1. SAP Sales Order Processing EIN 6133 Enterprise Engineering Spring 2010

2. R/3 S & D Integrated Solution Client / Server Open Systems Financial
Accounting
Sales &
Distribution
Materials
Mgmt.
Controlling
Production
Planning
R/3
Fixed Assets
Mgmt.
Integrated Solution
Quality
Mgmt.
Project
System
Client / Server
Plant
Maintenance
Open Systems
Workflow
Human
Resources
Industry
Solutions

3. Process Integration Purchase Requisition Purchase Order Run MRP Goods
Procurement
Process
Purchase
Order
Run MRP
Sales Order
Process
Goods
Receipt
Sales Order
Entry
Check
Availability
Invoice
Receipt
Pick
Materials
Receipt of
Payment
Payment
to Vendor
Post Goods
Issue
Invoice
Customer

4. Process Integration Purchase Order Purchase Requisition Goods Receipt
Procurement
Process
Purchase
Requisition
Convert Production
Proposal
Goods
Receipt
Production
Process
Schedule
and Release
Run MPS
w/MRP
Invoice
Receipt
Goods
Issue
Sales Order
Process
Check
Availability
Payment
to Vendor
Sales Order
Entry
Completion
Confirmation
Quality
Inspection
Pick
Materials
Goods
Receipt
Order Settlement
Receipt of
Payment
Post Goods
Issue
Invoice
Customer

5. Components of Sales and Distribution
(SD)
Sales
Support
Credit
Mgmt.
Shipping
Transport
Billing
Foreign
Trade
Information
System
Master
Data
Sales Support: Computer-Aided Selling
Purpose
The Sales Support component provides a wide range of functions for opportunity management. It helps your sales and marketing department to support your existing customers and, at the same time, to develop new business. Within the Sales Support environment, all sales personnel in the field and in the office can share valuable information about customers, sales prospects, competitors and their products, and contact people.
The Sales Support component is:
a source of information for all areas of Sales and Distribution
a tool for lead generation, lead qualification, and lead tracking
 Sales
Sales allows you to execute different business transactions based on sales documents defined in the system.
Four groups of sales documents are differentiated:
Customer inquiries and quotations
Sales orders
Outline agreements, such as contracts and scheduling agreements
Complaints, such as free of charge deliveries, credit and debit memo requests and returns
Shipping Transportation
Transportation is an essential element in the logistics chain. It affects both incoming and outgoing goods. Effective transportation planning and processing ensure that shipments are dispatched without delay and arrive on schedule. Transportation costs play an essential role in the calculation of the price of a product. It is important to keep these transportation costs to a minimum so that the price of a product remains competitive. Efficient transportation planning and processing helps to keep these costs down.
Billing 
Billing represents the final processing stage for a business transaction in Sales and Distribution. Information on billing is available at every stage of order processing and delivery processing.
This component includes the following functions:
Creation of:
Invoices based on deliveries or services
Issue credit and debit memos
Pro forma invoices
Cancel billing transactions
Comprehensive pricing functions
Issue rebates
Transfer billing data to Financial Accounting (FI)
Credit and Risk Management
Credit management
Outstanding or uncollectible receivables can spoil the success of the company greatly. Credit Management enables you to minimize the credit risk yourself by specifying a specific credit limit for your customers. Thus you can take the financial pulse of a customer or group of customers, identify early warning signs, and enhance your credit-related decision-making. This is particularly useful if your customers are in financially unstable industries or companies, or if you conduct business with countries that are politically unstable or that employ a restrictive exchange rate policy.
Customer Service Processing 
Customer Service enables you to plan and manage a wide range of service scenarios. It includes functions for processing:
Service notifications
Warranties
Service orders
Service contracts
Service quotations
Repair orders
Customer Service (CS) draws on functionality from different SAP application components, in particular Plant Maintenance (PM) and Sales and Distribution (SD). For example, CS involves the planning and processing of external services, such as contracts for the maintenance and repair of equipment that a customer has either bought or rented. Maintenance planning and servicing is managed in PM; in SD you can create and maintain the relevant service contracts. Contract-related charges that are incurred in PM are passed on in the form of requests for billing in SD
Sales Information Systems - Reports and Analyses  
The SAP R/3 System offers you a wide range of information and analysis tools for sales and distribution. These provide you with a quick overview of your current business situation.
You want to determine how many orders customer XY issued in the last quarter. To see this information, you can execute the report "List orders". This gives you a list of orders and also contains information on the items, order value etc. You can set the scope of this list yourself.
Foreign Trade / Customs
As markets become increasingly more global and business structures more complex, the need for accuracy in handling the foreign trade needs of a business is gaining rapidly in importance. SAP’s R/3 Foreign Trade / Customs application (FT) provides the tools you need to compete effectively in today’s fast-paced market. It is designed to help you meet the rapidly changing foreign trade requirements of your business.
SAP’s R/3 Foreign Trade application enables you to:
Manage import and export processes, integrating them efficiently into the supply chain
Automatically identify licensing requirements for importing and exporting goods based on current regulations
Simplify reporting with automatic procedures for creating, printing and submitting declarations
Determine which of your products qualify for preference handling
Provide an active interface for sending or retrieving data via internationally available EDI systems and other electronic media
Update or change data in all relevant foreign trade documents at any time prior to the final goods issue. Even after you have posted the goods issue, you can still change data in the invoice.

