Outline agreements play an important role in nearly all business processes.

Customers
and vendors agree on the goods to be provided under certain conditions and within a
specific period of time. Outline agreements streamline business processes for both
partners in a business relationship. The two main outline agreements are:

• scheduling agreements
• contracts

There are two types of contracts – value and quantity. Contracts can cover both goods
and services. Generally, no restrictions apply to the different contract forms.

A contract is an outline agreement between you and your customer that is valid for a
certain time period. The contract does not contain any schedule lines, delivery quantities,
or delivery dates. The same functions are available in contracts as in orders. You can
also agree on special price agreements. The customer fulfills the contract with individual
releases. Schedule lines are created in the release order when it is placed. The release
order is then processed like any standard order. Any special agreements regarding prices
are copied from the contract.

Release orders are created with reference to a contract. This generates a document
flow record that allows you to update released quantities and values in the contract.

You can create release orders in the following ways:

• Choose Create with reference on the initial screen

• In the Sales document menu, choose Sales document → Create with
reference→ To contract
• Assign an order item to a contract retrospectively
• Use the automatic system to search for open outline agreements when you
create an order

Standard SAP SD contract normally contains:

• Customer and material Information

• Pricing, be it customer or material specific
• Information about shipment processing
• Information about billing
• Validity periods / dates
How to Start Contract Transaction
• Enter VA41 in Transaction Command Field for creating Contract or

Enter VA41 Transaction

• Navigate through ‘Tree’

VA41 Transaction for Creation of Quotation in SAP Menu

How to Create SAP SD Contract

Once you have entered the contract creation initial screen, you have to select relevant
contract type. Each contract type has its own functionality and viewing based on the
configuration done at backend.

Standard Types of Contracts:

 • Quantity Contract is: QC
• Rental Contract: QP
• Value Contract: WK1
• Material rel. Value Contract: WK2
• Service and Maintenance Contract: SC

Create Contract – Initial Screen

Please note, any field having a ‘tick mark’ means its

mandatory and it has to be populated else system would not allow you to proceed
further. In order to opt for a required contract type, either press F4 on the respective
field and it will show all LoVs (List of Values).
List with Contract Types
Select the relevant Contract type to proceed to the next step
Create a Quantity Contract
Populate Sales Area with your relevant Sales Organization, Distribution
Channel and Division.
Fill in Sales Area Data
Hint: if you populate your relevant Sales Organization, Distribution Channel and
Division first and then opt for the relevant contract type, only contract types relevant for
the selected Sales Organization, Distribution Channel and Division will be displayed in
LoVs.

Master Data Involved when Creating Contract

The following master data is involved when creating a contract. This master data
fetches relevant information and populates the relevant fields accordingly.

CUSTOMER MASTER DATA

• Name of the customer

• Address
• Location
• Taxation details
• Geographical location according to company’s sales geographical structure
• Shipping details
• Billing details as in terms of payment
 • Partners associated with the customer, i.e. ship-to party, bill-to party, payer,
etc.

MATERIAL MASTER DATA

• Material description
• Unit of measure (Stock Keeping Unit – SKU)
• Transportation group
• Loading group (fork lifter, manual handling etc.)
• Taxation information

CUSTOMER MATERIAL INFO RECORDS

• Used to maintain customer relevant SKU codes which are mapped with the
company code

CONDITION MASTER (PRICING)

• Base price of the product or special price for a particular customer

• Discount(s) on the product or special discount offered to one customer
• Freight
• Taxes

OUTPUT MASTER

• The process of communication with customer once the contract is created via
printout of the quotation which is sent to customer by post, fax or email.

Partners (Parties) Involved in Contract Creation

• Sold-To Party: the entity that inquired the goods

• Ship-To Party: to whom goods are be delivered to
• Bill-To Party: the entity that is responsible to receive the bill
• Payer: the entity responsible for the payment

Entering the Customer – Sold-To and Ship-To

This is the initial screen of contract once you have selected the relevant contract type and
sales area (the combination of Sales Organization, Distribution Channel and Division is
technically termed as Sales Area in SAP SD).

Create Quantity Contract – Overview

You can see Sold-To Party and Ship-To Party fields at the top left of the screen just
below the contract field. One Sold-To Party can have multiple Ship-To Parties. If there
are many Ship-To parties associated with one Sold-To Party, a dialog box will pop up in
the contract screen. You select the relevant Ship-To Party which the Sold-To Party has
instructed you to ship the products at.

Press F4 or button on the Sold-To Party field to search for your relevant Sold-To
Party. You can search by Search term maintained in the customer master or also
by Name. To remain specific with your search, enter relevant Sales Organization so that
only customer maintained in your Sales Organization will be displayed.

