Unit 1 :1 Condition Technique in Pricing

The pricing procedure is determined in Customizing according to the following criteria:

● Sales area

● Sales document (document pricing procedure)

● Sold-to party (customer pricing procedure)

Pricing Procedure Attributes

Customizing for pricing procedures contains a variety of attributes that can influence the

processing of individual condition types.

Some of these attributes are as follows:

● Level (STEP):

The level in the pricing procedure determines the sequence in which the system processes

and places the conditions in the sales document (where applicable).

● Subtotals:

The pricing procedure can contain any number of subtotals. To define subtotals, leave the

Condition Type field blank and enter a name for the subtotal in the Description field.

● Condition formula:

The condition formula in the pricing procedure allows you to define an alternative base for

calculating the condition value and for consolidating conditions for subtotals. The default

base is the current value that resulted from processing the previous condition types.

● Requirements:

You can specify requirements to determine how the system must use the individual

condition types.

● Specific settings:

You can mark a condition type in the pricing procedure as a condition that is mandatory, a

condition that can only be entered manually (any existing access sequence is ignored in

this case), or as a condition that can be used for statistical purposes only.

Access sequence
An access sequence is a search strategy that the system uses to find valid condition records
for a condition type. This search strategy defines the sequence in which the system reads the
condition records for a condition type.
An access sequence can be assigned to a condition type (except for condition types that are
configured as a header condition).
Every access in an access sequence is defined by using a condition table. A condition table is

a combination of fields that form the key for a condition record.

If an access sequence contains more than one access, the accesses are usually arranged

from specific to general in descending order.

An access can also be made depending on the requirements that are assigned in the access

sequence.

Pricing flow

The figure shows that an order for 120 pieces of a material is created. The system must

determine the price automatically.

Determine pricing procedure

The system determines the relevant pricing procedure based on the sales area, customer,

and sales document type.

Determine access sequence

The system reads the condition type and determines the access sequence that is assigned to

this condition type.

Determine the Sequence of Condition Tables in Access Sequence

The system reads the access sequence. The sequence of condition tables represents the

search strategy for finding the relevant condition record.

Each condition table represents one access, which can be used to create a condition record

by using the specified key.

Search for a Valid Condition Record

The system searches for valid condition records by using the key that is specified by the

condition table (accesses).

If the first access does not find a valid condition record, the system searches for the next

access by using the next condition table.

Copy the Scale Base Values

After the system finds a valid condition record for an access, the system reads the condition

record and copies the value that corresponds to the scale into the sales document.

The system repeats the entire process for each condition type until the system completes the

entire pricing procedure.

Copy the scale base values

After the system finds a valid condition record for an access, the system reads the condition

record and copies the value that corresponds to the scale into the sales document.

The system repeats the entire process for each condition type until the system completes the

entire pricing procedure.

Manual price changes

The prices, surcharges, and discounts that are determined automatically by the system can

be changed manually and are then marked as such.

In the condition records, you can specify the limits within which a manual change can be

made. For example, you may define a discount that can only be changed between 1% and 3%.

In addition to determining conditions automatically, you can enter conditions manually in a

sales document. These conditions are marked by the system as having been entered

manually.

You can change or create conditions on the condition screen. You can prevent a condition

type from being changed manually by making the appropriate settings in Customizing.
Header Condition Amount Distributed Among Items

You can also enter conditions at the document header level. These are known as header
conditions and are valid for all items.

The system automatically distributes these header conditions among the items based on the

net value. The basis for distributing the header conditions can be changed in the pricing

procedure by selecting the appropriate routine, such as weight (12 = gross weight and 13 =

net weight) and volume (01 = volume), in the Alternative Condition Base Value (AltCBV) field.

---The figure shows that the header condition amount is copied to each item of the order

---The figure shows that the header condition amount is distributed among the items based on

the portion of the total net value that is defined for that item.

New Pricing and Pricing Types

You can configure the pricing behavior in the pricing type.

The new pricing function in a sales document can be controlled as follows:

● The updated prices on the condition screens are available at the header and item levels.

You can choose the pricing type in the dialog box that appears.

● To use the new pricing document function for a sales document ( Edit→ New Pricing

Document ), assign a pricing type to the pricing procedure in Customizing. If you do not

specify an entry, the system uses pricing type B (carry out new pricing).

The new pricing and pricing type functions are supported for both sales and billing
documents.

1. You can limit a pricing agreement to a certain period.

Determine whether this statement is true or false.

X True

X False

Correct. You can limit a pricing agreement to a certain period.

2. What is controlled by the condition type?

Choose the correct answer.

X A Calculation Type

B Period

C Amount

Correct. Calculation type is controlled by condition type.

3. The header conditions are distributed manually among the items based on the net value.

Determine whether this statement is true or false.

True

X False

Correct. The header conditions are automatically distributed among the items based on

the net value.

4. A condition table is a combination of fields that form the key for a condition record.

Determine whether this statement is true or false.

X True

False

Correct. A condition table is a combination of fields that form the key for a condition

record.
Unit 2 : Pricing Configuration
Lesson 1 :Configuring Pricing

Sequence of Configuration Steps

You configure pricing in the reverse order as explained in the previous unit.

When you create a new pricing procedure, you have to consider the ultimate objective from

the beginning. The objective is to locate an appropriate condition record that can determine

the necessary key components. This means that the first step is to create a new condition

table if the required key combination (condition table) is not already available in the standard

system.

A condition table defines the structure of the key that you can use to create dependent

condition records.

Key Fields of a Condition Table

Condition records are always created by using a specific key.

You use condition tables to define the structure of the keys for a condition record.

The most important fields that are used in pricing at the header and item levels are available

in the standard system.

The key fields of a condition table must appear at the top of the table.
In the condition table, you can determine whether a field appears in the header or in the item

part of the fast entry screen that is generated for defining condition records.

Access sequence

An access sequence can contain one or more condition tables

Creation of an access sequence

You can define prices, discounts, and surcharges at various levels.

Each level is defined by a condition table.

The hierarchy of the different levels is determined by the sequence of the entries in an access

sequence.

The system determines the condition records in the specified sequence.

Special Case: Assigning Alternative Source Fields

Within each access of an access sequence, you can specify the document field or source field
with which an access is performed.
Examples
● Material or pricing material
● Document currency or local currency
● Sold-to party or ship-to party

Restrictions in Access Sequences

Condition Types

Condition Types

After you create the access sequence, you assign it to a condition type.