6. SD: Pre-Sales Activities
Functionality:
Creating and tracking customer contacts and communications (sales activity)
Phone call records
On-site meeting
Letters
Campaign communication
Implementing and tracking direct mailing, internet, and trade fair campaigns based on customer attributes
Pre-sales documents :
Inquiries and Quotations.

7. SD Process: Quotation
The quotation presents the customer with a legally binding offer to deliver specific products or a selection of a certain amount of products in a specified timeframe at a pre-defined price.

8. SD Process: Sales Order
Sales order processing can originate from a variety of documents and activities
Customer contacts us for order: phone, internet,
Existing Contract
Quotations
The electronic document that is created should contain the following basic information:
Customer Information
Material/service and quantity
Pricing (conditions)
Specific delivery dates and quantities
Shipping information
Billing Information

9. SD Process: Sales Order
The sales document is made up of three primary areas:
Header
Data relevant for the entire sales order: customer data, total cost of the order
Line Item
Information about the specific product: Ex: material and quantity, cost of an individual line
Schedule Lines
Uniquely belongs to a Line Item, contains delivery quantities and dates for partial deliveries

10. SD Process: Sales Order
The sales order contains all of the information needed to process your customers request, the following information is determined for each sales order:
Delivering Schedule
Shipping point and route determination
Availability Check
Transfer of requirements to MRP
Pricing
Credit limit check

11. Sales Order: Availability Check
Determines the material availability date
Considers all inward and outward inventory movements
Proposes 3 methods of delivery
One-time delivery
Complete delivery
Delayed proposal
Rules are created by YOU

12. Sales Order: Transfer to Planning
The order is transferred to Material Requirements Planning as an (CIR) Customer Independent Requirement. If a deficit is found the system will propose a Purchase Req. or Order to fulfill the shortage.

13. Sales Order: Pricing
The system displays pricing information at both the header and the line item level.
Header pricing is valid for the whole order it is the cumulative of all line items within the order
Line item pricing is for each specific material.
The system will automatically search for price, discounts, surcharges, calculate taxes and freight. You have the ability to manually manipulate the pricing at both the header and line item level within the sales order by entering a condition type and amount.
Taxes and freight can be set-up so we can’t manually enter.

14. Sales Order: Credit Check
Allows your company to manage its credit exposure and risk for each customer by specifying credit limits.
During the sales order process the system will alert the sales rep about the customers credit situation that arises, if necessary the system can be configured to block orders and deliveries.

15. SD Process: Shipping & Transportation
The shipping process begins when you create the delivery document for the sales order. This document controls, supports, and monitors numerous sub- processes for shipping processing:
Picking
Packing
Post Goods Issue
Integrated with the Material Management (MM) and Finance (FI) modules

16. SD Process: Shipping Order Combination Partial Delivery Complete
Sales Order 1
Sales Order 2
Sales Order 3
Delivery 8…12
Partial
Delivery
Sales Order 4
Delivery 8…13
Delivery 8…14
Delivery 8…15
Complete
Sales Order 5
Delivery 8…16

17. SD Process: Delivery Document
The Delivery Document initiates the delivery process and is the control mechanism for this process
Picking
Packing
Loading
Posting Goods Issue
Changes to delivery are allowable - products, quantities
Changes in delivery will update the sales order

18. Delivery: Picking
Quantities based on delivery note Assigned date when picking should begin Automated storage location assignment Supports serial number/lot number tracking and batch management Integrated with Warehouse Management (WM)
In the system standard settings, it is a prerequisite for goods issue to be posted before the item relevant for picking can be picked completely. Therefore, delivery quantity and picking quantity (picked quantity) in the outbound delivery must be equal.
Considering the picking lead time the picking date will be assigned based upon material availability
The picking process involves taking goods from a storage location and staging the right quantity in a picking area where the goods will be prepared for shipping.
Depending on the picking procedure being used, you can either determine delivery-relevant data before picking or wait until after picking is completed to record it. Delivery-relevant data may be made up of the following:
Which batches a material is picked from
Which serial numbers are picked
Which valuation types the stock is taken from
The use of the WM transfer order as a picking order offers you the following advantages:
Determining of target data for transfer orders
Splitting transfer orders according to target data
Printing transfer orders or transmitting them in IDoc format
Determining actual data for picking with option of executing incentive wage calculations using the Human Resources (HR) module
Confirming transfer orders

