Sales Order Process

Sales Order Process
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2008 by SAP AG. All rights reserved.
Sales Organization
A sales organization is responsible for negotiating sales conditions and distributing goods and services. It represents the top organizational level to which you sum sales figures. There must be at least one sales organization defined A sales organization is assigned to only one company code. More than one sales organization can be assigned to a company code.
2008 by SAP AG. All rights reserved. 2
Distribution Channel
Sales Organization Distribution Channel Wholesale Retail Direct
A Distribution Channel is the way sales materials reach the customer. A distribution channel can be assigned (serve) to more than one sales organization. Distribution Channels allow for different conditions such as minimum order quantities and pricing.
Division
Sales Organization
Product Line 1
Divisions Product Line 2
Product Line 3
Divisions are used to present product lines. At least one division must be defined. Divisions can be assigned to more than one sales organization. Divisions restrict access to materials, so care should be exercised in defining divisions.
Sales Area
Sales Organization 1 Distribution Channel 1 Division 1 Division 2 Distribution Channel 2 Division 1
Sales Organization 2
Distribution Channel 1
Division 1
Division 2
A Sales Area is a valid combination of Sales organization, Distribution Channel and Division. Customer Master Data and Sales Documents are linked to sales areas. Simple organizational structures are usually preferred to complex ones.
Fitter Snacker Sales Organization

Fitter Sales (##FS) Wholesale (WH) Snackbar (SB) Direct (DI) Snackbar (SB)
Shipping Point
A shipping point is a fixed location that carries out shipping activities. It may be a loading dock, a mail room or a shipping department. One plant can have multiple shipping points. A shipping point can serve multiple plants. Lead times for determining delivery dates are associated with shipping points.
Customer Order Cycle
Pre-Sales Activities
Sales Order Processing
Inventory Sourcing
Payment Billing Delivery

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Pre-Sales Activities
There are two categories of presales activity: Sales Support and Pre-sales Documents. Sales Support allows for tracking of customer contacts by including sales visits, phone calls, letters and direct mailings. Mailing lists can be generated based on specific customer characteristics. Basically an Integrated CRM system. Pre-sales contacts include inquiries and quotes. Inquiries document customer requests for information (how much is . . ., is the product in stock . . .) Quotes are binding documents to a customer offering a specific quantity of material at a specific price if accepted within a specific period. Both Inquiries and Quotes can be used as a starting point to create a customer order.
Sales Order Processing

Customers place orders with a customer service representative who create a document* with information on: Customer Material Ordered - material and quantity Pricing conditions for each item Schedule lines - delivery dates and quantities Delivery Information Billing information Information is pulled from master data on customers and materials to minimize data entry errors.
*Electronic Capture of a Business Event
Inventory Sourcing
Inventory Sourcing determines: If a product is available (availability check). How the product will be supplied: From stock on hand. From production or purchase orders that should be available. From make-to-order production. Shipped from an external supplier. Shipped from another plant or warehouse.
Inventory Sourcing
Inventory sourcing occurs when: An order is created. An order is changed. When the delivery document is created.
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Delivery
Delivery activities include: Creating delivery documents Creating transfer orders for material picking Provide packing information (if required) Goods issue (updating accounting and inventory data)
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Billing
A Billing Document is created by copying information for the sales order and delivery document into the billing document which is used to create the invoice. Creating a Billing Document will automatically debit the customers accounts receivable account and credits the revenue account. Postings may also be made to other accounts.
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Payment
Payment is the final step in the customer order management cycle. Final payment includes: Posting payments against invoices. Reconciling differences, if necessary. The Cycle may not always go as planned (material not in stock, defective material returned for credit, etc.). SAP has procedures to deal with these possibilities.
Order Management Process

