CHAPTER 1

INTRODUCTION TO SAP

SAP creates software for businesses (SAP stands for systems, Applications and Products) that
many companies use for a variety of business management purposes. SAP was founded in
1972 in Walldorf , Germany. Sap has grown and it becomes the world premier provider of
client\server business solutions for which it is so well known today. The SAP R\3 enterprise
application suite for open client server systems has established new standards for providing
business information management solution. SAP providing ERP (Enterprise Resource and
Planning) solutions and services. ERP is software that is built to organizations belonging to
industrials sectors, regardless of their size and strength.

The Enterprise Resource and Planning(ERP) package is designed to support and integrate almost
every functional area of a business such as procurement of goods and services, Sale and
Distribution, Finance, Human Resources, Manufacturing, Production planning, Logistics and
ware housing management.

SAP is table drive customization software. It allows businesses to make rapid changes in their
business requirements with a common set of programs. The main purpose of using a standard
business application like SAP is to reduce the amount of time and money spends on developing
and testing all the programs. Mainly sap helps the organization run smoothly.

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 CHAPTER 2

FUNCTIONAL ANALYSIS ( SALES AND DISTRIBUTION)

2.1 FOUNDATION:

SAP Founded in Walldorf, Germany in 1972. It is enterprise resource planning software

developed by the German company SAP SE, it is incorporates the key business functions of an
organization. The latest version SAP 6.0 was made available in 2016.

Business processes in SAP include Sales & Distributions, Material management, Production
planning, logistics execution operation, and Quality Management operations, and financial
accounting, management accounting, financial supply chain management, and also include
human capital management.

SAP business suit is a bundle of business applications so here SAP ERP is the part of it.

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2.2 Organizational Units in Sales and Distribution

The important organization units in SAP SD are

Company Code
Sales Organization
Distribution channel
Division
Sales Area
Sales office
Sales Group
Shipping point
Loading point

Company Code: It is a legal entity of organization in which balance sheets and profits & loss
statements are prepared and used for external reporting.

Sales Organization: It is an organizational unit that groups the organization as per the
requirements of sales & distribution. It helps the distribution of goods and services and negotiate
the sales.

Distribution Channel: It provides the detailed information how the goods and services reaches
the customer. Examples of distribution channels are traders, third party sales, export, etc.

Division: It is product line and it is used to group the products or services. In division you can
make the customer specific information and requirements like payment terms, deliveries, pricing.

Sales Area: It is a comprised of Sales Organization + Distribution channel + Division. It is

mandatory to mention sales area in every sales transaction. Sales area can be used for statistical
analysis.

Sales Office: It can be a territory or market area. The configuration of Sales office in SAP is
optional. It can be defined as the place where the sales activities are taking happened at
company branches can be referred as sales office.

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Sales Group: The definition of sales group organizational element in sap is optional. Group of
employees are assigned to sales group.

Shipping Point: It is a location where the delivery activities are performed. The delivery process
can be done from only one shipping point.

Loading Point: It is a location where the sub-division of shipping points is used for the purpose
special handling of goods.

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2.3 Sales and Distribution Flow

Inquiry
Quotation
Sales order
Goods delivery
Billing
Finance

Inquiry Once we receive the quotation from the customer then as a vendor we need to check
whether we can deliver the goods with customer conditions or not.

Quotation Once we finish inquiry then as a vendor we need to send quotations to the particular
customer.

Sales order once we receive the purchase order from customer then as a vendor we need to
raise the sales order. While rising sales order we should know the partner functions.

Sold to party who as raised the purchase orders.

Ship to party where we need to deliver the goods.

Bill to party to whom we have to give the bill.

Payer who is going to pay the money?

Goods delivery After raising the sales order as a vendor we need to deliver the goods.

Billing While delivering the goods we need to send the billing document.

Finance Once we deliver the goods with billing vendor finance guy will interact with the
customer for finance settlements.

2.4 Sales and Distribution overview

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 Mechanisms to execute the business processes used in the selling, shipping and billing of
products and services
Extension sets were used to deliver new features and keep the core as stable as possible.
The Web Application Server contained all the capabilities of SAP Basis.
As a result of marketing changes and changes in the industry, new versions of SAP have
been released.
Flexible tool that allows one to collect, consolidate, and utilize data from sales and
distribution processing.
A component of the Logistic Information System (LIS)

A complete architecture change took place with the introduction of SAP ERP edition in 2004.
R/3 Enterprise was replaced with the introduction of ERP Central Component.

