sales order process

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Sales Order Process

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Sales Organization

A sales organization is responsible for negotiating sales conditions and distributing goods and services.

It represents the 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.

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Distribution Channel

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.

SalesOrganization

Distribution Channel

Wholesale Retail Direct

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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.

DivisionsProduct Line 1

Product Line 2

ProductLine 3

SalesOrganization

Division

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Sales Area

A Sales Area is a valid combination of Sales organization, Distribution Channel and Division.

Customer Master Data and Sales Documents are linked to sales areas.

Simple organizational structures are usually preferred to complex ones.

Division 1 Division 2

Distribution Channel 1

Division 1

Distribution Channel 2

Sales Organization 1

D ivis ion 1 D ivis ion 2

D is trib u tion C h an n e l 1

S a les O rg an iza tion 2

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Fitter Snacker Sales Organization

Wholesale (WH) Direct (DI)

Fitter Sales (##FS)

Snackbar (SB)Snackbar (SB)

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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 ActivitiesSales Order Processing

DeliveryBilling

Inventory Sourcing

Payment

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Pre-Sales Activities

There are two categories of presales activity: Sales Support and Pre-sales Documents.

Sales Support allows for tracking of customer contacts by including sales visits, phone calls, letters and direct mailings. Mailing lists can be generated based on specific customer characteristics. Basically an Integrated CRM system.

Pre-sales contacts 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: Creating delivery documents Creating transfer orders for material

picking Provide packing information (if required) Goods issue (updating accounting and

inventory data)

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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.

Creating a Billing Document will automatically debit the customer’s accounts receivable account and credits 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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Order Management Process

Quotation

Contact

Schedulingagreement

Order

Delivery Goods issue

Shipment

Invoice

Accounts ReceivableMaterial Stock

Account

Inquiry

Contract

Pre-SalesPre-Sales

Sales OrderProcessingSales OrderProcessing

Delivery/TransportationDelivery/Transportation Transfer Order

BillingBilling

Payment/AccountingPayment/Accounting

Mate

rials M

anagem

ent

Mate

rials M

anagem

ent

Pro

ductio

n P

lannin

gPro

ductio

n P

lannin

g

Inventory SourcingInventory Sourcing

Sale

s Info

rmatio

n S

yste

mSale

s Info

rmatio

n S

yste

m

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Document Flow

Order Delivery Invoice Accounting

Document Flow of a Sales OrderOrder 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

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 R/3 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

CustomerMaster

CustomerMaster

MaterialMaster

MaterialMaster

PricingMasterPricingMaster

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Creating an Order

When a sales order is created in R/3, 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.

Sold-to party 2540-00

Item Material Quantity 1 1400-500-00 30 2 1400-100-00 20

Customer Master

Material Master

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Shipping Point and Route

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)

Plant Shipping Point Route Customer

SP 1

SP 2

SP 3

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Stock Available: Backward Scheduling

RequestedDelivery

DateGoods

issue dateLoading

DateTransportationPlanning Date

MaterialAvailability DateOrder Date

Transit TimeLoading Time

Pick Pack and Stage

TransportationLead Time

The R/3 System uses thelonger of these two times in

calculating delivery scheduling.

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Stock Unavailable: Forward Scheduling

ConfirmedDelivery

DateGoods

issue dateLoading

DateTransportationPlanning Date

New MaterialAvailability DateOrder Date

Transit TimeLoading Time

Pick Pack and Stage

TransportationLead Time

The confirmed delivery dateis derived by the R/3 System

using forward scheduling basedon the new material availability date

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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.

Sales Order Delivery

DeliverySales Order

Sales Order

Delivery

Delivery

Delivery

CompleteDelivery

PartialDelivery

OrderCombination

Sales Order

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Picking Process

D elive ry Item s C om p le te

C op y p icked q u an tity C rea te a n ew tran s fe r o rd erfo r va rian ce q u an tity

P rocess d iffe ren ces

C on firm Tran s fe r O rd er*

P rin t Tran s fe r O rd er

Tran s fe r O rd er

D e live ry

* not mandatory

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Billing

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.

Sales Order Delivery Invoice

Invoice

Sales Order Delivery

Delivery

Invoice

Invoice

Delivery

Sales Order

Sales Order

Delivery

Delivery

Invoice

InvoiceSplit

SeparateInvoiceper delivery

CollectiveInvoice

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Posting Payments

Customers may send one check to cover multiple invoices. They may also send checks 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.

Invoice 1

Invoice 2

Invoice 3

Invoice 4

Acme Corp. 4325

Pay to $ Dollars

First National Bank 2132 123123 54545 345 34

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Fitter Snacker Exercise

Inquiry

West HillsAthletic Club

SalesOrder

1 2

AvailabilityPricing

Sales andDistribution

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DeliverySalesOrder

3

5Pick

MaterialsManagement

Goods Issue

Delivery

4

Delivery

30


InvoiceWest Hills

Athletic Club

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Sales andDistribution

AccountsReceivable

Delivery

Receivable

Post

Receivable