AVAILABILITY CHECK

1. INTRODUCTION
1.1. Availability Check

Availability Check in SAP is determining if the desired delivery quantity

can be met on the requested delivery date.

1.2. Requirements

Requirements are planned outward movements of stock. Sales transfers

the information on materials ordered as requirements to material
requirements planning.

1.3. Transfer of Requirements

The transfer of requirements informs production that goods must be

produced, or advises purchasing that purchase requisitions have been
created for which purchase orders must be created and sent to the
suppliers. An availability check can only be carried out if these
requirements are transferred.

1.4. Available to Promise [ATP]

The ATP quantity is calculated from the warehouse stock, the planned
inward movements of stock (production orders, purchase orders, planned
orders) and the planned outward movements of stock (sales orders,
deliveries, reservations).

1.5. Replenishment Lead Time [RLT]

Replenishment lead time is the time required to make the material

available. That is it is the time needed to order or produce the requested
material. It is defined in MRP 3 view of MMR.

2. TYPES OF AVAILABILITY CHECKS

2.1. Types of Availability Checks

There are three types of availability checks in SAP.

1. Check against ATP quantities

2. Check against product allocation
3. Rule based Availability Check

2.2. Check on the Basis of the ATP Quantities

 This type of check is performed dynamically for each transaction, taking
into account the relevant stock and planned goods movements with or
without replenishment lead time. Planned independent requirements are
not taken into account here.

2.3. Check against Product Allocation

This type of check is based on certain predefined distribution quantity of

products to Customers. Product allocation facilitates period-based
distribution of products for certain customers or regions. This ensures, for
example, that when production is low, the first customer does not get the
full amount, resulting in following sales orders not being confirmed or
being confirmed far too late.

2.4. Rule based Availability Check

Rule based Availability Check is based on certain rules like carrying out an
availability check in several plants and with several alternative materials.
This availability check takes place in the stand-alone APO planning system
(Advanced Planner and Optimizer) from SAP.

2.5. Availability Check Including Replenishment Time

Replenishment lead time is only included in the check performed on the

basis of the ATP quantity. Availability is only checked up to the end of
replenishment lead time. If the material availability date is calculated on
the basis of the current date to lie after the replenishment lead time for
the item, the item itself can be confirmed despite insufficient stock being
available. In this case, the system assumes that any quantity requested
by the customer can be procured by the material availability date and
considers the goods to be available.

3. SCHEDULING FOR AVAILABILITY CHECK IN SD

3.1 Requested Delivery Date

Requested delivery date is the date on which the material should be

delivered to the customer at his location.

3.2 Date for Availability Check

Availability is checked on the material availability date.

3.3 Material Availability Date

Material Availability date is the date on which the material should be

available in order to confirm the customer’s requested delivery date. On
this date, you must begin picking, packing, labeling, and loading the
goods.
 It is determined by carrying out backward scheduling from the customers
requested delivery date.

3.4 Backwards Scheduling

Backward Scheduling is the scheduling of delivery related activities in the

backward direction from the requested delivery date to determine
Material Availability date.

3.5 Forward Scheduling

Forward Scheduling is the scheduling of delivery related activities in the

forward direction from Material Availability Date to the requested delivery
date.

4. PREREQUISITES FOR CARRYING OUT AVAILABILITY CHECK IN SD

4.1 Requirements Class

i. The availability check must be switched on at requirements class

level.
ii. The requirements class contains all control features for planning
such as relevance for planning, requirements planning strategy and
requirements consumption strategy.

4.2 Requirements type

i. A requirements type must exist by which the requirements class

can be found.
ii. Various requirements are identified by their requirements type. The
requirements type refers to the requirements class and its control
features.

4.3 Delivering Plant

A plant must be defined at document item level

4.4 Schedule Line Category

Av. Ch. must be switched on at Schedule Line Category [only for Sales
Documents]

4.5 Checking Group

i. A checking group must be defined in the material master record on

the Sales/plant data screen in the Availability check field.
 ii. The checking group controls whether the system is to create
individual or collective requirements in sales and shipping
processing.

4.6 For Deliveries

The delivery item category can be used to control whether an availability

check takes place in deliveries.

4.7 Checking Rule

Checking rule is used to control the scope of the availability check for
each transaction in sales and distribution.

4.8 Other General Controls

Strategy Group, MRP Group and Planning Strategies are other controls
used in the process of Availability Check.

5. CONFIGURATION FOR AVAILABILITY CHECK IN SD

Configurations at IMG level [Basic Functions/TOR & Av. Ch]

S.No Configuratio Description Examples/
n Remarks
01 Checking Define Checking Group and specify Ex : 01 for Coll. Req.
Group whether check to be carried out 02 for Ind. Req.
and set for Individual/Collective etc.
requirements.
02 Requirement Switch on Availability Check for the Ex – For
Class Requirement Class. Requirement Class
041.
03 Schedule Line Switch on Availability Check at Ex : For CP, C1 etc.
Category Schedule Line Category level.
04 Control for Assign Checking Rule to Checking Checking Rules are
Availability Group and define the scope of predefined in SD.
Check Availability Check. The scope Ex : A for SD Order
includes various stock [safety, B for SD
transfer etc], Inward/Outward Delivery
movements, RLT etc. etc.
Other Settings
01 Default Value Checking Group set for [Material Ex : FERT +
Type + Plant ] as default value. Plant1000
Used only if not mentioned in = Ch. Gr. 01.
MMR.
02 Material Block Block indicator can be activated if A –Order, B –
others have to be blocked from Delivery Note, C-
carrying out Av. Ch while it is being Reservation. These
checked. initiators cannot be
changed.
 03 Item Category Availability Check can be activated Ex : REN can be
or deactivated at Item Category switched off.
level.
04 System Based on Sales Area, system Ex : A dialog box for
Responses responses can be set in Av. Ch. selecting one time /
Rule, should there be complete / delevery
no/insufficient stock[after Av. Ch]. proposal.

6. SCOPE OF AVAILABILITY CHECK

6.1 Factors for defining the Scope of Availability Check

Checking rule in combination with the checking group controls the scope
of the availability check.

6.2 Elements that can be considered in the Scope

The following elements can be included in the availability check:

a. Stock

 safety stock
 stock in transfer
 quality inspection
 blocked stock

b. Inward/Outward movement of goods

 purchase orders
 purchase requisitions
 planned orders
 production orders
 reservations
 dependent reservations
 dependent requirements
 sales requirements
 delivery requirements

6.3 Replenishment Time in Scope

Replenishment lead time can be included in the check performed on the

basis of the ATP quantity. Availability is only checked up to the end of
replenishment lead time.
7. REACTIONS TO AVAILABILITY CHECK

7.1 Introduction

If the goods ordered by the customer are not available on the requested
date, the system branches automatically during sales document
processing to Availability Control screen where the following proposals
are offered for selection:

i. One-time delivery on the requested delivery date

ii. Complete delivery
iii. Delivery proposal

This is on account of configuration in IMG based on Sales Area and

Availability Check Rule.

7.2 One Time Delivery

If stock of the material is available to make a delivery on the requested

delivery date, the stock quantity is confirmed here. If there is no stock
available, confirmed quantity zero is displayed.

7.3 Complete Delivery

i. If there is sufficient stock available at a later date to cover the

required quantity in the sales document, the system proposes the
date here.
ii. If the system determines that complete delivery cannot be made at
a later date, no date is proposed in this section.

7.4 Delivery Proposal

The system checks whether and for which dates partial deliveries can be
made. Partial deliveries are displayed for different dates. These dates are
based on the planned inward and outward movements of stock.


 Batch Management
1.0 Batch

1.1 Definition

Batch is a quantity or partial quantity of a certain material or product that has been
produced according to the same recipe. It represents a homogenous unit with unique
specifications.

Note :

• Batches are always assigned to a material

• Batches can only be used for materials that are to be handled in batches

1.2 Purpose

In various industries – particularly the process industry – you have to work with
homogenous partial quantities of a material or product throughout the logistics
quantity and value chain

There are various reasons for this:

• Legal requirements (for example, the guidelines set out by GMP (Good
Manufacturing Practice) or regulations on hazardous material
• Defect tracing, callback activities, and regression requirement
• The need for differentiated quantity-and value-based Inventory Management
(for example, due to heterogeneous yield/result qualities or varying
constituents in Production.
• Differences in usage and the monitoring thereof in materials planning in SD
and Production.
• Production or procedural requirements (for example, settlement of material
quantities on the basis of different batch specifications).

2.0 Batch Level and Number Assignment

2.1 Batch Level

In the SAP System, the batch number uniquely identifies the batch. You use the
batch level to specify whether the batch number for a material is unique in one
plant, or in all plants.

• Plant level
The batch number is unique in connection with the plant and material.

The batch number is only known in the plant in which it was created if the
stock is transferred to another plant, the batch is unknown in the recipient
plant and the system does not adopt any data. You have to recreate and
specify the batch in the receiving plant; that is, the same batch number may
have different specifications in several plants.
 • Material level:
The batch number is unique in all plants in connection with the material.

The same batch number has the same meaning for the material in all plants.
One batch number cannot have different specifications in different plants.
During stock transfer to another plant, the specification of the batch is known
in the destination plant even if the batch is placed into storage in that plant
for the first time.

• Client level:
The batch number is unique in the whole client. A batch number can only be
assigned once in the client. You cannot assign the same batch number for
different materials

2.2 Batch Number Assignment

The batch number may be assigned at different times, for example:

• During manual creation of a batch

• When carrying out goods movements, for example, goods receipt or transfer
posting
• During creation of a process or production order
• When a usage decision is made in quality management
• During quality analysis (due to aging, for example)
• When creating a purchase order

3.0 Batches in Sales Processing

3.1 Sales Documents for Batches

For materials managed in batches individual batch numbers can be entered for the
following documents:

• Pre-sales documents (such as inquiries or quotations)

• Sales orders
• Delivery

3.2 Batch Checks

If you enter a batch number directly into the sales document, system may carry out
the following checks :

a. Availability of Batch
b. Expiry Date for Batch etc.

4.0 Copying Batch Numbers

4.1 Copying Batch Numbers in Sales Documents

When a pre-sales document is copied to a sales order, any existing batch numbers
are also automatically copied but cannot be changed in the sales order.

For a sales order with materials to be managed in batches that does not have a
preceding document, batch numbers can be changed until subsequent documents,
such as the delivery, have also been created.

4.2 Copying Batch Numbers from Sales Order to Deliveries

When copying a sales order with batch numbers to a delivery, all batch data is
automatically copied. The batch numbers which are copied to the delivery cannot be
changed.

when creating a delivery, if the system discovers that the copied batch is not valid, a
warning is issued by the system. In this case, the batch specification must be
changed in the sales document source

4.3 Automatic Batch Determination in Delivery Documents

If no batch number is proposed in the sales order for an item with material to be
handled in batches, automatic batch determination can be carried out in the delivery.

5.0 Splitting Batches in a Delivery

Batch split describes the situation when you want to specify quantities from more
than one batch for a particular delivery item.

To carry out batch split in a delivery, proceed as follows:

In the delivery, mark the item for which you want to split batches and choose Goto 
Item Batch
 split.