The Sales & Distribution (SD) module consists of various components also called sub-modules.
Which are known as?

(SD-BF) Basic Functions and Master Data in SD Processing. (Also subdivided in several
components as: Pricing, Outputetc)
(SD-BF-PR) Pricing and Conditions
(SD-BF-EC) Extra Charge
(SD-BF-CM) Availability Check and Requirements in Sales and Distribution Credit and
Risk Management
(SD-BF-AS) Material Sorting
(SD-BF-OC) Output Determination
(SD-SLS) Sales
(SD-SLS-OA) Scheduling Agreements for Component Suppliers
(SD-SLS-OA) Customer Service Processing
(SD-FT) Foreign Trade/Customs
(SD-BIL) Billing
(SD-BIL-IV) Payment Card Processing
(CAS) Sales Support: Computer-Aided Selling
(SD-EDI) Electronic Data Interchange/I Doc Interface
(LE-SHP) Shipping

2.5 Sales and distribution transaction

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SD Components
Master Data
Detailed information about customers, materials and business partners.
Flexible data structures that support the business environment.
Specialized master data to support sales order processing.
Sales Support
Provides the functionally to support the staff involved in business development and
customer service processes
Shipping
Picking, Picking & inventory management
Generate Shipping Documents
Delivery scheduling, Returns deliveries & Stock transfer
Billing
Invoice Generation
Comprehensive set of billing functions
Real-time integration with finance
FUNCTIONS:

Inquiries & quotes

Sales orders
Sales returns
Contracts & scheduling agreements
Credit & debit memo request
Rush order & cash sales
Back orders

The most frequently used transaction are as follows:

1. VS00 - Master data

2. VC00 - Sales Support

3. VA00 - Sales

4. VL00 - Shipping

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 5. VT00 - Transportation

6. VF00 Billing

End-user:

1. Customer Master Creation-VD01 and XD01 (for full include company code)

VD02 - Change Customer

VD03 - Display Customer

VD04 - Customer Account Changes

VD06 - Flag for Deletion Customer

XD01 - Create Customer

XD02 - Modify Customer

XD03 - Display Customer

2. MM00-Create other material

3. VB11- To create material determination condition record

4. CO09- Material availability Overview

5. VL01 - Create outbound delivery with ref sales order

6. VL04 - Collective processing of delivery

7. VA11 - Create Inquiry

VA12 - Change Inquiry

VA13 - Display Inquiry

Sales & Distribution

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Sales order / Quote / Schedule Agreement / Contract

VA01 - Create Order

VA02 - Change Order

VA03 - Display Order

VA02 - Sales order change

VA05 - List of sales orders

VA32 - Scheduling agreement change

VA42 - Contract change

VA21 - Create Quotation

VA22 - Change Quotation

VA23 - Display Quotation

Billing

VF02 - Change billing document

VF11 - Cancel Billing document

VF04 - Billing due list

FBL5N - Display Customer invoices by line

FBL1N - Display Vendor invoices by line

Delivery

VL02N - Change delivery document

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 VL04 - Delivery due list

VKM5 - List of deliveries

VL06G - List of outbound deliveries for goods issue

VL06P - List of outbound deliveries for picking

VL09 - Cancel goods issue

VT02N - Change shipment

VT70 - Output for shipments

General

VKM3, VKM4 - List of sales documents

VKM1 - List of blocked SD documents

VD52 - Material Determination

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2.6 Outline agreements

The vendor selection is an important process in the procurement cycle. Vendors can be selected
by a quotation process. Once these vendors are shortlisted by an organization. They enter into
an agreement with a certain vendor to supply specific items with certain conditions. This
happens when an agreement is reached or a formal contract is signed with the vendor. So, this
outline agreement is a long term purchasing agreement with the vendor. The key points about an
outline agreement are as follows

An outline agreement is a long term purchasing agreement with the vendor. It contains
the terms and conditions regarding the material that is to be supplied by the vendor.

These outline agreements are valid up to a certain period of time and cover a certain
predefined quantity or value.

Outline agreement have two types:

1. Contract
2. Scheduling Agreement

Contract The contract is draft agreement, and they do not include delivery dates for the
material. Contract is two types:
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 1. Quantity Contract: This contract considered to fulfill when the company supplied an
agreed total quantity of materials against the contract.
2. Value Contract: This contract considered to fulfill when the company supplied agreed
total value of material against the contract.