You can also create your own condition types. You can determine the characteristics of each

condition type. For example, you can determine whether the condition type represents

surcharges or discounts and whether it is dependent on values or quantities.

Pricing procedures

Condition types are combined in the required sequence in the pricing procedure.

Pricing procedure determination

The pricing procedure is determined based on the following factors:

● The sales area

● The customer pricing procedure in the customer master

● The document pricing procedure that is assigned to the sales document type
 Lesson 2
Further Options for Pricing Control
Counter Field in a Pricing Procedure

Impact of the Counter Field in a Pricing Procedure

If you want to retain the input sequence for manual conditions, these conditions must appear

at the same level. Use the Counter subkey to enter conditions at the same level in the pricing

procedure.

New Fields for Pricing

Customizing for pricing is restricted by the catalog of allowed fields for condition tables. If a

particular situation requires an exception to this rule, you can use the release-neutral

procedure to add additional fields to the catalog.

The information that you need to add new pricing fields is available in the Customizing
documentation. To access the documentation, see Customizing for Sales and Distribution

under System Modifications→ Create New Fields Using Condition Technique .

Pricing Strategies

To solve particular problems, build and link all the pricing components creatively.

Meeting particular pricing requirements may require one or more new pricing components.

Understanding the purpose and capabilities of each component and the relationship between

pricing components is critical to meeting pricing requirements.

Pricing Elements for Complex Scenarios

You can add new fields to the pricing field catalog. This allows you to use the new field to
define any condition table Requirement routines and formulas provide a method for modifying the
standard pricing logic

to meet unique user requirements.

SAP provides tools to create these pricing elements. You can access these tools in

Customizing.

1. Which of the following provides a method to modify the standard pricing logic to meet

unique user requirements?

Choose the correct answer.

X A Requirement routines

B Condition types

C Pricing procedures

Correct. Requirement routines and formulas provide a method for modifying the standard

pricing logic to meet unique user requirements.

2. An access sequence only consists of one condition table.

Determine whether this statement is true or false.

True

X False

Correct. An access sequence can have more than one condition table.

3. Which of the following elements contains keys that are used to create dependent

condition records?

Choose the correct answer.

A Condition types

B Access sequences

C Requirement routines

X D Condition tables

Correct. A condition table contains keys used to create dependent condition records.

4. New fields can be added to the pricing field catalog.

Determine whether this statement is true or false.

X True

False

Correct. New fields can be added to the pricing field catalog. This allows you to use the
new field to define condition tables.

UNIT 3 Condition Records

Lesson 1 :Working with Condition Records
 UNIT 5 :
Lesson1 : Using Special Condition Types
Manual Pricing Header condition type HM00 allows you to enter the order value manually. The system then
distributes the new order value proportionally between the items, taking into account the
previous net item value. The system determines the taxes again for each item.
Net Price PN00Condition type PN00 allows you to specify the net price for an item manually. The system
deactivates the original conditions.
Minimum Order Value AMIW You can create a minimum value for each order by using condition type AMIW. If
the value in
the order header is less than this minimum order value during pricing, the system uses theminimum value as the net order value
automatically. The minimum order value is a statistical
condition.
Condition type AMIW is a group condition and is divided among all the items according to
value.
Calculation formula 13 is assigned to condition type AMIZ in the pricing procedure. This
formula calculates the minimum value surcharge by subtracting the net sales order value
from the minimum order value. AMIW is the minimum value of an order , AMIZ is the amount to be added to the value of the order
to reach the minimum value .
Minimum Price PMIN
You can create a minimum price for a material by using condition type PMIN. If the minimum
price is not met during pricing, the system determines the difference by using condition type
PMIN.
Scale Pricing You can maintain condition records with interval scales if the condition type is set to scale
type D in Customizing. You CANNOT use interval scales for group conditions
Customer Hierarchy Pricing Customer hierarchies are available in the SAP standard system to enable you to create
flexible hierarchies that reflect the structure of customer organizations. For example, if your
customer base includes multi-level buying groups, cooperatives, or chains of retail outlets,
you can create hierarchies to reflect the structure of these groups. You use customer
hierarchies during sales order processing and billing to determine pricing and statistics.
Customer hierarchies are valid only for a certain period of time.
A customer hierarchy consists of nodes.
The steps to create a customer hierarchy are as follows:
1. Create master records for each node.
2. Assign the nodes to each other.
3. Assign the customer master records to the relevant nodes.
You can move the hierarchy nodes. If you move a node, the system automatically reassigns all
related nodes and customer master records.
Hierarchy Path You can assign price or rebate agreements to a high-level node within a customer hierarchy.
The agreements are then valid for customers at all the subordinate levels of this node. You
can create pricing condition records for each node that is indicated as relevant for pricing. If
one or more nodes in the hierarchy path of a sales order contain pricing information, the
system takes these nodes into account automatically during pricing according to the defined
access sequence.
Hierarchy Discount HI01
In the SAP standard system, the access sequence is set in Customizing so that the discount is
initiated at the lowest hierarchy level.
Condition Type DIFF You can maintain a rounding unit in table T001R (SAP NetWeaver→ General Settings→
Currencies→ Define rounding rules for currencies ) for each company code and currency. If
the final amount in the order header differs from the rounding unit, the system rounds the
amount up or down as specified.
Condition type DIFF determines the difference amount. This condition type is a group
condition that is distributed among all the items according to value.

