1. SAP Sales Order Management EIN 5346, Logistics Engineering Spring 2010

2. R/3 S & D Integrated Solution Client / Server Open Systems Financial
Accounting
Sales &
Distribution
Materials
Mgmt.
Controlling
Production
Planning
R/3
Fixed Assets
Mgmt.
Integrated Solution
Quality
Mgmt.
Project
System
Client / Server
Plant
Maintenance
Open Systems
Workflow
Human
Resources
Industry
Solutions

3. Process Integration Purchase Requisition Purchase Order Run MRP Goods
Procurement
Process
Purchase
Order
Run MRP
Sales Order
Process
Goods
Receipt
Sales Order
Entry
Check
Availability
Invoice
Receipt
Pick
Materials
Receipt of
Payment
Payment
to Vendor
Post Goods
Issue
Invoice
Customer

4. Process Integration Purchase Order Purchase Requisition Goods Receipt
Procurement
Process
Purchase
Requisition
Convert Production
Proposal
Goods
Receipt
Production
Process
Schedule
and Release
Run MPS
w/MRP
Invoice
Receipt
Goods
Issue
Sales Order
Process
Check
Availability
Payment
to Vendor
Sales Order
Entry
Completion
Confirmation
Quality
Inspection
Pick
Materials
Goods
Receipt
Order Settlement
Receipt of
Payment
Post Goods
Issue
Invoice
Customer

5. Components of Sales and Distribution
(SD)
Sales
Support
Credit
Mgmt.
Shipping
Transport
Billing
Foreign
Trade
Information
System
Master
Data
Sales Support: Computer-Aided Selling
Purpose
The Sales Support component provides a wide range of functions for opportunity management. It helps your sales and marketing department to support your existing customers and, at the same time, to develop new business. Within the Sales Support environment, all sales personnel in the field and in the office can share valuable information about customers, sales prospects, competitors and their products, and contact people.
The Sales Support component is:
a source of information for all areas of Sales and Distribution
a tool for lead generation, lead qualification, and lead tracking
 Sales
Sales allows you to execute different business transactions based on sales documents defined in the system.
Four groups of sales documents are differentiated:
Customer inquiries and quotations
Sales orders
Outline agreements, such as contracts and scheduling agreements
Complaints, such as free of charge deliveries, credit and debit memo requests and returns
Shipping Transportation
Transportation is an essential element in the logistics chain. It affects both incoming and outgoing goods. Effective transportation planning and processing ensure that shipments are dispatched without delay and arrive on schedule. Transportation costs play an essential role in the calculation of the price of a product. It is important to keep these transportation costs to a minimum so that the price of a product remains competitive. Efficient transportation planning and processing helps to keep these costs down.
Billing 
Billing represents the final processing stage for a business transaction in Sales and Distribution. Information on billing is available at every stage of order processing and delivery processing.
This component includes the following functions:
Creation of:
Invoices based on deliveries or services
Issue credit and debit memos
Pro forma invoices
Cancel billing transactions
Comprehensive pricing functions
Issue rebates
Transfer billing data to Financial Accounting (FI)
Credit and Risk Management
Credit management
Outstanding or uncollectible receivables can spoil the success of the company greatly. Credit Management enables you to minimize the credit risk yourself by specifying a specific credit limit for your customers. Thus you can take the financial pulse of a customer or group of customers, identify early warning signs, and enhance your credit-related decision-making. This is particularly useful if your customers are in financially unstable industries or companies, or if you conduct business with countries that are politically unstable or that employ a restrictive exchange rate policy.
Customer Service Processing 
Customer Service enables you to plan and manage a wide range of service scenarios. It includes functions for processing:
Service notifications
Warranties
Service orders
Service contracts
Service quotations
Repair orders
Customer Service (CS) draws on functionality from different SAP application components, in particular Plant Maintenance (PM) and Sales and Distribution (SD). For example, CS involves the planning and processing of external services, such as contracts for the maintenance and repair of equipment that a customer has either bought or rented. Maintenance planning and servicing is managed in PM; in SD you can create and maintain the relevant service contracts. Contract-related charges that are incurred in PM are passed on in the form of requests for billing in SD
Sales Information Systems - Reports and Analyses  
The SAP R/3 System offers you a wide range of information and analysis tools for sales and distribution. These provide you with a quick overview of your current business situation.
You want to determine how many orders customer XY issued in the last quarter. To see this information, you can execute the report "List orders". This gives you a list of orders and also contains information on the items, order value etc. You can set the scope of this list yourself.
Foreign Trade / Customs
As markets become increasingly more global and business structures more complex, the need for accuracy in handling the foreign trade needs of a business is gaining rapidly in importance. SAP’s R/3 Foreign Trade / Customs application (FT) provides the tools you need to compete effectively in today’s fast-paced market. It is designed to help you meet the rapidly changing foreign trade requirements of your business.
SAP’s R/3 Foreign Trade application enables you to:
Manage import and export processes, integrating them efficiently into the supply chain
Automatically identify licensing requirements for importing and exporting goods based on current regulations
Simplify reporting with automatic procedures for creating, printing and submitting declarations
Determine which of your products qualify for preference handling
Provide an active interface for sending or retrieving data via internationally available EDI systems and other electronic media
Update or change data in all relevant foreign trade documents at any time prior to the final goods issue. Even after you have posted the goods issue, you can still change data in the invoice.

