Sales Order Process
ADMS3502
January 23, 2010
Douglas Peebles, PhD
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© 2008 by SAP AG. All rights reserved.
Sales Organization
 A sales organization is responsible for negotiating sales conditions and
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distributing goods and services.
Top organizational level to which you sum sales figures.
There must be at least one sales organization defined
A sales organization is assigned to only one company code.
More than one sales organization can be assigned to a company code.
© 2008 by SAP AG. All rights reserved.
Distribution Channel
Sales
Organization
Distribution Channel
Wholesale
Retail
Direct
 A Distribution Channel is the way sales materials reach the customer.
 A distribution channel can be assigned (serve) to more than one sales
organization.
 Distribution Channels allow for different conditions such as minimum order
quantities and pricing.
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Division
Sales
Organization
Product
Line 1
Divisions
Product
Line 2
Product
Line 3
 Divisions are used to present product lines.
 At least one division must be defined.
 Divisions can be assigned to more than one sales organization.
 Divisions restrict access to materials, so care should be exercised in defining
divisions.
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Sales Area
Sales Organization 1
Distribution Channel 1
Division 1
Distribution Channel 2
Division 2
Division 1
Sales Organization 2
Distribution Channel 1
Division 1
 A Sales Area is a valid combination of Sales organization,
Division 2
Distribution Channel and Division.
 Customer Master Data and Sales Documents are linked to sales
areas.
 Simple organizational structures are usually preferred to complex
ones.
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Fitter Snacker Organizational
Structure for Sales
Fitter Sales (##FS)
Wholesale (WH)
Snackbar (SB)
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Direct (DI)
Snackbar (SB)
Shipping Point
 A shipping point is a fixed location that carries out shipping activities. It may be
a loading dock, a mail room or a shipping department.
 One plant can have multiple shipping points.
 A shipping point can serve multiple plants.
 Lead times for determining delivery dates are associated with shipping points.
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Customer Order Cycle
Pre-Sales Activities
Sales Order Processing
Inventory Sourcing
Payment
Billing
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Delivery
Pre-Sales Activities
 Includes Sales Support and Pre-sales Documents.
 Sales Support
 Allows for tracking of customer contacts
 Includes management of sales visits, phone calls, letters and direct mailings.
 Mailing lists can be generated based on specific customer characteristics.
 Basically an Integrated Customer Relationship Management (CRM) system.
 Pre-sales docuiments include inquiries and quotes.
 Inquiries document customer requests for information (“how much is . . .”,
“is the product in stock . . .”)
 Quotes are binding documents to a customer offering a specific quantity of
material at a specific price if accepted within a specific period.
 Both Inquiries and Quotes can be used as a starting point to create a
customer order.
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Sales Order Processing
 Customers place orders with a customer service representative
who create a document* with information on:
 Customer
 Material Ordered - material and quantity
 Pricing conditions for each item
 Schedule lines - delivery dates and quantities
 Delivery Information
 Billing information
 Information is pulled from master data on customers and
materials to minimize data entry errors.
*Electronic Capture of a Business Event
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Inventory Sourcing
 Inventory Sourcing determines:
 If a product is available (availability check).
 How the product will be supplied:
 From stock on hand.
 From production or purchase orders that should be available.
 From make-to-order production.
 Shipped from an external supplier.
 Shipped from another plant or warehouse.
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Inventory Sourcing
 Inventory sourcing occurs when:
 An order is created.
 An order is changed.
 When the delivery document is created.
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Delivery
 Delivery activities include:
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Creating delivery documents
Creating transfer orders for material picking
Provide packing information (if required)
Goods issue (updating accounting and inventory data)
© 2008 by SAP AG. All rights reserved.
Billing
 A Billing Document is created by copying information for the sales
order and delivery document into the billing document which is
used to create the invoice.
 Billing Documents automatically debit the customer’s accounts
receivable account and credit the revenue account.
 Postings may also be made to other accounts.
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Payment
 Payment is the final step in the customer order management cycle.
 Final payment includes:
 Posting payments against invoices.
 Reconciling differences, if necessary.
 The Cycle may not always go as planned
 material not in stock
 defective material returned for credit, etc.
 SAP has procedures to deal with these possibilities.
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© 2008 by SAP AG. All rights reserved.
Order Management Process
Pre-Sales
Contact
Inquiry
Order
Inventory Sourcing
Delivery/
Transportation
Billing
© 2008 by SAP AG. All rights reserved.