6.0 Master Data for Materials handled in Batches

6.1 Batch Management Indicator

If a material is managed in batches, you indicate this fact in the material master
record in either the Purchasing or Plant data/storage 1 views.

6.2 Availability Check

In the General Sales view, or in the MRP view, choose availability check group CH.
The replenishment lead time should not be considered in the dynamic availability
check for batches, since batches are not reproducible.

6.3 Classification

A Class must be assigned with Class type 022 or 023.

7.0 Batch Specifications

7.1 Definition

Batch specifications describe the technical, physical and/or chemical properties of a

batch. You store batch specifications, such as batch status or active ingredient
potency, as characteristics in the Classification System.

Example : Batches of car paint are specified by color value, viscosity and
expiration date. The characteristics color value, viscosity and expiration date
for these properties are stored in the classification system and the respective
values are assigned to each individual batch.

7.2 Specifications in the Classification System [Characteristics]

You define properties of the material and its batches and store them as
characteristics in the classification system.

7.3 Classes

You create classes for the material and the batches and assign the characteristics to
the classes.

7.4 Class Type

The class must be assigned to a class type. There are two class types of the category
Batch for batches and their materials:

o 022 at plant level

o 023 at client or material level

7.5 Material Master Record

Material master record is to be created and assigned the desired class to the material
and assign characteristics to the material. Only one Class may be assigned for the
Class type 022 or 023.

The replenishment lead time should not be considered in the dynamic availability
check for batches, since batches are not reproducible. In the General Sales view, or
in the MRP view, choose availability check group CH.

8.0 Path for creating various objects

8.1 Characteristics [CT04]

Cross Application Components → Classification → Master Data → Characteristics

8.2 Classes [CL01]

Cross Application Components → Classification → Master Data → Classes

8.3 Batch [MSC1N]

Logistics → Central Functions → Batch Management → Batch → Create

9.0 Creating a Batch Master Record

9.1 Creating a Batch Master Record Manually

To create a batch master record manually, choose Logistics  Central Functions 

Batch Management  Batch  Create

9.2 Creating a Batch Master Record in the Background

The system creates a batch master record in the background in the following
procedures:

• The first time goods are received for a batch

• During creation of a process or production order
• When a usage decision is made in quality management
• During a recurring inspection
• For transfer postings (when you want to split a batch, for example)
• When creating a purchase order

10.0 Batch Determination

10.1 Batch determination in Supply Chain Process

Batch determination is used for all types of goods movements from the warehouse
to find batches that meet defined specifications. It is used for the following areas :

i. Inventory Management (IM),

ii. Production (PP/PP-PI)
iii. Sales and Distribution (SD)
iv. Warehouse Management System (WM)

10.2 Condition Technique

Condition Technique is used for the determination of Batches.

11.0 Batch Determination in Sales and Distribution

11.1 Points for Batch Determination

There are four points at which you should use batch determination in Sales &
Distribution. These are:

• Quotations
• Quantity contracts
• Sales orders (or scheduling agreement)
• Delivery
11.2 Path for Configuration

IMG → Logistics General → Batch Management → Batch Determination and Batch

Check

11.3 Path for Condition Records

Logistics → Central Functions → Batch Management → Batch → Create

12.0 Batch Determination – Configuration[for Sales and

Distribution]

12.1 Standard Condition Tables

• 001 Material

• 002 Customer/material

• 003 Customer/plant/material

• 004 Destination country/material group

• 005 Destination country

• 006 Material group

12.2 Standard Access Sequences

Access sequences SD01, SD02, and SD03 are defined in the standard SAP R/3 System

12.3 Standard Strategy types [Condition Types]

Strategy types SD01, SD02, and SD03 are defined in the standard SAP R/3 System

12.4 Standard Batch Search Procedure

The standard SAP R/3 System contains search procedure SD0001

12.5 Allocate Batch Search Procedure/Activate Check

Batch search procedures are assigned to the combinations of sales organization, distribution
channel, division and sales document type. [1000 10 00 OR → SD0001].

Set indicator Check batch, if the system has to check manually entered batches

12.6 Activate Automatic Batch Determination in SD

Auto batch determination indicator is set for those order and delivery item categories for which
batch determination is to be triggered automatically.
   

FREE GOODS

1.0 BASICS
FREE GOODS
S.No Item Description Remarks
1 Free Goods Free Goods in SAP is giving certain This may depend on
material/quantity as free of some conditions
charge based on Order
quantity.
2 Types of Free Free Goods are of two types in SAP,
Goods Inclusive Free Goods and
Exclusive Free Goods
If the Free Goods quantity is a part of Order Also called as
quantity, it is said to be Inclusive Free Goods.Inclusive Bonus
Inclusive Free Quantity.
3
Goods Example: Buy 10 get 1 free is the Policy. The total quantity
Customer is charged for 9 qty. only and one is customer gets is 10.
given free.
If the Free Goods quantity is in addition to Also called as
Order quantity, it is said to be Exclusive Free Exclusive Bonus
Goods. Quantity.
Example: Buy 10 get 1 free is the Policy. The total quantity
Exclusive Free
4 Customer is charged for 10 qty. and one is customer gets is 11.
Goods
given extra.
For Exclusive Free Goods, the material being For Material X,
given free could be different from Ordered Material Y may be
material. given free.
Free goods agreement is maintained like a Transaction Code for
condition. These agreements are maintained Master Data : VBN1
5 Conditions
as Master Data which is copied into Sales
Documents.
Condition Technique could be used to In the standard
determine the Free Goods based on the system, conditions
Condition
6 appropriate levels. For example, at may be maintained
Technique
customer/material level or customer at customer/material
hierarchy/material level etc.. level.

2.0 MASTER DATA MAINTENANCE

MASTER DATA FOR FREE GOODS

S.No Data Entry Description Examples/
Remarks
01 Path Logistics → SD → Master Data → Conditions → -
Free Goods → Create
02 T-Code VBN1 -
 03 Initial Screen Enter Condition Type Ex : Discount.
Type – NA00
Select Inclusive or Exclusive as desired by
-
clicking on the Button on Application Tool Bar.
Specify a validity period for the free goods
-
agreement
Specify a minimum quantity that Customer may Ex : Min. Order
Order for Free Goods eligibility Qty. 20.
Specify Quantity and Unit of measure for which Ex : For every 5
free goods will be given. PCs free some
qty. is given
04 Overview Screen
Specify the quantity of Goods being given as Ex : 1 PC is free
free along with Unit of measure
Maintain Calculation Rule By default 1 is
maintained.
For Exclusive Free Goods additional Material, Not applicable for
different from Ordered Material, being given Inclusive Free
free can also be maintained Goods
If required maintain other information and click
-
on save button

3.0 FIELDS IN THE MASTER DATA SCREEN

FIELDS IN THE MASTER DATA OVERVIEW SCREEN

Field description Contents

Material Material, for which free goods is to be granted

Minimum quantity Minimum quantity for which free goods can be granted
From Quantity of sales material
FGQ Quantity unit of Sales material

Quantity of free goods with reference to the quantity and quantity unit of
Free Goods the sales material

AQU Quantity unit of the free goods additional quantity

Rule Calculation rule
D Delivery Control

Additional Material Additional material (only available for entry in exclusive free goods)

4.0 CALCULATION RULE

CALCULATION RULE FOR FREE GOODS

S.No Item Description Examples/
Remarks
 01 Calculation Rule The calculation rule defines the manner in which
the free goods amount is calculated from the free
-
goods quantity, additional quantity and the
document quantity.
02 Standard Calculation Rules Description
Calculation Rule 1 Proportional [pro-rata]
-
Rules Rule 2 Unit Reference
Rule 3 Whole Unit
03 Enhancements / We can enhance the rules for determining the Transaction :
Routines free goods quantity by modifying existing VOFM
routines or adding new routines
04 Example for 10 pieces of a material are granted as exclusive
Calculation Rule free goods for an order of 100 pieces. A
customer orders 150 pieces. Depending on the
-
rule used, the customer receives the following
free goods quantity:

Calculation Description Free Goods

Rules Quantity
Rule 1 Proportional [pro-rata] 15
Rule 2 Unit Reference 10
Rule 3 Whole Unit 10

5.0 LIMITATIONS OF FREE GOODS

LIMITATIONS
S.No Item Description Remarks
1 1:1 Ratio Free goods can only be supported on a 1:1 Not Possible :
[Exclusive] ratio. For an order item another different Item For X and Y, Z is
may be given free. free etc.
2 Material Free goods are not supported in combinations Ex : Product
Structures with material structures. selection, BOM,
variants with BOM
explosion
3 Document Free goods are only supported for sales orders Ex : Not supported
Category with document category C. with Credit Memo
Requests etc.
4 Deliveries Free goods are not supported for deliveries Order Reference
without reference to a sales order. Mandatory
5 Special Free goods cannot be used for certain special Ex : MTO, TPO,
Business business processes. Scheduling
Processes Agreements etc.

6.0 FREE GOODS DETERMINATION

6.1 CONDITION TABLE
S.No Item Description Remarks
A Condition Table is a combination of fields
1 Definition -
which form a key for a Condition Record.
IMG → SD → Basic Functions → Free Goods →
2 Path Condition Technique for Free Goods → -
Maintain Condition Tables
3 T-Code V/N2 -
In the entry screen, enter the desired Table
5 Entry Screen number otherwise system generates a number -
automatically
5 Table Number Users can create table from 501 to 999. -
Standard Condition Table used is Table 10 which Assigned to
6 Standard Table has fields Sales Organization, Distribution Access Sequence
Channel, Customer and Material NA00.
Select the fields from the list of allowed fields
[Field Catalogue] by double clicking the required
6 Process fields which are reflected on the selected fields -
and click on Generate Icon on Application Tool
Bar.
Note : The tables are created from the List of allowed fields.

6.2 ACCESS SEQUENCE

S.No Item Description Remarks
An Access Sequence is a search strategy which
The access
SAP system uses to search for condition records
sequence consists
1 Definition valid for a condition type.
of one or more
It determines the sequence in which the system
accesses
searches for data.
IMG → SD → Basic Functions → Free Goods →
2 Path Condition Technique for Free Goods → Maintain -
Access Sequence
3 Characters Access Sequence is a 4 digit Alpha Numeric key -
New Access In the Application Tool bar select New Entries A text can also be
4
Sequence and define the desired Access Sequence. added.
Select the new Access Sequence and double click
on Accesses. System may not display any An Access is like
Accesses here. serial number
5 Accesses Again click on new Entries on Application Tool which is to be
Bar. numbered with
Now we can add the desired condition tables some gaps.
against each access.
Select the first Access double click on fields.
System may display all the fields in the condition
6 Fields -
table maintained for that Access. Similarly each
access is selected and fields are initialized.
 Standard Access
7 Standard Access Sequence maintained is NA00. It has Table 10.
Sequence
Tables Tables in an Access Sequence are to be arranged
8 -
arrangement from the most specific to the most general table.

