EGN 5620 Enterprise Systems Configuration
(Professional MSEM)
Fall, 2012

5.
6.
7.
1.
2.
3.
4.
Engage in pre-sales activities
Create quotations and send to customers
Create sales orders
Schedule & deliver
Bill customer (by invoice)
Receive payment from customer
Handle sales order return
January 2008
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EGN 5620 Enterprise Systems Configuration
(Professional MSEM)
Fall, 2012

FI MM SD
FI
MM
SD
January 2008
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Sales Order
Pre-Sales
Activity
Delivery Billing
Availability
Check
In
Inventory
YES
Plant or
Warehouse
Goods to
Delivery
Inventory
Postings
NO
Purchase
Requisition
Purchase
Order
Goods from
Purchase Order
Goods
Receipt
Invoice
Receipt
Accounts
Receivable
General
Ledger
Accounts
Accounts
Payable
January 2008
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SD Process
January 2008
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Integration
Sales Order
Entry
Check
Availability
Sales Quotation
Entry
Delivery Note &
Pick Materials
Pre-Sales
Activities
Sales
Process
Pack
Materials
Receipt of
Customer Payment
Post Goods
Issue
Invoice
Customer
January 2008
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1.
2.
3.
5.
6.
7.
4.
Engage in pre-sales activities
Create quotations and send to customers
Create sales orders, item proposal, or scheduling agreement
Schedule delivery and create delivery note
Create/send invoice to customer (billing)
Receive/post payment from customer
Handle sales order return
January 2008
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
A sales order contains all of the information needed to process customers request. The process for creating a sales order has the following steps:
1.
Pricing
2.
Credit limit check
3.
Availability Check
4.
Delivering Schedule
5.
Shipping point and route determination
6.
Transfer of requirements to MRP
7.
foreign trade and license processing


SAP can display pricing information at both the header and the line item level for sales order.

It enables the user to program varied pricing procedures to meet individual organizations needs.

The pricing is extendable; it can be attached, or extended to external pricing programs or elements outside SAP for pricing.

It also allows Gross to Net pricing: This allows discounts and reductions from the ‘master’ price.


SAP provides an efficient means to implement credit management

It is integrated with Financial Accounting (FI), via credit control area

It automatically alerts when a credit check fails
January 2008
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
A large number of outstanding receivables or bad debts can have a considerable impact on company performance.

The user may minimize credit risk by defining a credit limit for customers by using Credit
Management.

This is especially important if a company does business with customers in financially unstable sectors or countries, or trade with countries that are politically unstable or that adopt a restrictive exchange rate policy.
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January 2008
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Availability Check
◦ Determines the material availability date
◦ Considers all inward and outward inventory movements
Allow for 3 methods of delivery
 One-time delivery ( ontime one-time delivery)
 Complete delivery
(possibly delayed onetime delivery)
 Delayed proposal (allows partial delivery schedule)


In determining the material availability the following elements can be included in the availability check
◦ Safety stock
◦ Stock in transfer
◦ Quality inspection stock
◦ Blocked stock
◦ Restricted use stock
◦ All movements of stock
January 2008
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
Inward/Outward movement of goods
◦ purchase orders
◦ purchase requisitions
◦ planned orders
◦ production orders
◦ reservations
◦ dependent reservations
◦ dependent requirements
◦ sales requirements
◦ delivery requirements
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One-time delivery
• Deliver on the requested delivery date
• In this section, SAP checks whether the requested delivery date can be kept to. If stock of the material is available to make a delivery on the requested delivery date, the stock quantity is confirmed here.
• If there is no stock available, confirmed quantity zero is displayed.
January 2008
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Complete delivery

In this section, SAP checks whether there will be sufficient stock for complete delivery at a later date:
 If there is sufficient stock available at a later date to cover the required quantity in the sales document, the system proposes the date here.
 If the system determines that complete delivery cannot be made at a later date, no date is proposed in this section.
January 2008
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Delayed proposal


In this section, SAP checks whether and for which dates partial deliveries can be made. Partial deliveries are displayed for different dates. These dates are based on the planned inward and outward movements of stock.
During an availability check which takes replenishment lead time into account, the date on which replenishment lead time ends is displayed if insufficient stock means that no partial deliveries can be made before replenishment lead time ends.
January 2008
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
SAP can automatically schedule essential shipping activities, using backward and forward scheduling rules.

