

A new window will open, then you can enter the following details

Material Details

Base unit of Measure

Division

Material Group

Tax

Then, go to Sales Org 2 tab. This information is required for analysis.

Material Statistics Group Value should be 1 always. Value in this field

with Customer Statistical Group maintained in customer master will update
the information system.

Gen Item Category Group and Item Category Group Generally for
Finished Products value NORM will default in both the fields.

Go to Sales General/Plant tab. Enter the value of Availability check,

Transport group and loading group, SerialNoProfile (managed if base
unit of measure is discrete, not required here) and Press Enter Yes

You will get a confirmation message.

here are different types of customer account groups that can be
created.
Group

Name

X001

Domestic Customers

X002

Export Customers

X003

One Time Customers

How to create a Customer Account Group?

Go to SPRO SAP Reference IMG Financial Accounting AR and AP
Customer Accounts Master Data Preparations for creating
customer master data Define Account Groups with screen layout
(Customers) Execute

A new window will open click New entries.

Then again a new window will open. Enter the following details in it.

Customer Account Group Enter a 4-digit account group.

Name Enter a name under the General data field.

Field Status Click on the Company code data.

Once you select the field status, a new window will open. Then, select
Account Management from the selected group and the click
Reconciliation account Req. Entry

Once this is done, click Save to save this configuration. Similarly, you
can also create X002, X003 for other customers.
All Sales activities in this SAP SD system can be divided into presales
and post sales activities. Pre-sales activities are classified as
activities that take place before a product is sold to the customer. In
contrast, post-sales activities are those that take place after a
product is sold.
There are two types of pre-sales activities in Sales and Distribution

Inquiries
Inquiries are the inquiries received from customers like, if a product is
available, costing of product, delivery of a product, etc.

Different T-Codes

VA11 Create Inquiry Logistics Sales and Distribution Sales

Inquiry Create.

VA12 Change Inquiry

VA13 Display/Search Inquiry

Quotation
A quotation is a legal document to the customer for delivery of goods
and services.

Different T-Codes

VA21 Create Quotation

VA22 Change Quotation

VA23 Display/Search Quotation

In this chapter, we will see how to create inquiries in SAP SD.

Create Inquiries
An Inquiry is not a legal document and is used to record the
information about delivery or services from customers. The information
that is captured using an inquiry is related to materials and quality of
goods.
Menu Path: Logistics Sales and Distribution Sales Inquiry
Create T-Code: VA11

When you run this T-code, you need to fill the below information to
create an inquiry.
Field

Data

Inquiry type

ZEC 1 (IECPP inquiry)

Sales organization

4000

Distribution channel

40

Division

00

Enter Inquiry Type as IN and Organizational Data as below and then

click Sales.

The Sales Office is an optional entry, which helps in reporting. Then a

new window will open. Enter Partner Function (Sold-To-Party/Ship-ToParty). Enter the material code and quantity and then Click Save.

A Message Inquiry 10000037 has been saved will be displayed.

A quotation is a legal document to the customer for delivery of goods
and services. This is normally issued after an inquiry from the customer
or without an inquiry.
SAP R/3 Menu Logistics Sales and Distribution Sales
Quotation Create T-Code: VA21

Enter the Quotation Type, then you can enter the Sales Organization,
Distribution Channel, Division and then click Create with Reference.

A new window will open, then enter the Inquiry number and click Copy.
It will fetch all the details from that Inquiry document.

Then another new window will open. Enter the following details

Enter Partner Function, Sold-To-Party, Ship-To-Party

Enter Purchase Order #

Enter Valid from and Valid to Date

Enter Quantity of material

After this, click save. A Message will be displayed Quotation 40000047

has been saved.
Sales support is one of the key components in Sales and Distribution
module. It is also called computer Aided Selling, SD-CAS. This module
helps organizations to create new sales, tracking of existing sales, and
performance as well, which eventually helps in improving the marketing
and sales of an organization.
This SAP SD Sales support module provides an option of creating an
email list of the customers and directly sending mails for new leads.
The sales support stores all the data pertaining to the sales and
distribution related to customers, products, materials, competitor
products, etc.

SAP Sales Support Tables

VBKA

TKSF

TVC6

TVC5

SAP Sales Support Transaction Codes

VC01

OV4Z

VC05

VC00

VOC1

here are various modules which are helpful in creating, processing, as

well as controlling the sales and distribution operations. These include

Sales Order Processing

Creation of Sales Order with Reference

Item Categories

Schedule Lines Categories

Copy Control

Log of Incomplete Items

In this chapter, we will discuss how to process sales orders in SAP SD.

Sales Order Processing

Sales order processing describes a function related to the wholesale
part of an organizational business.
The most common functions under the sales order processing are

Availability of the articles purchased.

Checking for incomplete data.

Checking the status of the sales transaction.

Calculation of pricing and taxes.

Schedule the deliveries of goods.

Printing of documents or e-transfer of documents.

All these functions can be configured automatically or manually as per

the system configuration. The data from these functions is stored in a
sales document and can be changed manually during the processing. A
sales document can be a single document or can be part of a series
consisting of interrelated documents.

Example
There is a customer telephone inquiry in the system. Then the
customer requests a quotation, which can be created by referring to the
same inquiry. Next, assume that the customer places an order on the
basis of that quotation and a sales order is created by copying the
information from this quotation and if at all there are any modifications
that are required. The merchandise is then shipped and the bill is sent
to this customer. After the delivery of goods, this customer raises a
claim of damaged articles. Then a delivery can be created free of
charge with reference to the sales order.
All these sales documents starting with the inquiry, quotation, raising
a sales order, delivery of goods, billing document to customer and the
free of charge delivery forms a document flow. The data flow from one
document to another removes or decreases the practice of manual
processing and helps in simpler problem resolution.

A Sales order is a request made by a customer to the company for

delivery of some defined quantity of goods or a service in a specific
time period.

The Structure of a Sales Order

An inquiry from a customer consists of one or more items that contains
the quantity of a material or service entered in the order. The quantity
in a sales order is further divided into business lines and comprises of
various subsets and delivering dates. The items mentioned in the Sales
order are combined in a hierarchy and allows to differentiate between
batches or to use combinations of materials. All the valid conditions on
these items are mentioned in item conditions. These conditions for an
item can be derived via a full condition and can be valid for the entire
sales order.
You can divide an item to multiple billing plan deadlines and each of
them will tell you the time, when a fixed amount of the item is to be
billed.

VA02 Edit a Sales Order.

VA03 Display a Sales Order.

T-Code: VA01 Create a Sales Order

A new window will open, then you can enter the below details

Enter the Order Type, below order types are available. Enter the sales
organization, distribution channel and division. You can also click on
Create with Reference option to open a Sales order with reference to an
inquiry or even a quotation.
CR

Credit Memo

GK

Master Contact

KA

Consignment Pick-up

KB

Consignment fill-up

KE

Consignment issue

FD

Delivery free of charge

CQ

Quantity contract

SD

Subsequent Del. Free of charge

KR

Consignment returns

DR

Debit memo request

PV

Item Proposal

RE

Returns

RK

Invoice correction request

RZ

Returns scheduling agreement

SO

Rush order

OR

Standard Order

Once you click on Create with Reference, a new window will open. Enter
the Quotation number and click on Copy.

It will open a new window. Enter the following details

Enter Ship-To-Party, Purchase Order and Date.

Enter the Required Delivery Date.

Enter the item details.

In VA01, it allows you to enter header data and item data. Then to
enter Header data, click on Goto Tab Header and select header data.
The next step is to click on the Goto tab Item select item data and
once done click on OK.
After this you can click on the save icon at the top. You will get a
confirmation message
There are different types of sales documents that can be defined in a
SAP system. These include

Credit Memo

Debit Memo

Standard Order

Delivery Returns, etc.

To define a Sales Document Enter T-Code: VOV8 or SPRO IMG

Sales and Distribution Sales Sales Document Sales Document
Header Define Sales Document Type.

A new window will open, go to New entries.

Then you can enter the mandatory fields in this new window.

Click the save icon at the top.

An item category is used to define if an item is suitable for billing or
pricing. It defines the additional control functions for a sales document.
Example A standard item function is totally different from the
function of a free of charge item or a text item.
As per the sales document type, you can define different types of item
categories. If required, you can also modify the existing item categories
or can also define new item categories. An item category can be
defined on the basis of the following questions

General Data Control Elements

An item refers to a material or a text item?

Whether pricing has to be carried out for an item?

Are schedule lines allowed for an item?

When the item has to be considered as completed?

If an item cannot be fully delivered, a message will appear in the system or

not?

Which partner functions are allowed for an item?

Which output is allowed for business transactions?

Shipping Data Control Elements

Is the volume and weight of an item determined?

Whether this Item is relevant for a delivery or not?

Billing Data Control Elements

Is the item suitable for billing?

Should the cost of this item be determined?

Is it a return item?

Whether it is a statistical item?

Categorization

Description of an Item

TAN

Standard Item

TAB

Individual Purchase Order

TAS

Third Party Item

TAD

Service

TANN

Free of charge item

TATX

Text item

AFX

Inquiry item

AGX

Quotation item

To create an Item T-Code: VOV4

The list of all existing items will be displayed. Then you can click on
New Entries to create a new item.

A new window will now open, then you can enter the below details
Sales Document Type Item cat.group Item Category (This will be
default as per the Sales Document Type. You can change it with a
manual item category.) Manual item category (You can use manual
item category in place of default item category)

Once all the details are mentioned, click on the save icon.
In a sales document, items are divided into one or more schedule lines.
These lines vary as per the date and quantity. You can define multiple
control elements for these schedule lines. Items with schedule lines are
only copied to the SAP system. These schedule lines contain important
information like delivery dates and quantity, available inventory, etc.
You can define different schedule line categories as per the sales
document
type
and
item
category.
The
various control
elements related to general data and shipping data are used for
categorizing schedule lines. You can also define new schedule lines and
the system administrator manages data related to control elements.

General Data Control Elements

If an availability check is carried out in system?

Is it a schedule line for a return item?

Whether a customer request is posted to purchase department?

Shipping Data Control Elements

If a delivery block is set automatically for a defined schedule line?

Is the schedule line relevant for delivery?

The categorization of schedule line majorly varies as per the item

category of a corresponding item and the material requirement
planning MRP. This is defined in the material master record. The
categories for a schedule line are defined automatically as per their
values in the corresponding table. In case if it is required, you can do
some manual changes to the values in the sales document, but cant
change all the values.

How to Define Schedule Line Categories?

It can be defined in the following ways

You can copy an existing schedule line category and make changes as per
the requirement.

Changes can be made to the existing schedule line category.

Creation of a new schedule line category.

Schedule Line Categories in different sales

document
Inquiry

No delivery of an item.

No availability check.

Information purpose.

Quotation

No Delivery.

No Movement.

Order

Schedule line is suitable for delivery.

Movement Type 601.

Return

Schedule line is suitable for delivery.

Movement Type 651.

Defining a Schedule line Category

T-Code: VOV6

A new window will open, then you can click on New Entries.

Once the details are entered, then click on the save icon at the top.

Copy Control is defined as a process in which important transactions in

a sales document are copied from one document to other. It consists of
routines, which determine the system on how the data is to be copied
from a source document to a target document. A SAP system contains
a number of these routines and you can also create additional routines
to meet the business requirements. To create a new routine, you can
use an existing sales document as a reference.

How to find Copy Controls in SAP system?

These controls are created and configured under IMG and can be found
at the following menu path

SPRO IMG Sales and Distribution Sales Maintain copy control for
sales documents.

SPRO IMG Sales and Distribution Shipping Specify copy control

for deliveries.

SPRO IMG Sales and Distribution Billing Billing Documents

Maintain copy control for billing.

You can also use the following T-Codes to find copy controls in a system

VTAA This control is used for copying from sales order to sales order

VTLA This control is used control for copying from sales order to delivery

VTFL This control is used control for copying from delivery to billing doc

VTFF This control is used control for copying from billing doc to billing
doc

VTAF This control is used control for copying from billing doc to sales
order

VTFA This control is used control for copying from sales order to billing
doc

How Copy Controls work in SAP system?

You can setup Copy controls in a system at three different levels in a
Sales Order

Header level.

Item level.

Schedule line level (Only relevant, when you copy from a sales order to
sales order or from billing doc to sales order).

The Header Copy Control routine is required when you copy data from
header of a source document to the header of a target document.
T-Code: VTLA to check copy control between sales order and delivery.

You can check the source of a routing by selecting the routine and press
F4. To open it in the ABAP editor, you can press F5. Copy controls for an
item can be checked by a double click on the item folder and choosing
an item category and then clicking on the Display view item overview
screen. You can then use the F1 key to find out how each routine is
employed. The target documents will be assigned an updated reference
status in the copied item.
The following types of status can be possible for an item

Not relevant it tells if an item is not relevant for copying.

Not referenced it tells an item has not been copied.

Partially referenced it tells if an item quantity is fully copied.

Fully referenced It tells if an entire item quantity has been copied or

not and an item cannot be referenced further.

You can also display reference status for a copy control

Select the Header Status for the status of the entire document. This
field is used Field VBUK-RFSTK.

