SAP SD

What is SAP Sales and Distribution?

SAP Sales and Distribution is one of key component of SAP ERP system
and is used to manage shipping, billing, selling and transportation of
products and services in an organization.

SAP Sales and Distribution module is part of SAP Logistics module that
manages customer relationship starting from raising a quotation to sales
order and billing of the product or service. This module is closely
integrated with other modules like SAP Material Management and PP.

What do you understand by Organization structure in SAP Sales and

Distribution?

SAP SD organization structure majorly consists of two steps: Creation of

Organization elements in SAP system and second is to link each element
as per requirement. On the top of organization structure in SD module,
sales organization is at highest level and is responsible for distribution of
goods and services.

SAP recommends to keep number of sales organization in organizational

structure to be minimum which helps in making reporting process easy
and ideally it should have a single Sales organization.

What is Sales area, Distribution channel and division in SAP Sales and
Distribution?

 Distribution channel tells the medium by which products and services are
distributed by an organization to its end users. Division in an organizational
structure represents a product or service line in a single organization.

 A Sales area is known as entity which is required to process an order in a

company. It is comprised of Sales organization, distribution channel and a
division.

 In SAP SD organizational structure, each sales organization is assigned to a

company code. Distribution channel and divisions are assigned to Sales
organization and all comprise to make a sales area.
What is the use of Sales area?
A Sales area is known as entity which is required to process an order in a
company. It is comprised of Sales organization, distribution channel and a
division.

Een verkoopgebied wordt entiteit genoemd die nodig is om een bestelling

in een bedrijf te verwerken. Het bestaat uit verkooporganisatie,
distributiekanaal en een divisie.

Can you do delivery without shipping point?

No, shipping point is required to perform goods delivery.

Is it possible to create invoices without delivery?

No, invoice is not possible without delivery.

Give an example of Material Management integration with Sales and

Distribution?

Consider an example of creating a sales order in SAP SD, it involves

copying details of item from Material Management.

Availability check of the item and price details are also taken from MM
but this can be controlled this data in SD module. To create inbound and
outbound delivery of goods for a sales order, shipping details, loading
point etc. also come from Material Master.

What is the use of SAP FI in SAP Sales and Distribution?

In case of standard sales order, you create an outbound goods delivery to

the customer. Here movement 601 takes place. This movement is
configured in MM and movement of goods hit some G/L account in FI.

What are the link point of SAP Sales and Distribution with other SAP
modules?
 Link Points Module Involved

Availability Check MM

Credit Check FI

Costing CO/MM

Tax Determination FI

Transfer of Requirements PP/MM

What is the use of partner function in SAP Sales and Distribution?

Partner function allows you to identify which functions partner has to be

perform in business process. Consider a simplest case, where all the
customer functions are performed by partner customer. As these are
mandate functions they has to be defined as obligatory functions in SD
system.

What are different partner type functions available in SAP SD?

Below partner types are Customer, Vendor, Personnel, Contact Person

and common partner functions as per these partner types are −

Partner Partner Entry from Master Record

Type Function System

Customer Sold-to party Customer Customer master

(CU) number record
(SP)

Ship-to party
(SH)

Bill-to party
 (BP)

Payer (PY)

Forwading agent Vendor

Vendor (V) Vendor master record
(fwdg agent) number

Employee
responsible
Human
(ER) Personnel Personnel master
resources
number record
(HR) Sales personnel
(SP)

Contact Contact person Contact (created in customer

Person (CP) (CP) partner
master recors, no
number
master record of its
own)

What are the different Customer account groups that you can create in
SAP SD?

 Domestic customers
 Export Customers
 One Time Customers

What is a Sales activity? What are different sales activity that you perform
in SD?
All Sales activities in SAP SD system can be divided into presales and
post sales activities. Presales activities are classified as activities which
occurs before product is sold to customer and post sales activities are
those which occurs after product is sold.

 Pre Sales Activities − Inquiry, quotation

 Post Sales Activities − Support, Relationship management

What is the use of Sales support in SAP SD module?

Sales support is one of the key component in Sales and Distribution SD
module. It is also called computer Aided Selling SD-CAS.
This module helps organizations to create new sales, tracking of existing
sales, and performance and eventually help in improving marketing and
sales in an organization.

