Sales - A/R Contents: Basic Sales Process

Sales - A/R Contents: Basic Sales Process
Additional Documents and Functionalities of Sales

Sales – A/R: Unit Objectives
At the conclusion of this unit, you will be able to: Model the basic sales process in the system Use additional functionalities of sales Use additional documents of sales

Sales – A/R: Business Scenario
The company has set customer satisfaction as its top priority and wants to streamline its processes in sales to make sure that its customer’s demands can be met as quickly as possible.

Basic Sales Process: Topic Objectives
At the conclusion of this topic, you will be able to: Model a basic sales process in SAP Business One Use the different transactions of Sales - A/R

General Ledger (Value)
Document Flow in Sales Quotation Order Delivery A/R Invoice Warehouse (Quantity) 1.) 2.) 3.) General Ledger (Value) The sales process involves the quotation, order, delivery note, and A/R invoice documents. Quotations, orders, and delivery notes are optional, but if you do not refer to a delivery note when you post an A/R invoice, the A/R invoice affects your stock. 1.) When you create an order the Available quantity is reduced and the Committed quantity is increased by the sales order quantity. 2.) When you create a delivery the In Stock quantity and the Committed quantity is reduced. 3.) When you create an invoice the In Stock quantity is reduced if you did not create a delivery note beforehand. When you create a document, you can always refer to one or more documents that you created earlier (except for quotations). When you create a document with a reference to an existing document, only documents that are still open are displayed. All documents, for which you have not created a follow-on document have open status. Open documents remain open until you have transferred all the items to a follow-on document, or until you manually close or reverse them. You cannot make any changes to base documents that you have already copied completely to a follow-on document. Copy rules: Reference to just one base document: The system copies all the header and row data to the target document. Reference to several base documents: The system distributes the total discount from the header data of the base document to the rows and copies it to the rows in the target document.

Sales Documents and Their Properties
Quotation Order Delivery A/R Invoice 1.) Sales Document must be Created in the System X X X 2.) Change/Reverse 3.) Sales Document for Correction Returns A/R Credit Memo Quotation Order Quotation A/R Reserve Invoice Delivery Order Quotation 4.) Reference When Added 5.) Quantities Posted in Inventory Management (X) X (Goods Issue) X (If No Reference to Delivery) 6.) Values Posted in General Ledger X X 1.) The A/R invoice is the only document that has to be created in the system. Quotations, orders and deliveries are optional. 2.) A quotation and an order can be changed or cancelled after they have been created. You could disable the possibility to make changes to sales orders: choose Administration  System Initialization  Document Settings, on the Per Document tab page for the Document Sales Order deselect Allow Changes to Existing Orders. You can not change deliveries or A/R invoices after they have been added. 3.) If you need to correct a delivery, you have to do that by creating a return. If you need to correct a A/R invoice, you have to do that by creating a A/R credit memo. 4.) When you create an order, you could do that by referencing a quotation. You can create a delivery by referencing a quotation, an order, or a A/R reserve invoice. You can create an A/R invoice by referencing a quotation, an order, or a delivery. 5.) When you create a delivery, the goods issue is posted as well. The In Stock quantity is reduced. When you create an A/R invoice without reference to a delivery, the goods issue is posted. The In Stock quantity is reduced. 6.) Values from both the delivery and the A/R invoice are posted in the general ledger. The goods issue from both deliveries and A/R invoices (with no reference to a delivery) create journal entries which post to the general ledger. An A/R invoice creates entries for sales revenue and the amount the customer owes.