Delivery
Goods issue
Transfer Order Shipment
Invoice
Accounts Receivable
Material Stock
Account
Production Planning
Sales Information System
Sales Order
Processing
Payment/
Accounting
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Quotation
Materials Management
Contract
Scheduling
agreement
Document Flow
Order
Delivery
Invoice
Accounting
Document Flow of a Sales Order
Order 900
. Delivery 50000672
. . WMS transfer order 100000828
. . GD goods issue: delivery 40000184
. . Invoice 90000376
. . . Accounting document 100000269
 The sales order management process consists of a chain of steps. Each step in
the process causes the creation of a document which can be used to track the
progress of the sales order. All changes to documents (sales orders, delivery,
etc.) creates a document to keep track of the changes.
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Document Flow
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Master Data
Customer
Master
Pricing
Master
Material
Master
 Master Data is centrally stored (shared across application modules) and is
processed to eliminate data redundancy.
 When creating business transactions (like a sales order) the ERP system copies
information from master data.
 Three kinds of master data are critical to sales order processing:
 Customer - Shared with FI/CO
 Material - Shared with MM and PP
 Pricing
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Creating an Order
Customer Master
Sold-to party 2540-00
Material Master
Item Material
1 1400-500-00
2 1400-100-00
Quantity
30
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 When a sales order is created in ERP, data is copied from:
 Customer Master
 Material Master
 Condition Records for Pricing
 Tables in Configuration for shipping point and route.
 Data can also be copied from an inquiry or quote.
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Shipping Point and Route
SP 1
SP 2
SP 3
Plant Shipping Point
Route
Customer
 The Shipping Point is the logical or physical location where deliveries are
created and managed (see Organizational Elements).
 The Route is the path that the delivery follows from the plant to the customer
site.
 Delivery dates are determined based on lead times associated with the shipping
point (picking and packing time) and route (transportation lead times and
transit times)
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Stock Available: Backward Scheduling
Order Date
Material
Transportation
Availability Date Planning Date
Loading
Date
Goods
issue date
Loading Time
Pick Pack and Stage
Transportation
Lead Time
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Requested
Delivery
Date
Transit Time
The ERP system uses the
longer of these two times in
calculating delivery scheduling.
Stock Unavailable: Forward Scheduling
Order Date
New Material Transportation
Availability Date Planning Date
Loading
Date
Goods
issue date
Loading Time
Pick Pack and Stage
Transportation
Lead Time
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Confirmed
Delivery
Date
Transit Time
The confirmed delivery date
is derived by the ERP system
using forward scheduling based
on the new material availability date
Delivery
Complete
Delivery
Sales Order
Partial
Delivery
Delivery
Delivery
Sales Order
Delivery
Delivery
Order
Combination
Sales Order
Sales Order
Delivery
 A delivery can be created for each sales order.
 Sales orders may split into multiple deliveries (availability).
 A delivery may combine a number of sales orders for efficiency.
 Combined sales orders must have something in common like shipping point,
delivery processing date, ship-to party or route.
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Picking Process
Delivery
Transfer Order
Print Transfer Order
Confirm Transfer Order*
* not mandatory
Delivery Items Complete
Process differences
Copy picked quantity
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Create a new transfer order
for variance quantity
Billing
Invoice
Split
Sales Order
Delivery
Invoice
Invoice
Separate Sales Order
Invoice
per delivery
Delivery
Invoice
Delivery
Invoice
Collective Sales Order
Invoice
Delivery
Sales Order
Delivery
Delivery
Invoice
 Invoice splits can be used to bill for different items like materials
and services.
 Collective invoices can be used to consolidate deliveries onto one
invoice to minimize paperwork.
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Posting Payments
Invoice 1
Invoice 2
Acme Corp.
Pay to
Invoice 3
Invoice 4
4325
$
Dollars
First National Bank
2132 123123 54545 345 34
 Customers may send one cheque to cover multiple invoices. They may also send
cheques for less than the full amount due. SAP allows for partial payments to be
applied to invoices.
 Payment posting is performed by the accounts receivable department.
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© 2008 by SAP AG. All rights reserved.
Fitter Snacker Exercise
West Hills
Athletic Club
Sales and
Distribution
Inquiry
1
Pricing
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© 2008 by SAP AG. All rights reserved.
Sales
Order
2
Availability
Fitter Snacker Exercise
Goods Issue
Pick
4
5
Materials
Management
Sales
Order
Delivery
3
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© 2008 by SAP AG. All rights reserved.
Delivery
Delivery
Fitter Snacker Exercise
Invoice
West Hills
Athletic Club
Sales and
Distribution
Delivery
6
Accounts
Receivable
30
© 2008 by SAP AG. All rights reserved.
Post
Receivable
7
Receivable