6.3 DISCOUNT TYPE [CONDITION TYPE]

S.No Item Description Remarks
Discount Types in Free Goods similar to
1 Definition -
Condition Types in Pricing.
IMG → SD → Basic Functions → Free Goods →
2 Path Condition Technique for Free Goods → -
Maintain Condition Type.
3 Characters Condition Type is a 4 digit Alpha Numeric key -
Select a Condition Type which is similar to the
desired condition Type and click on New Entries
New Condition in the Application Tool bar. A text can also be
4
Type added.
Define a new Condition Type with 4 characters
and assign the new Access Sequence to it.
Standard It has Access
5 Standard Condition Type maintained is NA00.
Condition Type Sequence NA00.

6.4 PRICING PROCEDURE [FREE GOODS PROCEDURE]

S.No Item Description Remarks
Pricing procedure is the collection of desired Free Goods
Condition Types along with other control Procedure is also
1 Definition
features. called as Pricing
Procedure
IMG → SD → Basic Functions → Free Goods →
2 Path Condition Technique for Free Goods Maintain -
Pricing Procedures
3 Characters Pricing Procedure is a 6 digit Alpha Numeric key -
Select a standard Pricing Procedure which is
similar to the desired Pricing Procedure and click
New Pricing on Copy As Icon in the Application Tool bar. A text can also be
4
Procedure Define a new Pricing Procedure with 6 characters added.
and assign the new Condition Types and also
retain the required standard condition Types.
Standard Free
It has Condition
5 Goods SAP Standard Free Goods Procedure is NA0001
Type NA00.
Procedure

6.5 CUSTOMER PRICING PROCEDURE

S.No Item Description Remarks
 Customer Pricing procedure is a single digit
alpha-numeric key assigned to customer master
1 Definition -
record and is used in Pricing Procedure
determination
IMG → SD → Basic Functions → Pricing →
Pricing Control → Define and Assign Pricing
2 Path -
Procedures → Define Customer Pricing
Procedure
3 T-Code OVKP -
4 Characters Single digit alpha-numeric key Ex : 1 - Standard
Select a standard Customer Pricing Procedure
New Customer and click on Copy As Icon in the Application
A text can also be
5 Pricing Tool bar.
added.
Procedure Enter any single digit number or a character and
give a meaningful name and save.
Sales view of
This Customer Pricing Procedure is to be
6 CMR Sales Area in
assigned to the required customer master records.
CMR.

6.6 DOCUMENT PRICING PROCEDURE

S.No Item Description Remarks
Document Pricing procedure is a single digit
1 Definition alpha-numeric key assigned to Document Type -
and is used in Pricing Procedure determination
IMG → SD → Basic Functions → Pricing →
Pricing Control → Define and Assign Pricing
2 Path -
Procedures → Define Document Pricing
Procedure
3 T-Code OVKI -
4 Characters Single digit alpha-numeric key Ex : A - Standard
Select a standard Document Pricing Procedure
New Document and click on Copy As Icon in the Application
A text can also be
5 Pricing Tool bar.
added.
Procedure Enter any single digit number or a character and
give a meaningful name and save.

6.7 ASSIGNING DOCUMENT PRICING PROCEDURES

S.No Item Description Remarks
Document Pricing procedure is to be assigned to Ex : A – OR
1 Definition
required sales and billing document types.
IMG → SD → Basic Functions → Pricing →
Pricing Control → Define and Assign Pricing
2 Path -
Procedures → Assign Document Pricing
Procedure
3 T-Code OVKJ OVTP for Billing
6.8 PRICING PROCEDURE [FREE GOODS PROCEDURE] DETERMINATION
S.No Item Description Remarks
Pricing procedure is determined based on Sales
1 Definition Area, Customer Pricing Procedure and Document -
Pricing Procedure.
IMG → SD → Basic Functions → Pricing →
Pricing Control → Define and Assign Pricing
2 Path -
Procedures → Define Pricing Procedure
Determination
Select a standard combination of sales area, This is similar to
Customer Pricing Procedure and Document General Pricing
New Pricing Pricing Procedure and click on Copy As Icon in Procedure
3 Procedure the Application Tool bar. Determination.
Determination .
Enter the desired values and the new Pricing
Procedure.


 MATERIAL DETERMINATION

7.0 BASICS

MATERIAL DETERMINATION
S.No Item Description Remarks
Material determination enables the automatic It is triggered when a
Material
1 substitution of materials in sales documents material is entered in
Determination
during sales order processing the order.
1. As sales promotion the system can, In the case of
during sales order entry, automatically International Article
substitute a material that has Numbers, you must
promotional packaging. also enter a unit of
2. Customer-specific product numbers measure for the
2 Examples
with your own material numbers etc. substitute material
3. International Article Numbers (EANs)
with your own material numbers.
4. Substituting discontinued materials
with newer materials.
Displaying The material entered can be viewed in Sales A Overview Screen :
3 Material view in a Sales Document. Goto → Item → Sales
Entered A
Master Data for Material Determination is Transaction Code for
maintained like conditions. Master Data Master Data : VB11
4 Conditions
contains the details like the substitute materials
and original materials etc.
Condition Technique could be used for Material In the standard
Condition Determination based on the appropriate levels. system, conditions
5
Technique For example, at material level or customer may be maintained at
material level etc. material level.

2.0 CREATION OF MASTER DATA

Master Data
Examples/
S.No Item Description
Remarks
Logistics → Sales and distribution → T-Code - VB11
01 Path Master data → Products → Material
Determination → Create
02 Initial Screen Enter desired Determination Type Ex : A001
03 Overview Screen Enter the following data: In the case of
– Validity period for the master record International
– Material entered (the material you want Article Numbers,
the system to substitute with another) a unit of measure
– Substitute material. must be entered
 – Optionally, a reason for the substitution for the substitute
(the reason may appear in system material.
messages during sales order processing)
– If more than one Substitute materials are
to be maintained by double clicking on the

Substitute Material field

- Click on Save Button

3.0 SUBSTITUTION REASON

SUBSTITUTION REASON
S.No Item Description Examples/ Remarks
01 Definition A Substitution Reason [or Proposed It is assigned in the
Reason] controls the execution of Material master data [ VB11 ]
Determination
02 Path for IMG → SD → Basic Functions → Material T-Code - OVRQ
Configuration Determination → Define Substitution
Reason
03 New Substitution Define a New Substitution Reason with a Reasons : International
Reason 4-Character Alpha Numeric Key and a Article Number, Advt.,
description for the Reasons Special Packing, etc.
04 Controls Substitution Reason is associated with the Depending on the
controls like Entry, Warning, Strategy, requirement the controls
Outcome etc. may be set.
Indicates if the system is to print the name To be marked for original
Entry or number of the original material, in the material reflection in
output [Order Confirmation etc]. output.
Indicates whether the system displays a To be marked if warn.
Warning warning message before substituting a Message is required.
material
Controls whether product selection should Ex : Blank- Auto. Subs
occur automatically in the background or A – Disp. Sub list
05 Control Strategy whether the alternative materials should B - Without ATP
elements be offered for selection in a dialog box. *Av. Ch. done for Prod
Sel. in back ground.*
Controls whether the outcome of product Ex : Blank – Replace
selection should replace the original entry A : Subs. Prod.
or whether it should be recorded as a sub- disp as subitem
Outcome
item of the original entry. B : As in A, but in
in sales order
only.
Note : 1. For Automatic swapping Material Entered need not have MMR.
2. When outcome sub-item is displayed then both the materials should have MMRs.

4.0 MATERIAL DETERMINATION PROCEDURE

4.1 CONDITION TABLE
S.No Item Description Remarks
A Condition Table is a combination of fields
1 Definition -
which form a key for a Condition Record.
IMG → SD → Basic Functions → Material
Determination → Maintain Prerequisites for
2 Path -
Material Determination → Define Condition
Table
3 T-Code OV16 -
In the entry screen enter the desired Table
4 Entry Screen number and press enter button otherwise system
assigns number automatically.
Users can create table from 501 to 999. Ex : Table 1 –
5 Table Number Fields Material
Entered
Select the fields from the list of allowed fields
[Field Catalogue] by double clicking the required
6 Process fields which are reflected on the selected fields -
and click on Generate Icon on Application Tool
Bar.
7 Change OV17 -
8 Display OV18 -
Note : The tables are created from the List of allowed fields.

4.2 ACCESS SEQUENCE

S.No Item Description Remarks
An Access Sequence is a search strategy which
The access
SAP system uses to search for condition records
sequence consists
1 Definition valid for a condition type.
of one or more
It determines the sequence in which the system
accesses
searches for data.
IMG → SD → Basic Functions → Material
Determination → Maintain Prerequisites for
2 Path -
Material Determination → Maintain Access
Sequence
3 Characters Access Sequence is a 4 digit Alpha Numeric key -
New Access In the Application Tool bar select New Entries A text can also be
4
Sequence and define the desired Access Sequence. added.
Select the new Access Sequence and double click
on Accesses. System may not display any An Access is like
Accesses here. serial number
5 Accesses Again click on new Entries on Application Tool which is to be
Bar. numbered with
Now we can add the desired condition tables some gaps.
against each access.
 Select the first Access double click on fields.
System may display all the fields in the condition
6 Fields -
table maintained for that Access. Similarly each
access is selected and fields are initialized.
Tables Tables in an Access Sequence are to be arranged
7 -
arrangement from the most specific to the most general table.

4.3 MATERIAL DETERMINATION TYPE

S.No Item Description Remarks
Material Determination Type is similar to
1 Definition -
Condition Type in Pricing.
IMG → SD → Basic Functions → Material
Determination → Maintain Prerequisites for
2 Path -
Material Determination → Define Condition
Types
3 Characters Condition Type is a 4 digit Alpha Numeric key -
Select a Condition Type which is similar to the
desired condition Type and click on Copy As
New Condition button in the Application Tool bar. A text can also be
4
Type added.
Define a new Condition Type with 4 characters
and assign the new Access Sequence to it.

4.4 MATERIAL DETERMINATION PROCEDURE

S.No Item Description Remarks
Material Determination procedure is the
1 Definition collection of desired Material Determination -
Types [Condition Types].
IMG → SD → Basic Functions → Material
2 Path Determination → Maintain Pre-requisites for -
Material Determination → Maintain Procedure
Material Determination Procedure is a 6 digit Ex : A00001
3 Characters
Alpha Numeric key
Select a standard Material Determination
Procedure and click on Copy As Icon in the
Application Tool bar.
New Pricing A text can also be
4 Define a new Material Determination Procedure
Procedure added.
with 6 characters and assign the new Condition
Types and also if required retain the required
standard condition Types.

4.5 ASSIGNING PROCEDURE TO SALES DOCUMENT TYPES

S.No Item Description Remarks
Material Determination procedure is to be
1 Definition -
assigned to the desired Sales Document Types.
IMG → SD → Basic Functions → Material
2 Path Determination → Assign Procedures To Sales -
Document Types
 Assign the Material Determination Procedure to Ex : A00001 is
3 Example assigned to OR
Sales Document

5.0 STANDARD ITEM CATEGORIES AND SCHEDULE LINE CATEGORIES

Item Category Determination when sub item is used

S.No Item Doc. Type Item Category Usage Higher Level . Item Category
Group Item Category
01 Main Item OR Norm PSHP TAX
02 Sub Item OR Norm PSEL TAX TAPS
Note : 1. Schedule Line Category for Main Item – CX.
2. Schedule Line Category for Sub Item - PP.