SAP SD Sales support module provides an option of creating email list for
the customer and directly sending mails for new leads.
What do you understand by Sales Order processing?
Sales order processing describes a function related to whole sale part of
an organizational business. Common functions under sales order
processing −

 Availability of the articles purchased

 Checking for incomplete data
 Checking the status of the sales transaction
 Calculation of pricing and taxes
 Schedule the deliveries of goods
 Printing of documents or e-transfer of documents

What is the structure of Sales Order in SAP SD? How can you create, edit
or display an existing sales order?
Structure of a Sales Order −

An inquiry from a customer consists one or more items that contains the
quantity of a material or service entered in the order.

The quantity in a Sales order is further divided into business lines and
comprise of various subsets and delivering dates.

Items in Sales order are combined in a hierarchy and allows to

differentiate between batches or to use combinations of materials.

All the valid conditions on the items are mentioned in item conditions.
These conditions for an item can be derived via a full condition and can
be valid for entire sales order.

You can divide an item to multiple billing plan deadlines and each tells
the time when a fixed amount of the item is to be billed.

 VA02 − Edit a Sales Order

 VA03 − Display a Sales Order
 T-Code − VA01 Create a Sales Order
What is an inquiry under presales activity? How to create a new inquiry?
An Inquiry is not a legal document and is used to record the information
about delivery or services from customers. The information that is
captured using an inquiry is related to materials and quality of goods.

Menu Path − Logistics → Sales and Distribution → Sales → Inquiry →

Create

T-Code − VA11
How can you create a quotation in SAP Sales and Distribution?
Quotation is a legal document to customer for delivery of goods and
services. This is normally issued after an inquiry from customer or
without an inquiry.

 SAP R/3 Menu

 Logistics → Sales and Distribution → Sales → Quotation → Create
 T-Code − VA21

What is the difference between a Sales activity and a sales document?

Sales Activity −

Sales activities are categorized as Presales and post sales −

This include when you sell material rather you do your preparation for
sales with the customer...

Sales Call, Phone Call, Sales Letter, and post sales like support and
relationship, etc.

Sales documents −

These documents are considered under sales, where you sell the
materials to the customer and are created in SAP system to manage
sales process.

Example − Sales orders, Quotations, etc.

How do you assign a sales organization to delivering plant?
 SPRO-IMG-Enterprise Structure-Assignment-SD-Assign Plant to
Sales Organization/Dist.Channel

 T-Code − OVX6

Is it possible to process outbound delivery without a shipping point?

No

What is the use of Sales support function in SD module?

Sales support is one of the key component in Sales and Distribution SD
module. It is also called computer Aided Selling SD-CAS.

This module helps organizations to create new sales, tracking of existing

sales, and performance and eventually help in improving marketing and
sales in an organization.

SAP SD Sales support module provides an option of creating email list for
the customer and directly sending mails for new leads.

Sales support stores all the data related to sales and distribution related
to customers, products, materials, competitor products, etc.
Give an example of a sales process from presales activity to free of charge
replacement?
There is a customer telephone inquiry in the system and then customer
requests a quotation which can be created by referring to same inquiry.
Next is the customer place an order on the basis of quotation and a sales
order is created by copying the information from the quotation and if any
modifications are required.

Merchandise is shipped and bill is sent to the customer. After the delivery
of goods, customer raises a claim damaged articles, a delivery can be
created free of charge with reference to the sales order.
What are different sales document in SAP system? How to create a sales
document?
There are different types of sales document that can be defined in SAP
system −

 Credit Memo
 Debit Memo
 Standard Order
 Delivery Returns, etc.
To define a Sales Document

Enter T-Code − VOV8 or SPRO → IMG → Sales and Distribution → Sales

→ Sales Document → Sales Document Header → Define Sales Document
Type
In SAP Sales process, a standard item function is same as function of free
or charge item or text item?
No
What are the different factors to be considered while defining different
types of item categories?

 General Data Control Elements

 Shipping data Control Elements
 Billing Data Control Elements
What are different schedule line categories as per different sales
document?
Inquiry −

 No Delivery of an item
 No Availability check
 Information purpose
Quotation −

 No Delivery
 No Movement
Order −

 Schedule line is suitable for delivery

 Movement type 601
Return −

 Schedule line is suitable for delivery

In a sales order how system does picks up plant?

You can assign particular material master to particular Plant and it picks
up from there.