Lesson 2 : Using Statistical Condition Types

Statistical Condition Types The standard SAP system uses condition type VPRS to retrieve the standard cost of the
material. In the pricing procedure, this condition type is marked as statistical.
By using condition category G, condition type VPRS accesses the valuation segment of the
material master to determine either the standard cost or the moving average cost, as
specified in the material master.
Condition category S always accesses the standard cost, whereas condition category T
always accesses the moving average cost.
The system calculates the profit margin by using formula 11 in the pricing procedure. This
formula subtracts the cost from the net value.
Cash Discount SKTO In the standard SAP system, condition type SKTO is used to retrieve the cash discount rate. In
the pricing procedure, this condition type is marked as statistical.
The system accesses table T052 by using condition category E. The system then calculates
the amount from the first percentage rate of the item payment terms.
Customer Expected Price - EDI1 and EDI2 4 Resolving disputed invoices costs some industries (for example,
the consumer packaged
goods industry) a great deal of time and money. Customers deduct disputed invoices from payments and staff members spend
valuable time investigating and researching the reasonsfor the disputed payment. In addition, prolonged disputes can endanger
supplier-customer relations. To avoid disputed invoices, you can enter the customer expected price during sales
order processing and compare it with your price.
You can enter customer-expected price data manually during order entry in the double-line
overview screen of the sales order. Alternatively, you can enter the expected price data
directly in the pricing screen by using one of the two following condition types: EID1
(Customer expected price) or EDI2 (Customer expected value). If, during order entry, the
expected price and the actual price differ beyond a specified amount (according to the
formula you specify in the pricing procedure), the system assigns an incompletion status to
the order. The sales order cannot be processed for delivery or billing until the discrepancy is
resolved.
You control the customer-expected price functionality with the pricing procedure. You must
include condition types EDI1 and EDI2 in your pricing procedure and, in addition, specify a
formula for each condition type. The SAP standard formula 8 enables you to specify different
criteria for comparing expected and actual prices.
The Manage Sales documents with Customer-Expected Price app lists sales document items
that are locked due to discrepancies between the net price and the customer-expected price
until the discrepancy is resolved.
Conditions in Customer Expected Price
You can either accept or decline the customer-expected price, or you can reject the sales
document item:
● If you accept the customer-expected price, you can manually adjust, for example, the

value of the net price within the app.

● If you decline the customer-expected price for a sales document item, the system releases

it for further document processing with the net price.

● If you reject the item, the item is not processed any further. You can use this action, for

example, if you cannot agree on a net price and the customer does not want the item
anymore.
Additionally, you can display information about customer contacts that is relevant for the
selected sales document item and navigate to related apps to display and change the
corresponding sales document
Statistical and Relevant for Account Determination The Statistical and Relevant for Account
Determination option defines whether a statistical
price condition is relevant for account determination.
You might want to post statistical price conditions to CO-PA, such as Warranties, Delivery
costs, Surcharges, Discount, or Commission.
You use this indicator to define that the statistical price condition is posted to account-based
Profitability Analysis (CO-PA) as journal entry to an extension ledger of Financial Accounting.
You do this to increase and improve information relevant for management reporting.
In sales, you do not have any effect of this field, it just shows the condition type marked as
statistical. The actual effect and information is only available in CO-PA. This statistical
condition value is posted as a journal entry to an extension ledger of Financial Accounting. For
more information, see the Profitability and Cost Management topic under Finance→ Cost
Management and Profitability Analysis at https://help.sap.com or the S4F29: Profitability
Analysis in SAP S/4HANA course.

Lesson 3 : Analyzing the Determination of Taxes

Criteria for Tax Determination
For the Blank status, the standard priority rules are as follows:
● Rule 1:
If the payer (PY ) has a sales tax identification number and a different sold-to party (SP
),
the sales tax identification number and tax classification are taken from PY. The ship-to
party ( SH ) is then not relevant. The system determines the sales tax identification
number according to the tax destination country.
● Rule 2: If rule 1 does not apply, that is if SP does not have a sales tax identification
number but SH
has a sales tax identification number, the sales tax identification number and tax
classification are taken from SH.
● Rule 3:
If rule 2 does not apply, the sales tax identification number and tax classification are
transferred from the sold-to party.
For status A, the sales tax identification number and tax classification are transferred
from
the sold-to party. The sales tax identification number is transferred according to the tax
destination country.
For status B, the sales tax identification number and tax classification are transferred
from
the payer by using the same method described in the rule for status A.
Tax Classification

The system determines a tax rate in the order document or the billing document based on
the following criteria:
● The business transaction (domestic, export, or import)

● The tax liability of the ship-to party

● The tax liability of the material

Tax Determination

In SAP Standard system you find the condition type MWST as well as condition type TTX1 for
taxes. Both condition types can be used to determine taxes. In our training setting we use
condition type MWST.
You can calculate the taxes in the Sales and Distribution (SD) component by using the normal
condition techniques.
You enter the condition type for tax into the pricing procedure.
The access sequence is used to find the appropriate condition record for the current key
combinations.
Tax Interfaces

You need to decide when to calculate taxes. The tax procedure is assigned to a country in the
basic settings of the Financial Accounting (FI) component.
For the United States, you have the following tax procedures:
● TAXUS:

Taxes are calculated in the Sales and Distribution (SD) component.

● TAXUSJ:

Taxes are calculated in the central tax procedure by using the tax jurisdiction value stored
in the master data for the ship-to party.
● TAXUSX

Taxes are calculated through a Remote Function Call (RFC) and a central tax procedure.
For jurisdictional and third-party tax calculations, after the procedure is determined, the
corresponding pricing procedure in SD uses the appropriate condition types. For example, if
the tax procedure assigned to the country is TAXUSJ, pricing procedure RVAJUS uses
condition types UTXJ, JR1, JR2, JR3, and JR4. If the central tax procedure is TAXUSX, pricing
procedure RVAXUS uses condition types UTXJ, XR1, XR2, XR3, XR4, XR5, and XR6.
Condition type UTXJ initiates the tax calculation. Condition types JR1-4 and XR1-6 receive the
jurisdictional breakdown of the tax amounts that are returned from the central tax procedure.
----------------------------------------------------------------------------------------------------------------------------------------
1. Which of the following condition types are group conditions and are divided among all the
items in an order according to value?
Choose the correct answers.
X A PN00 (Net Price)
X B AMIW (Minimum Order Values)
X C PMIN (Minimum Price)
X D HM00 (Manual Order Value)
Correct. Condition types AMIW and HM00 are group conditions and are divided among all
the items in an order according to value.
2. In customer hierarchies, you can assign price or rebate agreements only to a low-level
node.
Determine whether this statement is true or false.
X True
X False
Correct. In customer hierarchies, you can assign price or rebate agreements to a highlevel
node.
3. A pallet discount like (KP00) offers a discount for whole units of measure only. This
behavior is controlled by a basic formula in the pricing procedure.
Determine whether this statement is true or false.
X True
X False
Correct. The pallet discount like (KP00) offers a discount for whole units of measure only.
This behavior is controlled by a basic formula in the pricing procedure.
4. Which condition types are statistical?
Choose the correct answers.
X A PR02 (Interval Price)
X B DIFF (Rounding Off)
X C VPRS (Cost (price)
X D SKTO (Cash Discount)
Correct. VPRS (Cost price) and SKTO (Cash Discount) are the condition types that are
statistical.
5. Which of the following factors are considered when determining tax rates?
Choose the correct answers.
X A The tax liability of the ship-to party
X B The tax liability of the material
X C The tax procedure
X D The business transaction – domestic or export and import
Correct. The factors that are considered in determining tax rates are the business
transactions (domestic, export, or import), the tax liability of the ship-to party, and the tax
liability of the material.
6. The tax procedure is assigned according to country in the basic settings of the Financial
Accounting (FI) component.
Determine whether this statement is true or false.
X True
X False
Correct. The tax procedure is assigned according to a country in the basic settings of the
Financial Accounting (FI) component. For example, for the United States, you have the
following tax procedures: TAXUS, TAXUSJ, and TAXUSX