 OUTPUT DETERMINATION

OUTPUT DETERMINATION
S.No Item Description Remarks
1 Introduction The output determination component is used -
for output control. Output control is used to
exchange information with internal and
external partners.
2 Examples 5. Order Confirmations. These are also called
6. Delivery Notes as Business Forms.
7. Invoices
8. Shipping Notifications etc.
3 Output Output is a form of media from a business to Printouts, Faxes,
one of its partners. Outputs are in the form of Telexes, E-Mails,
Order Confirmations, Delivery Notes, and Electronic data
Invoices, and Shipping Notifications. Interchange.

4 Output Type Output Type is a type of output and contains -

all the control features for the output. It is
used for output determination.
1. Kind of Output Order Confirm. etc
2. Business Transaction Sales Order etc.
Output Type – 3. Partner receiving the output Sold-to Party etc.
5 4. Media Fax, Email etc.
Control Features
5. Print Program -
6. SAPScript Layout for formatting -
output
5 Output Output Determination can be maintained Condition Technique
Determination as Originating from CMR, or as is generally
Originating by using Condition preferred.
Technique.
6 Print Program
7 Form A form in SAPSCRIPT is used for Page Elements : Header
Layout. A form contains various elements Data, Paragraphs,
for Layout control of Individual pages etc. Windows, Pages,
Page Windows,

SAP SCRIPT FORM

S.No Item Description Remarks
1 Introduction Sapscript form is a template which simplifies Sapscripts Forms are
the process of designing the Business Forms. needed to print,
It supplies layout and contents for the distribute or display
Business Forms. business forms.
2 Architecture Layout : The layout is defined by a set of
windows.
 Content : It is either text or graphics [Logo Architecture consists
etc.]. of two components :
Layout and Content.
3 Windows The central object of SAPscript form is SAPscript form
Windows. Windows houses the form content. derives its structure
We can define size, position and content of from a set of
each window in a form. windows, each with
its own content.
4 Processing of SAPscript runtime environment : SAPscript runtime
SAPscript Form  Retrieves layout and content environment
data from SAPscript form coordinates the
 Collects the necessary processing of
business data from database SAPscript form.
 Generates the final SAPscript
form.
The resulting Business form can be printed, e-
mailed, faxed or displayed.

OUTPUT PRINT OUTPUT

S.NO DESCRIPTION FORM
TYPES PROGRAM PROCEDURE

1 AF00 Inquiry RVADOR01 RVORDER01 V05000

2 AN00 Quotation RVADOR01 RVORDER01 V06000

3 BA00 Order Confirmation RVADOR01 RVORDER01 V10000

4 RD03 Cash Sales Invoice RVADOR01 SD CASH SALE V10001

5 LD00 Delivery Note RVADDN01 RVDELNOTE V10000

6 PL00 Packing List SDPACKLI SD_PACKING_LIST V10000
7 RD00 Invoice RVADIN01 RVINVOICE01 V10000

8 LR00 Invoice List RVADIL01 SD_INVOICE_LIST V30000

 REBATE

REBATE
S.No Item Description Remarks
A Rebate is a special discount which is paid It is an Agreement
retroactively to a customer. This discount is between the
1 Rebate
based on the customer's sales volume over a Customer and the
specified time period company.
Rebate agreements cane be processed only
when the following prerequisite conditions are
Prerequisites for met i.e., activated for Rebate:
2 Rebate  Sales Organization
Processing  Payer
 Billing type (invoice, credit memo etc)

A rebate agreement usually consists of a

number of individual agreements in the form of
Rebate
3 condition records.
records. A rebate agreement and the
Agreement
condition records it contains are uniquely
identified by a rebate agreement number.
number.
Logistics → SD → Master Data → Rebate T – Code : VBO1
Path [Master
4
Data] Arrangements → Rebate Arrangements →
Create
The general data that applies to all condition records within the The credit memo passes
rebate agreement are : this information on to
Financial Accounting.

 Validity period
 Status (for example, whether the
agreement is released for settlement)
General Data in  Rebate recipient (the party who
5 Reb. Agreement receives the credit memo)
[VBO1]  Currency (default from the sales
organization)
 Method of payment (check, bank
transfer, and so on)
 You can define the following data for each
condition record in a rebate agreement:

• Basis for the rebate (customer,

customer/material, rebate group, and so
on)
• Validity period (the validity period for
Data in each condition record must be the same
Condition as or lie within the validity period of
6
Records the rebate agreement)
[VBO1] • Condition rate
• Material for settlement
• Accrual rate
• Other control data, such as the pricing
scale type

Rebate accruals allow the accounting

department to keep track of how much your
7 Accruals
company owes customers with whom you have
rebate agreements.
The rebate agreement type determines which
data the system automatically proposes for the
corresponding rebate agreement. For example,
the system can propose :

• Condition types we can use in an

agreement
• Validity period the system
Rebate
8 automatically proposes for an
Agreement Type
agreement
• Status required before an agreement
can be processed for payment.
• Rebate agreement types are defined in
Customizing for Sales and
Distribution.

9 Path for IMG → SD → Billing → Rebate Processing →

Rebate Agreements → Define Rebate
Configuration
Agreement Types
CONTROL DATA OF REBATE AGREEMENT TYPES
 Validity
Periods &
Default Status

Text
Payment Determination
Method

Man Payments Settlement

- Payment - Final
Procedure Rebate Settlement
- Partial
Agreement - Rebate
Settlement Correction
-Reverse
Type
- Min. status
Accruals

Condition Manual
Type Group Accruals
Verification
Levels

STANDARD REBATE AGREEMENT TYPES

Agreement Basis of Condition

S.No Remarks
type Type
rebate
Pricing Reference Material : It is the material
Customer/material which when entered in Pricing Reference field in
01 0001 BO01
(% rebate) MMR Sales Org. view copies all the conditions
to other materials.
02 0001 Customer/rebate BO01 Volume Rebate Group : A rebate group consists
group of materials to which same rebate is applied. A
(% rebate) material is assigned to a rebate group in the
material master record Sales Org. view, Rebate
Group field. In the condition record Material for
 settlement is used.
Customer/material
03 0002 (quantity BO02 -
dependent)
Material for Settlement : When the basis for
Rebate is customer, customer hierarchy or group
Customer
04 0003 BO03 of materials then “Material for Settlement”
(% rebate)
material is used for these agreements. This is a
special material created only for this purpose
Customer
In the condition record Material for settlement is
05 0004 hierarchy BO04
used.
(% rebate)
Cust.
06 0004 hierarchy/material BO05 -
(% rebate)
Sales volume
07 0005 BO06 -
independent

Configuration at IMG level [SD/Billing/Rebate Processing]

S.No Configuration Description Examples/
Remarks
Activating Rebate is activated for Sales Organization, Ex : B1, F2, G2 etc
01 Rebate CMR and the relevent Billing Documets. for Billing
Processing Documents.
Define Condition Type Group, a grouping Ex – 0001 – Reb.
of Cond. Types for Rebate [4 digit alpha- Grp.
Defining
num. key]. 0002 –
02 Condition Type
Material
Group
0003 -
Customer
Condition Type Assign. Condition Type to Cond. Type Ex : B001 to 0001
03 assign. to Con. Group. Also assigned is the table B002 to 0002
Type Group represented by Sequence no. B003 to 0003
Assign Condition Assign Cond. Type Group to Rebate Ex – 0001 – 0001.
04 Type Group To Agreement Type. 0002 – 0002
Rebate Agrmnt 0003 - 0003
05 Define Rebate Define Rebate agreement based on Group, 4 digit alpha-
Agreement Material, Customer etc. numeric key
Verification Level can be set. To see Reb. details.
Control Data
Manual Accruals Order type is set [R4] Billing Type – B4
Payment Procedure is defined. Pay. upto accruals,
etc
Manual Payment Partial Settlement Ord. Type. defined[R3] Part. Bil. Type – B3
Switch on the reverse accruals indicator. Reverses man.
Paymts.
Settlement Final Setlment Ord. related Bill. Type – B1 Credit Memo Req –
B1
 Order Type for Rebate Correction – B2 Reb. Cor– B2[Bill.
Type]
Minimum Status for final settlement Ex : Agrmnt rel. for
setl.
Pricing Procedure/Account Determination
Rebate Condition Types are assigned Access Seq.
Condition Class – C [Exp. Reimbursement]. assigned.
Rebate Condition Ex : B002 for B002
01
Type Rebate Procedure indicates if the condition Also, Accruals
is dependent on Sales Volume. Correc. Procedure
corrects accruals.
The Condition subtotal “SubTo” field Generally Net Value
02 Rebate Basis should have value as 7 [for Rebate Basis] is used for Rebate
Basis.
To the rebate Condition Type requirement Not Accessible in
Not Relevent for
03 024 is assigned which determines that it is Sales.
Sales Order
accessed in Billing.
Revenue Account Key - ERB Ex : For Reb.
04 Account Keys Accrual Account Key - ERU assigned to Condition
the Reb. Cond. Type. Type – B002.

Note : Rebate Agreement in Easy Access [VBO1]

S.No Field Description Examples/
Remarks
Rebate Recipient could be Sold-to-party, System cannot
01 Rebate Recipient Payer or Ship-to-party. determine Alt.
payer.
Rebate can be set to start from a past date. Past accruals not
02 Validity Periods
posted
Mat., rate and accruals are maintained. Use Conditions
03 Conditions
button.
Material for Settlement is generally used for A mat. is defined
04 Matl. f Settl. matl group rather than for a material. for credit Memo
request.



RETURNS PROCESS IN SAP

RETURNS PROCESS
S.No Item Description Remarks
01 Sales Returns Sales Returns is a process where in a customer sends the
material back to the supplier, generally when the
material is found to be defective.
02 Returns In SAP a Sales Returns Document is created either w.r.t
Document Invoice or the actual Sales Order.
03 Transaction Flow Invoice / Sales Order → Returns Order → Returns
Delivery → Post Goods Receipt [PGR].

