SAP Sales Order Management EIN 6133 Enterprise Engineering

SAP Sales Order Management EIN 6133, Enterprise Engineering Summer A 2010

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

Components of Sales and Distribution Shipping Transport Sales and Distribution (SD) Sales Information System Sales Support Master Data Billing Foreign Trade Sales Credit Mgmt.

Sales Order Process Run MRP Sales Order Entry Delivery Pick/Pack Materials Check Availability Sales Order Process Receipt of Payment Invoice Customer Post Goods Issue

Sales process Master ◦ ◦ data Trading goods/Finished goods Customers Organization Price Business processes Quotation ◦ Sales Order ◦ Delivery/Goods Issuing ◦ Billing ◦ Payments Sales order tracking Document flow 5

Material Master – Sales Views Sales: sales org. 1 Sales: sales org 2 Sales: general/plant Foreign trade export rg. 1 O s Sale View Sa l Vie es Or g. 2 w Barrel Pen January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 6

Customer Master A master record must be created for every customer (Customer ID is subledger account) General data, Company Code data (Financial Accounting - FI), and Sales Org. data (Sales and Distribution - SD) General data Address Control data Payment transactions Company Code data Account Mgmt Payment transactions Correspondence January 2008 Sales Org. data Sales Shipping Billing Partner Usage © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 7

Sales Organization ◦ Sells and distributes products ◦ Negotiates terms of sales ◦ Responsible for these business transactions Critical organization element to the definition of business markets A sales transaction is linked to only one Sales Organization January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 8

Distribution Channel Identifies how products and services reach the customer: whole sale (WH), Retail (RE), internet (IN). Can be assigned to one or more Sales Organizations January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 9

Division Often times used to define product line distribution Organization level to which customer specific information and requirements are maintained (e. g. pricing, partial delivery) Assigned to one or more Sales Organizations January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 10

Sales Area comprised ◦ Sales Organization ◦ Distribution Channel ◦ Division of: Will be used to link together the organizational aspects of sales to customers Used for statistical analysis January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 11

295 xx. A 1 10, 20, 30 WH xx. A 1 01

Master Data Core Elements Customer Master Data Material Pricing January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 13

Change Finished Product Price January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 14

Credit Limits and Checking Define automatic credit limit checks to your company’s requirements Define at what point the system carries out these checks (order, delivery, goods issue, and so on) Alerted to a customer’s critical credit situation to decide whether the customer should be granted credit Employees can be automatically notified of critical credit situations via internal mail January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 15

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.

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.

SD Process: Sales Order Sales order processing can originate from a variety of documents and activities ◦ Customer contacts us for order: phone, internet, email ◦ 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

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

SD Process: Sales Order A created sales order contains all of the information needed to process 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

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

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.

Sales Order: Pricing The system displays pricing information at both the header and the line item level for sales order. ◦ 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.

SD Process: Delivery Notes Initiates the delivery process Control mechanism for the process Changes to delivery are allowable - products, quantities Integrated with the Material Management (MM) and Finance (FI) modules Picking Packing Loading Post Goods Issue Delivery Note January 2008 Each step in the delivery process updates the delivery note status © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 24

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

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)

Delivery: Loading and Packing Identifies which packaging is to be used for specified products 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

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

Delivery/ Goods Issuing Reconciliation Account No impact on Financial Accounting (FI) Sales quotation Sales order Materials Management (MM) and Financial Accounting (FI) Delivery/Goods Issuing Inventory (Trading, F/G) Dr Cr $100 COGS Dr $100 Cr

SD Process: Billing The billing document is created based on sales orders and/or deliveries The billing process is used to generate the customer invoice. Integration with Financial Accounting (FI) and Controlling (CO) It will update the customer’s credit status.

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.

Billing Reconciliation Account Billing amount is assigned and transferred to customer account receivable Billing Customer (sub-ledger) Dr Cr $120 Account Receivable (AR) Dr $120 Sales Revenues Dr Cr Cr

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

Customer Payment Amount is paid by Customer and account receivable is reduced Customer (sub-ledger) Dr Cr $120 Account Receivable (A/R) Dr Cr $120 Bank Dr Cr $120

Document Flow The document flow feature allows you to find the status of an order at any point in time. The SAP system updated the order status every time a change is made to any of the documents created in the customer order management cycle (Order to Cash). January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 35