SAP R/3 Training

Sales to cash overview – from Contract to

Invoice

Dilip Sadh
AGENDA

• Targets of the training

• Organizational elements in sales
• Master Data in sales
• The sales process - overview
• Contracts and sales orders
• Deliveries, picking and goods issue
• Billing
Targets of the training Dilip Sadh

• To show you how to work with SAP R/3.

• To show you the most important, most need and basic
functionalities of SAP R/3.
• To show you how processes are represented in SAP R/3.
• We are not going to show you special Q8 processes and
functionalities.
• The training is set up on a general CGEY’s SAP Oil &Gas trainings
system and therefore e.g. no Q8 specific customer or material mater data
are used.
• CGEY’s SAP Oil & Gas trainings system represents one possible but
practice-proven solution how to run oil and gas business.
• Organizational elements in sales
– Sales area
- Sales organization
- Distribution channel
- Division
- The sales office organization
– Plant
– Shipping point
Organizational elements in sales Dilip Sadh
Sales area

•A combination of sales organization, distribution channel and

division.
•All data relevant for sales can be defined per sales area, e.g. master data,
sales documents,etc.
•Generally analyses are carried out per sales area. They can be used as
selection criteria.
•Sales areas are adapted to company codes. A company code represents a
legal entity for which internal and external reporting is carried out (a
balance sheet and P&L are required).
•Sales Areas can be defined for any combination of sales organization,
distribution channel, and division.
Organizational elements in sales
Sales organization

•The sales organization is the selling unit in the legal sense.

•Responsible, e.g. for product liability and other recourse claims
made by customers.
•Regional subdividing of the market can also be carried out by
means of sales organizations.
•Each business transaction is processed within it.
•It is assigned to a company code where sales revenues are
recognized in the chart of account.
•It is required to have at least one sales organization per company
code.
•It is the highest summation level for sales statistics.
Organizational elements in sales
Distribution channel

•Distribution channel
•Within a sales organization a customer can be supplied through
several distribution channels.
•The distribution channel is the unit through which saleable
materials or services reach the customers.
•Typical distribution channels are, for example, wholesale trade,
retail trade, industrial customers or direct sales from plant.
•The distribution channel is assigned to one or more sales
organizations.
Organizational elements in sales
The Division

•Division
•The Division is used primarily to split the organization by product
e.g. Fuel, Lubes.
•Together with the sales organizations and Distribution Channel, the
Division stores it’s own master data for customers, materials and
pricing.
•For every division you can make customer-specific agreements on,
for example, partial deliveries, pricing and terms of payment.
•Within a division you can carry out statistical analyses or set up
separate marketing.
Organizational elements in sales
Overview

Company code
800

S Sales
A 10
1000 2000 3000
L
organization
E
S Sales
10 20 10 20
channel
A
R
E Division
01 02 01
10 01 02 03
A
S
Organizational elements in sales
The sales office organization

•The sales office structure reflects the organizational hierarchy

responsible for sale and comprises of the following entities…
•Sales office
•Sales group
•Sales employee
•The use of the sales office structure in SAP is optional.
•As oppose to the sales organizational structure, the sales office
structure does not impact the structure of master data nor the pricing
functionality.
Organizational elements in sales
The sales office / The sales group

•The sales office

•A sales office typically has a physical address but can also be a logical
unit.
•The sales office is assigned to one or more sales areas. Sales employees
are assigned to a sales office.
•The sales office acts as a selection criterion for lists of sales documents.
• The sales group
•The sales group is a cross sales office subdivision of the sales office.
•The sales group is assigned to one or more sales offices.
•Sales employees are assigned to a sales group.
•The sales group acts as a selection criterion for lists of sales documents.
Organizational elements in sales
The sales employee

•The sales employee processes business transactions within the

company.
•The sales employee is assigned to a sales organization, a sales
office and a sales group.
•The sales employee can be linked to the customer master data and
sales documents.
Organizational elements in sales
Plant and Shipping points

•Plant
•Originally an organizational element out of Materials Management where
materials are produced and / or are stored.
•In customizing, plants are assessed to company code and to sales
organization.
•A plant can be assessed to more than one sales organization, but never
can be assessed to more then one company code.