DOCUMENT TYPE SETTINGS – IMG

S.No Settings Details
01 Path IMG → SD → Sales → Sales Documents → Sales
Document Header → Define Sales Document Type
02 Transaction Code VOV8
03 Standard Document Type RE –Returns Sales Document
04 Table TVAK : Document Type – AUART [Field]
SD Document H - Returns
Category
Transaction Group 0 - Order
Screen Sequence RE – Returns
Group
Incompletion 14 – Credit Memo
Procedure
RE
05 Delivery Type LR – Returns Delivery
Settings
Delivery Related RE – Credit for Returns
Billing Type
Order Related Billing RE – Credit for Returns
Type
Billing Block 08 – Check Credit Memo
Propose Delivery Activated
Date
 ITEM CATEGORY – IMG
S.No Settings Details
Path IMG → SD → Sales → Sales Documents → Sales Document Item
01
→ Define Item Categories
02 Transaction Code VOV7
Standard Item REN – Returns Item Category
03
Category
04 Table TVAP : Item Category – PSTYV [Field]
Pricing X – Pricing Standard
Billing B – Order related Billing, status according to order quantity.
Returns Activated
Credit De-activated
Schedule Activated
REN
05 Lines
Settings
Wt/Vol Activated
Determine Activated
Cost
Business De-activated
Item

SCHEDULE LINE CATEGORY - IMG

S.No Settings Details
Path IMG → SD → Sales → Sales Documents → Schedule Lines → Define
01
Schedule Line Categories
02 Transaction Code VOV6
Standard Schedule Line DN – Returns Item Category
03
Category
04 Table TVEP : Schedule Line Category – ETTYP [Field]
Movement 651 – Goods Return Delivery. This will enable the stock value and
Type quantity to go up in Inventory Accounting.
Item Rel. Activated
DN
05 for
Settings
Delivery
Incomp. 30 – Delivery Relevant Schedule Line
Procedure


 THIRD PARTY ORDER

THIRD PARTY ORDER

S.No Item Description Remarks
1 Scenario Some businesses will have
subcontractors who manufacture on
their behalf and supply them to the
customers directly, though the order is
placed on the business.
2 Examples 9. HLL has a few companies
which manufacture its
products and deliver to its
customers directly.
10. Trading Goods can be allowed
for delivery directly to the
customer of a company.
3 Third Party In a Third Party Order process Eventually Invoice is
Order Customer places Order on Company raised by the business
but the material will be supplied by a and sent to the
Third Party Vendor directly to the Customer.
customer.
4 Third Party System creates a Purchase Requisition For viewing Purchase
Order Process during Sales Order Processing, which Requisition Number go
is used by Purchasing in creating a PO. to VA02/VA03 –
Based on this PO material is supplied Schedule Line,
by a third party Vendor to the customer Procurement.
directly.

SD Module
Sales Order Cust. Inv.

Cust : 1000 Cust : 1000

Item Qty Item Qty

Item
Mat A 10 Cat.
Mat A 10
TAS

MM Module
Pur. Ord. Goods. Rcp. Inv. Ver.
Pur. Req.
Cust :1000 Vend :ABC Vend :ABC
Vend :ABC
Item Qty Item Qty Item Qty
Item Qty
Mat A 10 Mat A 10
Mat A 10 Mat A 10
 5 Item Category Item Category Group in MMR Sales BANS determines Item
Group Org 2 is BANS [Standard]. Category as TAS.
6 Schedule Line SAP standard schedule line category is
Category CS.
7 Purchase Order A purchase order can be created with The PO number can
reference to a Purchase requisition [T- be seen in the
Code : ME21N]. document flow of
Sales Order.
Note :
1. If the material is delivered to company and not to customer then it is called
Individual Purchase Order [IPO].
2. For IPO:
i. Item Category Group [MMR] – BANC
ii. MRP Group - 020
iii. Item Category – TAB
iv. Schedule Line Category - CB

For IPO Process Flow is as follows:

SD
Module
Delivery &
Sales Order PGI. Cust. Inv.
Trnsfr Ord.
Cust : 1000 Cust : 1000 Cust : 1000
Cust : 1000
Item Qty Item Qty Item Qty
Item Qty
Mat A 10 Mat A 10 Mat A 10
Mat A 10

MM
Module
Pur. Ord. Goods. Rcp. Inv. Ver.
Pur. Req.
Cust :1000 Vend :ABC
Vend :ABC Vend :ABC
Item Qty Item Qty
Item Qty Item Qty
Mat A 10 Mat A 10 Mat A 10
Mat A 10

ITEM CATEGORY SETTINGS

Creat
S. Item Spec. Bus. Schd. Retur Wt /
Trans Pric. Bill. Credt Cost PO
No Categ Stock Item Lines n Vol.
Auto.
    
1 TAS - X F - -
TPO -
     
2 TAB E X A - -
IPO
Note : 1. Path - IMG → SD → Sales Documents → Sales Document Item → Define Item Category.
2. Table - TVAP
11. For TPO Billing F stands for Order related billing document , status according to invoice quantity. It
could be B – relevant for Order related billing, status according to order quantity.

SCHEDULE LINE CATEGORY SETTINGS

Schedule Item
Descripti Movemen Rel. for Order Acc Av
S.No Process Line Catego TOR
on t Type Delvry Type Ass Ch.
Category ry
1 TPO CS Leg - - NB 5 1 - -
2 IPO CB IPO - NB 0 E
Note : 1. Path - IMG → SD → Sales Documents → Schedule Lines → Define Schedule Line Category.
2. Table - TVEP

THIRD PARTY ORDER IN EASY ACCESS

S.No Configuration Description Examples/ Remarks
Item Category Group BANS in sales 2 screen Item Category TAS is
01 Automatic of MMR specifies material as third-party Item determined in Sales Order
processing
For the material which is also procured from Item Category Group is
02 Manual outside, change TAN to TAS in Sales Order NORM.
manually.
Purchase For each item in the Sales Order system Purchase Requisition is
03 Requisition & generates a Purchase Requisition [and PO] generated for each
Vendor and also a vendor automatically. schedule line.
Automatic System takes into account lead times Time for processing
03 Delivery specified by Purchase department. third party items + time
Scheduling required by vendor.
Address of Ship-to-party changed in the Sales Address data cannot be
Address of Ship-
05 Order is copied into the Purchase Requisition changed in PO.
to-Party
directly.
Purchase Order For each Third Party item text entered is PO number appears in the
06
Text copied into the PO. document flow.
Changes made in PO are automatically copied Ex : Confirmed
07 Changes in PO onto the Sales Order. quantities, delivery dates
etc.
Changing a Third Party Order
If there are no POs, then only changes to This copied automat. to
When there is
08 quantity or delivery data can be made. Pur. Req if permitted
no PO
by release status.
09 When there is a If a PO already exists, then the changes Changes in PO are
PO made on Sales Order are to be copied to copied automatically to
 PO manually only. Sales Order.
Deleting a Third Party Order
When there are If there are any POs related to third party Otherwise customer
10
POs order they have to be deleted first. still will receive goods.

BILLING - THIRD PARTY ORDER

S.No Configuration Description Examples/ Remarks
If relevance for billing is set for “B”, then third-party item is
considered to be completely billed if invoiced qty is equal to sales
order item qty.
01 Item Category If relevance for billing is set for “F”, then each time a vendor
invoice is received, a customer invoice is created for the quantity in
the vendor invoice and the order is considered to be completely
billed until the next vendor invoice is received.
Copy Quantity - F If Billing Relevance is F[Item Cat.]
Copy Quantity – E or I If Billing Relevance is B[Item Cat.]
02 Copy Control
[Billing after Order or
MIGO]


 Transfer of Requirements

Configuration at IMG level [Basic Functions/TOR]

S.No Configuration Description Examples/ Remarks
01 Requirement Define requirement Class and switch on Ex : Order /Del.
Class TOR and Availability Check etc. Requirment[041].
02 Requirement Define Requirement Type and assign Ex : 041 created and
Type Requirement Class. assigned to Req. Class.
03 Det. of Req. Item Category + MRP Type = Ex : TAN + PD = 041
Type Requirement Type.
04 Schedule Line Switch on TOR at Schedule Line Effective only when
Category Category. TOR is switched on at
Requirement Class
level.
05 Quantity Maintain Blocking reasons, define Qty transfered but not
Confirmation delivery blocks and duration. resrvd.
06 Requirement Certain requirements have to be fulfilled Ex : Stand. Req 101 –
Fulfillment for TOR to happen. For Cr. Block, No PO.

Important Settings in Easy Access

S.No Configuration Description Examples/ Remarks
01 Availability Mention the checking group in the Ex : 01 – Col. Req.
Check Availability Check field of Sales/plant 02 - Ind. Req.
veiw of MMR. etc.
02 Delivering Plant Mention delivering plant for the line
item in the sales order.

Important Points
S.No Item Description Examples/ Remarks
01 Special Stock Even when the special stock is indicated Ex : Consignment,
as Coll. Req. in MMR system transfers Ret. packaging,
them as individual requirements Make-to order etc.
02 Avail. Over. For Ind. Req. CO09 shows quantity, Ind. Req. can also be
[CO09] doc. no. item no and requirement class. seen in MD04.
03 Strategy Group Requirement Type and eventually Seq. for Req Typ
requirement Class are determined in Det : Strat. Group >
Strategy Group of MMR, MRP3 view. MRP Gr. > Mat.
Type
 04 Planning Similar materials can be assigned [MRP TOR cannot be
Material 3] to Planning Material & Ind. req. can performed for
be created for this material. Planning material.
05 Consumption Defines whether and in which direction Ex : 1. No. Pln. Cons.
Mode on the time axis from requirements date 2. Forward cons.
the consumption of cust. Req. occurs 3. Backwrd cons.
with planned independent requirements. Etc.

AVAILABILITY CHECK

Configuration at IMG level [Basic Functions/TOR & Av. Ch]

S.No Configuration Description Examples/ Remarks
01 Checking Define Checking Group and specify Ex : 01 for Coll. Req.
Group whether check to be carried out and set 02 for Ind. Req.
for Individual/Collective requirements. etc.
02 Requirement Switch on Availability Check for the Ex – For Requirement
Class Requirement Class. Class 041.
03 Schedule Line Switch on Availability Check at Ex : For CP, C1 etc.
Category Schedule Line Category level.
04 Control for Assign Checking Rule to Checking Checking Rules are
Availability Group and define the scope of predefined in SD.
Check Availability Check. The scope includes Ex : A for SD Order
various stock [safety, transfer etc], B for SD Delivery
Inward/Outward movements, RLT etc. etc.
Other Settings
01 Default Value Checking Group set for [Material Type Ex : FERT + Plant1000
+ Plant ] as default value. Used only if = Ch. Gr. 01.
not mentioned in MMR.
02 Material Block Block indicator can be activated if A –Order, B – Delivery
others have to be blocked from carrying Note, C-Reservation.
out Av. Ch while it is being checked. These initiators cannot
be changed.
03 Item Category Availability Check can be activated or Ex : REN can be
deactivated at Item Category level. switched off.
04 System Based on Sales Area, system responses Ex : A dialog box for
Responses can be set in Av. Ch. Rule, should there selecting one time /
be no/insufficient stock[after Av. Ch]. complete / delevery
proposal.

Important Settings in Easy Access

S.No Configuration Description Examples/ Remarks
 01 Availability Mention the checking group in 01 – Col. Req.
Check Availability Check field of MRP 3 veiw 02 - Ind. Req.
of MMR.. etc.
02 Delivering Plant Mention delivering plant for the line
item in the sales order.

Other Availability Checks

S.No Item Description
01 Against Product Availability Check against Product Allocation allows a
Allocation predefined distribution quantity of products to customers.
02 Against The check is not against sales orders but the quantities are
Planning produced in line with expected sales quantities [ind. of orders].
Intercompany Business Processing
Use
Intercompany business processing describes business transactions which take place between
two companies (company codes) belonging to one organization. The ordering company orders
goods from a plant which is assigned to another company code.

The following intercompany business transactions are possible:

• Intercompany sales processing

A sales organization which is assigned to the ordering company code creates a sales
order ordering goods from a plant assigned to another company code.

The plant in the delivering company code delivers the goods to the customer for whom
the sales organization placed the order.

• Intercompany stock transfer

A purchasing organization which is assigned to the ordering company code creates a

purchase order ordering goods from a plant assigned to another company code.