If you decide to find the customer with name, enter customer’s first name with * before
and after the name. This is called a wild-card search.

Example: *demo*.
Search for Customer
Hint: You can use asterisk to be more specific in your search and press Enter to get
output of your search.

Search Results
Double click on the required Customer line in the contract to select that customer.
Sold-To Party Populated into the Contract
Press Enter once you have selected the Sold-To Party, so that the SAP system can
accept the customer and proceed with the contract creation.

Select Ship-To Party

Since this customer has two Ship-To Parties, a dialog box is popped up to select the
relevant one which your customer, Sold-To, has instructed. Double click on the required
one and same will be selected.
Sold-To and Ship-To Partied were Successfully Populated
If there’s only one Ship-To Party, once you press Enter, Ship-To Party will automatically
get populated. Since the contract is a legal document, system will prompt to populate
validity dates:

Validity of Contract
Populate contract validity dates, i.e. Valid From and Valid To dates:
Select Validity Dates using Calendar

SAP SD Contract Screen Navigation

This part is called Header of the Contract:

Header of SAP SD Contract

This part is called Overview of the Contract:
Overview of SAP SD Contract
This is called the line item part of the contract where materials which are inquired by the
customer are to be maintained:

Line Items of SAP SD Contract

Add Items to SAP SD Contract

Use F4 to search for the material the same way we did for customer and repeat the
same process for entering multiple line items (if required).

Search for Materials to Populate Items of the Contract

Material was Found
Double click on the desired material to select.

Material Number was Added to the Contract

If you press Enter without entering the Quantity, the system will prompt:
SAP Asks to Enter Quantity of Material (at the bottom of the screen)
Enter Quantity.

Information about Material Entered into the Contract

Incompletion Log for Contract

Go to Edit > Incompletion Log or Ctrl+F8 to see if the contract Created is Complete.
Check Incompletion Log of Contract
If there is anything or fields which needs to be populated, the system will prompt and
new window will be displayed.

Incompletion Log Results

Press or F2 to complete the missing data.

The System Shows the Screen with Missing Data
Enter the PO Number. PO stands for Purchase Order and it is a number of customer’s
purchase order.
Enter PO Number in Contract

Press or F5 to populate the next data, if any. Once all the required data is
populated, the system shall take you to the main screen of the contract.
SAP SD Contract is Complete
If the document is complete, the system will prompt the relevant message
accordingly. .

Navigating Contract Screens – Header

Press button to view header details in the contract.

Header of Contract
Here you can see relevant sales data:

• User who created this Contract

• Sales Organization, Distribution Channel and Division information
• Sales Office
• Sales Group
• Date on which the document is created
• Document Currency
• Customer Group
• Price list
 • Sales District

Sales Data in SAP SD Contract Header

Press tab to see the partners which the customer is having:

Business Partners in the Header of the Contract

Press to know the current status of the contract.
Status Screen of SAP Contract Header
Press to go back to the main contract screen.

Navigating Contract Screens – Item

If you want to see the pricing of the individual material, select that line item and press

this conditions button .

Pricing Conditions Button

Here, you can see the pricing of the selected product.
Prices for Contract Item
Press to view material’s details.

Sales B Tab of Contract Item

Press to go back to the main contract screen.

Save the Contract

Once you have created the contract and satisfied with the information populated,
press or CTRL+S to save the contract.

SAP SD Contract was Successfully Saved

Outline agreements play an important role in nearly all business processes. Customers
and vendors agree on the goods to be provided under certain conditions and within a
specific period of time. Outline agreements streamline business processes for both
partners in a business relationship.

The two main outline agreements, which are:

• scheduling agreements
• contracts
A scheduling agreement is an outline agreement between you and a sold-to party that
is valid for a certain period of time. The scheduling agreement contains fixed delivery
dates and quantities. These dates are contained in the schedule lines for the scheduling
agreements. Once the scheduling agreement is due for delivery, you can create the
delivery as normal or by using a delivery due list.

When you enter schedule lines for an item in the scheduling agreement, the system adds
up the quantities that have already been entered and compares them to both the target
quantity and the quantity already shipped. This gives you an overview of all the open
quantities.

If the quantity in the schedule lines exceeds the target quantity, the system issues a
warning message. If the customer requires it, you can process invoices periodically – for
example, once a month. All deliveries due for the billing document are combined in a
collective invoice.