•Shipping point
•Is responsible for scheduling and processing deliveries to customers, as
well as replenishment deliveries to your own warehouses.
•A delivery is always carried out by one shipping point only.
• Shipping points are defined dependant from: the delivering plant, the type
of shipping (e.g. train, truck) and the loading equipment necessary.
Organizational elements in sales
Plant assingnment

Company code 1 Company Code 2

plant 1 plant 2 plant 3 plant 4 plant 5

SO 1 SO 2 SO33
SO
• Master data in sales
– Overview customer and material master data
– Customer master data
- Customer partner functions
- Account groups
- Organizational levels
– Material master data
- General data
- Sales data
Master data in sales
Overview customer and material master data I

Ship-to party
Bill-to party

Customer

Sold-to party Material

Payer

Products
Services
Master data in sales
Overview customer and material master data II

•Master data are time-stably data.

•The integration of all customer and material data in a single
database objects eliminates redundant data storage. Areas such as
order processing, delivery, invoicing, purchasing, inventory
management, etc. can all use the same data.
•A single, correct and complete customer master record reduces
data entry and potential errors for order, delivery and invoice
processing.
Master data in sales
Customer master data – partner functions I

Sold-to
party

Ship-to Bill-to
party party

Business
partners

Payer Others
Master data in sales
Customer master data – partner functions II

•Have to be created for all business partners. Standard Business

partners in sales and distribution are defined as sold to party, ship-to
party, payer and bill-to party.
•Sold-to Party:

For the sold-to party, data on sales is necessary. In many cases, the
company which places an order for the delivery of goods or the rendering
of services is at the same time ship-to party, payer and bill-to party. For
this reason the function sold-to party includes all these other functions.

•Ship-to Party:

For the ship-to party only data required for shipping is necessary (for
example, unloading point and goods receiving hours).
Master data in sales
Customer master data – partner functions III

•Payer:

A payer is a company or person who settles the invoices for delivered

goods or rendered services. For the payer data on billing schedules and
bank data is necessary.

• Bill-to Party:

For the bill-to party the address is required as well as data on output and
possibly data on electronic communication.

•Other:

Other partners can be created e.g. one time customer, sales employee etc.
Master data in sales
Customer master data – account groups I

Possible partner Account groups

functions
Others Other (000X)
Payer Payer (0003)
Bill-to
party Bill-to party (0004)
Ship-to
Ship-to party (0002)
party
Sold-to
Sold-to party (0001)
party
Master data in sales
Customer master data – account groups II

•The account group ensures that for the different partner functions of
a customer only the necessary screens and fields are displayed for
input in master data.
•Therefore different partner functions can have different account
groups, e.g. one account group for the sold-to party and one for the
ship-to party.
•The account group also controls which partner functions the
customer can transfer into a document.
Master data in sales
Customer master data – organizational levels I

Finance module
Client Level Company Level

General data: Financial data:

- address - account mgmt
- marketing - payment trans
..... .....
Customer
Sales Area Level Credit control Area

Sales and dist. Credit mgnt:

data: - credit status
- sales, shipping - credit limit
- billing, output .....
.....
Master data in sales
Customer master data – organizational levels II

•Customer data is important for both - accounting department and

sales and distribution department.
•To avoid data redundancy, accounting data and sales and
distribution data is stored in one master record but at different
organizational levels.

•Data at client level (general data)

– General data, like address and telephone number, etc., is maintained
for every customer.
– General data are identified only by the customer number, not by
company code or sales area.
Master data in sales
Customer master data – organizational levels III

• Data at sales area level

– Sales and distribution data is of interest for the sales and distribution
department, e.g. data on pricing or shipping.
– Data only applies to one sales area, and therefore is dependent on the
sales structure (sales organization, distribution channel and division).
– One customer can be defined for more then one sales structure.
Master data in sales
Customer master data – organizational levels IV

• Company level
– Company code data is of interest for the accounting department. It
includes, for example, information on insurance or account
management.
– This data applies to only one company code.