Postings in Sales Process for Inventory Items
Sales Item Purchased Item Fixed Assets Sales Order Delivery A/R Invoice Revenues Account Sales Revenues – EU Foreign Revenues Acc. Cost Acc. Stock Acc. Customer 100 100 100 100 When you sell inventory items, the system creates the following journal entries: The delivery creates a journal entry that posts the value of the delivered goods to the debit side of a cost account (cost of goods sold or COGS) and to the credit side of the stock account. The stock account and the cost account are retrieved from the Stock Account field and the Cost Account field on the Inventory tab of the item master record. The A/R invoice creates a journal entry that posts the invoiced amount to the debit side of the customer account and to the credit side of a revenues account. The revenues account is retrieved from the Inventory tab of the item master record. If the customer is located in the same country, the account from the Revenues Account field is used. If the customer is located in a European Union (EU) country, the account from the Sales Revenue - EU field is used. If the customer is located in a non-EU foreign country, the account from the Foreign Revenues Account field is used. If you skipped the delivery before posting the A/R invoice, the system adds the stock posting to the A/R invoice posting. To create an order, choose Sales – A/R  Sales Order. To create a delivery, choose Sales – A/R  Delivery. To post an A/R invoice, choose Sales – A/R  A/R Invoice. This graphic does not cover tax postings or postings of additional revenues and expenses. The sales order document is not relevant for accounting.

Postings in Sales Process for Non-Inventory Items
Sales Item Purchased Item Fixed Assets Sales Order Delivery A/R Invoice Revenues Account Sales Revenues – EU Foreign Revenues Acc. Customer 100 100 When you sell items that you do not manage as inventory items (for example, services that you created as items), the system does not trigger a posting for the delivery. Actually, you can skip the delivery altogether. The A/R invoice is posted the same way as it is posted for inventory items. Although the item is not an inventory item, the Inventory tab does not disappear from the item master record because the system needs it for the G/L account determination. The revenues account is retrieved from the default warehouse on the Inventory tab of the item master record. If the customer is located in the same country, the account from the Revenues Account field is used. If the customer is located in an EU country, the account from the Sales Revenue - EU field is used. If the customer is located in a non-EU foreign country, the account from the Foreign Revenues Account field is used. This graphic does not cover tax postings or postings of additional revenues and expenses.

Sales Process with Picking
Quotation Order Pick Pack Manager 2.) 4.) 1.) Open Released Picked List of orders to be released or picked. Deliver 3.) 5.) Pick List Delivery A/R Invoice You use Pick and Pack manager to enter the selection criteria to create pick lists. You can keep track of the items at different stages of the picking process, starting from the status open, then releasing the items, and finally creating the pick list to pick the items. The Pick&Pack Manager enables you to release partial or all of the items, perform a partial pick for the items, or to pick all the items. You can also create a delivery note at any stage of the picking process. In SAP Business One, the sales order or the reserve invoice serve as the pick document. Choose Inventory  Pick and Pack  Pick Pack Manager 1.) Status Open: This window displays all the items that are still open. They have not been released, picked or delivered yet. In this window you select the orders and quantities to be released. Quantity To Release = In Stock – Released – Picked 2.) Status Released: This window displays all the pick lists in status released. You can display the data in two views – Detailed and Summary. Quantity Available to Pick = In Stock – Picked 3.) To get the pick list, click in the list of the released orders into the orange arrow link next to the pick no. or choose Inventory  Pick and Pack  Pick List . Enter the picked quantity. 4.) Status Picked: This window displays the items that are already picked but are not delivered yet. 5.) In the list of the picked items choose the Deliver button to create the deliveries. You can create the deliveries also from the open or released list.

Sales Process with Packing
Quotation Order Pick List Delivery 1.) Define Packages 2.) Existing Packages Box 3.) Available Items A pcs. Package Content A pcs. > < A/R Invoice In SAP Business One, the delivery or A/R invoice may serve as the pack document. 1.) In the delivery choose Goto  Packaging or right mouse click to get to the Packages - Setup window. 2.) Existing Packages: Enter the packages that you want to use for packing the items of the delivery. You can define Package Types in Administration  Setup  Inventory  Package Types. Available Items: Lists items and quantities that you can pack into the packages. 3.) Select the items and enter the quantities that you want to assign to the package selected in the Existing Packages list above. Package Contents: Shows the content of the package that is selected in the Existing Packages list above.