UNIT 6 Pricing Agreements

Lesson 1 :Using Pricing Agreements
Promotion and Sales Deal
A promotion typically represents a high-level marketing plan for particular products or
product lines. For example, a promotion for a range of products during a specific sales cycle.
A promotion can include a number of different sales deals. For example, if your promotion
covers a range of different product lines, you can create separate sales deals for each product
line.
You can define a promotion or a general marketing plan for a product line for a certain period
of time. You can link the promotion with specific sales deals, which are linked to special
condition records that are used for promotional pricing or discounts.
Example of a Sales Deal

The sales deal example in the figure depicts a summer sales promotion, which contains
several sales deals for various product lines. The condition records for discounts are linked to
the corresponding sales deals.
Sales deals provide a finer focus for your promotional activities. In the example above, a
promotion includes separate sales deals for each product line. Within the sales deal for a
product line, you might want to be able to promote the products in different ways. You might,
for example, want to offer customer-specific discounts in some cases and material-based
discounts in others.
You can then create specific condition records that are linked to the sales deal, or assign
existing condition records. If the sales deal is linked to a promotion, the condition record also
contains the number of the promotion. This makes it possible later on, for example, to list and
analyze all the condition records that refer to a particular promotion.

Sales Deals and Promotions in the Billing Document

The detail screen of a billing item displays the sales deal number and promotion number
fields.
Release Status for Sales Deals

The release status of a sales deal controls where you can find the condition records for a sales
agreement. For example, if the activity has status B, the activity records are included in the
pricing simulation (net price list) but not used in the current documents. If the activity has
status C, the condition records are considered while planning in the Profitability Analysis (COPA)
component.
1. Which document displays the sales deal and promotion information?
Choose the correct answer.
X A Sales Order
X B Delivery
X C Billing Document
X D Accounting Document
Correct. The detail screen of a billing item displays the sales deal number and promotion
number fields.

UNIT 7 Introduction to
 Condition Contract
Management ( to review fully )
Lesson 1 : Introducing Condition Contract Management
The condition contract combines all information relevant to the agreement, such as the
condition granter or owner of the condition contract, the list of eligible partners, and special
conditions such as discounts or prices. It can be used to grant discounts for meeting quantity
or value targets for sales or purchase volumes. A pricing enhancement ensures that pricing
finds only special conditions for the eligible partners listed in the condition contract.
Supported Subsequent Settlement Scenarios
The standard configuration comprises settings for the basic sales rebate scenario and
settings for several variations of this basic scenario. The basic scenario concerns the sales
rebate agreement with one customer. The settlement documents that you create in the
different settlement runs (partial and final settlement, delta accruals settlement) are directly
transferred to Financial Accounting. This basic scenario is related to condition contract type
0S01 Sales Rebate.
As variations, the standard delivery also contains settings for contracts valid for several
customers (for example, condition contract 0S02 Sales Rebate - Multiple Customers) and the
collection of settlement documents before the transfer to Financial Accounting is posted.
Another variation concerns how taxes for the rebate amount are determined for which there
are two options. The first option is to regard sales rebate agreements as a kind of service for
the customer. Under this perspective, you apply the usual value added tax for services.
The second option is to regard subsequent sales rebates as normal revenue reductions. Then
you must apply the tax valid for the sales of a material (goods-related taxation). In the
standard delivery, there are four scenarios with a taxation as service (condition contract
types 0S01 to 0S04) and four scenarios with good related taxation (condition contract types
0SG1 to 0SG4).
In addition, special settings have been made for the integration of Condition Contract
Management with Trade Promotion Management (TPM). There are four condition contract
types, 0ST1 to 0ST4, which conform with the condition contact types 0S01 and 0S02 for the
taxation as a service. The standard delivery does not contain settings for the TPM integration
for goods-related taxation, as they can simply be derived from the settings for 0SG1 and
0SG2.
The configuration settings of the different scenarios are almost identical. The following
sequence of sub-topics reflects the logical sequence for maintaining the settings for
Condition Contract Management and Settlement.
You find the relevant customizing settings in Customizing:
IMG: Logistics - General→ Settlement Management→ Condition Contract
Management→ Condition Contract Maintenance → Define Condition Contract Types .

UNIT 8 /9 (to see )

UNIT 10 Billing Documents in

Sales and Distribution
Processes
Lesson 1 : Integrating Billing Documents in the Sales and Distribution Process
An important part of billing is the interface to Financial Accounting. This allows documents to
be created automatically in Financial Accounting and Controlling when you create billing
documents.
All billing documents have the same structure. They are made up of the header and any
number of items.
The header contains the following general data that is valid for the entire billing
document:
● Customer number of the payer

● Billing date

● Net value of the entire billing document

The items contain the following data relevant for each individual item:
● Material number

● Billing quantity

● Net value of the individual items

1. Which of the following elements make up a billing document structure?

Choose the correct answers.
X A Header
B Schedule line
C Overview
X D Item
Correct. A billing document structure is made of Header and Item.
2. Which information can be found in the billing document header level?
Choose the correct answers.
X A Payer
B Billing quantity
X C Billing date
D Ship-to-party
Correct. The payer and the billing date can be found in the header level.