• Data at credit control area level

– Credit management data is maintained in a separate view of the
customer master, at the credit control area level.
– A credit control area is defined for one or more company codes. Credit
management data is important for credit limit checking in sales order
processing.
Master data in sales
Material master data – general data and sales data I

General data

Sales spec.
data

Data depending on
Sales area / organization Plant specific
Master data in sales
Material master data – general data and sales data II

•Some material data is valid at all organizational levels, while other

data is valid only at certain levels.
•In sales especially plant-specific material data and data on sales area
and sales organization level is important.
•Data on plant level:
All data that is valid for a particular plant, as well as for the storage
locations.
•Data on sales organization level:
All material data relevant to sales is stored at sales organization level. This
includes, for example, grouping terms such as account assignment group
and pricing reference material.
• The sales process
– Overview
- Process sales out of own stock
- Process sales out of third-party stock
– Sales documents
- Structure of sales document
- Views in sales document
- Sources of data in sales document
– Document flow
The sales process
Overview I – own stock

material
md
customer
md SAP

Delivery Shipment Shipment

condition planning planning
transpotation

Standard Delivery Goods FI

Contract Order Invoice
Creation Delivery issue
creation condition CO
pick up

Re-
schedule
delivery
date and Availability
change check
sales
order

Re-
scheduling
The sales process
Overview II – third-party stock

material
md
customer
md

SAP
FI
Standard Billing Billing
Contract Order Release CO
creation
Invoice
Verification
Purchase Purchase
MM
Requisition Order

Invoice

Goods
Receipt
The sales process
Sales document – structure of sales document

Data valid for the whole

Head document, e.g. Sales data,
conditions

Item 1 Data just valid for the item,

e.g. Sales data, conditions

Schedule line 1

Item 2
Data relevante for shipping
Schedule line 1 and supply (delivery time and
delivery quantity)

Schedule line 2
The sales process
Sales document – view of sales document

Overview Details

Head On header On item

level level
Item
Schedule line
The sales process
Sales document – sources of data in sales document

Data out of
Master data Head

Item 1
By system
determined data Scedule line 1

Item 2
Data out of
Former documents Scedule line 2
The sales process
Sales document – document flow I

Sales
Contract order Delivery Invoice

Retoure Delivery Credit

note

Documentflow in
sales order
Contract
. Sales order
.. Delivery
... Invoice
.. Retoure
... Retoure delivery
.... Credit note
The sales process
Sales document – document flow II

•A business process is an order of process steps. In SAP each step is

represented in a document. Process chains are described in the
document flows.
•Document flows exist on document level and on item level.
•In document flow for each document a status is listed, e.g. for sales
orders the delivery status; for deliveries the picking status and
invoice status.
• Contract and sales order entry
– Contract and sales order document types
– The Contract
– The sales order
– Data in contract and sales order
- Determination of plant
- Determination of shipping point
- Availability check
Contract and sales order entry
Contract and sales order document types – overview I

•Several standard SAP document types exist. These document types

can be completed by defining special document types.
•Via the document type several functions can be activated, e.g. price
calculation, availability check, credit limit check, etc.
•Document types have to be linked to sales areas.
Contract and sales order entry
Contract and sales order document types – overview II

•Mainly two kinds of standard SAP contracts exist.

•Quantity contracts:
– Defined quantity in a defined period of time.
– No special defined order and delivery dates or quantities.
•Scheduling assignments:
– Clearly defined order quantity and time.
•EXTRA: Special Oil contracts are Spot and Term contracts.
•Spot contract: generally short period of validity (one month)
•Term contract: generally long period of validity (one year)
•In addition to standard contract an oil contract has an quantity
schedule. Call-off quantities are checked against quantity schedule
lines in contract.
Contract and sales order entry
Contract and sales order document types – overview III

•Mainly three kinds of standard SAP sales order types exist

• Standard order:
– Typical document with data coming out of master data or former
documents.
• Rush order:
– Pick up or delivery of material directly.
– Billing later on.
•Cash sales
• Sold-to party receives the material directly.
• Material has to be paid when placing the order.
Contract and sales order entry
Contract and sales order document types – overview IV

•EXTRA: Special oil sales orders are call-offs referring to contracts.