Select an Item To find the status of the line item. This field is used
VBUP-RFSTA.
You can also define a sales activity or a sales document as incomplete.
How the system behaves when you create such document in system is
shown below.
The following entries can be made to the system for incomplete data

Header Data of a Sales document

Item Data of a Sales Document

Schedule Line Data of Sales Document

Sales Activity Data

Partner Data

Delivery Header Data

Delivery Item Data

Use T-Code: OVA2 or the below menu path to display the incomplete
group
SPRO IMG Sales and Distribution Basic Functions log of
incomplete item Define Incompleteness Procedure Execute

A new window will now open and you can check the list of this
incomplete group.

To assign incompletion procedures to each document type. You can use

T-Code: VUA2 or SPRO IMG Sales and Distribution Basic
Functions log of incomplete item Assign Incompleteness
procedure.

Then a new window will open. Please select Assign procedures to Sales
Document Type.

You can now view document configuration using a VOV8, but it can only
be changed here. If you dont want to populate a procedure cos of an
incomplete field, you can select IC check box.

Important T-Codes to be used for this

OVA2 To define incompletion procedure.

VUA4 To assign incompletion procedure to delivery type.

VUPA To assign incompletion procedure to Partner functions.

VUC2 To assign incompletion procedure to Sales Activities.

OVA0 To define Status groups.

VUA2 To assign incompletion procedure to Sales Document Header.

V.02 Execute to get a checklist of incomplete sales orders.

VUA2 To set a warning or error message on document save.

VUP2 To assign incompletion procedure to Sales item category.

VUE2 To assign incompletion procedure to Schedule line category.

Key tables to check Incompletion Logs

VBUV Incompletion log - Sales documents

VBUK Header incompletion

TVUVG Groups

V50UC Incompletion log Deliveries

V50UC_USER Incompletion log Deliveries Enhancements

TVUV Procedures

TVUVF Fields

TVUVS Status groups

VBUP Item incompletion

TVUVFC Fcodes

FMII1 Funds Management Account Assignment Data

Pricing in Sales and Distribution is used to define the calculation of

prices for external vendors or customers and cost. This condition is
defined as a set of conditions when a price is calculated.

Example
Consider a case when customer orders specific quantity of a product on
a particular day. Various factors like customer, product, order quantity
and date tells the final price to that customer. This information is stored
in the system as master data in the form of condition records.
There are various pricing elements like prices, surcharges, discounts,
and taxes, which are defined in SAP system as condition types. To
manage pricing information for a pricing element in a system, you have
to create condition records.

Manual Pricing
While processing a sales order, you can also manipulate the pricing at
the item as well as the header level. Manual processing of a price
screen is dependent on individual condition types. During a Sales Order
processing using manual processing for a condition type, you can
perform the below activities

Deleting the pricing element.

Changing a condition amount.

Entering additional pricing elements.

How to add Pricing elements manually?

If you want to add customer discount manually in the pricing screen of
a sales order, click on Add line. In Data screen, you can enter additional
conditions like customer discount in the condition type field. Enter a
percentage range and then press ENTER. You can also delete pricing
elements in item pricing and header screens. To do this, select the
particular condition by positioning the cursor and click on delete line.
Note that all header conditions defined at header level cannot be
changed at the item level, and conditions defined at this level cannot be
changed at the header level. Only the Conditions that you define at
both header and item conditions can only be edited at both levels.
A Condition table is defined as a combination of keys to identify an
individual condition record. A condition record is defined as how system
stores the specific condition.
Example of a Condition Record Entering the price of a product or
to specify the discount for a privileged customer.
Example of a Condition Table Condition records for a customer
specific material prices are stored by a sales department. SAP system

contains a conditional table 005 for this purpose. Key of table 005
includes the following field

Customer

Material

Sales Organization

Distribution Channel

In the first two fields, the customer and material determines the
relationship between customers and specific materials. The last two
fields are used to identify organization data in a SAP system. Now, if
sales department in an organization enters a condition record for
discount to one privileged customer, the system will automatically make
use of the condition table 005 to store the record and define a key. Any
standard SAP system contains predefined condition tables and specifies
for each access in a predefined access sequence.

Creating Condition Tables

In a SAP system, you can create or change existing condition tables. As
per the new business requirement in an organization, you can create
new condition tables.
Go to SPRO IMG Sales and Distribution Basic Functions
Pricing Pricing Control Define Conditional Tables

A new window will open and then you can select from create, change or
display field as per the requirement. To create a new table, you have to
select create and click on Choose.

Enter condition table in table field and then you can enter the existing
table to copy the condition.

Once data is copied, you can modify the table as per the business
requirement.
Condition type is defined as specific features of daily pricing activities in
a SAP system. Using the condition type, you can also put different
condition types for each pricing, discounts on goods, tax and surcharge
that occurs in business transactions.

Example
Condition type allows you to define the discount for special material.
This can be specified in the system to calculate discount as an amount
or it can calculate discount in terms of percentage. In case you have to
use both discount types, two separate condition types have to be
defined in the system.
There are predefined condition types in a standard system
S.No

Condition Type & Description

1
PR00
Price

2
K004
Material Discount

3
K005
Customer-specific material discount

4
K007
Customer discount

5
K020
Price group discount

6
KF00
Freight surcharge(by item)

7
UTX1
State tax

8
UTX2
Country tax

9
UTX3
City tax

How to create or change an existing condition type in a

system?
You can change or maintain existing condition type in a standard
system. You can also create a new condition types as per business
requirements in your organization.
Go to SPRO IMG Sales and Distribution Basic Functions
Pricing Pricing Control Define Condition Types

A new window will open. Select maintain and then change as per the
requirement and click on Choose.

Once you select Maintain Condition Types and click on Choose, a new
window will open. Select a condition type and click on copy.

Enter the name of condition type. Fill the details for Control Data

Condition Class (A, B, D, E)

Condition Type (A-Percentage, B- Amount, C, G)

Condition Category (Cost, Price, etc.)

Rounding rule (Commercial, round up, round down)

Structure Condition

Plus/Minus

Group Condition data

Changes which can be made

Master Data Section

Scale and Control Data 2 section

Once all the details are entered, click on the save icon at the top.
This is the search strategy, which is used by the system to find valid
data for a particular condition type. It tells about the order in which a
system searches for the data. An access sequence consists of one or
more access sequences. It helps the system to search first, second and
so on until it finds a valid record. An access sequence is defined for
each condition type where a condition record is created.
You can create or maintain access sequence in customizing
Go to SPRO IMG Sales and Distribution Basic Functions
Pricing Pricing Control Define Access Sequences.

Determine Pricing by item Category

It is not necessary that all the items are suitable for pricing or not. If an
item is not relevant for pricing, then line item will be blank for that
item. An Item category is used to control the pricing of an item.

Billing Item Categories

An item is suitable for billing?

Cost of item should be determined?

Is it a return item?

Whether it is a statistical item?

T-Code: OVKO

Enter Pricing flag in pricing field.

Enter Statistical value as Blank, X, Y. Statistical value flag control an

item in sales document as shown below.

Click the save button.

Prices and Types

In a standard SAP system, price is defined as gross price of a material.
Below are the predefined price types in a system

Material Price

Price List Type

Customer specific price

By default, the system takes gross price in the automatic pricing for a
business transaction. In a standard SAP system, system takes customer
specific price. If no such price exists, system checks for a valid price list
type. If this is also not present in the system, it takes the material
price.

Material Prices
When material price is created, it means the price for a specific
material or pricing for a specific material type. A combination of sales
organization and distribution channel for which material price is valid.

Price List Types

As per your business requirement in an organization, you can define
your own price list.

Example Price list can be created as per the customer type like
Retail, Wholesale customer and so on. Price list can also be created as
per currency type.
Customer Specific Prices You can also create pricing records for
specific customers. You can assign pricing record for specific
combination of customers and material type.

Surcharges and Discounts

A standard SAP system includes a variety of common discount types.
You can also define or customize discounts and surcharges as per the
business requirement.
A Standard SAP system includes the below mentioned discount types
Discount(Key)

Kind of Discount

Customer(K007)

Percentage

Material(K004)

Absolute

Price group(K020)

Percentage

Material group(K029)

Absolute discount by weight

Customer/material(K005)

Absolute

Customer/material group(K030)

Percentage

Price group/material(K032)

Absolute

Price group/material group(K030)

Percentage

Rebate processing(BO01)

Group rebate(%)

Rebate processing(BO02)

Material rebate(fixed)

Rebate processing(BO03)

Customer rebate(%)

Inter-company processing(PI01)

Intercompany discount(fixed)

Inter-company processing(PI02)

Intercompany discount(%)

Invoice lists(RL00)

Factoring discount

Invoice lists(MW15)

Factoring discount tax

While creating a condition record, you can use any of above standard
discount types. While doing automatic pricing, system checks for the
discount that satisfies a certain condition and it checks for a valid
condition record. If a discount refers to a group like a material group or
price groups, that particular group must be assigned to a relevant
customer or material master record before automatic pricing is done in
the system.
A Product Proposal helps an organization to increase the sales by
recommending other products to the already added products or by
replacing the one already added. The products recommended can be
cheaper, expensive or similar to the product that are requested by the
customer.
An Automatic Product Proposal is one of the most powerful tool used in
online marketing of products. Product Proposals can be mapped to
specific requirement of business partners to match their market
requirement. You can use Top n Product list to provide the list of
products proposed. The data in a product proposal is integrated with
SAP CRM module to get product master data.

A Product proposal also supports features like cross selling, up selling

and down selling, Top N Product list, proposing accessories for specific
products and generating product proposals with respect to specific
promotions.

Cross Selling The product association rules are defined for products and
relationship between different products. Each rule contains a leading
product and the dependent products to be suggested with these products.
This allows you to offer other products with the one already added by a
customer.

Up-Selling and Down Selling If you are selling a specific product you
can define other products to be proposed. These proposed products are
defined using down selling and up selling rules.

Top N Product Lists With the use of SAP NetWeaver BI component, you
can define a list of top products for a target group.

Proposing Accessories This is maintained in the product master data

and with already added products. It suggests suitable accessories that can
be added.

Generating Product Proposal w.r.t specific promotions You can

assign a specific product to a promotion for a customer.

Listing, Determination and material exclusion is a key feature provided

by SAP SD that allows the sale of materials to allowed/disallowed
customers.

Listing You can create a material list for specific customers, which allows
those customers to order only those materials which are maintained in the
list.

Exclusion You can also maintain an exclusion record for specific

customers and this doesnt allow that customer to order those materials.

To display Material listing and exclusion, go to SPRO Sales and

Distribution Basic functions Listing/Exclusion.

A new window will open, then you can Activate Listing/Exclusion as

shown in the following image and then click choose.

It will show you the existing material listing and exclusion as per the
selection.

Creating Material Exclusion

Use T-Code: VB01
Select Exclusion Type: B001 and click Key combination to select
material and customer.

Click on the save icon and a confirmation message will be displayed.

n a SAP system, you define different sales document types according to
different business transactions. Business transactions are recorded in a
system as sales documents and are grouped into the below mentioned
categories

Inquiries and Quotations come under pre-sales documents.

Sales Orders that are placed by customers.

Outline agreement includes contracts and scheduling documents.

Post sales documents includes customer feedbacks on delivered

products and complaints, free replacements and return products, etc.

Types of Sales Orders

Cash Sales
This is defined as an order type, where the customer places an order,
picks up the order and pays for the goods. In this order type, delivery
of the order is executed immediately, when the order has been entered.

Cash invoice and billing can be printed immediately from the order. No
receivables are entered for customer as invoice amount is paid in cash
and directly entered to a cash account.

Rush Order
In this order type, delivery of goods is picked by the customer or you
deliver the goods on the same day, when the order is placed.

Scheduling Agreement
A scheduling agreement is defined as an external agreement with the
customer having details of quantity of goods and delivery dates. This
information is mentioned as schedule lines in a standard system. These
schedule lines can be created with the scheduling agreement or you can
also create these at a later stage. The deliveries are processed for a
scheduling agreement in similar way it is processed for a normal
delivery. Once the delivery is done, system updates the delivered
quantity in the scheduling agreement.

Consignment Fill-up
In this sales order type, goods are produced and moved to a warehouse
or provided to an agent to deliver to end customer.

Consignment Issue
In this order type, whenever there is requirement from a customer, he
will move to the warehouse or contact the agent and this will be treated
as a sale.

Third-Party Order
In a third-party order type, products are not delivered to the customer
and then you have to handover the order to a third-party vendor, who
is responsible to deliver the items to the customer and generate the
bill.

Free of charge delivery or subsequent delivery is made, when a

customer is not satisfied with the products or the quantity of good is
lesser when delivered. The company has to initiate a return as per the
customers request. In this delivery, customer is not charged for
shipping of goods.

Steps to be followed in case of Return

request

Credit Memo This is done when the customer wants a refund for the
delivered goods. The system creates a credit memo sales document for the
customer with reference to the sales order.

Subsequent Delivery This includes free of charge delivery of disputed

goods to the customer. This is required when incorrect quantity of goods
are delivered to the customer.

Creating a return request in the system: T-Code: VA01. Then enter the
details as shown below

Enter Sale Order number and click Copy.

Then you can enter the following details

PO Number

PO Date

Order Reason

Order Quantity and then Click save.

For creating a Return Delivery Document, use T-Code: VL01N.