UNIT 11 Organizational Units

The company code represents an independent company in the legal sense, for which you can
draw a complete set of accounts for purposes of external reporting.
Sales organizations and plants are assigned uniquely to one company code.
For each sales organization, the system determines allowed plants on the basis of the
distribution channel, so that a sales organization can sell goods from more than one plant.
You can also assign a plant to several sales organizations. All of these sales organizations can
sell from this plant.
In the sales order, the system automatically creates a delivering plant on the basis of a priority
rule.
A sales organization can also sell products supplied by a plant that is assigned to a different
company code (intercompany sales processing).
By making the plant dependent on the distribution channel, you can further differentiate
between plants within a sales organization from a sales view. The distribution channel (direct
sales), for example, may be allowed for certain plants in a sales organization but not for
others.

Organization in Accounting
Each company code in the system uses general ledger accounts from exactly one chart of
accounts. General ledger accounts within a chart of accounts are unique. You can name the
chart of accounts to meet your specific requirements.
In Financial Accounting, you create, save, process, and post the business transactions at
company code level. You can create several company codes for each client, to carry out
accounting for several independent companies. There must always be at least one company
code.
A unique assignment is made between the sales organization and company code. Therefore,
the system automatically determines the company code when you enter the relevant sales
organization in the sales order.
1. A sales organization can be assigned to more than one company code.
Determine whether this statement is true or false.
True
X False
Correct. A sales organization is uniquely assigned to only one company code.
2. A company code can be assigned to more than one chart of accounts.
Determine whether this statement is true or false.
True
X False
Correct. A company code is uniquely assigned to only one chart of accounts.
3. A company code can be used be more than one sales organization.
Determine whether this statement is true or false.
X True
False
Correct. A company code can be used by several sales organization.

UNIT 12 The Billing Process

Lesson 1 : Controlling the Billing Process
Billing Type
F2 Invoice
F8 Pro forma invoice
CS Cash sale
G2 Credit memo
L2 Debit memo
RE Returns
IV Intercompany billing (invoice)
IG Intercompany billing (credit memo)
S1 Cancellation invoice
S2 Cancellation credit memo
LR Invoice list
LG Credit memo list
Billing type controls

You can create new billing types or redefine existing ones in the standard system to meet the
requirements of your company installation.
You assign a number range and optional item number increment to each billing document
type. The billing document numbering has to be a number range with internal number
assignments. The system automatically assigns a number that lies within the appropriate
number range. If you want to be more flexible it is possible, for more details please refer to the
appendix topic: Flexible Billing Document Numbering and Number Range Prefixes .
Many control parameters in the billing type influence further processing in Financial
Accounting, such as posting block or account determination.

Relevance of the Item Category

Billing Type Proposal
In Customizing for the item category, you can determine whether billing is to be carried out
with reference to a delivery or an order.
The system proposes a relevant billing type from the underlying sales document type. For
example, in delivery-related billing, you invoice a standard order (order type OR) using billing
type F2.
You can change the proposed value when creating billing documents by entering the required
billing type in default data.
Delivery-Related Invoices

You can reference either an order or a delivery when creating an invoice.

If you want to ensure that goods have already been shipped before an invoice is created,
create an invoice with reference to a delivery. For example, reference the delivery of a carpet.
You can use an invoice to simultaneously refer to an order and a delivery. For example, you
can create a single invoice for goods (the carpet) and service (laying the carpet), as long as
the corresponding requirements for combining the two are met.
Order-Related Invoices

If you want to invoice a customer for services rendered, you normally create an invoice with
reference to the sales order. This is because deliveries are not usually created for services,
such as laying a carpet.
Create invoice based on outbound delivery for goods because they need to be delivered , and with
sales order for service because they do not have to be delivered .
1. Can you create a billing document which refers simultaneously to an order and a delivery?
Determine whether this statement is true or false.
X True
X False
Correct. You can create a billing document which refers simultaneously to an order and a
delivery
2. With reference to which of the following elements will you create an invoice to ensure that
goods have already been shipped before you create the billing document?
Choose the correct answer.
X A Sales order
X B Purchase order
X C Delivery
X D Shipping instructions
Correct. When you create an invoice with respect to a Delivery, only shipped goods are
billed.

UNIT 13 Special Billing Types

Lesson 1 : Processing Special Billing Types
Cancellation
Cancellation Process

To cancel a billing document, you must create a cancellation document credit or debit memo ) . The system copies
data from the reference document into the cancellation and offsets the entry in Financial
Accounting.
The reference document of the billing document (for example, the delivery for the canceled
invoice) can now be billed again.
You can use billing document type S2 in the standard system to cancel credit memos.
You do not need to make an entry in copying control for cancellations. The parameters to be
changed (for example, assignment number and reference number) are stored for each billing
type directly in the Cancellation area of the screen.
You can also cancel individual items in a billing document.
When you cancel a document, you branch to an overview screen containing the original billing
document as well as the cancellation billing document. Before updating, you can compare
both documents to avoid any discrepancies during cancellation. During the update, the
system also attempts to complete the billing document and the cancellation billing document.
Credit and Debit Memos
Credit and Debit Memos — Overview
You can create credit and debit memos either with reference to credit or debit memo
requests (sales documents), or, if your company does not require a release procedure in the
case of complaints, directly with reference to a billing document.
You can create credit and debit memo requests in the following ways:
● Without reference to a previous business transaction

● With reference to an order

● With reference to a billing document

You can control in Customizing whether the system is to set a billing block automatically for a
credit or debit memo request.
As the employee responsible, you can do the following:
● Release the credit or debit memo request after review. You can decide the amount or

quantity to be credited or debited.

● Reject items in the credit or debit memo request and enter a reason for rejection.

Releasing or Rejecting Credit Memo Requests

You can release a credit memo request or return by removing the billing block.
If the complaint has not yet been justified, you can enter a reason for rejection for each item.
The value of these items will not be copied into the billing document.
The reason for rejection allows you to control the item as follows:
● Whether it is copied into the credit memo with a zero value

● Whether it appears in the credit memo at all

Debit memo requests are processed in exactly the same way.