Additional Documents and Functionalities of Sales: Topic Objectives
At the conclusion of this topic, you will be able to: Describe the additional documents and functions used in the sales process Follow the changes in stock during the sales process Display and evaluate sales analyses Model sales for one-time customers

Document Generation Wizard
Deliveries to a customer Invoices need to be produced Summarized A/R Invoice The Document Generation Wizard in SAP Business One is a simple process used for gathering rows from base documents to target documents, based on several user defined parameters. The system takes you through the individual steps required to define the parameters for the summary. Examples of the parameters that exist are target document type, posting date, document date, items or service and many more. This wizard can be used for example, to produce a summarized A/R Invoice for a customer, containing all delivery notes that were created for the customer over the past week. It is a simple yet effective method of summarizing data to reduce data input. All deliveries can be placed into one invoice per customer. It is important to note at this stage that once the Document Generation Wizard has run the process, it is irreversible. Note that the wizard does not handle customers defined as multi-currency.

Document Generation Wizard Steps
Document Generation Options Step 1 Customers Step 5 Messages and Alerts Step 2 Target Documents Step 6 Step 3 Base Documents Save and Execute Options Step 7 Consolidation Options Summary Report Step 4 Step 8 This wizard will guide you step-by-step through the definition of parameters required to generate the target document. Step 1 – Document Generation Options: Choose to define a new set of parameters or use an existing set. Step 2 – Target Documents: Set the type and characteristics of the target documents. Step 3 – Base Documents: Select the base documents to be processed by choosing the required document types and selection criteria. Step 4 – Consolidation Options: This step was added in release 2005 A. Set the grouping criteria by which the base documents will be consolidated to the target document. Step 5 – Customers: Select customers for whom you would like to perform the summary. Step 6 – Messages and Alerts: Set the system’s response to missing data such as missing exchange rate and inventory or bookkeeping alerts such as deviation from credit line. Step 7 – Save and Execute Options: Starting in release 2005 A, it is possible not only to execute the wizard but to save the parameter set before the execution or just to save the parameters and exit. Step 8 – Summary Report: This report displays the summary of target documents created per customers as well as error and warning messages.

Sales to One-Time Customers (A/R Invoice + Payment)
Menu Administration Setup  Financials  G/L Account Determination Sales Default Customer for A/R Invoice + Payment C9999 One-Time Customer A/R Invoice + Payment Payment Means Customer C9999 Name Michael Kramer Check Bank Transfer Credit Card Cash Ship To Main 9855 Chicago TX 65095 USD Item No. Item Description A00001 Twin Seater USD A00002 Three Seater ... SAP Business One provides the A/R Invoice + Payment transaction for sales to one-time customers. Prerequisites The customer pays the entire amount at once (for example, in a shop). The customer does not need documents such as an order or delivery note document. Settings in the System You maintain a representative master record for one-time customers in the system (Administration  Setup  Financials  G/L Account Determination, choose the Sales tab page, then choose Default Customer for A/R Invoice + Payment) The system automatically calls up this customer when you enter the invoice. You cannot change the customer number in the document. You can, however, change the customer's name and address in the fields provided. Using the default values in the user parameters, you can also assign a separate customer master record to each user for the A/R Invoice + Payment transaction. Exception: The customer only makes a partial payment In this case, you should create a separate customer master record for this customer so that you can monitor the incoming payments. Balance Due USD Add Balance Due USD