Create Quantity Contract

Step-1

1. Enter T-code ME31K in the command field.

2. Enter Vendor / Agreement Type (MK- Quantity Contract) / Agreement Date.
3. Enter Purchase Org., Purchasing Group in organizational data.

Step-2 Enter Validity End date of contract in header data screen.

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Step-3

1. Enter Material ,Target quantity (A quantity for which quantity contract being created) and
net price
2. Click On Save Button.

A message as will be displayed.

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Create Scheduling agreement

The scheduling agreement is a long-term purchase agreement with the vendor in which a vendor
is bound for supplying of material according to predetermined conditions. Details of the delivery
date and quantity communicated to the vendor in the form of the delivery schedule.

Step-1

1. Enter T-code ME31 in command field.

2. Enter Vendor / Agreement Type (LP- Scheduling agreement) / Agreement Date.
3. Enter Purch. Organization / Purchasing group.

Step-2 Enter Validity End Date in header screen.

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Step-3 Enter Material / Target Quantity / Net Price / Plant in Item Overview Screen.

Step-4 Enter Exclusion in next screen.

Step-5 Get back previous screen item overview and click on save button. A message as below -

2.7 out puts

Overview

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Outputs are an essential media of communication with various business partners & internal
partner within the organization during or for sales processing. This output can be either be taken
as print on paper or generated PDF files or sent by mails/electronically. You can even restrict or
allow the trigger of these outputs.

Output determination using condition technique majorly defines 3 functions:

1. Automatic determination of output in respective object.

2. Processing of output based on some events.

3. Respective parameter/medium for print.

So, output types are assigned to

1. Partner functions,

2. Transmission media and

3. Dispatch time.

We need to co-ordinate with ABAPers for output processing program and form.

Output determination is carried out through condition technique in Sales and Distribution.

Application Keys Area

V1 Sales

V2 Shipping

V3 Billing

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 Application Keys Area

V6 Handling Units

V7 Transport

Types of Output

Print Output,

Fax,

Telex,

E-Mail

EDI (Electronic Data Interchange)

Output Determination

Output is determined using condition technique.

Output can be determined from customer master, but it is recommended that Output in sales
document through output determination procedure (Condition technique). Output can be
determined separately for Sales Document: Header and Sales Document: Item level.

Unlike any other determination procedure getting determined through condition technique. The
output determination also involves,

Condition Table

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 Access Sequence

Condition Types

Output Determination Procedure

Output Determination Procedure Assignment

1.) Condition Table

T Code V/57

SPRO Path IMG - SD - Basic Function - Output Control

- Output Determination using Condition Technique
- Output Determination for Sales Documents
- Maintain Condition Table

We have to define combination of fields for which you want condition records in condition tables
of output. Provided existing standard condition tables does not meet your requirement. In case of
new condition table enter name of condition table, the number of table must be starting from 900.
Select the fields for table from allowed fields and generate new condition table.

2.) Access Sequence

SPRO Path IMG - SD - Basic Function - Output Control

- Output Determination using Condition Technique
- Output Determination for Sales Documents
- Maintain Access Sequence

We have to define new access sequence by copying existing one and change to your requirement,
provided standard access sequence does not meet you requirement. It is search strategy which

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system uses to find out condition records stored in condition tables for condition types. Unlike
pricing, all output type has access sequence. Therefore, you maintain output condition record for
all output types.

3.) Output Types

T Code V/30

SPRO Path IMG - SD - Basic function - Output control

- Output determination using condition technique
- Output determination for sales documents
- Maintain Output Types

We have to define new Output types by copying existing one and change to your requirement,
provided standard output type does not meet you requirement.

Languages of Output

Print Program: print specification

SAP Script: layout

Partners (to whom you need to send output)

We need to mention Partner function wise Output type.

3.1.) Assign Output types of Partner Function

SPRO Path IMG - SD - Basic Function - Output Control

- Output determination using condition technique
- Output determination for Sales documents
- Assign Output type to Partner Function

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Here we assign Output types to desired Partner function like SP/SH/PY etc.. Generally that
would be the intent recipient of that output type.

4.) Maintain Output Determination Procedure

SPRO Path IMG - SD - Basic function - Output control

- Output determination using condition technique
- Output determination for sales documents
- Maintain Output determination procedures

We have to define new Output determination procedure by copying existing one and change to
your requirement, provided standard output determination procedure does not meet you
requirement.