Enter the Shipping Point and then Delivery Date as Return Delivery and
then press ENTER.

You can then enter Quantity of goods and click save.

For creating Free of Charge Delivery, use T-Code: VA01
Order Type: Delivery free of charge

Enter the PO number and click Copy.

Enter Order Reason and Quantity.

Click the save button.

The vendor selection is an important process in the procurement cycle.
Vendors can be selected by a quotation process. Once these vendors
are shortlisted by an organization. They enter into an agreement with a
certain vendor to supply specific items with certain conditions. This

happens when an agreement is reached or a formal contract is signed

with the vendor. So, this outline agreement is a long term purchasing
agreement with the vendor. The key points about an outline agreement
are as follows

An outline agreement is a long term purchasing agreement with the vendor.

It contains the terms and conditions regarding the material that is to be
supplied by the vendor.

These outline agreements are valid up to a certain period of time and cover
a certain predefined quantity or value.

An Outline agreement is of two types, which includes Contract and a

Scheduling Agreement.

Contract Agreement
A Contract is basically a long term outline agreement between the
vendor and the ordering party. It is made on predefined material or
services to be given over a certain framework of time.
There are two types of contract

Quantity Contract In this type of contract, the overall value is specified

in terms of total quantity of material to be supplied by vendor.

Value Contract In this contract type, the overall value is specified in

terms of total amount to be paid for that material to the vendor.

A Contract can be created by following the steps shown below

Path to Create Contract

Logistics Materials Management Purchasing Outline Agreement
Contract Create.
T-code: ME31K

On the SAP Menu screen, select Create execute icon by following the
above path.

Then, provide the name of vendor, type of contract, purchasing

organization, purchasing group and plant along with the agreement
date.

Fill in all the necessary details like agreement validity start date, end
date, and pay terms (i.e. terms of payment).

Then provide the material number along with target quantity. If the
quantity contract or net price of value contract and material group.
Click save. A new Contract will be created.

Scheduling Agreement
A Scheduling Agreement is a long term outline agreement between the
vendor and the ordering party. This is done over a predefined material
or service, which are procured on predetermined dates over an already
agreed framework of time. A Scheduling agreement can be created by
the following two steps

Creating scheduling agreement

Maintain scheduling lines for the agreement

Creating a Scheduling Agreement

This can be created by following the steps shown below.
The path to create a Scheduling Agreement Logistics Materials
Management Purchasing Outline Agreement Scheduling
Agreement Create Vendor Known.
T-code: ME31L
On the SAP Menu screen, select Create execute icon by following the
above step.

Provide the name of that vendor, agreement type (LP for scheduling
agreement), purchasing organization, purchasing group, plant along
with agreement date.

Fill in all the necessary details like agreement validity start date, end
date, payment terms.

Provide material number along with target quantity, net price, currency
and material group. Click save. A new Scheduling Agreement will be
created.

Maintain scheduling lines for the agreement

These schedule lines can be maintained for scheduling agreement by
following these steps

Path to maintain Schedule Lines Logistics Materials

Management Purchasing Outline Agreement Scheduling
Agreement Delivery Schedule Maintain.
On a SAP Menu screen, select Maintain execute icon by following the
above step.

Provide a Scheduling Agreement number. Select line item. Go to the

Item tab at the top Select Delivery schedule.

Provide a delivery schedule date and target quantity. Click save. The
schedule lines are now maintained for the scheduling agreement.

A particular material can be procured from different vendors depending

on the customer requirement. So, the total requirement of a material is
distributed to different vendors i.e. quota is assigned to each source of
supply. This is known as quota arrangement.
The key points about quota arrangement are as follows
Quota arrangement divides the total requirement of material among
certain sources of supply, i.e. vendors and then assigns quota to each
source. This particular quota specifies the portion of material that is to
be procured from this assigned vendor or source. Quota rating is used
to determine the amount of material that is to be assigned to a
particular source or vendor. The source with lowest quota rating
represents the valid source.
Quota rating can be calculated by the following formula
Quota rating = (Quota Allocated Quantity + Quota Base
Quantity)/Quota
Where the Quota Allocated Quantity is the total quantity from all orders
that are procured from a particular source. Quota Base Quantity is the
quantity from a new source of supply. Quota is the total requirement of
material that is given to a particular source of supply.

The mandatory setting before creating quota is information record

and source list should be maintained for the particular material. Also, in
the material master, the source list and quota arrangement usage
check box should be checked. This setting can be made in the material
master by going to T-Code MM03. In the purchasing view, check the
quota arrangement usage and source list. Setting is now maintained for
quota arrangement.

Create Quota Arrangement

Quota arrangement divides the total requirement of a material among
certain sources of supply i.e. vendors. Quota arrangement can be
created by following the steps shown below.
Path to create Quota Arrangement Logistics Materials
Management Purchasing Master Data Quota Arrangement
Maintain.

T-Code: MEQ1
On the Sap Menu screen, select Maintain execute icon by following the
above step.

Enter the material number and plant for which quota arrangement
needs to be maintained.

Enter the names of the vendors along with all the assigned and
allocated quantity to them. Click save. Quota arrangement is now
maintained for this particular material.
In SAP Sales and Distribution module, along with the processing of
normal sales orders, you can also create special business processes like
configurable products, items manufactured on order, etc.

Consignments Processing
Consignments are known as products, which are owned by your
company and are located at the client location. It is not required for the
customer to pay for these goods, until they are moved from the

consignment stock. The customers can also return the products in

consignment stock, which are not required.

Key Features of Consignment Stock

The goods in a consignment stock can be accessed by the customer at any

time.

Consignment goods are stored by the customers at their warehouse.

Customer has to only pay for goods, which are removed from the stock and
only for the quantity taken.

As the consignment stock is still a part of companys valuable stock, so

there is a need to manage this in the system. You must manage the
consignment stock separately, so that company should be aware, which
stock is available at the customer location. This should be managed
separately for each customer.
For an organization, consignment stock is managed as a special stock in
inventory and this helps you to track returnable goods from the
customer. Consignment stock management includes four key activities
in the system, which are

Creating a Consignment Fill-Up (Stock is fill up at warehouse).

Creating Consignment Issue (Stock issued from warehouse).

Creating a Consignment Pick-Up (Stock return to manufacturer).

Displaying Consignment Returns (Stock return from customer).

Creating a Consignment Fill-up

In this, stock is stored at the customer location and owned by the
company. This is called Consignment fill up (CF) and sales order KB is
used for this.
T-Code: VA01

Enter Order Type and then enter Organization Data

A new window will open, then you can enter the following details

Purchase Order Number

Purchase Order Date

Order Quantity

Once these details are entered, click Save.

Consignment Issue
This is for the goods that are issued to the customer from a warehouse.
T-Code: VA01
Order Type: CI
Sales Order Type: KE
Click save.

Consignment Return
This is done for the goods returned from the customer.
T-Code: VA01
Order Type: CONR
Sales Order Type: KA
Click save, once all the details are entered.

Consignment Pickup
When a customer requests return of a product to the company, this is
known as a consignment pick up.
T-Code: VA01
Order Type: CP
Sales Order Type: KR
Once these details are entered, click save.
hipping is defined as a very important activity in the sales process. It comes under the
logistics chain and guarantees customer service and distribution of goods. It is a
significant component of Sales and Distribution module. It is used to perform outbound
delivery and other shipping activities like picking and packing of the goods.
In the shipping process, there are a few key sub processes, which include

Delivery processing of the goods

Picking of items

Packing of the goods

Post goods issue

Shipping communication

Planning & monitoring of shipping

Other functions like batch determination, serial numbers, inspection, etc.

Organizational Units in Shipping

In shipping the stock of goods is managed at Storage Locations.
The shipping point key characteristics include

It is under client location.

An Outbound Delivery is processed from a single Shipping point.

Shipping point is determined at Item level in the order.

Shipping point can process outbound deliveries of several plants.

You can also assign several shipping points to one plant, but each point should have a
different loading equipment or a different processing time.
Other Organization units are warehouse#, type of storage, etc.
There is a warehouse# that is assigned to a plant and storage location. There can be
multiple storage locations in a plant and they can point to one warehouse.

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Route determination is done based on the target country and

transportation zone along with the shipping point. If you have the same
shipping points for two deliveries to the same country and same
transportation zone, then the same route determination is applied to
both.
While creating a delivery document, its route is determined based on
the shipping party and ship to party information.

How to define Modes of Transport?

Go to: SPRO IMG Logistics Execution Transportation Basic
Transportation Function Routes Define Routes Define modes of
transport Execute.

A new window will open, Click New Entries.

Enter the following details

Shipping Type,

Description, and

Click save.

Go to: SPRO IMG Logistics Execution Transportation Basic

Transportation Function Routes Define Routes Define Routes
and Stages Execute

A new window will open and it will show the list of existing routes,
Click New Entries

Enter the details in new window along with route stages and define.
Once these details are entered click save.

Maintain stages for all routes

Go to: SPRO IMG Logistics Execution Transportation Basic
Transportation Function Routes Define Routes Maintain Stages
for all routes.

Enter the following details

Route

Stage Category

Departure Point

Destination Point, etc.

Once done, click save.

With the availability of material or transport scheduling date, outbound

delivery is required for due shipping lines. It involves shipping activities
like picking of goods, transportation scheduling, etc. An outbound
delivery is done with the shipping points and is determined at the time
of placing the order. You can also define a shipping point manually at a
later stage.
Following are some checklist points to be carried out when a delivery is
created

To check the material and order to ensure if the outbound delivery of goods
is possible.

Defining the quantity of goods and its availability.

Packing the outbound delivery.

Calculating weight or volume of delivery.

Find out the delivery situation and the delivery agreement.

Defining the route.

Finding the pickup location.

Quality check of material to be delivered.

Updating and changing the status of the sales order.

If there is a change in a delivery situation, you can change the delivery

after it is created.

How to create an Outbound Delivery?

If you know the order number, you can create one outbound delivery
for a single order. You can change the shipping data at any point, if
required.
Use T-Code: VL10B

Enter the Shipping Point from shipping data. In the Purchase Order tab,
enter PO number due for delivery and quantity.

To create an outbound delivery with Order Ref or W/O Order Reference,

use T-Code: VL01N

To change the outbound delivery, Use T-Code: VL02N

There are various functions in delivery processing like

Quantity Management and adjustment

Text Management

Printing

Validation

You can post quantity difference in the inbound delivery for outbound
delivery to post change in delivery. Using text management, you can
make the following changes to the delivery document like

Display

Change

Delete

Save

If you want to create and save new texts for a particular delivery, this
can also be done.
Printing is done in EWM to print delivery notes. You can create an
outbound delivery order or an outbound delivery. Validation in EWM is
used to verify the delivery document, if it is complete and can be
further processed in the system.

Picking of goods is done in SAP warehouse management system. It is

done via a transfer order, which is used for picking list and to withdraw
the goods from the stock.
There are three types of Picking

Picking of goods individually

Picking as per defined intervals

Automatic Picking in SAP SD module

Packing of goods is done with the packing material and to be created as

material type VERP. This can be done in two ways

Manual

Automatic

The Post Good Issue (PGI) is the last step in delivery processing and in
this goods ownership is moved to the customer and stock is updated as
per delivery.
These functions can be performed in the system using the following
steps

Creating an Outbound delivery

Creating Picking Request

Create Packaging

Creating Post Goods Issue

Creating an Outbound Delivery

Use T-Code: VL01N

Click save.

Creating a Picking Request

Use T-Code: LT03

Enter Warehouse #

Enter Plant

Enter Delivery

Press Enter.

Click save.

Creating a Packing Request

Use T-Code: VL02N
Enter Outbound Delivery and click Pack.

Select Pack Material and Enter Packaging Material details.

Click save.

Post Good Issue PGI

T-Code: VL02N

Click Post Good Issue and a message will appear Replenishment

Delivery has been saved.
PGI creates two documents

Material Document

Accounting Document

n SAP Sales and Distribution module, billing is known as the final stage
for executing business transactions. When an order is processed and

delivery is made, billing information is available at each stage of this

order processing.
Billing contains the following components

Credit and Debit memos for return goods.

Invoice creation for delivery and services.

Cancel Billing transactions.

Pricing Functions.

Discount and Rebates.

Transferring billing data to Financial Accounting FI.

Billing is closely integrated with organization structure and it can be

assigned to Sales Organization, a Distribution Channel, and a division.
Key functions in Billing

Types of Billing

Match codes

Number Range

Blocking Reasons

Display billing list

Display billing due list

Billing Document Types

A billing document is created for a credit memo, debit memo, an
invoice or a cancelled transaction. Each billing document has a header
and list of items under it. Billing documents are normally controlled by
the billing type.

In a billing document header, it contains general data like

Date of Billing

Payer identification number

Billing value

Currency

Partner Identification numbers like ship to party, sold to party, etc.

Pricing Elements

In the list of items, you should maintain the following data

Material Number

Quantity of goods

Volume and weight

Value of Individual items

Pricing element for individual items

While doing the billing processing, you create, change and delete the
billing documents like invoices, credit memos, debit memos, etc.
Billing Processing also includes creation of billing documents as per the
below reference

To a sales order

To a delivery

To external transactions

You can refer to an entire document, individual items or partial

quantities of items.