It uses defined activity times to schedule delivery activities.
January 2008
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Terms used in scheduling are defined below.
Transit time is the time in days that is required to deliver goods from your premises to the customer location. It is defined for a route.
Loading time is the time in days that is required for loading a delivery item. It is determined from the shipping point, the route, and the loading group of the material.
Pick/pack time is the time in days that is required for allocating goods to a delivery as well as the time in days that is required for picking and packing. It is calculated using the shipping point, the route, and the weight group of the order item.
Transportation lead-time is the time in days that is needed to organize the shipping of the goods. This might include booking a ship and reserving a truck from a forwarding agent. It is defined for a route.
January 2008
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The following 5 deadlines are of importance for delivery scheduling:
1. Material availability deadline : must start picking and packing activities on the material availability deadline.
This deadline must be selected early enough in advance so that the goods are ready by the given loading deadline.
2. Transportation scheduling deadline: the date on which you must start to organize the transportation of the goods. This deadline must be selected early enough to ensure that the means of transport is available by the loading deadline.
January 2008
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3. Loading deadline: the date on which the goods must be available for loading and on which all vehicles that are required to ship these goods must be ready for loading. After the time required for loading the goods
(loading time) has expired, goods issue can be carried out.
4. Goods issue deadline: the date on which the goods leave the company in order to arrive punctually at the customer location.
January 2008
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5. Delivery deadline: the date on which the goods are to arrive at the customer location. The difference between the goods issue deadline and the delivery deadline is calculated from the transit time required for the route between the delivering plant and the customer.
The delivery deadline can be the customer's requested delivery deadline or the confirmed delivery date (that is, the earliest date on which you can deliver goods to the customer).
January 2008
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An item consists of one or more schedule lines. The schedule line contains all the data that is needed for a delivery.
For example, a customer orders 20 units of a particular material which you enter as one item in the sales order. However, you can only deliver 10 pieces now and the remaining 10 pieces next month. So you need to schedule two deliveries.
The data for these deliveries (dates, confirmed quantities) are stored in two separate schedule lines.
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
Structure of sales documents
Header
Line Item # 1
Schedule Line # 1
Schedule Line # 2
Line Item # 2
Schedule Line # 1
January 2008
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
A shipping point is determined for each line item

A delivery can only be processed from one shipping point

Routes - route to be traveled & transit time are determined using customized rules

Routes can be used to simply define transit time
January 2008
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SD3-6: Transfer of requirements to MRP
• Sales order is transferred to MRP as a Customer
Independent Requirement (CIR). If a deficit is found, SAP will propose a purchase req. or planned order to fulfill the shortage after running MRP or MPS.
• Sales and distribution requirements reduce existing stock or inward movements of stock on the material availability date to ensure that other outward movement of stock elements cannot access the quantity reserved in this way.
January 2008
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SD3-6: Transfer of requirements to MRP

SD3-7: Foreign Trade and License
Processing



Predefined trade areas — NAFTA, EU
Automated reporting for trade areas
Automated controls
◦ License management
◦ Embargo lists
◦ Control by customer, country, product, point in time
January 2008
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The sales order document is made up of three primary areas:
◦ Header
Data relevant for the entire sales order: customer data, currency and exchange rate, pricing elements for the
◦ Line Item quantity, cost of an individual line
◦ Schedule Lines

Item Data
Whereas data in the document header applies to all items in the document, some data applies only to specific items.
This data is stored at item level and includes the:
• Material number
• Target quantity for outline agreements
• Number of the ship-to party and the payer (an alternative ship-to party or payer can be defined for a particular item)
• Plant and storage location specifications
• Pricing elements for the individual items
• Schedule line data
January 2008
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
If a customer frequently orders the same combination of materials, SAP can store the frequently used data as an item proposal in the system.

