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Sales Order Process. ADMS3502 January 23, 2010 Douglas Peebles, PhD. Sales Organization. A sales organization is responsible for negotiating sales conditions and distributing goods and services. Top organizational level to which you sum sales figures.

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Sales order process l.jpg

Sales Order Process

ADMS3502

January 23, 2010

Douglas Peebles, PhD

© 2008 by SAP AG. All rights reserved.


Sales organization l.jpg
Sales Organization

  • A sales organization is responsible for negotiating sales conditions and 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 l.jpg

Sales

Organization

Distribution Channel

Wholesale

Retail

Direct

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.

© 2008 by SAP AG. All rights reserved.


Division l.jpg

Sales

Organization

Divisions

Product

Line 1

Product

Line 2

Product

Line 3

Division

  • 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.

© 2008 by SAP AG. All rights reserved.


Sales area l.jpg

Sales Organization 1

Distribution Channel 1

Distribution Channel 2

Division 1

Division 2

Division 1

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.

© 2008 by SAP AG. All rights reserved.


Fitter snacker organizational structure for sales l.jpg

Fitter Sales (##FS)

Wholesale (WH)

Direct (DI)

Snackbar (SB)

Snackbar (SB)

Fitter Snacker Organizational Structure for Sales

© 2008 by SAP AG. All rights reserved.


Shipping point l.jpg
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.

© 2008 by SAP AG. All rights reserved.


Customer order cycle l.jpg
Customer Order Cycle

Sales Order Processing

Pre-Sales Activities

Inventory Sourcing

Payment

Billing

Delivery

© 2008 by SAP AG. All rights reserved.


Pre sales activities l.jpg
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.

© 2008 by SAP AG. All rights reserved.


Sales order processing l.jpg
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

© 2008 by SAP AG. All rights reserved.


Inventory sourcing l.jpg
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.

© 2008 by SAP AG. All rights reserved.


Inventory sourcing12 l.jpg
Inventory Sourcing

  • Inventory sourcing occurs when:

    • An order is created.

    • An order is changed.

    • When the delivery document is created.

© 2008 by SAP AG. All rights reserved.


Delivery l.jpg
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)

© 2008 by SAP AG. All rights reserved.


Billing l.jpg
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.

© 2008 by SAP AG. All rights reserved.


Payment l.jpg
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.

© 2008 by SAP AG. All rights reserved.


Order management process l.jpg

Pre-Sales

Pre-Sales

Contact

Inventory Sourcing

Sales Order

Processing

Billing

Delivery/

Transportation

Inventory Sourcing

Delivery/

Transportation

Billing

Sales Order

Processing

Inquiry

Scheduling

agreement

Contract

Quotation

Production Planning

Production Planning

Order

Materials Management

Materials Management

Sales Information System

Sales Information System

Delivery

Goods issue

Transfer Order

Shipment

Invoice

Payment/

Accounting

Payment/

Accounting

Material Stock

Account

Accounts Receivable

Order Management Process

© 2008 by SAP AG. All rights reserved.


Document flow l.jpg

Delivery

Invoice

Order

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

Document Flow

  • 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.

© 2008 by SAP AG. All rights reserved.


Slide18 l.jpg

Document Flow

© 2008 by SAP AG. All rights reserved.


Master data l.jpg

Customer

Master

Material

Master

Pricing

Master

Customer

Master

Material

Master

Pricing

Master

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 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

© 2008 by SAP AG. All rights reserved.


Creating an order l.jpg

Customer Master

Sold-to party 2540-00

Item Material Quantity

1 1400-500-00 30

2 1400-100-00 20

Material Master

Creating an Order

  • 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.

© 2008 by SAP AG. All rights reserved.


Shipping point and route l.jpg

SP 1

SP 2

SP 3

Plant Shipping Point Route Customer

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)

© 2008 by SAP AG. All rights reserved.


Stock available backward scheduling l.jpg

Requested

Delivery

Date

Material

Availability Date

Transportation

Planning Date

Goods

issue date

Loading

Date

Order Date

Transit Time

Loading Time

The ERP system uses the

longer of these two times in

calculating delivery scheduling.

Pick Pack and Stage

Transportation

Lead Time

Stock Available: Backward Scheduling

© 2008 by SAP AG. All rights reserved.


Stock unavailable forward scheduling l.jpg

Confirmed

Delivery

Date

New Material

Availability Date

Transportation

Planning Date

Goods

issue date

Loading

Date

Order Date

Transit Time

Loading Time

The confirmed delivery date

is derived by the ERP system

using forward scheduling based

on the new material availability date

Pick Pack and Stage

Transportation

Lead Time

Stock Unavailable: Forward Scheduling

© 2008 by SAP AG. All rights reserved.


Delivery24 l.jpg

Complete

Delivery

Delivery

Sales Order

Partial

Delivery

Delivery

Sales Order

Delivery

Delivery

Order

Combination

Sales Order

Delivery

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.

© 2008 by SAP AG. All rights reserved.


Picking process l.jpg
Picking Process

* not mandatory

© 2008 by SAP AG. All rights reserved.


Billing26 l.jpg

Invoice

Split

Invoice

Delivery

Sales Order

Invoice

Separate

Invoice

per delivery

Sales Order

Invoice

Delivery

Invoice

Delivery

Collective

Invoice

Delivery

Sales Order

Delivery

Invoice

Delivery

Sales Order

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.

© 2008 by SAP AG. All rights reserved.


Posting payments l.jpg

Invoice 1

Acme Corp. 4325

Pay to $

Dollars

First National Bank

2132 123123 54545 345 34

Invoice 2

Invoice 3

Invoice 4

Posting Payments

  • 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.

© 2008 by SAP AG. All rights reserved.


Slide28 l.jpg

West HillsAthletic Club

Fitter Snacker Exercise

Sales

Order

Inquiry

Sales and

Distribution

1

2

Pricing

Availability

© 2008 by SAP AG. All rights reserved.


Slide29 l.jpg

Fitter Snacker Exercise

Goods Issue

Pick

4

5

Materials

Management

Sales

Order

Delivery

Delivery

Delivery

3

© 2008 by SAP AG. All rights reserved.


Slide30 l.jpg

West HillsAthletic Club

Fitter Snacker Exercise

Invoice

Sales and

Distribution

Delivery

6

Accounts

Receivable

7

Post

Receivable

Receivable

© 2008 by SAP AG. All rights reserved.


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