A Billing document can be created in the following ways

When a system processes a billing due list automatically as a background

task.

By manually processing from a worklist.

You can also create a billing document explicitly

Creation of Billing Documents

Use T-Code: VF01
Go to Logistics Sales and Distribution Billing Billing Document
Create.

A new window will open, then you can enter the Billing Type, Date and
enter the document number you want to create. Click save.

VF02 To change the Billing Document

VF03 Display Billing Document

VF11 Cancel a Billing Document

VF05 List Billing Document

A billing method determines whether you have to create an invoice for

every delivery or you want to send an invoice to the customer each
month.
You can use the following billing method types

Individual Billing per sales document.

Collective Billing method for multiple sales document.

Invoice Split for several billing documents for one or more sales document.

In Individual Billing method, you can make the setting in system to

create single billing document for each sales document. Example: One
invoice per delivery.

In Collective Billing, it allows you to combine different documents like

sales orders and/or deliveries either partially or fully in a common
billing document.
Invoice Splits allow you to create invoices as per the specific criteria.

Billing Plan
A billing plan in SAP SD is defined as a plan with individual billing dates
for goods and services and it doesnt depend on the delivery of goods.
Using this bill plan, you can bill for a service or product at regular time
intervals or at specific dates defined in the system in advance.
As per the business transactions, a system allows you to process any of
the billing plan type. There are two types of billing plan

Milestone Billing

Periodic Billing

Milestone billing includes dividing the total billed

billing dates that are defined in a billing plan. When
reached as per defined in the system, customer is
project cost or a predefined amount as per the
billing is normally used for long term projects.

amount in multiple
there is a milestone
charged as per the
bill plan. Milestone

Periodic billing includes charging of bill amount at a regular interval of

time. Example: Suppose you have to pay a rental amount monthly as
per the contract. The system can process monthly payment as per the
schedule. Periodic billing plan is normally used in the following
categories

For a Service like Annual Maintenance contracts, etc.

For lease agreements.

Intellectual Property Management.

Assigning Billing Plans to Business Transactions

In SAP system, you can mention if one billing plan is applicable for all
the products in a business transaction or you can define separate bill
plans for each transaction goods as per the requirement.
Note that you can define a billing plan in SAP CRM system Customer
Relationship Management Transactions Basic Settings Billing
Plan
You cannot use billing plans created in SAP CRM system in SAP ERP
system.

Revenue Account Determination

Revenue account is used for revenue recognition and is used for
integrating SAP SD module and Finance Accounting module. As per the
billing document to account, system determines the correct G/L account
for posting the revenue as per the revenue account determination.
To configure Revenue Account Determination: Use T-Code: OVK5
OR
Go to SPRO IMG Sales and Distribution Basic Function
Account Assignment/Costing Revenue Account Determination
Check Master data relevant for Determination.

Using this, you can define

Account Assignment for Materials

Account Assignment for Customers

Select any one of them and click Choose.

Materials Account Assignment Groups Using this option, you can

divide materials into different groups, services and retails groups. You
maintain this in Material Master MM01/MM02 under Sales Sales Org
2 view.
Customers Account Assignment Groups Using this option, you can
divide customer into different groups. Example: You can divide
customers into domestic customers and non-domestic or overseas. You
maintain this in Payer Customer Master using VD01/XD01/VD02/XD02
under billing document tab of Sales Area Data.
To create and display the condition table for revenue account
determination

Go to SPRO IMG SD Basic Function Account Assignment

Account Assignment/Costing Revenue Account Determination
Define dependency of Revenue Account Determination Execute.

A new window will open, then you can select the relevant option related
to the condition table and click Choose.

The following T-Codes can be used for managing condition tables

S.No.

TCode & Description

1
V/12
Account Determination : Create tables

2
V/13

Account Determination : Change table

3
V/14
Account determination : display tables

4
OV25
Field catalog : Allowed fields for the tables

The next step is to define access sequence and account determination

type.
Define and Assign Account Determination Procedure

The first step is to define and assign an account key and then

Assignment of General Ledger account.

Useful Structure in Revenue Account Determination

S.No

Structure & Description

1
KOMKCV
Account Determination Communication Header

2
KOMPCV
Account Determination Communication Item

Credit management deals with selling of goods and collecting money at

a later stage. The credit limit for a customer depends on the payment
method and customer payment history. The payment for the goods is
based on payment conditions based on the business transaction.

Example
A customers credit limit is set as 10000 and he makes an order worth
6000 and payment term of 30 days at 4%. Now if payment is made
within 30 days, customer will get 4% discount on the payment.
Why do we need Credit Management?
Credit management allows you to reduce the credit risk by setting up
the credit limit for the customers. You can get warning alerts for a
customer or a group of customers.

Key Features of Credit Management

As per your credit needs, you can define your various credit policies as
per different criteria. This also allows you to define key points in Sales
and Distribution system, where the system checks are performed.
While processing an order, the system allows a representative to get
the information about customers credit details. When a customer is
about to reach his credit limit. An electronic email can be sent to the
customer automatically. The credit representative in your company has
an option to review the credit situation of a customer quickly and
accurately and to decide if to extend the credit limit or not.

Types of Credit Management

There are two types of credit management

Simple Credit Check

Automatic Credit Check

Simple credit check involves comparing customer credit limit to the

total of all items and open item values in the order.
Credit Limit = Open item values + Value of current Sales Order
Open items are defined as the products that are invoiced to the
customer, but payment has not been received yet. You can configure
the system in such a way that it sends a warning message to the
customer, when their credit limit is exceeded.
Automatic Credit Check involves checking open items and open
deliveries of goods as well. If the credit limit is crossed, a customer can
still make the order because of a good payment history with the
company. This can be defined as Static and dynamic credit check.

Static Credit Limit Determination

Types of checking groups Sales, Delivery and Good Issue. You can
block the order at all these levels.
Risk Category It is used to determine how much credit has to be
given to the customer.

High Risk Low Credit

Low Risk More Credit

Medium Risk Average Credit

Dynamic Credit Limit Determination

It is used to determine the credit limit of their customer by considering
a horizon period

Open Document

Open Deliveries

Open Billings

Open Items

Horizon Period

Now if the horizon period is defined as 4 months, the system will not
consider these documents for 4 months.

Assigning Company Code to Credit Control Area

SPRO IMG Enterprise Structure Assignment Financial
Accounting Assign company code to credit control area

A new window will open, then you can set the automatic credit check.

Defining Credit Groups

Go to: SPRO IMG Sales and Distribution Basic Functions
Credit Management/Risk Management Define Credit Groups
The following credit groups are defined in a SAP system

Credit group for sales order

Credit group for deliveries

Credit Group for goods issue

The enterprise structure represents the business structure in the real

world. You can map various organizational units to enterprise structure
as per the requirement like Client, Distribution channel, division,
company code, Sales office, Shipping Point, Loading point, etc. You can
assign an organization unit to a single module (Example- A company
code can be assigned to Sales and Distribution module) or to multiple
modules.

Client
A client is an independent organizational unit and legal unit. Generic
data and multiple tables are saved at client level for multiple
organizational structure. Client is known at the top level in an
enterprise structure. You can assign multiple company codes to a client.

Company Code
A company code is defined as an independent legal unit in an
organization. Company code is an organizational unit created in Finance
Accounting. At the company code level, you can create P/L statements
and Balance sheets. You can assign multiple company codes to a client.

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.

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 companys
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.

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.
SAP Sales and Distribution is one of the key components of SAP ERP
system and is used to manage shipping, billing, selling and
transportation of products and services in an organization.
SAP Sales and Distribution module is a part of SAP Logistics module
that manages customer relationship starting from raising a quotation to
sales order and billing of the product or service. This module is closely
integrated with other modules like SAP Material Management and PP.

Key Components in SAP SD

The key components in SAP Sales and Distribution module are

Customer and Vendor Master Data

Sales Support

Shipping of Material

Sales Activities

Billing related

Transportation of products

Credit Management

Contract Handling and Management

Foreign Trade

Information System

SAP Sales and Distribution Cycle

SAP SD - Organizational Structure

SAP provides many components to complete SAP Sales and Distribution
organizational structure like Sales Areas, Distribution Channels,
Divisions, etc. The SAP SD organization structure majorly consists of
two steps

Creation of Organization elements in SAP system, and

second is to link each element as per requirement.

On top of this organization structure in the SD module, sales

organization is at highest level and is responsible for distribution of
goods and services. SAP recommends to keep the number of sales
organization in an organizational structure to be minimum. This will

help in making the reporting process easy and ideally it should have a
single sales organization.
The next level is distribution channel, which tells the medium by which
the products and services are distributed by an organization to its end
users. Division in an organizational structure, which represents a
product or service line in a single organization.
A sales area is known as entity, which is required to process an order in
a company. It comprises of sales organization, distribution channel and
a division.
In SAP SD organizational structure, each sales organization is assigned
to a company code. Then the distribution channel and divisions are
assigned to sales organization and all of these comprise to make a sales
area.
In the first step of an SD organizational structure, sales organization is
assigned to a company code and then is to define a distribution channel
and then division to a sales organization.
The following diagram shows the organizational structure of a Sales and
Distribution module

Material management
Material Management is one of the key modules in SAP ERP System and
covers the day to day business operations related to inventory and
procurement. This module is closely integrated with other modules of
R/3 systems like Finance Accounting and Controlling, Sales and
Distribution, Quality Management, Product Planning.

Integration with Sales and Distribution SD Module

Consider an example of creating a sales order in SAP SD, it involves
copying the details of items from Material Management. Availability
check of the item and price details are also taken from MM, but this can
be controlled in the SD module. To create inbound and outbound
delivery of goods for a sales order, shipping details, loading point etc.
also comes from the Material Master.
The item that is placed using a Sales order must be extended to the
sales area of an organization to sales order/customer, otherwise it
wont be possible to transact with this material. This confirms that there
is a link between SAP SD and MM module, when a sales order is created
and fulfilled. Similarly, there are many other links between two
modules.

Finance and Accounting

SAP FI stands for Financial Accounting and it is one of the important
modules of SAP ERP. It is used to store the financial data of an
organization. SAP FI helps to analyze the financial condition of a
company in the market. It can integrate with other SAP modules like
SD, PP, SAP MM, SAP SCM etc.
For SAP FI-MM, use T-code: OBYC

In case of a standard sales order, you create an outbound goods

delivery to the customer. Here movement 601 takes place. This
movement is configured in MM and movement of goods hit some G/L
account in FI. This shows the integration between SAP SD, FI and MM
module.

Document Flow
This shows how a transaction in one system effects the details in other
systems of an SAP module.
Consider the following transaction

For SAP FI-MM, use T-code: OBYC

Whenever there is a delivery created with reference to a sales order,
goods movement takes place in the system.

Example
In case of a standard sales order in the SD module, you create an
outbound goods delivery to the customer. Availability check and retail
price of that product is checked in the MM module. Here, movement
601 takes place. This movement is configured in the MM and movement
of goods hit some G/L account in FI. Every such movement of goods
hits General Ledger account in FI.

The accounts posting in FI is done with reference to the billing

documents like credit and debit note, invoice etc. created in SD and
hence this is the link between SD and FI. This shows the document flow
between different modules.

Process Chain
SD module is closely integrated with other SAP modules. The following
tables will give you a brief idea on how SD is linked with other modules

Sales Order
Link Points

Module Involved

Availability Check

MM

Credit Check

FI

Costing

CO/MM

Tax Determination

FI

Transfer of Requirements

PP/MM

Billing
Integration Point

Module

Debit A/R

FI/CO

Credit Revenue

FI/CO

Updates G/l (Tax,discounts,surcharges,etc)

FI/CO

Milestone Billing

PS

Goods Delivery and Issue of goods

Integration

Module

Availability Check

MM

Credit Check

FI

Reduces Stock

MM

Reduces Inventory

FI/CO

Reduces Eliminated

PP/MM

SAP SD - Customer & Material Master Data

Master data is one of the key factors in Sales and Distribution module.
There are two levels of masters in SD.
The first level master includes

Customer Master

Material Master

Pricing Conditions

While, the second level master is

Output condition

Create a Customer Master Record

The customer master data contains the information about business
transaction and how transactions are recorded and executed by the
system. A Master contains the information about the customers that an
organization uses to do business with them.

Key tables in Customer Master

Table Name

Key

Description

KNA1

KUNNR

General Information

KNB1

KUNNR,BUKRS

Company Code

KNVV

VKOGRG,VTWEG,SPART,KUNNR

Sales Area

KNBK

KUNNR,BANKS,BANKL,BANKN

Bank Data

VCNUM

CCINS,CCNUM

Credit Card

VCKUN

CCINS,CCNUM,KUNNR

Credit Card Assignment

KNVK

PARNR

Contact Person

KNVP

VKORG,VTWEG,SPART,PARVW,KUNNR

Partner Functions

Main Transaction Codes in a Customer Master

S.No

Transaction Codes & Description

1
XD01, XD02, XD03

Used to create/change/display customer centrally

2
VD01,VD02,VD03
Used to create/change/display customer sales area

3
FD01,FD02,FD03
Used to create/change/display customer company code

4
XD04
Display change documents

5
XD05
Display change documentsUsed to block Customer Global, order,
delivery, billing, sales area, etc.

6
XD06
Used for deletion

7
XD07
Change Account Group

8
VAP1
Create Contact Person

Creating a Customer Master Data

To create a customer master data, you need to use an Account group.