Standard SAP SD scheduling agreements normally contain:

• Customer and material information

• Pricing, be it customer or material specific
• Delivery dates and delivery quantities
• Information about shipment processing
• Information about billing
• Validity periods and dates

How to Create SAP SD Scheduling Agreement

There are two options to start the process of creating a scheduling agreement:

• Enter VA31 in Transaction Command Field for creating Scheduling Agreement or

Enter VA31 Transaction

• Navigate through ‘Tree’

VA31 Transaction for Creation of Quotation in SAP Menu
Once you have entered the Scheduling Agreement: Creation Initial screen, you have to
select relevant Scheduling Agreement Type. Each Scheduling Agreement Type has its
own functionality and viewing based on the configuration done at the backend of SAP
system.
Select Relevant Scheduling Agreement Type

Please note, any field having a ‘tick mark’ means its

mandatory and it has to be populated else the SAP system would not allow you to
proceed further. In order to opt for a required scheduling agreement type, press F4 on
the respective field and it will show all LoVs (List of Values) with available types of
scheduling agreements.
List with Scheduling Agreement Types

Select the relevant Scheduling Agreement Type to proceed to the next step.
Scheduling Agreement with Type DS will be Created

Populate Organizational Data with your relevant Sales Organization, Distribution

Channel and Division.
Fill in Sales Area Data

Hint: if you populate your relevant Sales Organization, Distribution Channel and
Division first and then opt for the relevant Scheduling Agreement type, only Scheduling
Agreement types relevant for the selected Sales Organization, Distribution Channel and
Division will be displayed in LoVs.

Master Data Involved when Creating Scheduling Agreement

The following master data is involved when creating a scheduling agreement. This
master data fetches relevant information and populates the relevant fields accordingly:

CUSTOMER MASTER DATA

• Name of the customer

• Address
• Location
• Taxation details
• Geographical location according to company’s sales geographical structure
• Shipping details
• Billing details as in terms of payment
• Partners associated with the customer, i.e. ship-to party, bill-to party, payer, etc.
MATERIAL MASTER DATA

• Material description
• Unit of measure (Stock Keeping Unit – SKU)
• Transportation group
• Loading group (fork lifter, manual handling, etc.)
• Taxation information

CUSTOMER MATERIAL INFO RECORDS

• Used to maintain customer relevant SKU codes which are mapped with the company
code

CONDITION MASTER (PRICING)

• Base price of the product or special price for a particular customer

• Discount(s) on the product or special discount offered to one customer
• Freight
• Taxes

OUTPUT MASTER

• The process of communication with customer once the scheduling agreements is

created via printout of the scheduling agreement which is sent to customer by post,
fax or email.

Partners Involved in Creation of Scheduling Agreement

• Sold-To Party: the entity that inquired the goods

• Ship-To Party: to whom goods are be delivered to
• Bill-To Party: the entity that is responsible to receive the bill
• Payer: the entity responsible for the payment

Entering the Customer – Sold-To and Ship-To

On the screenshot below is the initial screen of Scheduling Agreement once you have
selected the relevant Scheduling Agreement Type and Sales Area (combination
of Sales Organization, Distribution Channel and Division is technically termed as Sales
Area in SAP SD).
Scheduling Agreement Initial Screen

You can see Sold-to Part and Ship-to Party fields at the top left of the screen. One Sold-
to Party can have multiple Ship-to Parties. If there are many Ship-to parties associated
with one Sold-to Party, a dialog box will pop up in the scheduling agreement screen. You
need to select the relevant Ship-to Party which the Sold-to Party has instructed you to
ship the products to. Press F4 or button on the Sold-to Party field to search for your
relevant Sold-to Party.

You can search by Search Term maintained in the customer master data or also
by Name. To remain specific with your search, enter relevant Sales Organization, so that
only customers maintained in your sales organization will be displayed. If you decide to
find the customer with name, enter customer’s first name with * before and after the name.
This is called wild card search.

Example: *demo*

Here we are using ‘Search Term’ functionality:

Look up a Customer by Search Term

Hint: You can use asterisk to be more specific in your search and press Enter to get
output of your search.

Search Results
Double click on the required customer line in the window to select that customer.

A Customer was Entered into Scheduling Agreement

Press Enter once you have selected the Sold-to Party, so that the SAP system can
accept the customer and proceed with the scheduling agreement creation. If the customer
has two Ship-to Parties assigned, a dialog box will be popped up to select the relevant
one which your customer, Sold-to, has instructed. Double click on the required one and
the same will be selected.

If there’s only one Ship-to Party assigned to the Sold-to Party, once you press Enter,
Ship-to Party will automatically get populated.