Why do you use pricing date in condition type?

It shows date of calculation of pricing procedure for that Particular
document. So that in future you can see the date on which pricing
calculated for that particular document.

What is the use of copy control, explain?

Copy Control is defined as a process in which important transactions in a
sales document are copied from one document to other. It consist of
routines which determines the system how the data is to be copied from
source document to target document.

A SAP system contains number of these routines and you can also create
additional routines to meet the business requirements. To create a new
routine you can use an existing sales document as a reference.

How to find Copy Controls in SAP system?

These controls are created and configured under IMG and can be found at
below menu path −

 SPRO → IMG → Sales and Distribution → Sales → Maintain copy

control for sales documents

 SPRO → IMG → Sales and Distribution → Shipping → Specify copy

control for deliveries

 SPRO → IMG → Sales and Distribution → Billing → Billing

Documents → Maintain copy control for billing

What is pricing in Sales and Distribution? Explain?

Pricing in Sales and Distribution is used to define the calculation of prices
for external vendors or customers and cost. Condition is defined as set of
conditions when a price is calculated.

Example −

Consider a case when a customer orders specific quantity of a product on

a particular day. Various factors like customer, product, order quantity
and date tells the final price to customer. This information is stored in the
system as master data in the form of condition records.
What are the different pricing elements in SAP system?
There are various pricing elements like prices, surcharges, discounts, and
taxes are defined in SAP system as condition types. To manage pricing
information for a pricing element in a system, you have to create
condition records.

What is condition record and condition table?

A Condition table is defined as combination of keys to identify an
individual condition record. A condition record is defined as how system
stores the specific condition.
Give an example of condition record and condition table?
Example of Condition Record −

Entering the price of a product or to specify the discount for a privilege

customer.

Example of Condition Table −

Condition records for a customer specific material prices are stored by a

sales department. SAP system contains a conditional table 005 for this
purpose. Key of table 005 includes below field −

 Customer
 Material
 Sales Organization
 Distribution Channel
First two fields − Customer and Material determines the relationship
between customers and specific materials. Last two fields are used to
identify organization data in SAP system.
What do you understand by condition technique and type?
Condition type is defined as specific features of daily pricing activities in
SAP system. Using condition type you can also put different condition
types for each pricing, discounts on goods, tax and surcharge that occurs
in business transactions.
Any example of using condition technique and type?
Condition type allows you to define the discount for special material. This
can be specified in the system to calculate discount as an amount or it
can calculate discount in terms of percentage.

In case you have to use both discount types, two separate condition
types has to be defined in the system.

What are the predefined condition types in SAP SD system?

 Condition Type Description

PR00 price

K004 Material discount

K005 Customer-specific material discount

K007 Customer discount

K020 Price group discount

KF00 Freight surcharge (by item)

UTX1 State tax

UTX2 Country tax

UTX3 City tax

What do you understand by surcharge and discount? What are predefined

discount type in SAP system?
A standard SAP system includes variety of common discount types. You
can also define customize discounts and surcharges as per business
requirement.

Standard SAP system includes below discount types −

Discount (Key) Kind of discount

Customer (K007) Percentage

Material (K004) Absolute

Price group (K020) Percentage

 Material group (K029) Absolute discount by weight

Customer/material (K005) Absolute

Customer/material group (K030) Percentage

Price group/material (K032) Absolute

Price group/material group(K030) Percentage

Rebate processing (BO01) Group rebate (%)

Rebate Processing (BO02) Material rebate (fixed)

Rebate processing(BO03) Customer rebate(%)

Inter-company processing (P101) Intercompany discount (fixed)

Inter-company billing (P102) Intercompany discount (%)

Invoice lists (RL00) Factoring discount

Invoice lists (MW15) Factoring discount tax

How do you manage discounts in Condition record?

While creating a condition records, you can use any of standard discount
types. While doing automatic pricing, system checks for the discount that
satisfies a certain condition and it checks for a valid condition records.

If a discount refers to a group like a material group or price groups, that

group must be assigned to relevant customer or material master record
before automatic pricing is done in the system.
What is the use of product proposals in SAP SD module?
Product Proposal helps an organization to increase the sales by
recommended other products to the already added products or by
replacing one already added. The products recommended can be
cheaper, expensive or similar to the product that is requested by the
customer.