T-Code: XD01/VD01/FD01
Note that if you use

XD01 This Includes sales area in the customer master and data is stored
in tables KNA1, KNB1 and KNVV.

VD01 This includes sales area & data, which will be stored in tables
KNA1, KNB1 and KNVV and there is no company code data in this.

FD01 This is company code level & data is stored in tables KNA1 and
KNB1.

Then a new window will open. Enter the following details

Select the Account Group from the list.

Enter the customer number and select the company code.

Then you can enter the Sales Area details like

Sales Organization

Distribution Channel

Division

In case you want to take reference from an existing customer to create

customer master, you can use the reference option.
Once all the details are selected, click the Tick mark.

A new window will open to enter the customer master data. This
customer master data has 3 key sections

General Data like Title, Name, Address, etc.

Company Code Data and

Sales Area Data.

Note that this region fields define the tax calculation like VAT, CST, etc.
The next step is to go to Control Data and enter the following details.

Then you have to enter the particulars in Payment Transaction tab and
enter the details of Bank City, Bank Key, Bank Account and Account

Holder Name. You can also add more details by clicking on the Bank
data button.

The next step is to go to the Sales Area data and enter the details
Shipping Data, Customer Pricing and Partner Functions, etc.

Next is to click on the Save icon at the top and you will get a
confirmation that the customer has been created with #.

If you have to make any further changes to the customers master

data, you can use T-Code: XD02.
SAP SD - Create Partner Function

Partner function allows you to identify which functions a partner has to

perform in any business process. Consider a simplest case, where all
the customer functions are performed by the partner customer. As
these are mandatory functions, they have to be defined as obligatory
functions in a SD system.
These functions are categorized as per partner type in Sales and
Distribution system. The below partner types are Customer, Vendor,
Personnel, Contact Person and common partner functions as per these
partner types are

Partner Type Customer

o

Sold-To-Party

Ship-To Party

Bill-To-Party

Payer

Partner Type Contact Person

Partner Type Vendor

Forwarding Agent

Partner Type Personnel

Employee Responsible

Sales Personnel

The following tables show the main partner types

corresponding partner function in Sales and Distribution

and

their

Note that if a partner belongs to a different partner type, in this case

you need to create a master records for that partner.
Partner
Type

Partner Function

Entry from System

Master Record

Customer number

customer master
record

Sold-to Party(SP)
Customer(CU
)

Ship-to Party(SH)
Bill-to Party(BP)
Payer(PY)

Vendor(V)

Human
Resource(HR)

Forwarding
agent(fwdg agent)

Vendor number

Employee
responsible(ER)

Personnel number

Vendor master
record

Personnel master
record

Sales Personnel(SP)

Contact
Person(CP)

Contact Person(CP)

Contact Partner
number

Creating a Partner Function

Use T-Code: VOPAN

(created in
customer master
record,no master
record of its own)

A new window will open. Select the Partner Object and click the Change
button.

It will open a new window with the name Partner Determination

Procedures. Go to New Entries.

Enter the name and partner determination procedure and double click
on Partner Function in left pane.

Click the New Entries button.

Enter the Partner function details Name, Type, etc. KU- stands for
Customer.

Next is to click on the Partner Function under Partner Determination

Procedure node and enter the details Partner Det. Procedure, Name,
Partner Function.
Then, we need to assign this partner determination procedure to the
Partner Object. The Partner Object would be a Customer for this
example. Then Click on Account Groups and Select the Account group
name from the list. Once it is done, Click Save, it will save the partner
function.
SAP SD - Create Material Stock

Suppose you have implemented SAP in your company and now you
want to put all your stocks in the SD system. For this, use T-Code:
MB1C Movement Type: 561 this is for Good receipts without
reference.
Movement Type: 501 this is used for receiving goods with a
Purchase Order.

A new window will open. Enter the document date, Plant and storage
location, Movement type, etc.

Select the Movement type from the list and Press Enter after selecting
all the details.

A new window will open. Enter the material code and quantity for which
stock needs to be created and then click Save.

A message Document 300045646 posted will be displayed.

SAP SD - Create MM for Sales View

A Material Master is created in SAP SD system by the material

department. Once it is created, the person who manages sales related
material has to extend sales views.

Use T-Code: MM01 to create material master for different views. To

check the changes, use T-Code: MM04

A new window will open. Enter the Industry Sector and Material Type.
Click Select View(s).

Select Sales Org Data 1, Sales Org Data 2, Sales: General/Plant Data
and click the Green tick mark below.

Then a new window will open. Enter the Plant, Sales Organization and
Distribution Channel for which the material is to be extended. Repeated
entries have to be made for various materials with the above
selections.

A new window will open, then you can enter the following details

Material Details

Base unit of Measure

Division

Material Group

Tax

Then, go to Sales Org 2 tab. This information is required for analysis.

Material Statistics Group Value should be 1 always. Value in this field

with Customer Statistical Group maintained in customer master will update
the information system.

Gen Item Category Group and Item Category Group Generally for
Finished Products value NORM will default in both the fields.

Go to Sales General/Plant tab. Enter the value of Availability check,

Transport group and loading group, SerialNoProfile (managed if base
unit of measure is discrete, not required here) and Press Enter Yes

You will get a confirmation message.

SAP SD - Customer Account Groups

There are different types of customer account groups that can be

created.
Group

Name

X001

Domestic Customers

X002

Export Customers

X003

One Time Customers

How to create a Customer Account Group?

Go to SPRO SAP Reference IMG Financial Accounting AR and AP
Customer Accounts Master Data Preparations for creating
customer master data Define Account Groups with screen layout
(Customers) Execute

A new window will open click New entries.

Then again a new window will open. Enter the following details in it.

Customer Account Group Enter a 4-digit account group.

Name Enter a name under the General data field.

Field Status Click on the Company code data.

Once you select the field status, a new window will open. Then, select
Account Management from the selected group and the click
Reconciliation account Req. Entry

Once this is done, click Save to save this configuration. Similarly, you
can also create X002, X003 for other customers.
SAP SD - Pre Sales Activities

All Sales activities in this SAP SD system can be divided into presales
and post sales activities. Pre-sales activities are classified as
activities that take place before a product is sold to the customer. In
contrast, post-sales activities are those that take place after a
product is sold.

There are two types of pre-sales activities in Sales and Distribution

Inquiries
Inquiries are the inquiries received from customers like, if a product is
available, costing of product, delivery of a product, etc.

Different T-Codes

VA11 Create Inquiry Logistics Sales and Distribution Sales

Inquiry Create.

VA12 Change Inquiry

VA13 Display/Search Inquiry

Quotation
A quotation is a legal document to the customer for delivery of goods
and services.

Different T-Codes

VA21 Create Quotation

VA22 Change Quotation

VA23 Display/Search Quotation

In this chapter, we will see how to create inquiries in SAP SD.

Create Inquiries
An Inquiry is not a legal document and is used to record the
information about delivery or services from customers. The information
that is captured using an inquiry is related to materials and quality of
goods.

Menu Path: Logistics Sales and Distribution Sales Inquiry

Create T-Code: VA11
When you run this T-code, you need to fill the below information to
create an inquiry.
Field

Data

Inquiry type

ZEC 1 (IECPP inquiry)

Sales organization

4000

Distribution channel

40

Division

00

Enter Inquiry Type as IN and Organizational Data as below and then

click Sales.

The Sales Office is an optional entry, which helps in reporting. Then a

new window will open. Enter Partner Function (Sold-To-Party/Ship-ToParty). Enter the material code and quantity and then Click Save.

A Message Inquiry 10000037 has been saved will be displayed.

SAP SD - Create Quotations

A quotation is a legal document to the customer for delivery of goods

and services. This is normally issued after an inquiry from the customer
or without an inquiry.
SAP R/3 Menu Logistics Sales and Distribution Sales
Quotation Create T-Code: VA21

Enter the Quotation Type, then you can enter the Sales Organization,
Distribution Channel, Division and then click Create with Reference.

A new window will open, then enter the Inquiry number and click Copy.
It will fetch all the details from that Inquiry document.

Then another new window will open. Enter the following details

Enter Partner Function, Sold-To-Party, Ship-To-Party

Enter Purchase Order #

Enter Valid from and Valid to Date

Enter Quantity of material

After this, click save. A Message will be displayed Quotation 40000047

has been saved.
SAP SD - Sales Support

Sales support is one of the key components in Sales and Distribution

module. It is also called computer Aided Selling, SD-CAS. This module
helps organizations to create new sales, tracking of existing sales, and
performance as well, which eventually helps in improving the marketing
and sales of an organization.
This SAP SD Sales support module provides an option of creating an
email list of the customers and directly sending mails for new leads.
The sales support stores all the data pertaining to the sales and
distribution related to customers, products, materials, competitor
products, etc.

SAP Sales Support Tables

VBKA

TKSF

TVC6

TVC5

SAP Sales Support Transaction Codes

VC01

OV4Z

VC05

VC00

VOC1

SAP SD - Sales Order Processing

There are various modules which are helpful in creating, processing, as

well as controlling the sales and distribution operations. These include

Sales Order Processing

Creation of Sales Order with Reference

Item Categories

Schedule Lines Categories

Copy Control

Log of Incomplete Items

In this chapter, we will discuss how to process sales orders in SAP SD.

Sales Order Processing

Sales order processing describes a function related to the wholesale
part of an organizational business.
The most common functions under the sales order processing are

Availability of the articles purchased.

Checking for incomplete data.

Checking the status of the sales transaction.

Calculation of pricing and taxes.

Schedule the deliveries of goods.

Printing of documents or e-transfer of documents.

All these functions can be configured automatically or manually as per

the system configuration. The data from these functions is stored in a

sales document and can be changed manually during the processing. A

sales document can be a single document or can be part of a series
consisting of interrelated documents.

Example
There is a customer telephone inquiry in the system. Then the
customer requests a quotation, which can be created by referring to the
same inquiry. Next, assume that the customer places an order on the
basis of that quotation and a sales order is created by copying the
information from this quotation and if at all there are any modifications
that are required. The merchandise is then shipped and the bill is sent
to this customer. After the delivery of goods, this customer raises a
claim of damaged articles. Then a delivery can be created free of
charge with reference to the sales order.
All these sales documents starting with the inquiry, quotation, raising
a sales order, delivery of goods, billing document to customer and the
free of charge delivery forms a document flow. The data flow from one
document to another removes or decreases the practice of manual
processing and helps in simpler problem resolution.
SAP SD - Creation of Sales Order

A Sales order is a request made by a customer to the company for

delivery of some defined quantity of goods or a service in a specific
time period.

The Structure of a Sales Order

An inquiry from a customer consists of one or more items that contains
the quantity of a material or service entered in the order. The quantity
in a sales order is further divided into business lines and comprises of
various subsets and delivering dates. The items mentioned in the Sales
order are combined in a hierarchy and allows to differentiate between
batches or to use combinations of materials. All the valid conditions on
these items are mentioned in item conditions. These conditions for an

item can be derived via a full condition and can be valid for the entire
sales order.
You can divide an item to multiple billing plan deadlines and each of
them will tell you the time, when a fixed amount of the item is to be
billed.

VA02 Edit a Sales Order.

VA03 Display a Sales Order.

T-Code: VA01 Create a Sales Order

A new window will open, then you can enter the below details
Enter the Order Type, below order types are available. Enter the sales
organization, distribution channel and division. You can also click on
Create with Reference option to open a Sales order with reference to an
inquiry or even a quotation.
CR

Credit Memo

GK

Master Contact

KA

Consignment Pick-up

KB

Consignment fill-up

KE

Consignment issue

FD

Delivery free of charge

CQ

Quantity contract

SD

Subsequent Del. Free of charge

KR

Consignment returns

DR

Debit memo request

PV

Item Proposal

RE

Returns

RK

Invoice correction request

RZ

Returns scheduling agreement

SO

Rush order

OR

Standard Order

Once you click on Create with Reference, a new window will open. Enter
the Quotation number and click on Copy.

It will open a new window. Enter the following details

Enter Ship-To-Party, Purchase Order and Date.

Enter the Required Delivery Date.

Enter the item details.

In VA01, it allows you to enter header data and item data. Then to
enter Header data, click on Goto Tab Header and select header data.
The next step is to click on the Goto tab Item select item data and
once done click on OK.
After this you can click on the save icon at the top. You will get a
confirmation message

SAP SD - Defining a Sales Document

There are different types of sales documents that can be defined in a

SAP system. These include

Credit Memo

Debit Memo

Standard Order

Delivery Returns, etc.

To define a Sales Document Enter T-Code: VOV8 or SPRO IMG

Sales and Distribution Sales Sales Document Sales Document
Header Define Sales Document Type.

A new window will open, go to New entries.

Then you can enter the mandatory fields in this new window.

Click the save icon at the top.

SAP SD - Item Categories

An item category is used to define if an item is suitable for billing or

pricing. It defines the additional control functions for a sales document.
Example A standard item function is totally different from the
function of a free of charge item or a text item.
As per the sales document type, you can define different types of item
categories. If required, you can also modify the existing item categories

or can also define new item categories. An item category can be

defined on the basis of the following questions

General Data Control Elements

An item refers to a material or a text item?