Functions in Sales – A/R
Quotation Order Delivery A/R Invoice X X X 1.) Credit Limit Check 2.) Gross Profit and Last Prices Report X X X X 3.) Link to Transaction Journal (X) X 4.) Serial Number and Batch Management X X (X) X X X X 5.) Activities X X X X 6.) Create Document Drafts The system offers different functions within the sales process. Some of these functions are available only in specific sales documents. 1.) You can do a credit limit check in a sales order, delivery, and A/R invoice but not in a quotation. 2.) You can display the Gross profit and Last prices report for each document in sales. To display the gross profit in a document choose Goto  Gross Profit or select the icon in the menu bar or choose right mouse click. To display the Last Prices Report in a document put the cursor in the price field and choose Goto  Last Prices or right mouse-click on the unit price field. 3.) You have a link to the transaction journal report from the A/R invoice. If you have a continuous warehouse validation, you also have a link to the transaction journal in a delivery. To display the Transaction Journal Report in a document select the icon in the menu bar or choose right mouse click. 4.) Serial number and batch management is available in sales orders, deliveries, and A/R invoices. 5.) You can create activities from every sales document by choosing Goto  New Activity or by using a right mouse click. You can assign activities to every sales document. 6.) Drafts can be created for every sales document by choosing File  Save as Draft.

Alternative Items 1.) 2.) Alternative Items Item No. A00012 Item No.
Remarks Match Factor B04711 … 100,00 F00771 … 80,00 Sales- or Purchasing Document Alternative Items – Selection Criteria Vendor/Customer E4002 Item No. A00012 WH 01 Item No. Description Quantity WH Item No. Match Factor Available A00012 … 50 01 B04711 100,00 25 F00771 80,00 144 2.) 1.) You can define alternative items by choosing Inventory  Item Management  Alternative Items. Alternative items are defined per item and you can build a hierarchy of alternative items by defining alternatives to the alternatives. Remarks: Enter any free text as a remark for the alternative item. Match Factor: Enter the value to specify the matching degree in points. Higher value represents higher match. In our example, item A00012 has two alternative items – B04711 and F The matching factor defined for item B04711 is 100 and for item F00771 – 80. If there is no item A00012 in the warehouse, item B04711 can replace it because it has the highest matching factor. Reverse Link: Select the alternative item and choose Reverse Link to create a reverse relationship between the alternative item and the original item. This means that both items are defined as alternative items for each other. 2.) You can select alternative items while you create documents in sales or purchasing. You can display the list of alternative items and replace an item. Choose Goto  Alternative Item or use the right mouse click in the item line.

Item Availability Check in Sales Orders
1.) Administration  System Initialization  Document Settings Sales Order Document Settings Item No. Description Quantity WH Per Document A00001 … 50 01 Document Sales Order 2.) Activate Automatic Availability Check If Order Quantity > Quantity Available Item Availability Check 3.) Item No. A1000 Warehouse 01 Quantity Ordered 50 Pair = 100 pieces Quantity Available 28 pieces Select Action: Continue Change To Available Quantity 1.) You can activate an automatic availability check for sales orders. You do this in Administration  System Initialization  Document Settings on the Per Document tab page choose the Document Sales Order and select the checkbox for Activate Automatic Availability Check.. 2.) When you create a sales order and enter a quantity for an item, which is greater than the available quantity for this item, the Item Availability Check window comes up automatically. If the automatic availability check for sales orders is not activated through the document settings, you can also always get to the Item Availability Check window by choosing Goto  Item Availability Check or with a right mouse click in the item line. 3.) Item Availability Check Window: Quantity Ordered: The quantity from the item line of the sales order per sales unit of measure. Quantity Available: The quantity that is available per inventory unit of measure. Select Actions: Continue: You accept the information and go on. Change to Available Quantity: You reduce the order quantity to the available quantity. Display Quantities in other Warehouses: You can check and possibly select the quantities from another warehouse. Display Alternative Items: You can check and possibly select the quantities from an alternative item. Delete Row: You can delete the line from the sales order. Display Quantities in Other Warehouses Display Alternative Items Delete Row