19. Delivery: Loading and Packing
Identifies which packaging is to be used for specified products (customer preference and UCC-128 considerations) Identifies and updates accounts associated with returnable packaging Tracks the packed product by container Insures weight/volume restrictions are enforced All packed items are assigned to the required means of transportation
The Packing component and related packing information enables you to:
Update the stock situation of packing materials
Monitor returnable packaging stocks at the customer's or forwarding agent's place of business
Help you find you what was in a particular container (for example, if a customer maintains that they have received an incomplete delivery)
Make sure that the weight and volume limits have been adhered to
Ensure that products have been packed correctly
UCC-128: Universal Container Code – Uniform packing code

20. Delivery: Goods Issue
Event that indicates the legal change in ownership of the products Reduces inventory and enters Cost of Goods Sold Automatically updates the General Ledger (G/L) accounts Ends the shipping process and updates the status of the shipping documents
As soon as the goods leave the company, the shipping business activity is finished.
The outbound delivery forms the basis of goods issue posting. The data required for goods issue posting is copied from the outbound delivery into the goods issue document, which cannot be changed manually. Any changes must be made in the outbound delivery itself. In this way, you can be sure that the goods issue document is an accurate reflection of the outbound delivery.
When you post goods issue for an outbound delivery, the following functions are carried out on the basis of the goods issue document:
Warehouse stock of the material is reduced by the delivery quantity
Value changes are posted to the balance sheet account in inventory accounting
Requirements are reduced by the delivery quantity
The serial number status is updated
Goods issue posting is automatically recorded in the document flow
Stock determination is executed for the vendor's consignment stock
A worklist for the proof of delivery is generated
After goods issue is posted for an outbound delivery, the scope for changing the delivery document becomes very limited. This prevents there being any discrepancies between the goods issue document and the outbound delivery.

21. SD Process: Billing
The billing document is created by coping data from the sales order and/or delivery document.
Order-based billing
Delivery-based billing
The billing process is used to generate the customer invoice.
It will update the customer’s credit status.
Billing represents the final processing stage for a business transaction in Sales and Distribution. Information on billing is available at every stage of order processing and delivery processing.
This component includes the following functions:
Creation of:
Invoices based on deliveries or services
Issue credit and debit memos
Pro forma invoices
Cancel billing transactions
Comprehensive pricing functions
Issue rebates
Transfer billing data to Financial Accounting (FI)

22. SD Process: Billing Documents
The billing document will automatically create a debit posting to your customer sub-ledger account and credit your revenue account.
It is at this point that the sales process is passed over to Financial Accounting to await payment.
Creating Billing Documents Explicitly 
Purpose
If you only have to bill specific orders or deliveries, you can carry out manual billing explicitly.
When processing the billing due list, you do not need to enter the individual documents to be invoiced. The system lists the documents to be invoiced on the basis of the selection criteria you enter. It can also combine several deliveries in one invoice.
Process Flow
You select the function for creating a billing due list.
You enter the selection criteria for the billing documents to be created. For example, enter billing type F2, if you only want to create invoices with this billing type.
You then display the billing due list.
The system uses the selection criteria to create the billing due list (a list of sales documents to be billed). You can now process this list, e.g. select some or all of the sales documents to be billed.
You select the function for billing. The system creates the corresponding billing documents for the selected documents.
Automatic Posting to Finance (next slide0

23. SD Process: Payment
Payment is the final step in the sales order process, this step is managed by the Financial Accounting department.
Final payment includes:
Posting payments against invoices.
Reconciling differences between payment and invoice.
Payment will create a posting clearing the liability in the A/R account and increasing your bank account.

24. (FI – MM) Integration Points
Customer Payment
Delivery/ Goods Issuing
Billing
Inv. change/
Sales Rev.
AR (Customer)
F/G Inventory
Bank
Dr Cr
Dr Cr
Dr Cr
Dr Cr
$100
$100
$100
$100
$100
$100
Goods Receipt
Debit Inventory
Credit GR/IR
Invoice Receipt
Debit GR/IR
Credit AP
Payment Program (A/P)
Debit: AP
Credit Bank

25. Sales Order Document Flow
Goods Receipt
Debit Inventory
Credit GR/IR
Invoice Receipt
Debit GR/IR
Credit AP
Payment Program (A/P)
Debit: AP
Credit Bank