6. Sales Order Process (Order-to-Cash)
Integration
Sales Order Process (Order-to-Cash)
Check
Availability
Sales Order
Entry
Pick
Materials
Receipt of
Customer Payment
Pack
Materials
Not unlike the procure to pay process, this is completely configurable. You decide how you want the order to cash process to work and configure the system appropriately
May start with Sales Order
Check inventory
If you do not have inventory –procurement process or production process
Pick materials: from inventory
Pack material: (optional) pack in box appropriate box or other
Post Goods Issue (Title transfer)
Invoice Customer –Create Accounts Receivable
Collect Money
Invoice
Customer
Post Goods
Issue

7. Sales process Master data Business processes Transaction data
Finished products
Price conditions
Customers
Business processes
Sales Order
Delivery/Goods Issuing
Billing
Payments
Transaction data
Sales orders
Reporting
Sales order tracking, market reports, inventory and financial statements

8. Accounting view of the sales process

9. Delivery/ Goods Issuing Reconciliation Account
No impact on
Financial Accounting (FI)
Sales quotation
Sales order
Materials Management (MM) and Financial Accounting (FI)
via automatic account assignment
Delivery/Goods Issuing
Dr Cr
Finished Product
$100
Requisition – Nothing really happens unless we get the goods or pay for them
The system does the transactions for you using the automatic account assignment
When we receive these, it can match the receipt against the PO
Debit Inventory (we now have additional inventory value)
Credit GR/IR (we are going to owe/pay for that additional inventory)
Dr Cr
Inventory Change
$100

10. Billing Reconciliation Account
Billing amount is
assigned and transferred to
customer account receivable
Billing
Dr Cr
Account Receivable
$100
Dr Cr
Sales Revenues
$100
Once we get the receipt –
Debit GR/IR – now a wash
Vendor AP Credit – we owe
Some companies book it as a liability right away (previous slides), but it really isn’t until you receive the goods
Unique to SAP

11. Customer and account receivable is reduced
Customer Payment
Amount is paid by
Customer and account receivable is reduced
Bank
Bank
Account Receivable
Once we get the receipt –
Debit GR/IR – now a wash
Vendor AP Credit – we owe (it is debited: now a wash)
Some companies book it as a liability right away (previous slides), but it really isn’t until you receive the goods
Unique to SAP
Credit bank account (paid, now we have less cash)
Dr Cr
Dr Cr
$100
$100

12. (FI – MM) Integration Points
Customer Payment
Delivery/ Goods Issuing
Billing
Inv. change/
Sales Rev.
AR (Customer)
F/G Inventory
Bank
Dr Cr
Dr Cr
Dr Cr
Dr Cr
$100
$100
$100
$100
$100
$100
Goods Receipt
Debit Inventory
Credit GR/IR
Invoice Receipt
Debit GR/IR
Credit AP
Payment Program (A/P)
Debit: AP
Credit Bank

13. Sales Order Document Flow
Goods Receipt
Debit Inventory
Credit GR/IR
Invoice Receipt
Debit GR/IR
Credit AP
Payment Program (A/P)
Debit: AP
Credit Bank