SB CH. 9 - Sales Order Processing

Payer

Who will pay the bill

Quotation

- A formal request, typically a result from receiving a Request for Quotations from a customer - Quotation document is created to record the relevant information from RFQs - Can be created from an Inquiry Document as well

Sales Area

- A unique combination of sales organization, distribution channel, and division - Defined by linking the 3 org levels together manually - Must be a unique combo to create a Sales Area

Profit Centers

- ALWAYS a statistical object in SAP - Where profitability analysis (CO-PA) takes place - Used to manage costs and revenues for internal areas of responsibility - Receive only information - Various objects can be linked to profit centers to transfer statistical information

Conditions Master Data

- Appear in sales documents created during the sales order process - Prices - Discounts - Surcharges - Taxes - Freights

BP Customer Role

- Associated with a Sales Area - Keeps sales, shipping, billing, and partner function information related specifically to the customer - Sales info: defining how sales orders are processed for the customer - Shipping info: shipping conditions and delivering plant - Billing info: incoterms, tax classifications, and other terms for payment - Partner Function has 4 mandatory functions that need to be maintained in the Customer Role: 1. Sold-to-Party 2. Ship-to-Party 3. Bill-to-Party 4. Payer - These can be default or manually assigned, but they are REQUIRED

Worklists in Sales

- Create efficiencies and support the collective processing of multiple documents - In the warehouse, worklist is called a pick list 1. Delivery list - list of delivery docs to be processed 2. Pick list - list of items to be picked in the warehouse 3. Billing Due list - goods issues for deliveries that have been posted and are now ready for billing

CO Impacts of Billing

- Debit PSG in COPA; Credit PSG in COPA - Debit comes from COGS - Credit comes from Revenue

Costing-Based CO-PA

- Displays values as characteristics - Ex: Freight costs, material costs, production costs

Accounting-Based CO-PA

- Displays values by Cost Elements - Ex: 60000070 Production Overhead; 60000080 Sales Overhead; etc.

FI Impacts of Billing

- During Billing, a posting is made directly to the customer sub-ledger account - Debit Reconciliation A/R; Credit Revenue - Debit Customer Sub-ledger to create the update debit to reconciliation a/r

Sales Order Schedule Lines

- Each line item contains 1+ schedule lines - Represent the planned shipping dates for the items as well as the qty to be shipped - Help in the creation of the Outbound Delivery - Items with the same delivery date in their schedule lines can be shipped together using a single outbound delivery document

Sales Order Items

- Each line item contains a material, qty, and price condition - Also contains info regarding the Plant from where the materials will be delivered - Each line item contains 1+ schedule lines

Outbound Delivery Header

- Each outbound delivery doc is created for a single shipping point which is included - Ship-to-Party information - Document number - Delivery Date

Material Master Data

- In order to sell a material, it is required to maintain the Sales Views - Specific to the Plant org level, but are also maintained at additional org levels - When maintaining the views for Sales it is also necessary to create the data in the Sales Organization and Distribution Channel org levels - Division is NOT part of the Sales Views because it is a characteristic of a material and it does not change regardless of what Sales Org or Distribution Channel are used for sales - Division is maintained as part of the Basic Data for a material and is stored at the Client org level

Sales Order Header

- Includes Partner Function: Sold-to-Party (Generated from the customer role of the customer master record) - Includes a reference to the customer's Purchase order as well as a requested delivery date for the order - Order number and document date will also be included

Sales Order Processing Org Levels

- Logistics module - Client, CoCd, Plant, SLoc - Plant level is the key org level where data from operational activities are used and maintained - Additional Org Levels: - Sales Organization - Distribution Channel - Division - Shipping Point

Customer Master Data

- Maintained as Business Partners (mandatory) - BP categories: Organization, Person, Group - If a vendor already exists and that vendor is also a customer, there is no longer a need to create a separate master record - BP roles that support the sales order process: 1. General Role (Client level) 2. FI Customer (CoCd level) 3. Customer Role (Sales Area)

BP General Role

- Maintained at Client org level - Name, address, account number - Possible to maintain multiple addresses

BP FI Customer

- Maintained at CoCd org level - Links the customer to the reconciliation account

Master Data

- Material Master Data - Customer Master Data - Conditions Master Data - Output Master Data

Postings to PSG

- Occur during the GI and Billing - Values are likely to be different - Difference is shown as profit in PSG and recorded in a CO doc - Posting at GI = valued at material price - Posting at Billing = valued at sales price