Whether pricing has to be carried out for an item?

Are schedule lines allowed for an item?

When the item has to be considered as completed?

If an item cannot be fully delivered, a message will appear in the system or

not?

Which partner functions are allowed for an item?

Which output is allowed for business transactions?

Shipping Data Control Elements

Is the volume and weight of an item determined?

Whether this Item is relevant for a delivery or not?

Billing Data Control Elements

Is the item suitable for billing?

Should the cost of this item be determined?

Is it a return item?

Whether it is a statistical item?

Categorization

Description of an Item

TAN

Standard Item

TAB

Individual Purchase Order

TAS

Third Party Item

TAD

Service

TANN

Free of charge item

TATX

Text item

AFX

Inquiry item

AGX

Quotation item

To create an Item T-Code: VOV4

The list of all existing items will be displayed. Then you can click on
New Entries to create a new item.

A new window will now open, then you can enter the below details
Sales Document Type Item cat.group Item Category (This will be
default as per the Sales Document Type. You can change it with a
manual item category.) Manual item category (You can use manual
item category in place of default item category)

Once all the details are mentioned, click on the save icon.

SAP SD - Schedule Lines Categories

In a sales document, items are divided into one or more schedule lines.
These lines vary as per the date and quantity. You can define multiple
control elements for these schedule lines. Items with schedule lines are
only copied to the SAP system. These schedule lines contain important
information like delivery dates and quantity, available inventory, etc.
You can define different schedule line categories as per the sales
document
type
and
item
category.
The
various control
elements related to general data and shipping data are used for
categorizing schedule lines. You can also define new schedule lines and
the system administrator manages data related to control elements.

General Data Control Elements

If an availability check is carried out in system?

Is it a schedule line for a return item?

Whether a customer request is posted to purchase department?

Shipping Data Control Elements

If a delivery block is set automatically for a defined schedule line?

Is the schedule line relevant for delivery?

The categorization of schedule line majorly varies as per the item

category of a corresponding item and the material requirement
planning MRP. This is defined in the material master record. The
categories for a schedule line are defined automatically as per their
values in the corresponding table. In case if it is required, you can do
some manual changes to the values in the sales document, but cant
change all the values.

How to Define Schedule Line Categories?

It can be defined in the following ways

You can copy an existing schedule line category and make changes as per
the requirement.

Changes can be made to the existing schedule line category.

Creation of a new schedule line category.

Schedule Line Categories in different sales

document
Inquiry

No delivery of an item.

No availability check.

Information purpose.

Quotation

No Delivery.

No Movement.

Order

Schedule line is suitable for delivery.

Movement Type 601.

Return

Schedule line is suitable for delivery.

Movement Type 651.

Defining a Schedule line Category

T-Code: VOV6

A new window will open, then you can click on New Entries.

Once the details are entered, then click on the save icon at the top.

SAP SD - Copy Control

Copy Control is defined as a process in which important transactions in

a sales document are copied from one document to other. It consists of
routines, which determine the system on how the data is to be copied
from a source document to a target document. A SAP system contains
a number of these routines and you can also create additional routines
to meet the business requirements. To create a new routine, you can
use an existing sales document as a reference.

How to find Copy Controls in SAP system?

These controls are created and configured under IMG and can be found
at the following menu path

SPRO IMG Sales and Distribution Sales Maintain copy control for
sales documents.

SPRO IMG Sales and Distribution Shipping Specify copy control

for deliveries.

SPRO IMG Sales and Distribution Billing Billing Documents

Maintain copy control for billing.

You can also use the following T-Codes to find copy controls in a system

VTAA This control is used for copying from sales order to sales order

VTLA This control is used control for copying from sales order to delivery

VTFL This control is used control for copying from delivery to billing doc

VTFF This control is used control for copying from billing doc to billing
doc

VTAF This control is used control for copying from billing doc to sales
order

VTFA This control is used control for copying from sales order to billing
doc

How Copy Controls work in SAP system?

You can setup Copy controls in a system at three different levels in a
Sales Order

Header level.

Item level.

Schedule line level (Only relevant, when you copy from a sales order to
sales order or from billing doc to sales order).

The Header Copy Control routine is required when you copy data from
header of a source document to the header of a target document.
T-Code: VTLA to check copy control between sales order and delivery.

You can check the source of a routing by selecting the routine and press
F4. To open it in the ABAP editor, you can press F5. Copy controls for an
item can be checked by a double click on the item folder and choosing
an item category and then clicking on the Display view item overview
screen. You can then use the F1 key to find out how each routine is
employed. The target documents will be assigned an updated reference
status in the copied item.
The following types of status can be possible for an item

Not relevant it tells if an item is not relevant for copying.

Not referenced it tells an item has not been copied.

Partially referenced it tells if an item quantity is fully copied.

Fully referenced It tells if an entire item quantity has been copied or

not and an item cannot be referenced further.

You can also display reference status for a copy control

Select the Header Status for the status of the entire document. This
field is used Field VBUK-RFSTK.

Select an Item To find the status of the line item. This field is used
VBUP-RFSTA.
SAP SD - Log of INComplete Items

You can also define a sales activity or a sales document as incomplete.

How the system behaves when you create such document in system is
shown below.
The following entries can be made to the system for incomplete data

Header Data of a Sales document

Item Data of a Sales Document

Schedule Line Data of Sales Document

Sales Activity Data

Partner Data

Delivery Header Data

Delivery Item Data

Use T-Code: OVA2 or the below menu path to display the incomplete
group
SPRO IMG Sales and Distribution Basic Functions log of
incomplete item Define Incompleteness Procedure Execute

A new window will now open and you can check the list of this
incomplete group.

To assign incompletion procedures to each document type. You can use

T-Code: VUA2 or SPRO IMG Sales and Distribution Basic
Functions log of incomplete item Assign Incompleteness
procedure.

Then a new window will open. Please select Assign procedures to Sales
Document Type.

You can now view document configuration using a VOV8, but it can only
be changed here. If you dont want to populate a procedure cos of an
incomplete field, you can select IC check box.

Important T-Codes to be used for this

OVA2 To define incompletion procedure.

VUA4 To assign incompletion procedure to delivery type.

VUPA To assign incompletion procedure to Partner functions.

VUC2 To assign incompletion procedure to Sales Activities.

OVA0 To define Status groups.

VUA2 To assign incompletion procedure to Sales Document Header.

V.02 Execute to get a checklist of incomplete sales orders.

VUA2 To set a warning or error message on document save.

VUP2 To assign incompletion procedure to Sales item category.

VUE2 To assign incompletion procedure to Schedule line category.

Key tables to check Incompletion Logs

VBUV Incompletion log - Sales documents

VBUK Header incompletion

TVUVG Groups

V50UC Incompletion log Deliveries

V50UC_USER Incompletion log Deliveries Enhancements

TVUV Procedures

TVUVF Fields

TVUVS Status groups

VBUP Item incompletion

TVUVFC Fcodes

FMII1 Funds Management Account Assignment Data

SAP SD - Pricing

Pricing in Sales and Distribution is used to define the calculation of

prices for external vendors or customers and cost. This condition is
defined as a set of conditions when a price is calculated.

Example
Consider a case when customer orders specific quantity of a product on
a particular day. Various factors like customer, product, order quantity
and date tells the final price to that customer. This information is stored
in the system as master data in the form of condition records.
There are various pricing elements like prices, surcharges, discounts,
and taxes, which are defined in SAP system as condition types. To
manage pricing information for a pricing element in a system, you have
to create condition records.

Manual Pricing
While processing a sales order, you can also manipulate the pricing at
the item as well as the header level. Manual processing of a price
screen is dependent on individual condition types. During a Sales Order
processing using manual processing for a condition type, you can
perform the below activities

Deleting the pricing element.

Changing a condition amount.

Entering additional pricing elements.

How to add Pricing elements manually?

If you want to add customer discount manually in the pricing screen of
a sales order, click on Add line. In Data screen, you can enter additional
conditions like customer discount in the condition type field. Enter a
percentage range and then press ENTER. You can also delete pricing
elements in item pricing and header screens. To do this, select the
particular condition by positioning the cursor and click on delete line.
Note that all header conditions defined at header level cannot be
changed at the item level, and conditions defined at this level cannot be
changed at the header level. Only the Conditions that you define at
both header and item conditions can only be edited at both levels.
SAP SD - Condition Record & Table

A Condition table is defined as a combination of keys to identify an

individual condition record. A condition record is defined as how system
stores the specific condition.
Example of a Condition Record Entering the price of a product or
to specify the discount for a privileged customer.

Example of a Condition Table Condition records for a customer

specific material prices are stored by a sales department. SAP system
contains a conditional table 005 for this purpose. Key of table 005
includes the following field

Customer

Material

Sales Organization

Distribution Channel

In the first two fields, the customer and material determines the
relationship between customers and specific materials. The last two
fields are used to identify organization data in a SAP system. Now, if
sales department in an organization enters a condition record for
discount to one privileged customer, the system will automatically make
use of the condition table 005 to store the record and define a key. Any
standard SAP system contains predefined condition tables and specifies
for each access in a predefined access sequence.

Creating Condition Tables

In a SAP system, you can create or change existing condition tables. As
per the new business requirement in an organization, you can create
new condition tables.
Go to SPRO IMG Sales and Distribution Basic Functions
Pricing Pricing Control Define Conditional Tables

A new window will open and then you can select from create, change or
display field as per the requirement. To create a new table, you have to
select create and click on Choose.

Enter condition table in table field and then you can enter the existing
table to copy the condition.

Once data is copied, you can modify the table as per the business
requirement.
SAP SD - Condition Techniques & Types

Condition type is defined as specific features of daily pricing activities in

a SAP system. Using the condition type, you can also put different
condition types for each pricing, discounts on goods, tax and surcharge
that occurs in business transactions.

Example
Condition type allows you to define the discount for special material.
This can be specified in the system to calculate discount as an amount
or it can calculate discount in terms of percentage. In case you have to
use both discount types, two separate condition types have to be
defined in the system.
There are predefined condition types in a standard system
S.No

Condition Type & Description

1
PR00
Price

2
K004
Material Discount

3
K005

Customer-specific material discount

4
K007
Customer discount

5
K020
Price group discount

6
KF00
Freight surcharge(by item)

7
UTX1
State tax

8
UTX2
Country tax

9
UTX3
City tax

How to create or change an existing condition type in a

system?
You can change or maintain existing condition type in a standard
system. You can also create a new condition types as per business
requirements in your organization.
Go to SPRO IMG Sales and Distribution Basic Functions
Pricing Pricing Control Define Condition Types

A new window will open. Select maintain and then change as per the
requirement and click on Choose.

Once you select Maintain Condition Types and click on Choose, a new
window will open. Select a condition type and click on copy.

Enter the name of condition type. Fill the details for Control Data

Condition Class (A, B, D, E)

Condition Type (A-Percentage, B- Amount, C, G)

Condition Category (Cost, Price, etc.)

Rounding rule (Commercial, round up, round down)

Structure Condition

Plus/Minus

Group Condition data

Changes which can be made

Master Data Section

Scale and Control Data 2 section

Once all the details are entered, click on the save icon at the top.
SAP SD - Access Sequence

This is the search strategy, which is used by the system to find valid
data for a particular condition type. It tells about the order in which a
system searches for the data. An access sequence consists of one or
more access sequences. It helps the system to search first, second and
so on until it finds a valid record. An access sequence is defined for
each condition type where a condition record is created.
You can create or maintain access sequence in customizing
Go to SPRO IMG Sales and Distribution Basic Functions
Pricing Pricing Control Define Access Sequences.

Determine Pricing by item Category

It is not necessary that all the items are suitable for pricing or not. If an
item is not relevant for pricing, then line item will be blank for that
item. An Item category is used to control the pricing of an item.

Billing Item Categories

An item is suitable for billing?

Cost of item should be determined?

Is it a return item?

Whether it is a statistical item?

T-Code: OVKO

Enter Pricing flag in pricing field.

Enter Statistical value as Blank, X, Y. Statistical value flag control an

item in sales document as shown below.

Click the save button.

SAP SD - Prices, Surcharges & Discounts

Prices and Types

In a standard SAP system, price is defined as gross price of a material.
Below are the predefined price types in a system

Material Price

Price List Type

Customer specific price

By default, the system takes gross price in the automatic pricing for a
business transaction. In a standard SAP system, system takes customer
specific price. If no such price exists, system checks for a valid price list
type. If this is also not present in the system, it takes the material
price.

Material Prices
When material price is created, it means the price for a specific
material or pricing for a specific material type. A combination of sales
organization and distribution channel for which material price is valid.

Price List Types

As per your business requirement in an organization, you can define
your own price list.
Example Price list can be created as per the customer type like
Retail, Wholesale customer and so on. Price list can also be created as
per currency type.
Customer Specific Prices You can also create pricing records for
specific customers. You can assign pricing record for specific
combination of customers and material type.