These call-offs – as well as oil contracts – has quantity schedules.

• Automatic call-off: via interface to stock system automatically

created call-off generally referring to term contract.
•Nomination: manually created call-off referring to a term or spot
contract.
Contract and sales order entry
The contract I

Contract Sales Sales

Sales
order Sales
order
Sales
order Sales
order
Sales
order order
order Delivery

update

KM – standard contract
ZKM1 – special oil term contract
ZKM2 – special oil spot contract
Contract and sales order entry
The contract II

•A contract is a general agreement between vendor and customer

valid within a defined period of time.
•In a contract a special price for a defined quantity of a defined
material is confirmed.
•No special defined points of time for delivery.
•Call-offs on contract which update it.
•In contracts the same functionalities like in sales order are possible.
•EXTRA: In oil contracts the total quantity is divided into subsets in
quantity schedule.
Contract and sales order entry
The Sales order

Creation without Sales

Sales
order
reference to contract order delivery

Contract
Creation with Sales
reference to contract order delivery

update

OR – standard Order
ZAB1 – automatic call-off without transportation (oil)
ZAB2 – automatic call-off with transportation (oil)
ZAB3 – Nomination, i.e. Manual call-off (oil)
Contract and sales order entry
Data in contract and sales order – determination of plant I

Customer-
material
information
Plant defined
record Sales order

Not
defined
Item 10
Master data
Ship-to party
Plant defined Item 20

Item 30
Not
defined Item 40
Material
master data
Plant defined
Contract and sales order entry
Data in contract and sales order – determination of plant II

•First system checks if a plant is determined in customer-material

information record. If there is one this plant is proposed in contract /
sales order. If not …
•System checks if a plant is determined in mater data of ship-to party.
If there is one this plant is proposed in contract / sales order. If not …
•System proposes the plant which is determined in material mater.
Contract and sales order entry
Data in contract and sales order – determination of shipping point I

Shipping Loading Shipping point possible

Plant
condition group (proposed) Shipping point

0003
01 crane 0001 0002
0004

Ship-to party/ Sales order

Material
sales order item
Contract and sales order entry
Data in contract and sales order – determination of shipping point II

•Shipping point is determined pro-item.

•System proposes a shipping point via
• Shipping condition (out of sales order / contract)
• Loading group (out of material maser data)
• Plant (out of sales order)
•Therefore in customizing one or more shipping points have to be
determined for each combination of these data.
•Shipping point is relevant for delivery. A delivery is always carried
out by one shipping point.
•In delivery a shipping point can not be changed anymore.
Contract and sales order entry
Data in contract and sales order – pricing conditions I

Displayed in system
Price elements Condition types

-Price list
Prices -Material price PR00
-Customer specific price .
.
-To customer KF07
Discounts and KF04
-To material
surcharges -... .
.

-Incoterm part 1 KF00

Fright -Incoterm part 1+2

Taxes
Contract and sales order entry
Data in contract and sales order – pricing conditions II

•Condition types are stored in condition records.