Pre-Sales

- Order to Cash Process step 1 - Inquiry, Quotation, and Activities - Involves documents and activities designed to generate sales orders such as marketing campaigns; mail-outs; email marketing strategies; etc. - Documents exist as Inquiries and Quotations

Sales-Order Creation

- Order to Cash Process step 2 - SD document that includes mutually agreeable terms and conditions for one or more products to be sold to a customer - Can be created by: 1. Inquiries 2. Quotations 3. Contracts 4. Previous Sales Orders 5. Without Reference

Availability Check

- Order to Cash Process step 3 - Defined in the material master record - Informs the system which criteria should be used for carrying out the availability check - Can consider availability of materials at other plants - Provides customer with an Available to Promise (ATP) date for the materials in the sales order - An availability check must occur before the Outbound Delivery - Because the Outbound Delivery initiates the shipping activities, there must be a confirmed quantity in the schedule lines of the sales order to proceed

Outbound Delivery

- Order to Cash Process step 4 - Initiates the shipping activities (the 3 Ps) - 2 Sections: Header and Item - Created by referencing the schedule lines in the sales order (these represent the shipping dates) - The number of schedule lines for the items and their dates determines how many outbound deliveries are to be created - When the last outbound delivery is created, the status of the sales order changes to "Complete" - At this point, the sales order is no longer used to manage any remaining steps in the process > Outbound Delivery is not the document used for reference in the remaining logistics steps

CO-PA

- Profitability Analysis - Measures profitability of external market segments - Info is used by market analysts, strategists, and planners - Performed at the Operating Concern org level in CO - Can receive cost postings from settlements, overhead costs, assessments, and other forms of allocation

PSG

- Profitability Segments - Composed of 2+ characteristics

Goods Issue

- Order to Cash Process step 5 - Occurs with reference to the Outbound Delivery Doc - If EWM is in use, the GI is posted in EWM from within the Outbound Delivery Order - FI Impact (on BS and COGS) - All goods movements use the material price for valuation - Debit COGS; Credit Inv/Stock - Material doc and FI doc are created by the system - COGS = Primary Cost/Revenue Acct Type so it has an impact on CO > CO Doc created in parallel - All COGS postings from the sales process will go to a Profitability Segment (PSG) in COPA - Material Master Record is updated (qty and value in Accounting view & consumption statistics) - Billing Due list is also updated to indicate the delivered qty can now be billed to the customer

Billing

- Order to Cash Process step 6 - Result of GI > delivery is ready for billing - SD Billing Doc created (Header and Items) - Once created it must be sent to the customer - Triggers the transfer to financial accounting & ends the logistics steps - The delivery document status is now "Completed" - Possible to combine multiple deliveries to create a single billing document - Updates the customer's line of credit by reducing it by the amount billed

Payment

- Order to Cash Process step 7 - The processing of the customer payment to clear the open item in their sub-ledger account - In FI module - Customer credit is updated by increasing the amount by the payment amount - Debit Cash; Credit Customer Sub-ledger - Credit to customer sub-ledger creates Credit to Reconciliation A/R

Sales Organization

- Org level responsible for maintaining terms and conditions associated with sales and manages product liability and rights and recourse for customers - A Sales Org can be assigned to ONLY ONE CoCd - It is possible for a CoCd to have 1+ Sales Orgs assigned to it

Shipping Point

- Org level that is a physical location from which shipping activities occur - Ex: airport, shipping port, loading dock, etc. - Assigned to 1+ Plants - A Plant can have 1+ shipping points assigned to it - More than one Plant can share the same shipping point (think of different Airlines using the same Airport)

Division

- Org level that represents a product line - Ex: laptops, desktops, accessories, tablets (each are their own line of products even though they are sold by the same company) - Assigned to 1+ Sales Organizations

Distribution Channel

- Org level that represents the means in which products are sold to customers - Wholesale, retail, internet sales, and others - Assigned to 1+ Sales Organizations

Outbound Delivery Item

- Picking tab contains the material to be shipped, delivery qty, and the Plant (from sales order) - SLoc must be copied over from the sales order or entered manually - Plant/SLoc combo is used to see if a Warehouse Number has been assigned - If yes, the Pick Qty cannot be entered manually & WM will create a Transfer Order - Once picking is confirmed on the Transfer Order (TO), the Pick Qty will copy over from the TO - If EWM is used, Picking and Goods Issue occurs there which will update the outbound delivery afterwards

Inquiry

- Possible to use an inquiry as the foundation for generating a quotation - Can be the result of a customer informally inquiring about sales prices for a product - A formal inquiry document is created in SAP S/4HANA to record the information related to the inquiry, including customer information