Automatic Product Proposal is one of most powerful tool used in online

marketing of products.

Product Proposals can be mapped to specific requirement of business

partners to match their market requirement.
Can we extend material and customer to other sales area in SAP Sales
and Distribution?
Sales area is a combination of sales organization and distribution channel
and Division. Division is a logical grouping of products, hence you can’t
extend material to other sales areas. But you can extend customer to
other sales areas through common Distribution channel & division.
What are different sales order type that can be used in SAP SD system?
There are different types of Sales Order that can be placed −

Cash Sales

This is defined an order type where customer place an order, pick up the
order and pay for the goods. In this order type delivery of the order is
executed immediately when the order has been entered. Cash invoice
and billing can be printed immediately from the order.

No Receivables is entered for customer as invoice amount is paid cash

and directly entered to a cash account.

Rush Order

In this order type, delivery of good is picked by customer or you deliver

the goods on the same day when the order is placed.

Scheduling Agreement

A scheduling agreement is defined as an external agreement with the

customer and having details of quantity of goods and delivery dates. This
information is mentioned as schedule lines In a standard system,
Schedule lines can be created with the scheduling agreement or you can
also create these at later stage.
How do you manage deliveries when customer is not satisfied with
product/service?
Free of charge delivery or subsequent delivery is made when customer is
not satisfied with product or good or lesser quantity of good is delivered
and company has to initiate a return as per customer request. In this
delivery, customer is not charged for shipping of goods.

Steps to be followed in case of Return request −

Credit Memo −

This is done when customer wants refund for the delivered goods.
System creates credit memo sales document to customer with reference
to sales order.

Subsequent delivery −

This includes free of charge delivery of disputed goods to the customer.

This is required when incorrect quantity of goods is delivered to
customer.

Creating a return request in system −

T-Code − VA01
What is an outline agreement?
Outline agreement is a long term purchasing agreement with vendor
containing terms and conditions regarding the material that is supplied by
vendor.

Outline agreement are valid up to certain period of time and cover a

certain predefined quantity or value.
What are different type of outline agreements?
Outline agreement is of following two types.

 Contract
 Scheduling Agreement
Contract

Contract is a long term outline agreement between vendor and ordering

party over predefined material or services over certain framework of
time. There are two types of contract

Scheduling Agreement
A scheduling agreement is defined as an external agreement with the
customer and having details of quantity of goods and delivery dates. This
information is mentioned as schedule lines In a standard system,
Schedule lines can be created with the scheduling agreement or you can
also create these at later stage.
What are different contract types? How to create a contract in SAP
system?
Quantity Contract − In this type of contract overall value is specified in
terms of total quantity of material to be supplied by vendor.

Value Contract − In this type of contract overall value is specified in

terms of total amount to be paid for that material to the vendor.

Contract can be created by following the below steps −

 Path to create Contract −

Logistics ⇒ Materials Management ⇒ Purchasing ⇒ Outline

Agreement ⇒ Contract ⇒ Create

 T-code − ME31K
How you can create a scheduling agreement?
Path to create Scheduling Agreement −

 Logistics ⇒ Materials Management ⇒ Purchasing ⇒ Outline

Agreement ⇒ Scheduling Agreement ⇒ Create ⇒ Vendor Known

 T-code − ME31L
What are the different activities under consignment stock in SAP SD?
Consignment stock management includes four key activities in the
system −

 Creating a Consignment Fill-Up (Stock is fill up at warehouse)

 Creating Consignment Issue (Stock issued from warehouse)

 Creating a Consignment Pick-Up (Stock return to manufacturer)

 Displaying Consignment Returns (Stock return from customer)

What is the use of shipping process in SAP Sales and Distribution? How do
you define modes of transport?
Shipping is defined as an important activity in sales process. It comes
under logistic chain and guarantees customer service and distribution of
goods.

It is a component of Sales and Distribution module and is used to

perform outbound delivery and other shipping activities like picking and
packing of the goods.

In shipping process, below are the key sub processes −

 Delivery processing of the goods

 Picking of items
 Packing of the goods
 Post goods issue
 Shipping communication
 Planning & monitoring of shipping
To define Modes of Transport, navigate −

 SPRO → IMG → Logistics Execution → Transportation → Basic

Transportation Function → Routes → Define Routes → Define
modes of transport → Execute.

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