•Condition records allow you to store and retrieve pricing data in the
system.
•All condition types you want to use for automatic pricing must be
stored in the system as condition records.
•Condition records are defined as a function of a combination of
fields.
Contract and sales order entry
Data in contract and sales order – pricing conditions III

Condition type value

0001 01 1500066 40303384 200 EUR per pc
PR00

Key
Combination

Sales
Organization

Distribution
Channel

Customer

Material
Contract and sales order entry
Data in contract and sales order – availability check I

1 7
Sales or. Mat.
Req. del. Mat.
date Availab
date Availab

Incoming
Entry order
Backward scheduling Req. Del. date

Forward scheduling
100
+
60
50 + delay
+

- 20 pc
No 40 quantity; Confirmed
Availability!! Complete delivery date
- delivery
100

Issue
Contract and sales order entry
Data in contract and sales order – availability check II

•Availability check without taken replenishment lead time into

account
•Incoming order today with a requested delivery date at 7th.
•When carrying out a backward scheduling, at systems determined date,
no goods are available.
•Because the customer wants a complete delivery, a quantity of 20 pc
becomes available at stock shortly before requested delivery date, when
60 pc are incoming.
•When carrying out forward scheduling the system determines a
confirmed delivery date later than requested.
Contract and sales order entry
Data in contract and sales order – availability check III

1 7
Sales or. Mat.
Req. del. Mat.
date Availab
date Availab

Incoming
Entry order
Backward scheduling Req. Del. date

100
Forward scheduling
+
Replenishment lead time
delay
20
+
20
- 20 pc
No quantity; Confirmed
Availability!! Complete delivery date
- delivery
100

Issue
Contract and sales order entry
Data in contract and sales order – availability check IV

•Availability check with taken replenishment lead time into account

•Incoming order today with a requested delivery date at 7th.
•When carrying out a backward scheduling, at systems determined date,
no goods are available.
•So at same time when order comes new goods are ordered.
•Because of taking replenishment lead time into account, the 20 pc can be
delivered earlier compared to the case when availability is checked
without observing replenishment lead time.
• Delivery, picking and goods issue
– Ways of delivery creation
– Document structure
- Header data / Item data

– Relation between sales order and delivery

– Delivery scheduling
- Complete delivery / Partial delivery / Order
combination

– Picking
– Goods issue
Delivery, picking and goods issue
Ways of delivery creation

1 Creation of a delivery with direct reference to a sales order in system

Sales
order Delivery

2 Creation of delivery by means of delivery due list

Delivery
due list Sales
Sales
order
Sales
order Delivery
Sales
Sales order
Sales order
order
Sales
order
Sales
order
order Delivery
Delivery, picking and goods issue
Document structure - Header data / Item data

•Shipping point
•Data about delivery scheduling and
transportation scheduling (e.g. Goods issue
Header date)
•Weights and volumes of the entire
outbound delivery
Item 1 •Sold-to party and the ship-to party numbers
•Route

Item 2
•Material number
Item 3 •Delivery quantity
•Plant and storage location specifications
•Picking date
•Weights and volumes of the individual items
Delivery, picking and goods issue
Delivery scheduling I

Material Transpor-
Date of
availability tation Loading Goods issue Delivery date
order
date planning

Transit time
Loading time
Lead time for
transportation
planning

Pick / pack time

Delivery, picking and goods issue
Delivery scheduling II

• You must start picking and packing activities on the material availability
deadline. This deadline must be selected early enough in advance so that
the goods are ready by the given loading deadline.
•The transportation scheduling deadline is the date on which you must
start to organize the transportation of the goods. This deadline must be
selected early enough to ensure that the means of transport is available by
the loading deadline.
•The loading deadline is the date on which the goods must be available
for loading and on which all vehicles that are required to ship these goods
must be ready for loading. After the time required for loading the goods
(loading time) has expired, goods issue can be carried out.
• The goods issue deadline is the date on which the goods leave the
company in order to arrive punctually at the customer location.
•The delivery deadline is the date on which the goods are to arrive at the
customer location. The difference between the goods issue deadline and
the delivery deadline is calculated from the transit time required for the
route between the delivering plant and the customer.
Delivery, picking and goods issue
Relation between sales order and delivery I

1 Complete delivery

Sales order Delivery

10 pc 10 pc
Del.date 15.09. Del.date 18.09.

2 Partial deliveries

Sales order Delivery

10 pc 4 pc
Del.date 15.09. Del.date 15.09.
Delivery, picking and goods issue
Relation between sales order and delivery II

3 Sales order combination

Sales order
10 pc
Del.date 15.09. Delivery
26 pc
Del.date 15.09.
Sales order
16 pc
Del.date 15.09.