Sales Order

- SD Document - 3 main sections: Header, Items, and Schedule Lines - All sales orders belong to a Sales Area - Integrated with output master data - Ex: Whenever you place an order online you immediately receive a confirmation email with access to your order - Also contains an Incompletion Log

Transfer to Financial Accounting

- Step between Billing and Payment - During Billing, a posting is made directly to the customer sub-ledger account - Debit Reconciliation A/R; Credit Revenue - Debit Customer Sub-ledger to create the update debit to reconciliation a/r - An open item is created in the customer sub-ledger account which means the acct doesn't have a balance of zero > customer owes us the amount billed - Revenue is a Primary Cost/Revenue Acct > update in CO as Revenue will post to a PSG in COPA

Order Management

- TM step 1 - Impacts various business processes with transportation requirements - Provides advanced packing techniques to maximize efficiencies and minimize packing materials/costs - Sales orders - Purchase orders - Stock Transport orders - Returns - Scheduling agreements - Deliveries (Inbound/Outbound)

Transportation Planning

- TM step 2 - Goal is to make the best use of available resources for transportation - Driver Management allows SAP customers to manage transportation drivers as Business Partners to help with planning of schedules and availability

Transportation Execution

- TM step 3 - Integrates with EWM to provide support for the following: 1. Planning and Execution of Order 2. Planning and Execution of Drivers 3. Cost Settlement Capabilities 4. Planning of Arrivals and Departures in EWM

Freight Costing and Settlement

- TM step 4 - Allows for automated cost calculations to reduce errors during settlement of costs

Analytics and Reporting

- TM step 5 - Access to real-time analytics

Sales Order Process

- Takes place in Sales and Distribution (SD) module in SAP S/4HANA - A logistics module - Also referred to as the "Order to Cash" process - The first step in every logistics process is the first goods movement - The payment step takes place in FI module because it is NOT a logistics step

Combining Multiple Deliveries into a Single Billing Doc

- The following criteria must be met: 1. Payer must be the same 2. Destination country must be the same 3. Billing dates must be the same

Combining Items from Different Sales Orders into a Single Outbound Delivery Doc

- The following must be true for the items in the sales orders: 1. Shipping points are the same 2. Ship-to-Party is the same 3. Schedule Lines are the same

Incompletion Log

- Tool to validate that all the data needed for the sales order is complete - Checks fields to ensure there is no missing data in the customer master record which would inhibit further processing of the order - Can be done manually from Edit Menu or done automatically via Customizing

TM

- Transportation Management - Supports and manages all aspects of physically transporting material - Tightly integrated with EWM

Output Master Data

- Used to communicate and transmit documents during the SD Sales process - Most frequently used to send confirmations to the customer - Output used for Billing can be sent using a variety of forms include Adobe files

Billing Functions in SAP S/4HANA

1. Creation of invoices for goods sold or for services 2. Transfer of the sales process to accounting for collecting receivables 3. Posting customer credit or debit memos 4. Cancelling previous billing documents

Goods Issue Impacts

1. Material Doc 2. FI Doc 3. CO Doc 4. Billing Due list updated 5. Material Master updated 6. Print Goods Issue slip

TM Overview

1. Order Management 2. Transportation Planning 3. Transportation Execution 4. Freight Costing and Settlement 5. Analytics and Reporting

Outbound Delivery 3 Ps

1. Pick (Pick Quantity) - field must be populated with the qty that is being shipped. If WM is activated, the field must be populated using WM or EWM; otherwise done manually. 2. Pack - managed in Transportation Management (TM) 3. Post - posting the Goods Issue

SD Order to Cash Process Overview

1. Pre-Sales 2. Sales Order Confirmation 3. Availability Check 4. Outbound Delivery 5. Goods Issue 6. Billing 7. Payment

Billing Impacts

1. SD invoice doc 2. FI Doc 3. CO Doc 4. Open item to customer sub-ledger 5. Impact in Profitability 6. Process hands off to FI 7. Customer credit impacted

Billing Header

Information regarding the document date and the Payer

Sales Order Processing Doc Flow

Inquiry Sales Order Outbound Deliver Transfer Oder WH Picking GI Material Doc Billing Doc Accounting Doc

Sold-to-Party

The person who placed the sales order

Billing Items

The products or services that were billed and their quantities

Key Figures

Used as measurement for profitability

Bill-to-Party

Where the bill is sent

Ship-to-Part

Where the order will be delivered