Surcharges and Discounts

A standard SAP system includes a variety of common discount types.
You can also define or customize discounts and surcharges as per the
business requirement.
A Standard SAP system includes the below mentioned discount types
Discount(Key)

Kind of Discount

Customer(K007)

Percentage

Material(K004)

Absolute

Price group(K020)

Percentage

Material group(K029)

Absolute discount by weight

Customer/material(K005)

Absolute

Customer/material group(K030)

Percentage

Price group/material(K032)

Absolute

Price group/material group(K030)

Percentage

Rebate processing(BO01)

Group rebate(%)

Rebate processing(BO02)

Material rebate(fixed)

Rebate processing(BO03)

Customer rebate(%)

Inter-company processing(PI01)

Intercompany discount(fixed)

Inter-company processing(PI02)

Intercompany discount(%)

Invoice lists(RL00)

Factoring discount

Invoice lists(MW15)

Factoring discount tax

While creating a condition record, you can use any of above standard
discount types. While doing automatic pricing, system checks for the
discount that satisfies a certain condition and it checks for a valid
condition record. If a discount refers to a group like a material group or
price groups, that particular group must be assigned to a relevant
customer or material master record before automatic pricing is done in
the system.
SAP SD - Product Proposals

A Product Proposal helps an organization to increase the sales by

recommending other products to the already added products or by
replacing the one already added. The products recommended can be
cheaper, expensive or similar to the product that are requested by the
customer.

An Automatic Product Proposal is one of the most powerful tool used in

online marketing of products. Product Proposals can be mapped to
specific requirement of business partners to match their market
requirement. You can use Top n Product list to provide the list of
products proposed. The data in a product proposal is integrated with
SAP CRM module to get product master data.
A Product proposal also supports features like cross selling, up selling
and down selling, Top N Product list, proposing accessories for specific
products and generating product proposals with respect to specific
promotions.

Cross Selling The product association rules are defined for products and
relationship between different products. Each rule contains a leading
product and the dependent products to be suggested with these products.
This allows you to offer other products with the one already added by a
customer.

Up-Selling and Down Selling If you are selling a specific product you
can define other products to be proposed. These proposed products are
defined using down selling and up selling rules.

Top N Product Lists With the use of SAP NetWeaver BI component, you
can define a list of top products for a target group.

Proposing Accessories This is maintained in the product master data

and with already added products. It suggests suitable accessories that can
be added.

Generating Product Proposal w.r.t specific promotions You can

assign a specific product to a promotion for a customer.

SAP SD - Listing, Determination & Exclusion

Listing, Determination and material exclusion is a key feature provided

by SAP SD that allows the sale of materials to allowed/disallowed
customers.

Listing You can create a material list for specific customers, which allows
those customers to order only those materials which are maintained in the
list.

Exclusion You can also maintain an exclusion record for specific

customers and this doesnt allow that customer to order those materials.

To display Material listing and exclusion, go to SPRO Sales and

Distribution Basic functions Listing/Exclusion.

A new window will open, then you can Activate Listing/Exclusion as

shown in the following image and then click choose.

It will show you the existing material listing and exclusion as per the
selection.

Creating Material Exclusion

Use T-Code: VB01
Select Exclusion Type: B001 and click Key combination to select
material and customer.

Click on the save icon and a confirmation message will be displayed.

SAP SD - Sales Order Types

In a SAP system, you define different sales document types according

to different business transactions. Business transactions are recorded in
a system as sales documents and are grouped into the below
mentioned categories

Inquiries and Quotations come under pre-sales documents.

Sales Orders that are placed by customers.

Outline agreement includes contracts and scheduling documents.

Post sales documents includes customer feedbacks on delivered

products and complaints, free replacements and return products, etc.

Types of Sales Orders

Cash Sales
This is defined as an order type, where the customer places an order,
picks up the order and pays for the goods. In this order type, delivery
of the order is executed immediately, when the order has been entered.
Cash invoice and billing can be printed immediately from the order. No
receivables are entered for customer as invoice amount is paid in cash
and directly entered to a cash account.

Rush Order
In this order type, delivery of goods is picked by the customer or you
deliver the goods on the same day, when the order is placed.

Scheduling Agreement
A scheduling agreement is defined as an external agreement with the
customer having details of quantity of goods and delivery dates. This
information is mentioned as schedule lines in a standard system. These
schedule lines can be created with the scheduling agreement or you can
also create these at a later stage. The deliveries are processed for a
scheduling agreement in similar way it is processed for a normal
delivery. Once the delivery is done, system updates the delivered
quantity in the scheduling agreement.

Consignment Fill-up
In this sales order type, goods are produced and moved to a warehouse
or provided to an agent to deliver to end customer.

Consignment Issue
In this order type, whenever there is requirement from a customer, he
will move to the warehouse or contact the agent and this will be treated
as a sale.

Third-Party Order
In a third-party order type, products are not delivered to the customer
and then you have to handover the order to a third-party vendor, who
is responsible to deliver the items to the customer and generate the
bill.
SAP SD - Free of Charge Deliveries

Free of charge delivery or subsequent delivery is made, when a

customer is not satisfied with the products or the quantity of good is
lesser when delivered. The company has to initiate a return as per the
customers request. In this delivery, customer is not charged for
shipping of goods.

Steps to be followed in case of Return

request

Credit Memo This is done when the customer wants a refund for the
delivered goods. The system creates a credit memo sales document for the
customer with reference to the sales order.

Subsequent Delivery This includes free of charge delivery of disputed

goods to the customer. This is required when incorrect quantity of goods
are delivered to the customer.

Creating a return request in the system: T-Code: VA01. Then enter the
details as shown below

Enter Sale Order number and click Copy.

Then you can enter the following details

PO Number

PO Date

Order Reason

Order Quantity and then Click save.

For creating a Return Delivery Document, use T-Code: VL01N.

Enter the Shipping Point and then Delivery Date as Return Delivery and
then press ENTER.

You can then enter Quantity of goods and click save.

For creating Free of Charge Delivery, use T-Code: VA01
Order Type: Delivery free of charge

Enter the PO number and click Copy.

Enter Order Reason and Quantity.

Click the save button.

SAP SD - Outline Agreements

The vendor selection is an important process in the procurement cycle.

Vendors can be selected by a quotation process. Once these vendors

are shortlisted by an organization. They enter into an agreement with a

certain vendor to supply specific items with certain conditions. This
happens when an agreement is reached or a formal contract is signed
with the vendor. So, this outline agreement is a long term purchasing
agreement with the vendor. The key points about an outline agreement
are as follows

An outline agreement is a long term purchasing agreement with the vendor.

It contains the terms and conditions regarding the material that is to be
supplied by the vendor.

These outline agreements are valid up to a certain period of time and cover
a certain predefined quantity or value.

An Outline agreement is of two types, which includes Contract and a

Scheduling Agreement.

Contract Agreement
A Contract is basically a long term outline agreement between the
vendor and the ordering party. It is made on predefined material or
services to be given over a certain framework of time.
There are two types of contract

Quantity Contract In this type of contract, the overall value is specified

in terms of total quantity of material to be supplied by vendor.

Value Contract In this contract type, the overall value is specified in

terms of total amount to be paid for that material to the vendor.

A Contract can be created by following the steps shown below

Path to Create Contract

Logistics Materials Management Purchasing Outline Agreement
Contract Create.

T-code: ME31K
On the SAP Menu screen, select Create execute icon by following the
above path.

Then, provide the name of vendor, type of contract, purchasing

organization, purchasing group and plant along with the agreement
date.

Fill in all the necessary details like agreement validity start date, end
date, and pay terms (i.e. terms of payment).

Then provide the material number along with target quantity. If the
quantity contract or net price of value contract and material group.
Click save. A new Contract will be created.

Scheduling Agreement
A Scheduling Agreement is a long term outline agreement between the
vendor and the ordering party. This is done over a predefined material
or service, which are procured on predetermined dates over an already
agreed framework of time. A Scheduling agreement can be created by
the following two steps

Creating scheduling agreement

Maintain scheduling lines for the agreement

Creating a Scheduling Agreement

This can be created by following the steps shown below.
The path to create a Scheduling Agreement Logistics Materials
Management Purchasing Outline Agreement Scheduling
Agreement Create Vendor Known.
T-code: ME31L
On the SAP Menu screen, select Create execute icon by following the
above step.

Provide the name of that vendor, agreement type (LP for scheduling
agreement), purchasing organization, purchasing group, plant along
with agreement date.

Fill in all the necessary details like agreement validity start date, end
date, payment terms.

Provide material number along with target quantity, net price, currency
and material group. Click save. A new Scheduling Agreement will be
created.

Maintain scheduling lines for the agreement

These schedule lines can be maintained for scheduling agreement by
following these steps

Path to maintain Schedule Lines Logistics Materials

Management Purchasing Outline Agreement Scheduling
Agreement Delivery Schedule Maintain.
On a SAP Menu screen, select Maintain execute icon by following the
above step.

Provide a Scheduling Agreement number. Select line item. Go to the

Item tab at the top Select Delivery schedule.

Provide a delivery schedule date and target quantity. Click save. The
schedule lines are now maintained for the scheduling agreement.

SAP SD - Quota Arrangement

A particular material can be procured from different vendors depending

on the customer requirement. So, the total requirement of a material is
distributed to different vendors i.e. quota is assigned to each source of
supply. This is known as quota arrangement.
The key points about quota arrangement are as follows
Quota arrangement divides the total requirement of material among
certain sources of supply, i.e. vendors and then assigns quota to each
source. This particular quota specifies the portion of material that is to
be procured from this assigned vendor or source. Quota rating is used
to determine the amount of material that is to be assigned to a
particular source or vendor. The source with lowest quota rating
represents the valid source.
Quota rating can be calculated by the following formula
Quota rating = (Quota Allocated Quantity + Quota Base
Quantity)/Quota
Where the Quota Allocated Quantity is the total quantity from all orders
that are procured from a particular source. Quota Base Quantity is the

quantity from a new source of supply. Quota is the total requirement of

material that is given to a particular source of supply.
The mandatory setting before creating quota is information record
and source list should be maintained for the particular material. Also, in
the material master, the source list and quota arrangement usage
check box should be checked. This setting can be made in the material
master by going to T-Code MM03. In the purchasing view, check the
quota arrangement usage and source list. Setting is now maintained for
quota arrangement.

Create Quota Arrangement

Quota arrangement divides the total requirement of a material among
certain sources of supply i.e. vendors. Quota arrangement can be
created by following the steps shown below.

Path to create Quota Arrangement Logistics Materials

Management Purchasing Master Data Quota Arrangement
Maintain.
T-Code: MEQ1
On the Sap Menu screen, select Maintain execute icon by following the
above step.

Enter the material number and plant for which quota arrangement
needs to be maintained.

Enter the names of the vendors along with all the assigned and
allocated quantity to them. Click save. Quota arrangement is now
maintained for this particular material.

SAP SD - Special Business Process

In SAP Sales and Distribution module, along with the processing of

normal sales orders, you can also create special business processes like
configurable products, items manufactured on order, etc.

Consignments Processing
Consignments are known as products, which are owned by your
company and are located at the client location. It is not required for the
customer to pay for these goods, until they are moved from the
consignment stock. The customers can also return the products in
consignment stock, which are not required.

Key Features of Consignment Stock

The goods in a consignment stock can be accessed by the customer at any

time.

Consignment goods are stored by the customers at their warehouse.

Customer has to only pay for goods, which are removed from the stock and
only for the quantity taken.

As the consignment stock is still a part of companys valuable stock, so

there is a need to manage this in the system. You must manage the
consignment stock separately, so that company should be aware, which
stock is available at the customer location. This should be managed
separately for each customer.
For an organization, consignment stock is managed as a special stock in
inventory and this helps you to track returnable goods from the
customer. Consignment stock management includes four key activities
in the system, which are

Creating a Consignment Fill-Up (Stock is fill up at warehouse).

Creating Consignment Issue (Stock issued from warehouse).

Creating a Consignment Pick-Up (Stock return to manufacturer).

Displaying Consignment Returns (Stock return from customer).

Creating a Consignment Fill-up

In this, stock is stored at the customer location and owned by the
company. This is called Consignment fill up (CF) and sales order KB is
used for this.
T-Code: VA01

Enter Order Type and then enter Organization Data

A new window will open, then you can enter the following details

Purchase Order Number

Purchase Order Date

Order Quantity

Once these details are entered, click Save.

Consignment Issue
This is for the goods that are issued to the customer from a warehouse.
T-Code: VA01
Order Type: CI
Sales Order Type: KE
Click save.

Consignment Return
This is done for the goods returned from the customer.

T-Code: VA01
Order Type: CONR
Sales Order Type: KA
Click save, once all the details are entered.

Consignment Pickup
When a customer requests return of a product to the company, this is
known as a consignment pick up.
T-Code: VA01
Order Type: CP
Sales Order Type: KR
Once these details are entered, click save.

SAP SD - Shipping

Shipping is defined as a very important activity in the sales process. It

comes under the logistics chain and guarantees customer service and
distribution of goods. It is a significant component of Sales and
Distribution module. It is used to perform outbound delivery and other
shipping activities like picking and packing of the goods.
In the shipping process, there are a few key sub processes, which
include

Delivery processing of the goods

Picking of items

Packing of the goods

Post goods issue

Shipping communication

Planning & monitoring of shipping

Other functions like batch determination, serial numbers, inspection, etc.

Organizational Units in Shipping

In shipping the stock of goods is managed at Storage Locations.
The shipping point key characteristics include

It is under client location.