The plant in the delivering company code delivers the goods to the plant for which the
purchasing organization ordered the goods.

Because the two companies balance their accounts independently, the delivering company must
bill the ordering company for the goods. This internal billing transaction is carried out by means of
an intercompany billing document. The delivering company bills the ordering company at a
price that allows the delivering company to cover its costs.

Working with Intercompany Sales Processing

Intercompany sales processing consists of the following three stages:

• Processing sales orders

• Processing deliveries
• Billing

The sales organization and the plant are assigned to different company codes and have the
following responsibilities:
Sales organization: Processes the sales order

Bills the customer

Plant: Delivers goods to the customer
Bills the ordering company code (sales organization) - this
is intercompany billing.

Intercompany billing uses SAP EDI to carry out posting to

vendor account for the ordering company code.

Company Structure

Company code Sales organization Plant

0001 0001 0001
0002 0002

Condition Record

A condition record specifies that plant 0002 bills sales organization 0001 for
goods at 80% of the net invoice value.

Sales orders

Sales organization 0001 receives the following sales order from customer XYZ:

Item 10 Product A 20 pcs (Plant 0001) USD 200

Item 20 Product B 50 pcs (Plant 0002) USD 500

The second item requires intercompany sales processing, since product B must
be delivered from a different company (company code 0002).

Intercompany Sales Processing

The intercompany sales functions are carried out as follows:

o Pricing for customer invoice: Sales organization 0001

o delivery: Plant 0002

o billing: Sales organization 0001 bills the customer for USD 500

Sales organization 0002 bills sales

 organization 0001 for USD 400

(with an intercompany billing

document)

o inancial accounting: In company code 0001, SAP EDI

is used to carry out posting to vendor account

Relationship to Pricing
The system processes intercompany pricing elements in exactly the same way as other pricing
elements. The data for intercompany sales is stored in condition records. Pricing for
intercompany billing is controlled by condition types, pricing procedures, and access sequences.
Intercompany billing itself is controlled in a separate menu point in Customizing. This control data
is defined in Customizing for Sales by your system administrator.

Working with Intercompany Stock Transfer

You can transfer stock from one plant to another where the plants belong to different companies
(i.e. have different company codes).

Since the plants belong to different company codes, the following points have to be considered
from the sales point of view:

• delivery: the procedure for delivering on the basis of a purchase order from another plant
should be similar to delivering on the basis of a sales order from a customer
• billing: the delivering plant will be charging the receiving plant for the material.

To deal with these points, the stock transfer can be carried out with a normal purchase order type
NB.

The delivering plant can then create a delivery and an intercompany billing document on the
basis of this purchase order.

An incoming invoice with reference to the purchase order can be posted in the following ways:

• Manually, after the invoice has been checked

• Automatically, with an internal billing document via SAP EDI

The following example outlines the procedure for intercompany stock transfer.

Company Structure
Company code Plant City Name
0001 A Atlanta
0002 B Boston Smith & Co.

Business Transaction

Plant A orders 100 tons of "Steel-1" from plant B at a price of USD 10.00 per ton.

1. Plant A, company code 0001:

The clerk responsible creates a normal purchase order (type NB) for the vendor Smith &
Co. who is assigned to Plant B. The clerk can enter prices and delivery costs as usual.

2. Plant B, company code 0002:

On receipt of the purchase order, the vendor Smith & Co. enters a delivery for 100 tons of
"Steel-1".

3. When the material leaves the premises, the vendor Smith & Co. posts goods issue.

The values and the quantity are not yet posted in the receiving plant (Plant A).

4. Plant A, company code 0001:

When the material arrives at Plant A, the clerk responsible posts goods receipt against
the purchase order. The system now posts values and quantities in the receiving plant.

5. Plant B, company code 0002:

On the basis of the delivery, the system creates a billing document (intercompany billing)
amounting to USD 1000.

6. Plant A, company code 0001:

In company code 0001, the incoming invoice can be posted in the following ways:

o The receiving plant checks the invoice with reference to the purchase order and
posts invoice receipt.
o Invoice entry is posted with an internal billing document via SAP EDI.

Working with Intercompany Deliveries

Depending on the intercompany business transaction, the goods are delivered as follows:

when where to
for intercompany to the customer

sales processing
for intercompany to the plant assigned to the

stock transfer ordering company code

You process the delivery as usual, selecting a shipping point that is assigned to the delivering
plant.

Goods issue is carried out in the delivering plant.

You can create the delivery just like any other delivery on the Shipping screen:

• for a single delivery with the menu path Delivery → Create.

You can then enter the shipping point assigned to the delivery plant in the field Shipping
Point.

• for several deliveries with the menu path Delivery → Process dlv. due list.

You can

o select Settings → Organizational data to enter relevant sales area data as some
of the selection criteria for your delivery due list.
o select Settings → Further sel. screen to enter further selections (such as the
ship-to party or the material number).

If you are delivering to another plant on the basis of a purchase order (i.e. stock transfer):

• you cannot process a single delivery; i.e. you must process the delivery due list and mark
the field Stock transport

• you can enter the purchase order number by selecting Settings → Further sel. screen
and use the field Purchase doc. from.

Shipping (LE-SHP)
Implementation Options
Shipping is an important part of the logistics chain in which guaranteed customer service and
distribution planning support play major roles.

In shipping processing, all delivery procedure decisions can be made at the start of the process
by

• Taking into account general business agreements with your customer

• Recording special material requests
• Defining shipping conditions in the sales order
The result is an efficient and largely automatic shipping process in which manual changes are
only necessary under certain circumstances.

Integration
The Shipping component is integrated under the Logistics Execution component. Shipping is a
subsequent activity of the Sales component.

Range of Functions
The shipping module supports the following functions, which include but are not limited to:

• Deadline monitoring for reference documents due for shipment (sales orders and
purchase orders, for instance)
• Creating and processing outbound deliveries
• Planning and monitoring of worklists for shipping activities
• Monitoring material availability and processing outstanding orders
• Monitoring the warehouse's capacity situation
• Picking (with optional link to the Warehouse Management system)
• Packing deliveries
• Information support for transportation planning
• Support of foreign trade requirements
• Printing and transmitting shipping documents
• Processing goods issue
• Controlling using overviews of

o Deliveries currently in process

o Activities that still are to be carried out
o Possible bottlenecks

A list of deliveries posted as goods issue in the shipping department could be used to form a
worklist for the billing department.

Working with Intercompany Billing

After goods issue has taken place, you can process the delivery for billing. You can create the
billing documents just like any other billing document on the Billing screen:

• for a single billing document with the menu path Billing document → Create.
• for several billing documents with the menu path Billing document → Billing due list.

The delivery may have to be processed for billing twice.

• The delivering plant processes the delivery to create an intercompany billing document
(billing document type IV) for the selling company. This company code posts invoice
entry for this billing document.

The billing document is automatically billed to the internal payer that is assigned to the
sales organization. The intercompany charges that appear in the intercompany billing
 document represent the actual amount that the delivering plant is charging the sales
organization.

• If the selling company is selling the goods to a customer, it processes the delivery to
create an invoice for this customer. The system can take the prices from the order or
determine new prices. It takes the quantity to be invoiced from the delivery.

The billing due list for the intercompany invoice is generated after the customer invoice has been
created.

Prerequisites for Intercompany Business

Processing
Certain prerequisites must be met before you can process intercompany sales.

The following data must be defined in Customizing for Sales by your system administrator:

• If you need to use the intercompany billing document, billing type IV must be maintained
and assigned to the relevant sales document types
• Output type RD04 is used to enable intercompany billing to carry out posting to vendor
account or invoice entry. In the standard system, billing type IV is assigned to output
procedure V40000, which contains this output type.

For information on setting up intercompany billing, see the online Implementation Guide.

Billing type IG is used for internal credit memos.

• For condition records used in intercompany sales processing, one of the following
condition types must be maintained:

o PI01 (fixed amount per material unit)

o PI02 (percentage of the net invoice amount)

• Permissible combinations of plant and sales organization must be defined

• Sales area data (sales organization, distribution channel, and division) must be assigned
to each plant that participates in intercompany sales processing
• You must also create the following Sales master data:
• A customer master record for intercompany billing; this must be assigned to the ordering
company code.
• Condition records for intercompany billing for every permissible combination of plant and
sales organization.

Working with a Special Customer Master

Record
A customer master record must be created to represent the ordering company. This is created in
the sales organization representing the delivering plant.

When you create the special customer master record, you define how billing is carried out. You
can maintain billing-related data just like in any other customer master record. For example, you
can specify the periods in which intercompany billing is to be carried out.

If your intercompany business processing involves foreign currency conversion, you can control
the exchange rate that the system applies. You control the exchange rate by entering a value in
the Exchange rate type field in the Sales view of the customer master record.

When a delivering plant invoices a sales organization, the plant can use one of the following
condition types:

• PI01 Intercompany: fixed amount per material unit

• PI02 Intercompany: percentage of the net invoice amount

These condition types specify that the price charged by the delivering plant to the sales
organization is shown as a statistical value in the sales order and an effective charge in the
internal invoice.

The condition records you create and maintain for intercompany billing are the same kind of
records that you create for pricing in general.

Create Condition Record for Intercompany

Processing
To create a condition record for one of the two condition types associated with intercompany
business processing, proceed as follows:

1. In the SD Master Data Screen select, Conditions → Selection using condition type
→ Create.

The Create Condition Records screen appears.

2. Enter one of the following conditions in the Condition type field:

– PI01 (intercompany price)

– PI02 (intercompany %)

3. Choose ENTER.
4. Enter the following data:

– The sales organization of the sales order (i.e. the ordering company)

– The delivering plant

– The material, if necessary

 – The rate at which the plant will charge the sales organization that processes the orders
(percentage of net invoice value or fixed amount per sales unit of the material).

5. Save the condition record.

Working with Intercompany Sales Orders

When you create a sales order, you specify the sales organization of the ordering company code.
The system can propose a delivering plant from the following master records:

• Customer-material info
• Customer
• Material

The order of priority is as in the list above.

To maintain the delivering plant information in the sales order, select one of the following:

• for the whole sales order: Overview → Procurement

• for each item: Item → Business data

You can overwrite the proposed delivering plant or use a matchcode to list the alternative plants
from which the material may be delivered.

The system then checks to see if the combination of sales organization and delivering plant is
allowed. If it is, you can proceed with the intercompany transaction.

The system automatically carries out pricing using pricing master data from the sales
organization.

The intercompany charge appears in the pricing screen of the sales order as a statistical value
(the charge has no effect on the final value of the sales order for the customer). Since the
intercompany charge is of internal interest only, this pricing element is not printed out on
documents for the customer.
Stock Transfer Using Stock Transport Order
Use
A number of procedures are available to enable you to transfer materials from one plant to
another:

• Stock Transfer Between Plants in One Step

• Stock Transfer Between Plants in Two Steps
• Stock Transport Order Without Delivery
• Stock Transport Order with Delivery via Shipping
• Stock Transport Order with Delivery and Billing Document/Invoice

Features

Advantages of the Stock Transport Order

The transfer of stock using a stock transport order has the following advantages over the transfer
of stock without a stock transport order:

• A goods receipt can be planned in the receiving plant.