Returns Quotation Order Delivery Cost Account Stock Account 50 50 Returns Cost Account Sales Returns 50 50 Warehouse (Quantity) General Ledger (Value) For legal reasons, you cannot change or delete deliveries and customer invoices that have already been entered in the system. To correct these, you need to use a clearing document. If a delivery is returned before you create the A/R invoice for the customer, you can post the return delivery in the system. The system then updates both the quantities and associated values. When you create the returns with reference to the delivery note, the system corrects the stock postings in the delivery note. If a delivery is damaged or of poor quality, the customer returns it to you. You post the return in the system and the system creates a journal entry that posts the value of the returned goods to the debit side of a sales returns account and to the credit side of the cost account. The value of the returned goods is not posted back to the original stock account to keep it separate from the value of the undamaged goods. The sales returns account and the cost account are retrieved from the Sales Returns field and the Cost Account field on the Inventory tab of the item master record. If you also want to manage the inventory of the damaged goods separately from the undamaged goods, you should define a special warehouse for the damaged goods and enter this warehouse in the return document. To post a return, choose Sales – A/R  Return.

Credit Memo Quotation Sales Order Delivery A/R Invoice Sales Revenues Cost Acc. Stock Acc. Customer 50 50 100 100 A/R Credit Memo 100 Customer Revenues Acc. 100 50 Cost Acc. Stock Acc. 50 Warehouse (Quantity) General Ledger (Value) You always post an A/R credit memo if you can refer to an A/R invoice that has already been created. The A/R credit memo ensures that the system posts both the quantities and associated values. When you create an A/R credit memo with reference to the A/R invoice, the system corrects both the quantities and values in the A/R invoice. The system increases the stocks of the credited items. The system credits the credit memo value to the customer's account in the general ledger and corrects the revenue by the same amount When a customer returns items that do not refer to a specific delivery, you can post this quantity directly to the warehouse without referencing a preceding document. The stock and stock value increase as a result. An A/R credit memo with reference to the returns delivery ensures that system credits the values to the customer.

A/R Reserve Invoice Warehouse (Quantity) Accounting (Value)
Quotation Order Delivery Warehouse (Quantity) 1.) 2.) 3.) Accounting (Value) You use A/R reserve invoices to create a pro forma invoice. Unlike standard invoices, reserved invoices do not change the warehouse stock. 1.) The Available quantity is reduced by the sales order quantity. 2.) You post an A/R reserve invoice before you create a delivery note. The Available quantity is reduced if you did not create a sales order beforehand. 3.) You post the delivery afterwards with reference to the A/R reserve invoice. This reduces the In Stock quantity. A/R reserve invoices create value-based postings.

Stock Changes in Sales Model Report: Inventory Status Sales / AR + - -
Transaction In Stock - Committed + Ordered = Available Quotation Order + - Delivery for order - - Separate delivery (w/o reference to order) - - Sales / AR Pick List A/R Invoice for delivery Separate A/R Invoice (w/o reference to delivery) - - A/R Reserve Invoice for Order A/R Reserve Invoice (w/o reference to order) + - Delivery for A/R Reserve Invoice - - You can use the report Inventory Status to analyze the inventory situation for one or more selected items. Choose Inventory  Inventory Reports  Inventory Status. You can also see the inventory status in the item master on the Inventory Data tab page. In Stock: The current stock level of the item. Committed: The item stock reserved for customers and for internal use displays here. The stock reserved for internal use is the quantity of the item used in a finished product based on the BOMs for existing production instructions and work orders. Ordered: This field shows the quantity of the item ordered from the vendor. This figure consists of the quantity ordered from external vendors plus the quantity that is currently being produced and that will enter the warehouse by a certain date. Available: The available quantity of an item displays. This figure comprises: “In Stock” - “Committed” + “Ordered” If the available stock for an item is negative, the value displays in red. To display the details for the inventory situation of an item regarding open sales orders, purchase orders, and production orders, select the row for that item in the report. The system opens the Stock Situation sub-window. Returns + + A/R Credit memo + +