An Outbound Delivery is processed from a single Shipping point.

Shipping point is determined at Item level in the order.

Shipping point can process outbound deliveries of several plants.

You can also assign several shipping points to one plant, but each point
should have a different loading equipment or a different processing
time.
Other Organization units are warehouse#, type of storage, etc.
There is a warehouse# that is assigned to a plant and storage location.
There can be multiple storage locations in a plant and they can point to
one warehouse.
Shipping Point & Route Determination

Route determination is done based on the target country and

transportation zone along with the shipping point. If you have the same
shipping points for two deliveries to the same country and same
transportation zone, then the same route determination is applied to
both.
While creating a delivery document, its route is determined based on
the shipping party and ship to party information.

How to define Modes of Transport?

Go to: SPRO IMG Logistics Execution Transportation Basic
Transportation Function Routes Define Routes Define modes of
transport Execute.

A new window will open, Click New Entries.

Enter the following details

Shipping Type,

Description, and

Click save.

SAP SD - Define Routes & Stages

Go to: SPRO IMG Logistics Execution Transportation Basic

Transportation Function Routes Define Routes Define Routes
and Stages Execute

A new window will open and it will show the list of existing routes,
Click New Entries

Enter the details in new window along with route stages and define.
Once these details are entered click save.

Maintain stages for all routes

Go to: SPRO IMG Logistics Execution Transportation Basic
Transportation Function Routes Define Routes Maintain Stages
for all routes.

Enter the following details

Route

Stage Category

Departure Point

Destination Point, etc.

Once done, click save.

SAP SD - Outbound Delivery

With the availability of material or transport scheduling date, outbound

delivery is required for due shipping lines. It involves shipping activities
like picking of goods, transportation scheduling, etc. An outbound
delivery is done with the shipping points and is determined at the time
of placing the order. You can also define a shipping point manually at a
later stage.
Following are some checklist points to be carried out when a delivery is
created

To check the material and order to ensure if the outbound delivery of goods
is possible.

Defining the quantity of goods and its availability.

Packing the outbound delivery.

Calculating weight or volume of delivery.

Find out the delivery situation and the delivery agreement.

Defining the route.

Finding the pickup location.

Quality check of material to be delivered.

Updating and changing the status of the sales order.

If there is a change in a delivery situation, you can change the delivery

after it is created.

How to create an Outbound Delivery?

If you know the order number, you can create one outbound delivery
for a single order. You can change the shipping data at any point, if
required.
Use T-Code: VL10B

Enter the Shipping Point from shipping data. In the Purchase Order tab,
enter PO number due for delivery and quantity.

To create an outbound delivery with Order Ref or W/O Order Reference,

use T-Code: VL01N

To change the outbound delivery, Use T-Code: VL02N

SAP SD - Delivery Processing

There are various functions in delivery processing like

Quantity Management and adjustment

Text Management

Printing

Validation

You can post quantity difference in the inbound delivery for outbound
delivery to post change in delivery. Using text management, you can
make the following changes to the delivery document like

Display

Change

Delete

Save

If you want to create and save new texts for a particular delivery, this
can also be done.
Printing is done in EWM to print delivery notes. You can create an
outbound delivery order or an outbound delivery. Validation in EWM is

used to verify the delivery document, if it is complete and can be

further processed in the system.
SAP SD - Picking, Packing & Post Good Issue

Picking of goods is done in SAP warehouse management system. It is

done via a transfer order, which is used for picking list and to withdraw
the goods from the stock.
There are three types of Picking

Picking of goods individually

Picking as per defined intervals

Automatic Picking in SAP SD module

Packing of goods is done with the packing material and to be created as

material type VERP. This can be done in two ways

Manual

Automatic

The Post Good Issue (PGI) is the last step in delivery processing and in
this goods ownership is moved to the customer and stock is updated as
per delivery.
These functions can be performed in the system using the following
steps

Creating an Outbound delivery

Creating Picking Request

Create Packaging

Creating Post Goods Issue

Creating an Outbound Delivery

Use T-Code: VL01N

Click save.

Creating a Picking Request

Use T-Code: LT03

Enter Warehouse #

Enter Plant

Enter Delivery

Press Enter.

Click save.

Creating a Packing Request

Use T-Code: VL02N
Enter Outbound Delivery and click Pack.

Select Pack Material and Enter Packaging Material details.

Click save.

Post Good Issue PGI

T-Code: VL02N

Click Post Good Issue and a message will appear Replenishment

Delivery has been saved.
PGI creates two documents

Material Document

Accounting Document

SAP SD - Introduction To Billing

In SAP Sales and Distribution module, billing is known as the final stage
for executing business transactions. When an order is processed and
delivery is made, billing information is available at each stage of this
order processing.
Billing contains the following components

Credit and Debit memos for return goods.

Invoice creation for delivery and services.

Cancel Billing transactions.

Pricing Functions.

Discount and Rebates.

Transferring billing data to Financial Accounting FI.

Billing is closely integrated with organization structure and it can be

assigned to Sales Organization, a Distribution Channel, and a division.
Key functions in Billing

Types of Billing

Match codes

Number Range

Blocking Reasons

Display billing list

Display billing due list

Billing Document Types

A billing document is created for a credit memo, debit memo, an
invoice or a cancelled transaction. Each billing document has a header

and list of items under it. Billing documents are normally controlled by
the billing type.
In a billing document header, it contains general data like

Date of Billing

Payer identification number

Billing value

Currency

Partner Identification numbers like ship to party, sold to party, etc.

Pricing Elements

In the list of items, you should maintain the following data

Material Number

Quantity of goods

Volume and weight

Value of Individual items

Pricing element for individual items

While doing the billing processing, you create, change and delete the
billing documents like invoices, credit memos, debit memos, etc.
Billing Processing also includes creation of billing documents as per the
below reference

To a sales order

To a delivery

To external transactions

You can refer to an entire document, individual items or partial

quantities of items.
A Billing document can be created in the following ways

When a system processes a billing due list automatically as a background

task.

By manually processing from a worklist.

You can also create a billing document explicitly

Creation of Billing Documents

Use T-Code: VF01
Go to Logistics Sales and Distribution Billing Billing Document
Create.

A new window will open, then you can enter the Billing Type, Date and
enter the document number you want to create. Click save.

VF02 To change the Billing Document

VF03 Display Billing Document

VF11 Cancel a Billing Document

VF05 List Billing Document

SAP SD - Billing Methods

A billing method determines whether you have to create an invoice for

every delivery or you want to send an invoice to the customer each
month.
You can use the following billing method types

Individual Billing per sales document.

Collective Billing method for multiple sales document.

Invoice Split for several billing documents for one or more sales document.

In Individual Billing method, you can make the setting in system to

create single billing document for each sales document. Example: One
invoice per delivery.
In Collective Billing, it allows you to combine different documents like
sales orders and/or deliveries either partially or fully in a common
billing document.
Invoice Splits allow you to create invoices as per the specific criteria.

Billing Plan
A billing plan in SAP SD is defined as a plan with individual billing dates
for goods and services and it doesnt depend on the delivery of goods.
Using this bill plan, you can bill for a service or product at regular time
intervals or at specific dates defined in the system in advance.
As per the business transactions, a system allows you to process any of
the billing plan type. There are two types of billing plan

Milestone Billing

Periodic Billing

Milestone billing includes dividing the total billed

billing dates that are defined in a billing plan. When
reached as per defined in the system, customer is
project cost or a predefined amount as per the
billing is normally used for long term projects.

amount in multiple
there is a milestone
charged as per the
bill plan. Milestone

Periodic billing includes charging of bill amount at a regular interval of

time. Example: Suppose you have to pay a rental amount monthly as
per the contract. The system can process monthly payment as per the
schedule. Periodic billing plan is normally used in the following
categories

For a Service like Annual Maintenance contracts, etc.

For lease agreements.

Intellectual Property Management.

Assigning Billing Plans to Business Transactions

In SAP system, you can mention if one billing plan is applicable for all
the products in a business transaction or you can define separate bill
plans for each transaction goods as per the requirement.
Note that you can define a billing plan in SAP CRM system Customer
Relationship Management Transactions Basic Settings Billing
Plan
You cannot use billing plans created in SAP CRM system in SAP ERP
system.

Revenue Account Determination

Revenue account is used for revenue recognition and is used for
integrating SAP SD module and Finance Accounting module. As per the
billing document to account, system determines the correct G/L account
for posting the revenue as per the revenue account determination.
To configure Revenue Account Determination: Use T-Code: OVK5
OR
Go to SPRO IMG Sales and Distribution Basic Function
Account Assignment/Costing Revenue Account Determination
Check Master data relevant for Determination.

Using this, you can define

Account Assignment for Materials

Account Assignment for Customers

Select any one of them and click Choose.

Materials Account Assignment Groups Using this option, you can

divide materials into different groups, services and retails groups. You
maintain this in Material Master MM01/MM02 under Sales Sales Org
2 view.
Customers Account Assignment Groups Using this option, you can
divide customer into different groups. Example: You can divide
customers into domestic customers and non-domestic or overseas. You
maintain this in Payer Customer Master using VD01/XD01/VD02/XD02
under billing document tab of Sales Area Data.
To create and display the condition table for revenue account
determination

Go to SPRO IMG SD Basic Function Account Assignment

Account Assignment/Costing Revenue Account Determination
Define dependency of Revenue Account Determination Execute.

A new window will open, then you can select the relevant option related
to the condition table and click Choose.

The following T-Codes can be used for managing condition tables

S.No.

TCode & Description

1
V/12
Account Determination : Create tables

2
V/13

Account Determination : Change table

3
V/14
Account determination : display tables

4
OV25
Field catalog : Allowed fields for the tables

The next step is to define access sequence and account determination

type.
Define and Assign Account Determination Procedure

The first step is to define and assign an account key and then

Assignment of General Ledger account.

Useful Structure in Revenue Account Determination

S.No

Structure & Description

1
KOMKCV
Account Determination Communication Header

2
KOMPCV
Account Determination Communication Item

SAP SD - Credit Management

Credit management deals with selling of goods and collecting money at

a later stage. The credit limit for a customer depends on the payment
method and customer payment history. The payment for the goods is
based on payment conditions based on the business transaction.

Example
A customers credit limit is set as 10000 and he makes an order worth
6000 and payment term of 30 days at 4%. Now if payment is made
within 30 days, customer will get 4% discount on the payment.
Why do we need Credit Management?
Credit management allows you to reduce the credit risk by setting up
the credit limit for the customers. You can get warning alerts for a
customer or a group of customers.

Key Features of Credit Management

As per your credit needs, you can define your various credit policies as
per different criteria. This also allows you to define key points in Sales
and Distribution system, where the system checks are performed.
While processing an order, the system allows a representative to get
the information about customers credit details. When a customer is
about to reach his credit limit. An electronic email can be sent to the
customer automatically. The credit representative in your company has
an option to review the credit situation of a customer quickly and
accurately and to decide if to extend the credit limit or not.

Types of Credit Management

There are two types of credit management

Simple Credit Check

Automatic Credit Check

Simple credit check involves comparing customer credit limit to the

total of all items and open item values in the order.
Credit Limit = Open item values + Value of current Sales Order
Open items are defined as the products that are invoiced to the
customer, but payment has not been received yet. You can configure
the system in such a way that it sends a warning message to the
customer, when their credit limit is exceeded.
Automatic Credit Check involves checking open items and open
deliveries of goods as well. If the credit limit is crossed, a customer can
still make the order because of a good payment history with the
company. This can be defined as Static and dynamic credit check.

Static Credit Limit Determination

Types of checking groups Sales, Delivery and Good Issue. You can
block the order at all these levels.
Risk Category It is used to determine how much credit has to be
given to the customer.

High Risk Low Credit

Low Risk More Credit

Medium Risk Average Credit

Dynamic Credit Limit Determination

It is used to determine the credit limit of their customer by considering
a horizon period

Open Document

Open Deliveries

Open Billings

Open Items

Horizon Period

Now if the horizon period is defined as 4 months, the system will not
consider these documents for 4 months.

Assigning Company Code to Credit Control Area

SPRO IMG Enterprise Structure Assignment Financial
Accounting Assign company code to credit control area

A new window will open, then you can set the automatic credit check.

Defining Credit Groups

Go to: SPRO IMG Sales and Distribution Basic Functions
Credit Management/Risk Management Define Credit Groups
The following credit groups are defined in a SAP system

Credit group for sales order

Credit group for deliveries

Credit Group for goods issue

SAP SD - Mapping Enterprise Structure

The enterprise structure represents the business structure in the real

world. You can map various organizational units to enterprise structure
as per the requirement like Client, Distribution channel, division,
company code, Sales office, Shipping Point, Loading point, etc. You can
assign an organization unit to a single module (Example- A company
code can be assigned to Sales and Distribution module) or to multiple
modules.

Client
A client is an independent organizational unit and legal unit. Generic
data and multiple tables are saved at client level for multiple
organizational structure. Client is known at the top level in an
enterprise structure. You can assign multiple company codes to a client.

Company Code
A company code is defined as an independent legal unit in an
organization. Company code is an organizational unit created in Finance
Accounting. At the company code level, you can create P/L statements
and Balance sheets. You can assign multiple company codes to a client.

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.

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 companys
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.

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.