• You can enter a vendor (transport vendor) in the stock transport order.
• Delivery costs can be entered in the stock transport order.
• The stock transfer order is part of MRP: Purchase requisitions that were created in MRP
can be converted into stock transport orders.
• The goods issue can be entered using a delivery via Shipping (LE-SHP).
• The goods receipt can be posted directly to consumption.
• The entire process can be monitored via the purchase order history.

Characteristics of the Various Stock Transfer Procedures

The following table lists the characteristics of the individual procedures used for stock transfer.

Plant to plant Plant to plant St. trnsp. ord. St. trnsp. ord. St. trnsp. ord.
1 step 2 steps w/o SD with SD with billing
Order type - - UB UB NB
MM-PUR
Movement type Transfer postg. GI: 303 GI: 351 GI: 641 GI: 643
MM-IM using 301 GR: 305 GR: 101 GR: 101 GR: 101
Delivery type SD - - - NL NLCC
Billing type SD - - - - IV
Doc. type MM-IV - - - - RE
Price Valuation price Valuation price Valuation price Valuation price Pricing in SD
 and MM
Planning via... Reservation - Purchase Purchase Purchase order
order order
Stock after GI - Stock in Stock in Stock in (Stock in transit
transfer Transit Transit CC)
Delivery costs - - yes yes yes
Cross-company- Company code Company code Company code Company code Revenue
code via... clearing clearing clearing clearing account;
GR/IR clearing

You can find an overview of all the movement types in the Implementation Guide (IMG) for
Inventory Management in the step Copy/Change Movement Types.

Activities

Goods Issue in Inventory Management or in Shipping

You can enter a goods issue for the stock transport order in either Inventory Management (MM-
IM) or Shipping (LE-SHP). For goods issues in Shipping, a replenishment delivery is created (see
also Posting Goods Issue in Shipping).

Prerequisites for Goods Issues in Shipping:

To process the goods issue via Shipping, the following prerequisites must be fulfilled (see also
Goods Movements via Shipping):

• In Customizing for Purchasing, a delivery type must be assigned to the purchasing

document type. If the document type does not have a delivery type, you can post the
goods issue only in Inventory Management.
• The customer number of the receiving plant must also be maintained in Customizing for
Purchasing.
• In the Customizing system of Sales & Distribution, the shipping point determination must
be maintained.
• In the material master record, shipping data must be maintained.

If the document type contains a delivery type but another requirement is missing (for example,
shipping data), you receive either a warning message or an error message (depending on the
system configuration) when you try to enter the stock transport order.

If you receive a warning message, you can create the stock transport order, but you can post the
goods issue for this item only in Inventory Management.

Stock Transfer Using the Stock Determination Function

If you want to withdraw material for stock transfers from various storage locations and stocks
according to a particular strategy, the R/3 System can support you using Stock Determination.

Stock Transfer Between Plants in One Step

Use
This type of stock transfer can only be carried out in Inventory Management. Neither Shipping in
the issuing plant nor Purchasing in the receiving plant is involved in the process.

Transferring stock in one step has the following characteristics:

• The stock transfer is entered as a transfer posting in Inventory Management.

• The transfer posting can be planned by creating a reservation.
• The quantity of the stock transferred is posted immediately from the unrestricted-use
stock of the issuing plant to the unrestricted-use stock of the receiving plant
• The transfer posting is valuated at the valuation price of the material in the issuing plant.
• If the plants involved belong to different company codes, the transfer between plants is
also a transfer between company codes. In this case, the system creates two accounting
documents for the transfer posting. The stock posting is offset against a company code
clearing account.

Stock Transfer Between Plants in Two Steps

Use
This type of stock transfer can only be carried out in Inventory Management. Neither Shipping in
the issuing plant nor Purchasing in the receiving plant is involved in the process.

The stock transfer includes the following processes:

1. A goods issue in the issuing plant

2. A goods receipt in the receiving plant

Transferring stock in two steps has the following characteristics:

• The transfer posting cannot be planned by creating a reservation.

• The quantity posted from stock is first of all managed as stock in transfer in the receiving
plant. Only once the goods receipt has been posted is the quantity posted to the
unrestricted-use stock of the receiving plant.

This enables the quantity "on the road" to be monitored.

• The transfer posting is valuated at the valuation price of the material in the issuing plant.
• If the plants involved belong to different company codes, the transfer between plants is
also a transfer between company codes. In this case, the system creates two accounting
documents when the goods issue is posted. The stock posting is offset against a
company code clearing account.

Stock Transport Order Without Delivery

Purpose
This type of stock transfer not only involves Inventory Management but Purchasing in the
receiving plant. The goods issue posting in Inventory Management is carried out without the
involvement of SD.

Characteristics of a Stock Transfer Order

• The quantity posted from stock is first of all managed as stock in transit of the receiving
plant. Only once the goods receipt has been posted is the quantity posted to the
unrestricted-use stock of the receiving plant.

This enables the quantity "on the road" to be monitored.

• Delivery costs can be entered in the stock transport order.

• The transfer posting is valuated at the valuation price of the material in the issuing plant.
• If the plants involved belong to different company codes, the transfer between plants is
also a transfer between company codes. In this case, the system creates two accounting
documents when the goods issue is posted. The stock posting is offset against a
company code clearing account.

Process Flow
1. Creating a stock transport order in the receiving plant

Plant A would like to order materials from plant B. Plant A enters a stock transfer order.
The stock transfer is used to plan the movement.

2. Posting a goods issue in the issuing plant

Plant B supplies the goods to plant A. Plant B enters the goods issue for the stock
transfer order. The goods are then posted to the stock in transit of the receiving plant.

3. Posting a goods receipt in the receiving plant

Once the goods arrive in the receiving plant, the plant posts the goods receipt. The stock
in transit is therefore reduced and the unrestricted-use stock increased.

The goods receipt is entered with reference to the purchase order.

Stock Transport Order with Delivery via

Shipping
Purpose
The following components are involved in this type of stock transfer:

• Purchasing (MM-PUR) in entering the order

• Shipping (LE-SHP) in making the delivery from the issuing plant
• Inventory Management (MM-IM) at goods receipt in the receiving plant
Characteristics of a Stock Transfer Order

• The quantity posted from stock is first of all managed as stock in transit of the receiving
plant. Only once the goods receipt has been posted is the quantity posted to the
unrestricted-use stock of the receiving plant.

This enables the quantity "on the road" to be monitored.

• Delivery costs can be entered in the stock transport order.

• The transfer posting is valuated at the valuation price of the material in the issuing plant.
• If the plants involved belong to different company codes, the transfer between plants is
also a transfer between company codes. In this case, the system creates two accounting
documents when the goods issue is posted. The stock posting is offset against a
company code clearing account.

Process Flow
1. Creating a stock transport order in the receiving plant

Plant A would like to order materials from plant B. Plant A enters a stock transfer order.
The stock transfer is used to plan the movement.

2. Posting a delivery in the issuing plant

Plant B supplies the goods to plant A. Plant B enters a replenishment delivery in

Shipping. The goods are then posted to the stock in transit of the receiving plant.

3. Posting a goods receipt in the receiving plant

Once the goods arrive in the receiving plant, the plant posts a goods receipt for the
delivery. The stock in transit is therefore reduced and the unrestricted-use stock
increased.

Stock Transport Order with Delivery and Billing

Document/Invoice
Purpose
With this type of stock transfer, the transfer posting is not valuated at the valuation price of the
material in the issuing plant, but is defined in both the issuing and receiving plants using
conditions.

Stock transfers that include deliveries and billing documents/invoices are

only possible between plants belonging to different company codes.
If you want to carry out a cross-company-code stock transport order with
delivery but without a billing document, you must set the Relevant for
 Billing (data element FKREL) indicator in Customizing of the item type to
"blank" (Not relevant for billing).

The following applications are involved in this type of stock transfer:

• Purchasing (MM-PUR) in entering the order

• Shipping (LE-SHP) in making the delivery from the issuing plant
• Billing (SD-BIL) in creating the billing document for the delivery
• Inventory Management (MM-IM) at goods receipt in the receiving plant
• Invoice Verification (MM-IV) at invoice receipt in the receiving plant

Characteristics of a Stock Transfer Order

• The quantity posted from the stock of the issuing plant is managed neither in the issuing
plant nor in the receiving plant. The quantity is first posted to the unrestricted-use stock of
the receiving plant in the goods receipt posting. After the goods issue has been posted,
the stock overview displays the quantity transferred as Stock in trans. CC. This stock is
determined dynamically for stock balance display.
• With this transfer posting, price determination is carried out in both Purchasing and Sales
& Distribution (SD).

o In Purchasing, the price of the material in question is determined in the usual

manner (from the info record, for example).
o In SD, pricing is also carried out as normal during the billing process.

• The goods movements are valuated at the price determined in each case.
• Accounting documents are created for the following transactions:

o Goods issue
o Goods receipt
o Billing
o Invoice receipt

Stock Transport Order with Valuated and Non-Valuated Sales Order Stock

When entering goods issues for cross-company-code stock transport orders, you can work with
both valuated and non-valuated sales order stock (E) using the one-step procedure (movement
type 645) and the two-step procedure (movement type 643). In the MRP view of the material
master record (MRP 4) you determine the stock from which material is to be withdrawn by
selecting the Dependent requirements indicator for individual and collective requirements. There
are three options:

• Indicator set to Blank (individual and collective requirements): Material is removed from
sales order stock

• Indicator set to 1 (individual requirements only): Material is removed from sales order
stock

• Indicator set to 2 (collective requirements only): Material is removed from unrestricted-

use standard stock
Process Flow
1. Creating a stock transport order in the receiving plant

Purchasing also determines the price for the materials.

2. Posting a delivery in the issuing plant

The issuing plant enters a replenishment delivery in Sales and Distribution. Unlike a stock
transfer without a billing document, no stock in transit is created.

3. Creating a billing document in the issuing plant

The issuing plant creates the billing document for the delivery. SD also determines the
price for the delivery

4. Posting a goods receipt in the receiving plant

The receiving plant posts a goods receipt for the delivery. The goods are posted to
unrestricted-use stock

5. Posting an invoice in the receiving plant

The invoice referring to the billing document is entered in the receiving plant.

. Stock Transfer in Purchasing

Use
In Purchasing, you can request and monitor a stock transfer with a:

• Stock transfer order

• Purchase requisition
• Scheduling agreement

When a stock transfer involves two company codes and the issuing of a bill, you do not create a
stock transport order but a standard purchase order
(see also Cross-Company Stock Transfer).

Activities

Creating a Stock Transfer Order

From the Purchasing menu, choose Purchase Order → Create → Vendor/Supplying Plant Known.
Choose order type Stock transfer order. The item category must be U (stock transfer).

Maintain the data for all items as required and save the stock transfer order. In Materials
Planning, the stock transport order is taken into account for both the receiving and the issuing
plant.
If the material is not valuated in the receiving plant, it is not possible to enter an account
assignment. Therefore, the material can only be ordered for the warehouse.

Creating a Purchase Requisition for a Stock Transfer

You can request a stock transfer in a purchase requisition. From the Purchasing menu, select
Requisition → Create. Maintain data as required. A stock transfer order is created from the saved
stock transfer requisition once it has been released.