Workflow Credit Memo Request

Credit memo requests are usually blocked for billing (credit) upon creation, until the
employee responsible releases this block. Within your company, based on the value of the
credit memo request, you can define the point at which the check is carried out and the
employee responsible.
If the value of the credit memo request is below a certain minimum limit, the credit memo
request can be released automatically by the system.
The workflow within the framework of credit memo processing now guarantees that the
employee responsible is automatically determined and informed when a credit memo request
is created, depending on the value involved. The employee responsible can reject, release, or
process the credit memo request.
With the app Manage Credit Memo Request Workflow, you can configure the workflow to
optimize the approval process for credit memo requests. The app allows you to define
conditions under which to automatically release credit memo requests as well as to define
approvers for requests that need to be verified. If a workflow is activated and the configured
start conditions are fulfilled, the approval process is initiated.
Business process specialists can define sales teams with their team members and approvers.
Configuration experts can define and activate credit memo request workflows with their
thresholds and agents. Sales manager can receive notifications (My Inbox or Notifications) for
credit memo requests waiting for approval. The manager can decide to approve, to reject, or
to ask internal sales representatives to rework credit memo requests.
Before using the Manage Credit Memo Request Workflow app, you have to activate SAP
standard workflow WS00800286 for this scenario. For more information, refer to the SAP
Help documentation. Furthermore, to be able to assign the required credit memo request
approval functions to the responsible team members in the Manage Teams and
Responsibilities app, the authorizations listed below must be assigned to the user.
The sales workflow for credit memo requests provides a safe and secure approval process for
credit memo requests. It automates approval of credit memo requests under specific value
thresholds. This saves time and effort by sending notifications to the correct team members
and accelerates the processing of credit memo request approvals.
Invoice Correction Requests
Invoice Correction Process Flow

The invoice correction request represents a combination of credit and debit memo requests.
On one side, credit is granted fully for the incorrect billing item while it is simultaneously
debited (automatically created as a debit memo item). The difference created represents the
final full amount to be credited.
You must create the invoice correction request with reference to the corresponding billing
document (no reference to order or inquiry).
When creating an invoice correction request, the items are automatically duplicated. This
means that for every item in the billing document, a second item is created. The resulting item
categories must have opposite + and −values.
First all credit memo items are listed, followed by all debit memo items. The reference to the
corresponding billing document is created when you specify the preceding document and the
preceding item.
You cannot change the credit memo item. You can, however, update the corresponding debit
memo item according to new characteristics (for example, new pricing or change in quantity).
You can delete the credit and debit memos in pairs. You can delete unchanged pairs of items
all at once in this way.

Quantity Difference
Quantity difference is when you want to process a customer complaint because of a certain
amount of damaged or substandard goods.
The system corrects the quantity to be billed via the debit memo item.
If other item pairs arise from the relevant billing document and these item pairs are
unchanged, you can delete them in one step, using the Delete unchanged item function.
Price Difference

Price difference is when you want to process a customer complaint for incorrect pricing of
goods.
A correction of the pricing elements must be carried out in the debit memo.

Pro Forma Invoices

Pro Forma Invoices — Overview
Billing types for pro forma invoices are available for export transactions.
You can create pro forma invoices with reference to orders or deliveries. You do not need to
post the goods issue before creating a delivery-related pro forma invoice.
You can create as many pro forma invoices as required. This is because the billing status in
the reference document is not updated.
Data from pro forma invoices is not transferred to Financial Accounting.
Learning Assessment - Answers
1. Which of the following steps must you perform to cancel a billing document?
Choose the correct answer.
X A Create a cancellation document.
X B Delete the sales order.
X C Delete the billing document.
X D Create a credit note.
Correct. To cancel a billing document you create a cancellation document.
2. In which of the following ways can you create credit memo requests?
Choose the correct answers.
X A Without any reference to a document.
X B With reference to a sales order.
X C With reference to a delivery document.
X D With reference to a Purchase requisition.
Correct. You can create credit and debit memo requests with reference to an order or
without any reference to a document.
3. With reference to which of the following can you create an invoice correction request?
Choose the correct answer.
X A Billing document
X B Sales order
X C Purchase order
X D Purchase requisition
Correct. You create an invoice correction request with reference to a billing document.
4. Which of the following is true regarding invoice correction requests?
Choose the correct answers.
X A The items are automatically duplicated and the resulting item categories have
opposite + and −values.
X B Both the credit memo and debit memo items can be modified.
X C In the document only the remainder is listed and posted.
X D The credit and debit memos can be deleted in pairs and unchanged pairs of items
can be deleted all at once.
Correct. The items are automatically duplicated and the resulting item categories have
opposite + and −values. In addition, the credit and debit memos can be deleted in pairs
and unchanged pairs of items can be deleted all at once.
5. Does a pro forma invoice billing document get automatically transferred to Accounting?
Determine whether this statement is true or false.
X True
X False
Correct. A pro forma invoice billing document does not get automatically transferred to
Accounting.
6. Do you need to post the goods issue before creating a delivery-related pro forma invoice?
Determine whether this statement is true or false.
X True
X False
Correct. It is not necessary to post the goods issue before creating a delivery-related pro
forma invoice.

Unit 14
Lesson 1
Setting Up the Data Flow for Billing Documents

Each billing document requires a reference document (except billing of external

transactions).
These reference documents may be as follows:
● Sales document

● Outbound delivery

● Billing document

When billing explicitly, you must enter the number of the reference document as the
transaction to be billed.

Billing Document Reference Document

Invoice Sales-------- document or delivery
Credit memo ----------Credit memo request or billing document
Debit memo---------- Debit memo request or billing document
Returns credit memo--------- Returns document
Credit memo -------------Invoice correction request
Pro forma----------- invoice Sales document or delivery
Cancellation invoice------------ Billing document
Cancellation credit memo -----------Credit memo
Invoice list----------- Billing documents
Billing document external transaction----------- External transaction
Intercompany billing---------- Delivery
Rebate credit memo --------------Rebate request

You must always refer to an existing document when creating a billing document.
Data will then be copied from the reference document to the billing document.
For delivery-based billing, the quantities to be billed, for example, can be taken from the
delivery; the prices, however are taken from the underlying order.
The reference document is displayed as the source at header level in the copying control
table.

Data Flow

You can, to a certain extent, influence the data flow from reference documents to billing
documents.
You can do this using the following:
● Billing types (for example, for texts and partners)

● Copying control

The control options are as follows:

● At header level, there is foreign trade data, allocation number, reference number, and item

number assignment.
● At item level, there is quantity and pricing.

You can also use data transfer routines to influence the data flow to meet your individual
requirements. For example, you can copy the terms of payment from the customer master
instead of the preceding sales document.

Copying Control
Copying Control Table
The system administrator can define how data is transferred in the billing process in the
copying control table.
The system administrator determines controls for the following:
● The header

Target is billing type and the source is sales document type.