During sales order processing, the user can copy all or some of the materials and quantity data from the item proposal directly into the sales order (document)

Item proposal can be assigned to one or multiple customer master records
January 2008
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



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
Delivery
Note
Picking
Packing
Loading
Post Goods Issue
Each step in the delivery process updates the delivery note status
January 2008
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Sales quotation
No impact on
Financial Accounting (FI)
Sales order
Delivery/Goods
Issuing
Materials Management (MM) and Financial Accounting (FI)

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






SAP has the functions of processing credit/debit memos and rebates
It automates invoicing, based on sales orders and/or deliveries
It can create pro forma (paper) invoices
It is integrated with Finance (FI) &
Controlling (CO)
It updates customer’s credit data
January 2008
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The Rushmore Group, LLC 2007. All rights reserved.
36

Sales Invoice
Sold To:
Rushmore Group
Sales Org: S001
Dist Channel: RE
Division: 01
Conditions/Price:
$120
January 2008
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Delivery based
Invoicing
Order 6
Delivery 8…20
Delivery 8…21
Invoice 9…45
Invoice 9…46
Collective
Invoicing
Order 9
Order 14
Delivery 8…33
Delivery 8…34
Delivery 8…56
Invoice 9…68
Split
Invoicing
Order 32
Delivery 8…86
Invoice 9…91
Invoice 9…92
January 2008
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


It explicitly specifies documents
Billing due list — builds a work list of invoices that should be generated
Automatic posting to Financial Accounting
(FI): debit to customer sub-ledger account and credit revenue account.
January 2008
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



Periodic — total amount for a planned billing period
Milestone — distributing the total amount over multiple billing dates - typically used with the project system (PS)
Installment — evenly proportioned amounts and defined payment dates
Resource related — consumed resources such as service or consulting
January 2008
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
Payment is the final step in the sales order process.

SAP posts payments against invoices.

The posting clears the liability in the A/R account and increases your bank account.

Customer Return
Order received
Delivery
Note
Sales
Process
Goods
Receipt
Payment to Customer
Create
Credit Memo
Quality
Inspection
January 2008
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1 Order 14
Delivery 8…56
2 Return Order Return Delivery
3
Invoice 9…68
Quality
Inspection
Credit Memo
Return to Inventory
Payment
January 2008
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

Returns document
◦ Billing block can be proposed
◦ Use the Order reason field to identify the reason for the return
◦ Full access to pricing and ability to re-price
Return delivery
◦ Issues a goods receipt to place material into inventory
January 2008
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
Credit memo
◦ Billing block must be cleared from Return
◦ Posts to Financial Accounting (FI)
◦ Can be processed in batch (background)
◦ Can be processed collectively (grouped)
January 2008
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EGN 5620 Enterprise Systems Configuration
Fall, 2012

At this point that the sales process is passed over to Financial
Accounting to await payment.


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
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144a. Create customer quotation
144. Create sales order from sales quotation
145. Check stock status
146. Create delivery note for sales order
147. Check stock status
148. Picking materials on delivery note
149. Post goods issue
150. Check stock status
151. Bill customer
152. Post receipt of customer payment
153. Review document flow
154. Create Customer Material Info Record
155. Create sales order using customer info record
156. Create delivery for sales order
157. Pick materials on delivery note

158. Post goods issue
159. Bill customer
160. Post receipt of customer payment
161. Create a scheduling agreement
162. Process deliveries for a scheduling agreement
163. Display scheduling agreement
164. Check stock status
165. Bill customer
166. Run customer credit check
167. Post receipt of customer payment