Link Sales Order to Purchase Order
Contents Accounting Logistics Purchase Orders Add/Update Move Only Selected Items Purchase Order Confirmation BP Code WH Item No. Qty Price Card Code WH Item Qty Price S1000 01 A00001 100 189 S1000 01 A00001 100 189 >> A00003 150 299 A00003 150 299 S1011 01 A00002 200 155 >>> Data from Sales Order Select the checkbox of the Purchase Orders field on the Logistics tap of the sales order to automatically create purchase orders for the items of the sales order. After adding the sales order the Purchase Order Confirmation window opens and you can choose the items and quantities from the sales order for the purchase orders. The system will add purchase orders automatically and will establish a link between the sales order and the purchase orders. Purchase Order Confirmation window On the left side all of the line items from the sales order are summarized according to the selection chosen in the sales order. If a vendor and a warehouse ware selected, then each vendor line will have a drill down displaying the warehouse. Each warehouse will have its own drill down to display the items included in the sub-grouping. The system proposes as default value the vendor (default vendor from the item master data), the price (according the vendors pricelist), and the quantity (from the order). You may change the proposed values. On the right side, the line items are presented by purchase orders organized by the user after transferring the line items from the left side. When you add a purchase order that contains more than one warehouse, the system will prompt you to create child purchase orders. If you OK the message, SAP Business One creates separate child purchase orders for each warehouse. Choose Administration -> System Initialization ->Document Settings , Per Document tab page. Choose Purchase Order and select Split PO. Data for Purchase Order Move All Items

Drop Ship Purchase Order Confirmation WH 02 General Drop Ship
Menu Administration WH 02 Setup General Drop Ship Inventory Warehouses Batches Sales Order Item No. Description Quantity WH A00001 … 20 02 Add Purchase Order Confirmation In the drop ship process the stock does not arrive and exit from the company. The company serves only as an agent and receives a commission on the process. You mark a certain warehouse as drop ship and choose relevant stock accounts for the warehouse. Choose Administration  Setup  Inventory  Warehouses. Select the checkbox of the field Drop Ship to define the warehouse as a drop ship warehouse. When adding a sales order you can choose the drop ship warehouse in the item line. After adding the sales order the Purchase Order Confirmation window will open only for the lines where the drop ship warehouse was chosen. A00001 … 20

Sales Analyses in SAP Business One
Sales analyses provide information on sales according to the following criteria: Customers Items Sales employees A combination of the above Examples What are the sales figures per customer? Which customer is the most profitable? Which product is most successful? Which is the most profitable? How are the sales figures distributed among the quarters? Which products does a certain customer prefer? How successful is our sales staff? How well does a particular sales employee sell one item in comparison to another one? How are the sales figures per employee and item distributed over the entire year? Using sales analyses, you can quickly identify weak points in your sales and product portfolio. You can then use this information to optimize your sales processes. The Customer Receivables Aging report contains information about the number of open receivables for a customer, as well as how old the receivable is. It analyzes receivables owed to you by your customers.

Open Items List Open Items List: Open Sales Quotations
Open Sales Orders Open Deliveries Open … For the Open Items List choose Sales - A/R  Sales Reports  Open Items List This report allows the user to view open sales and purchasing documents. Using this report gives you an accurate picture regarding the status of documents in the system, only documents with status Open appears in this report. Documents that were partially copied to target documents also appear in this report. You can also display the documents from the report. This window displays the open sales or purchasing document according to the user’s choice. Choose from the drop down menu the required document (for example, open orders, open deliveries, …) to display. If you choose, for example, the option Open Sales Quotations, the table below this field updates and displays all the open sales quotations recorded in SAP Business One. After you close this window, the last open document choice is saved, and next time you open the window it will appear by default.

Sales/AR: Unit Summary
You are now able to: Model the basic sales process in the system Use additional functionalities of sales Use additional documents of sales

Sales - A/R Contents: Basic Sales Process

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