● The item

Target is billing type and the source is sales document type and the item category.
Controls Found at Header/Item Level
The following controls are found at header level:
● Reference document; the documents that may be used as reference for billing.

● Determination of foreign trade data, allocation numbers, reference numbers, and item

numbers.
The following controls are found at item level:
● Billing quantity:

Which quantity should be invoiced – the order or delivery quantity?

● Pricing and exchange rate:

Should pricing, for example, be carried out again or should prices from the order be copied
over, and at what exchange rate?
● Price source: From where should the conditions in the billing document be carried over (for example,

copying over shipment costs from the shipment cost document)?

Copying Requirements

You can specify the requirements for billing a sales document under requirements in copying
control.
You can determine copying requirements for the header and the item.
With the requirements in copying control you can, for example, specify whether goods issue
has to be posted before billing can be carried out.
You can define your own requirements using transaction VOFM.
Pricing overview
The system determines a pricing procedure based on the document information. Document
determination procedure is based on the transaction type, and customer determination
procedure is based on the customer master.
Individual condition types are stored in this pricing procedure in a corresponding sequence.
These condition types define the different elements in pricing, such as prices, special offer
discounts, and freight surcharges.
An access sequence is stored for every condition type. This defines the search strategy the
system uses when searching for valid condition records.
For each access, the key fields are filled with the document data so that the system can
search for available condition records in the condition file.
These condition records can be created using scales.
When determining a suitable, valid condition record, the scale is read with the number of
pieces or the value from the item, and the corresponding price or discount is set in the
document.
The procedure described above is carried out for every single condition type contained in the
pricing procedure.

Pricing in the Billing Document

Pricing type
The system administrator can assign a pricing type or define new ones for each billing type
and item category combination.
The system administrator can also define how the rate is determined

Learning assessment
1. How can you create a billing document?
Choose the correct answers.
X A You cannot create a billing document without an existing reference document.
X B You can create a billing document without an existing reference document.
X C You can use any reference document for any billing document any time, just like
creating a sales order.
X D You can only use a reference document for a billing document for which the
corresponding copy control entry exists.
Correct. You cannot create a billing document without an existing reference document,
and you can only use a reference document for a billing document for which the
corresponding copy control entry exists.
2. Which of the following copying control options are available at the item level?
Choose the correct answers.
X A Billing quantity
X B Pricing
X C Item number assignment
X D Allocation number
Correct. Billing quantity and pricing are available at the item level.
3. Which master data information can be updated during the billing process?
Choose the correct answer.
X A Pricing
X B Order quantity
X C Billing date
X D Payer
Correct. The pricing information can be updated during the billing process.

UNIT 15 Billing Document

Creation
Lesson 1
Creating Billing Documents in Different Ways
Billing on Request
are to be billed. You enter the order number or delivery note number, depending on whether
you want to carry out order-related billing or delivery-related billing.
If a billing document cannot be created, for example, because of a billing block, the system will
issue an error log.
You can also select individual items or partial quantities of items to be billed when billing
deliveries or orders. To do this, you have to choose the Item Selection function in billing. In
delivery-related billing, you can only change the item quantities for item categories that have
billing relevance K.
Billing Due List

You will usually not bill transactions individually. You are more likely to carry out periodic
collective billing runs (for example, by goods issue posting).
If you are working with the billing due list, enter the selection criteria, such as sold-to party,
billing date, and destination country. The system uses the selection criteria as a basis for
combining the transactions to be billed.
When selecting, you can also decide whether the billing due list should only contain
documents that are order-related, delivery-related, or both.
The figure displays a case in which creation of billing documents is restricted to those
documents that were delivered before May 15 for sold-to party C1. Based on this selection, the
system selects the worklist and creates billing documents when processing the billing due list.

Billing Options
You now have the following billing options:
● Individual billing documents:

An individual billing document is created for all documents marked in the billing due list. No
combination is carried out. You branch to transaction VF01 for every document selected.
● Collective billing documents:

All documents marked in the billing due list are billed. The system tries to combine them as
much as possible. Processing of the selected documents is carried out in the background.
After the documents are processed, you return to the billing due list. Here, icons indicate
whether or not a document has been billed successfully.
● Collective billing documents online:

The system branches to the Create Billing Document function (transaction VF01 ). The
documents are combined as far as possible according to the usual criteria.
You can process the billing due list in simulation mode. The system displays the billing
documents without saving the documents. Transactions containing errors are indicated with
the corresponding processing status.
Billing on Specific Dates
Creating Invoices on Specific Dates
You can process invoices periodically. All deliveries due for billing on a certain date can be
combined into one collective invoice.
To do this, you must do the following:
●Maintain individual billing dates in the factory calendar using special rules.
●Enter the factory calendar in the customer master record of the payer ( Billing schedule on
the billing screen).
When you create a document, the system copies the next invoice date from the factory
calendar to the appropriate document as the billing date.
Background Processing
Billing in the Background

You may decide to create invoices using a background job because it is practical and efficient.
You can run the background job automatically in the following ways:
●Periodically (for example, each Monday at 2 a.m.)
●At a specific time (for example, June 19 at 8 p.m.)
The system can divide the billing due list into multiple background jobs and start them
simultaneously. In this way, you can make better use of your hardware by operating more
than one processor.
If you do not require a log or a detailed list, SAP recommends that you do not select these
options on the selection screen. This will improve performance considerably.

Cancellation
Cancellation of Collective Billing Run

You can cancel a collective billing run.

This cancels all the billing documents in a collective run. The canceled billing documents are
combined under a collective processing number in collective processing type S and can be
displayed by choosing Billing document→ Log.
You can then bill the preceding documents for the canceled billing document again.
Only users with the correct authorization can cancel collective runs.
Hint:
To cancel a collective billing run, choose Billing→ Information system→ Billing
Documents→ Log of Collective Run. Choose the Documents pushbutton and
choose the Reverse all pushbutton.