Since a scheduling agreement is a legal document, the system will prompt you to
populate validity dates:
The System Asks for Validity Dates

Populate scheduling agreement validity dates, i.e. ‘Valid From’ and ‘Valid To’ dates:

Enter Validity Dates of Scheduling Agreement

A Scheduling Agreement with Validity Dates Correctly Populated

SAP SD Scheduling Agreement Screen Interface

This part is called header of the scheduling agreement:

Header of Scheduling Agreement

This part is called overview of the scheduling agreement:

Overview of Scheduling Agreement

This is called the line item part of the Scheduling Agreement where materials which are
inquired by the customer are to be maintained:

Line Items in a Scheduling Agreement

Add a Product to a Scheduling Agreement

Use F4 to search for the material the same way we did for the customer and repeat the
same process for entering multiple line items (if required).

Search for Material by Description

A Material was Found

Double click on the desired material to select it:

A Material Number was Added to the Scheduling Agreement

If you press Enter without entering the Quantity, the system will prompt:
Request to Enter Quantity for a Material

Enter quantity:

A Material was Added to the Scheduling Agreement

Here you can see that no value was updated in the Net Value field in the scheduling
agreement’s header part:
Net Value is Zero

The same goes for the line item:

Pricing Conditions of a Line Item in the Scheduling Agreement

This is due to the reason that scheduling agreements require the schedule line to be
populated. Select the relevant line item and press button in the line item section of
the scheduling agreement:
Click Details Button for a Line Item

Then, go to the Schedule Lines tab :

Schedule Lines of an Item

Enter the dates on which the customer has requested the goods along with the order
quantity.
Enter Schedule Lines for the Dates when the Customer Requested Shipments

Once one schedule line it entered, conditions will update. Go to the Conditions tab in
the line item data :

Pricing Conditions were Updated and Net Value is Not Zero Now
Enter another delivery date and quantity:

Enter Additional Schedule Lines for an Item

Conditions are updated accordingly in the line item pricing data:

Pricing Conditions were Updated Again

Incompletion Log for Scheduling Agreements

Press F3 or to go back to the main screen. Go to Edit > Incompletion

Log or Ctrl+F8 to see if the scheduling agreement that we have just created is complete.
Open Incompletion Log for a Scheduling Agreement

If there are any fields which need to be populated, the system will prompt and a new
window will be displayed:

A Scheduling Agreement is Incomplete

Press or F2 to complete the missing data:

Enter Missing Date (PO Number)

Enter the PO Number:

Missing PO Number was Added

Press or F5 to populate the next missing field, if any. Once all the required data is
populated, the system will take you to the main screen of the scheduling agreement. If
the document is complete, the SAP system will show the relevant message
accordingly: .

The Scheduling Agreement is Complete

Scheduling Agreement Screen – Header

Press button to view header details in the scheduling agreement:

Use the Button to View Header Details

Here you can see the relevant header data:

 • User who created this scheduling agreement
• Sales Organization, Distribution Channel and Division information
• Sales office
• Sales group
• Date on which the document is created
• Document currency
• Customer group
• Price list
• Sales district

Header Data of Scheduling Agreement

Press tab to see the partners which the customer is having:

Partners in the Header of the Scheduling Agreement

Press to know the current status of the scheduling agreement:

Status of the Scheduling Agreement

Press to go back to the main scheduling agreement screen.

Save Scheduling Agreement

Once you have created the scheduling agreement and are satisfied with the information
populated, press or CTRL+S to save the scheduling agreement.

The Scheduling Agreement was Successfully Saved

Delivery Due List

Since the scheduling agreement contains the delivery dates and quantities, deliveries
are created based on the delivery quantity. Let us see the delivery details in scheduling
agreement first:
Delivery Details in the Scheduling Agreement

Customer requested the delivery of 1 quantity of goods on 1st November, 2016 but the
system confirmed the delivery of goods on 4th November, 2016 based on the availability
settings. This means that delivery can take place on 4th November, 2016 and not before
that.

Similarly, the customer requested for the delivery of another 1 quantity of goods on 10th of
November, 2016 which system confirmed.

Now, let us go to the delivery monitor and due list using the transaction VL10A:

Delivery Monitor Transaction (VL10A)

Enter the relevant Shipping Point, Delivery Creation Date(s) and Sold-to Party:
SAP Delivery Monitor Initial Screen

Now, the system should show two deliveries required to be delivered on the following
dates based on the schedule lines maintained the scheduling agreement:

• 04th November, 2016 – 1 Quantity

• 10th November, 2016 – 1 Quantity

Press F8 or to execute the Delivery Due List:

Activities due for Shipping

Here you can see that the Ship-to Party A7000 has two deliveries that are against the
scheduling agreement number 30000053 which we created earlier. These deliveries are
due on 4th November, 2016 and 10th November, 2016 respectively.

Schedule Lines in the Scheduling Agreement