Creating a Stock Transport Scheduling Agreement

When you create a stock transport scheduling agreement, you can schedule the exact delivery
dates for a stock transfer. From the Purchasing menu, select Outline Agreement → Scheduling
Agreement → Create → Stock Transport Scheduling Agreement. Maintain data as required. The
agreement type LU is defined in the standard system. The item category must be U. Enter the
runtime end: Save the scheduling agreement.

Enter the delivery schedule for the scheduling agreement by choosing Outline Agreement →
Scheduling Agreement → Delivery Schedule → Maintain.

Goods Issue for a Stock Transport Order

Use
You can either post the goods issue for a stock transport order in Inventory Management or in SD
Shipping, depending on your system configuration. (Also refer to Stock Transfer Using a Stock
Transport Order).

When the stock transfer involves two different company codes and a bill is issued, you have to
post the goods issue in Shipping.

Posting a Goods Issue in Inventory

Management
Use
If you post the goods issue in Inventory Management, you subsequently enter the goods receipt
with reference to the stock transport order.

Activities

From the Inventory Management menu, choose Goods movement → Transfer posting. Enter the
data as required, entering the issuing plant and the issuing storage location as default values for
the individual items. Choose movement type 351 (goods issue for a stock transport order).
Results of a Goods Issue

The goods issue posting results in the following:

• Documents

The system creates a material document for the movement. If the plants belong to
different valuation areas, an accounting document is created in addition to the material
document.

• Change involving stocks

The quantity is debited from the issuing plant in the receiving plant, the quantity is
entered into stock (not into the unrestricted-use stock but the stock in transit on plant
level). A receiving storage location has not yet been specified.

• Purchase order history

When you post a goods issue, the system automatically creates an order history record.

Posting a Goods Issue in Shipping

Use
If you process the goods issue via a replenishment delivery in Shipping (LE-SHP), you can then
refer to the replenishment delivery or the stock transfer order at goods receipt.

Procedure

1. From the shipping menu, choose Delivery → Process delivery due list. The initial screen
is displayed.
2. Enter the data required. Select Purchase order as Documents to be selected.
3. Choose Delivery → Display delivery due list. A basic list is displayed from which you can
select the deliveries to be processed. The list only contains order items that contain
shipping data.
4. Choose Delivery → Save. The system creates a replenishment delivery for the selected
orders. A log of the deliveries created can be displayed.
5. When you choose the function Delivery → Change, you can enter the picking and post
the goods issue.

Processing in the issuing plant is complete when the goods issue is posted.

Result
A replenishment delivery has the same effects as a goods issue in Inventory Management (see
Effects of a Goods Issue Posting).
The quantity is debited from the issuing plant. In the receiving plant, the quantity is entered into
stock (not into the unrestricted-use stock but the stock in transit on plant level). A receiving
storage location has not yet been specified.

The system automatically creates an order history record for the replenishment delivery and for
the subsequent goods issue posting.

Displaying Stock in Transit

The stock in transit is the quantity of a material that was withdrawn from the stock of the issuing
plant but has not yet arrived at the receiving plant. You can display the stock in transit using the
following functions.

• Stock overview
• Plant stock availability list

Displaying Transit Stock in the Stock Overview

You can display the stock in transit in the stock overview of a material.

1. From the Inventory Management menu, choose Environment → Stock → Stock overview.
2. Enter your selection criteria (for example, the material and receiving plant).
3. Carry out the evaluation. A stock overview of your selected plants is displayed.
4. Select a plant. The stocks in the plant are displayed in a pop-up window.

Scroll down until the stock in transit is displayed.

Displaying Transit Stock in the Plant Stock Availability List

The transit stock for the receiving plant is also displayed in the plant stock availability list for a
material. To do this, proceed as follows:

1. From the Inventory Management menu, choose Environment → Stock → Plant stock
availability.

The initial screen for this function appears.

2. Enter the material and the receiving plant.

3. Enter the scope of list (for example, DD).
4. Carry out the evaluation. A list of the plant stock availability for the material is displayed.

This list also includes the stock in transit. In the case of inter-company-code stock transport
orders with SD billing documents, the system does not create a stock in transit. For stock balance
display, the posted quantity is calculated dynamically and displayed in the field Stock in trans.
CC.

Posting a Goods Receipt for a Stock Transport

Order
Use
If you posted the goods issue in Inventory Management, you post the goods receipt in the
receiving plant with reference to the stock transport order.

If you posted the goods issue in the Shipping component (LE-SHP), you can post the goods
receipt with reference to the stock transport order or the replenishment delivery.

Activities

Posting a Goods Receipt for Stock Transport Order

You enter a goods receipt for the stock transport order in the same way as a goods receipt for a
standard purchase order. However, it is not possible to post the goods receipt into goods receipt
blocked stock since the stock in transit has already been valuated.

Posting a Goods Receipt for Replenishment Delivery

You enter a goods receipt for the replenishment delivery in the same way as a goods receipt for
an unknown purchase order.

Results of the Goods Receipt

Placement into storage results in the following in the system:

• Documents

The R/3 system creates a material document for the movement. (The system does not
create an accounting document because it is a transfer posting within the plant.)

• Change in stock in the receiving plant

The quantity is transferred from the transit stock to the unrestricted-use stock in the
receiving storage location. The open purchase order quantity is also reduced with the
stock placement.

• Purchase order history

At goods receipt posting, a purchase order history record is created automatically.

• Document Flow

At goods receipt for a delivery, the goods receipt in the receiving plant is documented in
the SD document flow, based on the material document.

Cross-Company Stock Transfer

Use
Even when the plants involved in a stock transfer belong to different company codes, you can use
conventional methods to transfer the stock:

• By transferring the stock between plants in one or two steps

• By carrying out a stock transport order without the delivery function via Shipping
• By carrying out a stock transport order with the delivery function via Shipping

In these cases, the value of the transfer posting is posted to a company code clearing account in
both the issuing and the receiving plants. The stock transfer is posted at the valuation price of the
material in the issuing plant.

Features

Stock Transport Order with Delivery Via Shipping and Billing

Document/Invoice

You can carry out stock transfers with the delivery and billing function. In this procedure, the stock
is transferred in the form of a sale between two plants.

Stock transfers that include deliveries and billing documents/invoices are only
possible between plants belonging to different company codes.
If you want to carry out a cross-company-code stock transport order with delivery
but without a billing document, you must set the Relevant for Billing (data
element FKREL) indicator in Customizing of the item type to "blank" (Not relevant
for billing).

When you use the delivery function in Shipping, the whole transaction - from the delivery through
billing and invoice verification - is reflected in the system. The following Shipping functions are
available for this:

• Delivery:

For example, planning shipping activities, picking, packing

• Billing:

For example, price determination

Before you can use a stock transport order with the delivery function and a billing document, the
plant must be assigned to a vendor. You maintain the vendor - plant assignment in the vendor
master record.

If a user enters a vendor when creating a stock transport order, the plant is automatically copied
from the vendor master record.

A stock transport order with delivery and billing is a mixture of a standard purchase order and a
stock transport order: as in the standard purchase order, when items are entered (standard items
with no item category) price determination is carried out and shipping data established; as in the
stock transport order, the transfer of stocks from one location to another is monitored.

Stock Transport Order with Valuated and Non-Valuated Sales Order Stock

When entering goods issues for cross-company-code stock transport orders, you can work with
both valuated and non-valuated sales order stock (E) using the one-step procedure (movement
type 645) and the two-step procedure (movement type 643). In the MRP view of the material
master record (MRP 4) you define from which stock material is to be withdrawn by selecting the
Dependent requirements indicator for individual and collective requirements. There are three
options:

• Indicator set to Blank (individual and collective requirements): material is removed from
sales order stock

• Indicator set to 1 (individual requirements only): material is removed from sales order
stock

• Indicator set to 2 (collective requirements only): material is removed from unrestricted-

use standard stock

Prices

In Purchasing, the price of the material in question is determined in the usual manner (from the
info record, for example).

In SD, pricing is also carried out as normal during the billing process.

Your company has to maintain settings in the Customizing system determining whether stock
transfers between two plants should be with or without billing.

You can also determine whether individual users can carry out stock transfers, for example, with
or without billing or in either of the two ways.

If you choose Purchase Order → Create → Stock Transfer (i.e. a stock transport order without
billing) and stock transfer with billing has been defined for the plants in Customizing, a message
appears indicating that you should create a standard purchase order.

Making the Vendor - Plant Assignment

To transfer stock with a bill being issued, a vendor master record has to be created for the issuing
plant. You create the vendor master record in the same way as a standard vendor master record.

To assign a vendor master record to the supplying plant, proceed as follows:

1. From the Purchasing menu, choose Master data → Vendor → Purchasing → Change.
2. Enter the vendor and the purchasing organization.
Select Purchasing data and press ENTER .

The purchasing data detail screen appears.

 3. Choose Extras → Add. purchasing data. A window appears in which you can enter the
plant.
4. Save your data.

Process for Stock Transport Orders that Include

SD Deliveries and Billing Document
The process for stock transport orders with SD delivery and billing document includes the
following steps:

1. Creating a Purchase Order

In the receiving plant, you create a standard purchase order for the vendor to which the
issuing plant is assigned. To do this, choose Purchase order → Create → Vendor known.
As a result of the vendor entered, the system recognizes that the purchase order is in fact
a stock transport order with delivery and billing.

2. Creating Delivery and Billing Document

The issuing plant enters a delivery for the stock transport order and a billing document.
This is an intercompany billing document (billing type IV). Pricing takes place as normal.

This intercompany billing document can be posted as an invoice for a purchase order via
EDI using Idoc. It is then posted in Financial Accounting as a receivable in the supplying
company code.

When the material leaves the plant, the issuing plant posts a goods issue for the delivery,
resulting in a reduction in stock in the issuing plant. The total stock remains the same in
the receiving plant. Unlike a stock transport order without billing, no posting is made to
the stock in transit. You can see from the purchase order history that the material is "on
the road". The posted quantity is displayed in the stock overview of the receiving plant as
Stock in transit CC.

3. Posting Goods Receipt

When the goods arrive, the receiving plant posts a goods receipt for the purchase order.
The unrestricted-use stock increases and an accounting document is created.

4. Posting Invoice Receipt

The invoice is checked with reference to the purchase order.

Valuation of Stock Transfers

The account movements that result from a cross-company-code stock transport order with billing
document can be seen from the following example:
Plant 0002 orders 10 kg of a material from plant 0001. The following prices apply:

• Valuation price of material (plant 0001): 10 $/kg

• Price for intercompany billing (plant 0001): 12 $/kg
• Order price (plant 0002): 11 $/kg

The following postings are made for the individual transactions:

Plant Transaction Value Account

0001 Goods issue 100 - Stock account
100 + Change involving stocks
0001 Billing 120 - Sales revenue account
120 + Customer account
0002 Goods receipt 110 - GR/IR clearing
110 + Stock account
0002 Invoice receipt 120 - Vendor account
110 + GR/IR clearing
10 + Price difference account or stock
account

You can display the value of a material’s cross-company stock in transit. To do this, choose
Environment → Stock → Stock in transit CC from the Inventory Management menu.