S4HANA billing apps

Besides the traditional transactional processing for creating a billing document with
transactions VF01 and VF04, you have an SAP Fiori app: Create Billing Documents – Billing
Due List Items. Within the Create Billing Documents – Billing Due List Items Fiori app, you have
more filter and selection options than before. When you use the Create Billing Documents –
Billing Due List Items app, you have the option to set the Billing Settings. Here you can decide
how the invoicing process is carried out.
You can make billing settings so that the system does the following automatically when you
create billing documents:
● Enter billing date and type before billing If you enable this setting and choose to create
billing documents, the system requests a billing date and the required billing type before
creating billing documents.
● Create separate billing document for each item of billing due list If you enable this setting
and choose to create billing documents, the system creates separate billing documents for
each item of the billing due list that you have selected.
● Automatically post billing documents. The system automatically posts all billing
documents that you create to accounting and triggers output (for example, an invoice by
e-mail). Note that if you do not choose to automatically post billing documents, you must
manually post your billing documents using the Manage Billing Documents app.
● Display billing documents after creation The system generates and displays temporary
billing documents for the SD documents that you have selected for billing. You then have
the option to save or discard them. Saving converts them to final billing documents, while
discarding them returns you to the billing due list.
In the Create Billing Documents — Billing Due List Items app, you can now generate and view
temporary billing documents before converting them to final billing documents . If everything
you see in the temporary billing document is correct, you can go ahead and create the final
billing document in a single step. If you notice an error, you can discard the temporary billing
document and start again. This saves you time and effort because you no longer need to
cancel billing documents that were created using incorrect information. The feature also
reduces sequential discontinuity in the continuum of billing document numbers, meaning that
fewer numbers in the billing document number range are wasted.
For the Create Billing Documents — Billing Due List Items app, it is possible to use “custom
fields” to filter and sort the billing due list. As a prerequisite, the custom fields must be
enabled and implemented in the system (for more details please refer to SAP help: Process
Extensibility for Sales Documents and Billing Documents ).
Manage Billing Documents App
In addition, you have got the SAP Fiori App Manage Billing Documents to review the billing
documents. With this app, you can manage invoices, invoice cancellations, credit memos, and
other billing documents. This includes displaying, editing, posting, and canceling billing
documents. You can also generate PDF-based print previews of billing documents.
You can select multiple billing documents to display them simultaneously. In this case, the
system enables you to quickly navigate between the selected billing documents. Once a billing
document is displayed, you can view and change information. To display a summary of a
billing document's details, choose its document number in the list. This will display the
corresponding billing document object page.
Learning Assessment - Answers
1. You want to create an invoice. What options are available?
Choose the correct answer.
X A For creating an invoice, you can use the billing due list.
X B For creating an invoice, you have to use the "General Billing Interface".
X C You can only manually create single billing documents.
X D You have to use the Background Processing.
Correct. For creating an invoice, you can use the billing due list.
2. You want to create billing documents regularly on specific dates. How do you achieve this?
Choose the correct answer.
X A Use the billing due list on specific dates.
X B Use the "General Billing Interface".
X C Use a factory calendar and assign it to the customer master record of the payer .
X D Use the Background Processing only on Mondays.
Correct. You achieve when you use a factory calendar and assign it to the customer
master record of the payer .

UNIT 16 Types of Settlement

Lesson 1
Analyzing Invoice Combination and Invoice Split
As a rule, the system attempts to combine all compatible transactions in a single billing
document.
In the SAP system, you can include both order-related items and delivery-related items in the
same billing document.
Invoice Split
Automatic Invoice Split
If the header partners or data in the header fields are not identical, the system will
automatically perform an invoice split.
All header partners and header fields in the billing document can cause an invoice split. For
example, if the terms of payment in the two orders are different, as in the figure.
Item-Dependent Invoice Split

Material groups are defined at client level, you can define material groups in SAP to differentiate the various
materials. For example, an electronic manufacturing organization can classify computers as desktops, televisions
as electronics, speakers as sound systems, etc. Each classification have its own individual group.

The system administrator can also define additional split requirements in Customizing for
copying control to prevent the system from combining sales documents in a billing document.
For example, separation can be based on material group or profit center.
The VBRK-ZUKRI field in the billing header is used to store these additional split criteria.
The fields that cause a split are displayed in the split analysis.
Individual Billing Documents

You can configure the SAP system to create one billing document for each sales document.
To do this, specify data transfer routine 3 in Customizing for copying control (the number of
the reference document is set in the VBRK-ZUKRI field).

Lesson 2
Understanding Special Types of Settlement
Invoice List
Overview of Invoice List
Invoice lists are mainly used by purchasing associations, when the head office settles billing
documents for all the stores. The head office does not receive individual invoices of all the
stores instead the head office receives a single invoice list on specific dates.
The invoice list lets you create, at specified time intervals or on specific dates, a list of billing
documents (invoices, credit and debit memos) for a particular payer .
● If you have agreed upon a factoring discount, maintain condition type RL00 (factoring

discount) as well as condition type MW15.

● Each billing type to be included in an invoice list must be assigned an invoice list type. The
standard SAP version includes two invoice list types, LG for credit memos and LR for
invoices and debit memos.
You also need to maintain the following master data:
● Define a factory calendar that specifies when invoice lists are to be created. Enter this

factory calendar in the payer customer master record ( InvoicingListDates field on the
Billing Documents tab page).
● Maintain condition records for condition type, RL00, for the payer.

● Create output condition records for the condition types LR00 and RD01. (You can use

communications technology to decide whether invoice documents are sent to the

customer when the invoice is created or whether they are not sent until the invoice list is
created.)
You can cancel invoice lists. In the case of factoring discounts, a corresponding cancellation
document is created for FI.
SAP Factory Calendar is a configuration that defines which days are working days for a
specific plant.
factoring discount is used in invoice list to give a discount on the total value of all the
billing docs. eg. suppose there are 10 invoices and the value of the item goes above 1lakh,
maybe the customer can ask an additional dicount because of the huge value of business he
is generating.
External Billing Document Requests (EBDRs)
A billing method that enables you to bill different types of sales and distribution (SD)
documents in your SAP S/4HANA system together with billing data from external sources to
create combined customer invoices.
Convergent billing describes the process of billing different types of SD documents together
to create a single customer invoice. This method is recommended any time that you want to
bill a customer for sales orders, deliveries, or professional services simultaneously. In effect,
you are converging multiple billing due list items (including different billing types) into a single
customer invoice.
EBDR Converge Billing
Business Example
A customer purchases a solution-centric offering from an IT company. The solution includes
computer hardware (outbound delivery), a software license (sales order), consulting services
(debit memo request), and digital machine learning services delivered in the cloud (external
usage-based billing data persisted in an EBDR). During the billing process at the end of each
month, you converge the relevant billing data from all channels so that you can send out a
combined, single invoice that bills the customer according to how much they used each
offering component.