Assumption:
a) ship-to party is marked in master data for order collection.
b) Same ship-to party in sales order one and two.
c) Same delivery date and material availability date in sales order one and two.
Delivery, picking and goods issue
Picking I

Stock Shiping point

Delivery creation Delivery

Pick Del.quantity : 10
list Pick quantity: 10

Pick quantity
Feedback from picking
Delivery, picking and goods issue
Picking II

• The picking process involves taking goods from a storage location

and staging the right quantity in a picking area where the goods will
be prepared for shipping.

• Three ways of carrying out picking

• Automatically during outbound delivery creation

• Routinely at certain times

• Manually according to overviews of the day's workload.

Delivery, picking and goods issue
Goods issue

Store Shipping point

Account 1 Inventory Delivery 11

X X Goods issue 
• Billing
– Ways of invoice creation
– Billing document types
– Document structure
- Header data / Item data
- Pricing conditions
– Billing methods
- Individual billing / Invoice split / Collective
billing
– Interface to FI / CO
Billing
Ways of invoice creation I (basic notes)

1 Sales order-related billing

Sales
Sales
order
order delivery invoice

2 Delivery-related billing

Sales
Sales
order
order delivery invoice
Billing
Ways of invoice creation II

1 Manual billing

Sales
order Delivery Invoice

2 Creation of delivery by means of billing due list

Billing
due list Sales
Sales
order
Sales
order Invoice
Sales
Sales order
Sales order
order
Sales
order Invoice
order
Delivery
Billing
Billing document types

Sales order Delivery Invoice

Order / Delivery
F1/F2 related invoice

Credit memo Credit memo

request RE/G2 Credit memo/credit memo
for returns

Debit memo Debit memo

request L2 Debit memo

Cancellation
invoice Cancellation
S1/S2 invoice /credit memo

Sales order Pro forma

invoice Pro forma invoice for
Delivery F5/F8 sales order and delivery
Billing
Document structure - Header data / Item data

•Identification number of the payer

•Billing date
•Net value of the entire billing document
Header •Document currency
•Terms of payment and Incoterms
•Partner numbers, such as the identification
Item 1 number of the sold-to party
•Pricing elements

Item 2
•Material number
Item 3 •Billing quantity
•Net value of the individual items
•Weight and volume
•Number of the reference document for the
billing document
•Pricing elements relevant for the individual
items
Billing
Billing methods I

1. Individual billing
Delivery Invoice

Sales order
3. Collective billing
Delivery Invoice
Sales order Delivery

Delivery Invoice

2. Invoice split
Invoice Sales order Delivery

Sales order Delivery

Invoice
Billing
Billing methods II

• Assumptions for invoice split

• In Customizing for copying control, you can specify
requirements for splitting to prevent sales orders or
deliveries from being combined into a collective billing
document, e.g. Bill-to party.
•Assumptions for collective billing
• the header data appearing in the billing document must
agree .
• the split conditions specified do not apply.
Billing
Integration with Fi / Co I
Financial accounting (FI)

• Ballance demands to
debtors
• General ledger
• Gains
• Losses
• Accruals
Invoice Account
determination
Controlling (CO)

• Profit center
• Cost center
• Extended general ledger
• Projects
• Make-to-order sales orders
• Plant maintenance orders
• Profitability analysis
(COPA)
• Cost collector
Billing
Integration with Fi / Co II – account assignment

• The system can post entries in the billing documents automatically

to the relevant accounts. To do this, it must first carry out account
assignment.
•Elements for account assignment:
• Chart of accounts of the company code
• Sales organization
• Account assignment group of the customer (from the customer master
record, Billing screen, Account group field)
• Account assignment group of the material (from the material master
record, Sales 2 screen, Account assignment group field)
• Account key (from the pricing procedure)

•The system carries out account assignment using the condition

technique.
Thank you for your kind attention!

Dilip Sadh