Pre Sale Activities > Sale Order Processing > Inventory Sourcing > Shipping > Billing > Payment

Effective sales order processing connects all activity to customer demand in a series of integrated processes. The SAP System application component Sales and Distribution (SAP SD) makes this sales order processing possible. The steps in a sales process are then reproduced by electronic documents that are linked to each other.

The SAP sales and distribution process begins with establishing and maintaining customer relationships, and ends with invoicing for delivery of goods or service offered to the customer. Posting the customer incoming payments is part of the SAP System application component Financial Accounting.

The Customer Order Management cycle can begin with Pre-Sales Activities. For example, in response to a customer request, you create and send a quotation.

• As part of sales order processing, you need to create a sales document. During procurement processes, the SAP System determines the supplier of the goods, based on data that you have stored in the system. Is the supplier from one of your delivering plants, and, if so, which one? Is the supplier a third-party vendor, and, if so, which one?
• As part of shipping processing, you need to organize and perform the delivery of goods. So in the billing process, you create the invoice and transfer all the necessary data into Accounting.
• As part of handling payments, you check open items and post incoming payments

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If you have SAP Sales and Distribution implemented, there are additional fields you can maintain. These fields contain information and control data that are necessary for processing the business activities in the Sales area.

We also call the data records that remain in the database for a long period of time are called master data. Master data includes customers, vendors, materials, accounts, and so on.

Master data is created centrally in SAP system and can be used in all applications.

A customer is master data that can be used in customer requests, deliveries, invoices, and payments.

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Master data also has an organizational aspect as it is assigned to organizational units. Master data can be used cross-component as customer master data uses the same data for financial accounting view (SAP FI)?and sales view (SAP SD).

Customer master records can be assigned to the following organizational units:

• company code
• sales organization
• distribution
• channel
• division

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When creating a customer master record in SAP system, you have to enter shared data on the client level
and company code-specific data for each company code

Data on the client level can be used by all company codes. The customer account number is assigned on this level. That means, the same customer has an explicit accounts receivable number in all company codes from a financial view.

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The Division is an organizational unit in Logistics in the SAP system.

You can use divisions to organize materials or services, for example, product groups or lines. The division is responsible for the profits of materials and services.

Each transaction in Sales and Distribution (SAP SD) to a certain divison connected. It will either be derived:

• The combination of customer and sales area
• The material master record

You can use different types of master data for the each division, such as customer master data, prices and conditions.

• A broad product range can be divided into divisions. In the SAP system, you can also define a
  division-specific sales structure.
• You can make customer-specific agreements for each division, for example regarding partial
  deliveries or pricing. Within a division, you can carry out statistical analyses or devise your own
  marketing strategies.

For more information of Division, see: Division: Notes

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Company is a client to whom we are going to implement SAP system. It represents a corporate group. It is the highest organizational unit in the enterprise structure.

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However the definition of Company Code is:

Company code is an independent organization unit that represents subsidiary of company. Company code is the smallest organizational unit for which a complete self-contained set of accounts can be drawn up for purposes of external reporting. It has his own set of database tables from which we can drawn out reports, for?example,?Balance sheets Profit and Loss accounts that are required by law and those reports can be consolidated at company code level.

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The following is the relationship between company and company code:

One company can have many company codes. It means one company code should be assigned to only one company. So the relationship between company and company code is one to many. It means company code should be assigned to company.

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Find more definitions of SAP terms at:

SAP Tutorial & Training Online

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Distribution channels provide a general structure for distributing goods. Wholesale trade, sales to industrial customers or direct sales from a plant are typical examples of distribution channels. You can use different distribution channels in Sales and Distribution to provide the market with the best possible service.

Distribution channels can be set up according to your company’s market strategy or internal
organization. Customers can be served through one or more distribution channels within a sales organization.

In addition, you can vary the master data relevant to sales, such as customer master data, sales master data, prices, and surcharges/discounts, for each sales organization and distribution channel.

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Relationship between Distribution Channel to Division is:

One distribution channel can have many divisions. One division can be assigned to many distribution channels. So the relation is many to many.

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• A sales organization is assigned to exactly one company code.
• A sales organization is assigned to one or more plants.

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Each sales organization has its own master data, for example, its own customer and material master data as well as condition records.

Summary Relationship of Units

Company code to Sales Organization:
One company code can have many sales organizations. But one sales organization has to be assigned to one company code. So the relation is one to many.?

Sales Organization to Distribution Channel:
One sales organization can have many distribution channels. One distribution channel can be assigned to many sales organizations. So the relation is many to many.?

Sales Organization to Division:
One sales organization can have many divisions. One division can be assigned to many sales organizations. So the relation is many to many.

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SAP SD module integrates with every other SAP R/3 application including SAP FI, SAP CO, SAP MM, SAP PP, and so on. The SAP SD module is made up of multiple components.

The list of these are as follows:

SD ? MD = Master Data
SD ? BF = Basic Functions subdivided into multiple components, such as pricing, output, and so on.
SD ? SLS = Sales
SD ? SHP = Shipping
SD ? TBA = Transportation
SD ? FTT = Foreign Trade
SD ? BIL = Billing
SD ? CAS = Sales support
SD ? EDI = Electronic Data Interchange
SD ? IS = Information System

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The Structure of SAP SD Master Data

Master data forms the basis of the SD processing. Master data is the responsibility of all modules, as each module has an element of it. However, many other modules other than SD, such as PP, FI, AND CO, will access the SD master data. The structure of this master data represents how the system is to perform in the future. It is the highest level of data and thus it has the largest effect on the standard business process. Master data in SD is divided into three main areas:

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Organizational Data: This is the structure of the company, whereby each area of the business is represented by a hierarchical element. For example, a sales area is constructed of a sales organization, a distribution channel, and a division. The Finance module uses the highest form of master data, which is the ?company code?. The SAP SD module integrates with this company code via the sales organization. Thus, due to the link between the sales organization and the company code in Finance, SAP knows which company code to post a sales transaction to. This is based on the sales organization in the sales order.

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Customer and Material Master Data: As goods and services are sold by the company, for which the organizational data has been maintained, we need to represent this material and service data in our system as well as maintain and represent all our different sold-to-parties and partners.

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Document Master Data: Business transactions are stored in the form of documents.

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