Pre-Sales
Contract Contact Inquiry Quotation Order Scheduling agreement
Materials Management Materials Management
Sales Information System Sales Information System
Production Planning Production Planning
Sales Order Processing Inventory Sourcing
Delivery/ Transportation
Billing Payment/ Accounting
Delivery
Goods issue
Transfer Order Shipment Invoice Material Stock Account
Accounts Receivable
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Document Flow
Order Delivery Invoice
Accounting
Document Flow of a Sales Order Order 900 . Delivery 50000672 . . WMS transfer order 100000828 . . GD goods issue: delivery 40000184 . . Invoice 90000376 . . . Accounting document 100000269
The sales order management process consists of a chain of steps. Each step in the process causes the creation of a document which can be used to track the progress of the sales order. All changes to documents (sales orders, delivery, etc.) creates a document to keep track of the changes.
Document Flow
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Master Data
Customer Master Material Master
Pricing Master
Master Data is centrally stored (shared across application modules) and is processed to eliminate data redundancy. When creating business transactions (like a sales order) the R/3 system copies information from master data. Three kinds of master data are critical to sales order processing: Customer - Shared with FI/CO Material - Shared with MM and PP Pricing
Creating an Order
Customer Master Sold-to party 2540-00 Item Material 1 1400-500-00 2 1400-100-00 Quantity 30 20
Material Master
When a sales order is created in R/3, data is copied from: Customer Master Material Master Condition Records for Pricing Tables in Configuration for shipping point and route. Data can also be copied from an inquiry or quote.
Shipping Point and Route

SP 1 SP 2
SP 3
Plant Shipping Point
Route
Customer
The Shipping Point is the logical or physical location where deliveries are created and managed (see Organizational Elements). The Route is the path that the delivery follows from the plant to the customer site. Delivery dates are determined based on lead times associated with the shipping point (picking and packing time) and route (transportation lead times and transit times)
Stock Available: Backward Scheduling

Material Transportation Availability Date Planning Date Loading Date Goods issue date Requested Delivery Date
Order Date
Loading Time Pick Pack and Stage Transportation Lead Time
Transit Time
The R/3 System uses the longer of these two times in calculating delivery scheduling.
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Stock Unavailable: Forward Scheduling

Confirmed Delivery Date
Order Date
New Material Transportation Availability Date Planning Date
Loading Date
Goods issue date
Loading Time Pick Pack and Stage Transportation Lead Time
Transit Time
The confirmed delivery date is derived by the R/3 System using forward scheduling based on the new material availability date
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Delivery
Complete Delivery Partial Delivery
Sales Order
Sales Order
Delivery Delivery Delivery Delivery
Order Combination
Sales Order Sales Order
Delivery
A delivery can be created for each sales order. Sales orders may split into multiple deliveries (availability). A delivery may combine a number of sales orders for efficiency. Combined sales orders must have something in common like shipping point, delivery processing date, ship-to party or route.
Picking Process
Delivery
Transfer Order
Print Transfer Order
Confirm Transfer Order*

* not mandatory
Delivery Items Complete
Process differences
Copy picked quantity
Create a new transfer order for variance quantity
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Billing
Invoice Split Sales Order Delivery Invoice Invoice Delivery Delivery Delivery Delivery Delivery Invoice Invoice Invoice
Separate Sales Order Invoice per delivery Collective Sales Order Invoice Sales Order
Invoice splits can be used to bill for different items like materials and services. Collective invoices can be used to consolidate deliveries onto one invoice to minimize paperwork.
Posting Payments
Invoice 1 Invoice 2 Invoice 3 Invoice 4
First National Bank 2132 123123 54545 345 34
Acme Corp.
Pay to $
4325 Dollars
Customers may send one check to cover multiple invoices. They may also send checks for less than the full amount due. SAP allows for partial payments to be applied to invoices. Payment posting is performed by the accounts receivable department.
Fitter Snacker Exercise
West Hills Athletic Club
Sales and Distribution
Inquiry 1 Pricing Availability
Sales Order 2
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Pick 4 Materials Management Goods Issue 5
Sales Order
Delivery 3
Delivery
Delivery
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Invoice West Hills Athletic Club
Sales and Distribution Accounts Receivable
Delivery 6
Post
Receivable
Receivable
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Sales Order Process

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Sales Order Process

2008 by SAP AG. All rights reserved.

Divisions Product Line 2

Fitter Snacker Sales Organization

2008 by SAP AG. All rights reserved.

Customer Order Cycle