5.) Assign Output Determination Procedure

T Code V/43
Assign Output determination procedure to Sales document header level

T Code V/69
Assign Output determination procedure to Sales document item category

SPRO Path IMG - SD - Basic Function - Output control

- Output determination using condition technique
- Output determination for sales documents
- Assign Output determination procedures

We need to assign output determination procedure to Sales document. We may assign as per our
requirement Header level and item level.

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Similar steps could be followed for output determination for Sales activities and Billing
documents

Some Standard Output Types

Output Type relevant Sales Document Standard Output Type

Transfer Order WMTA
Packing PL00
Sales Orders BA00
Cash Sales RD03
Sales Invoice RD00
Delivery Note LD00

Condition Record

Without or in absence proper condition record maintenance, the desired output type will not
determine in relevant sales document type. Therefore condition record is crucial in Automatic
determination of output type.

T Code Condition Record Maintenance for

VV11 / VV12 / VV13 Sales Document relevant Output Type
VV21 / VV22 / VV23 Delivery Document relevant Output Type
VV31 / VV32 / VV33 Billing Document relevant Output Type

2.8 Pricing

The term pricing is used broadly to describe the calculation of prices (for external use by
customers or vendors) and costs (for internal purposes, such as cost
accounting). Conditions represent a set of circumstances that apply when a price is calculated.
For example, a particular customer orders a certain quantity of a particular product on a certain
day. The variable factors here - the customer, the product, the order quantity, the date - determine

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the final price the customer gets. The information about each of these factors can be stored in the
system as master data. This master data is stored in the form of condition records .

The Condition Technique in Pricing

The condition technique refers to the method by which the system determines prices from
information stored in condition records. In Sales and Distribution, the various elements used in
the condition technique are set up and controlled in Customizing. During sales order processing,
the system uses the condition technique to determine a variety of important pricing information.
For example, the system automatically determines which gross price the customer should be
charged and which discounts and surcharges are relevant given the conditions that apply.

Example of Pricing in the Sales Order

The following shows how the condition technique works in the background to produce the
pricing information.

1. The system determines the pricing procedure according to information defined in the
sales document type and the customer master record.

2. The pricing procedure defines the valid condition types and the sequence in which they
appear in the sales order. In the example, the system takes the first condition type (PR00)
in the pricing procedure and begins the search for a valid condition record.

3. Each condition type in the pricing procedure can have an access sequence assigned to it.
In this case, the system uses access sequence PR00. The system checks the accesses until
it finds a valid condition record. (Although you cannot see this in the diagram, each
access specifies a particular condition table. The table provides the key with which the
system searches for records).

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 4. In the example, the first access (searching for a customer-specific material price) is
unsuccessful. The system moves on to the next access and finds a valid record.

The system determines the price according to information stored in the condition record. If a
pricing scale exists, the system calculates the appropriate price. In the example, the sales order
item is for 120 pieces of the material. Using the scale price that applies to quantities from 100
pieces and more, the system determines a price of USD 99 per piece.

The system repeats this process for each condition type in the pricing procedure determines a
final price.

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2.9 Table structure

Tables and structures used in SAP Sales and Distribution. This can be used a ready reference for
writing Functional specifications or for data analysis.

VBAK Sales Document: Header Data

VBAP Sales Document: Item Data
VBKD Sales Document: Business Data/Sales district data
VBPA Partners
VAKPA Partner index
VBFA Document Flow
VBEP Sales Document: Schedule Line / Data related to line items, delivery lines
VBAKUK Sales Document: Header and Status Data
VBUP Sales Document: Item Status
VBUK Header Status and Administrative Data
VBBE Sales Requirements: Individual Records
VBBS Summarized requirements
VBUV Incompletion log
VBLB Forecast delivery schedules
VMVA Match codes
VEDA Contract Data
VBKA Sales activity

Logical Database

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AK V Sales documents

Delivery Document

Table/Structure Description
LIKP Delivery Document: Header data
LIPS Delivery Document: Item data

Shipping

Table/Structure Description
VTTK Shipment header
VTTP Shipment item
VTTS Stage in transport
VTSP Stage in transport per shipment item
VTPA Shipment partners
VEKP Handling Unit - Header Table
VEPO Packing: Handling Unit Item Contents

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 CHAPTER 3

CASE ANALYSIS

SAP- SD CASE SCENARIO

Lets assume your company HERO CYCLES (Bengalore) has got an inquiry for 100
cycles. Exactly inquiry up to quotation level. Based on the past performence of your
customer your company HERO CYCLES is giving a discount of 10%. Since the
customer is located in (Hospet) valu added tax @14.5% should be applicable along with
freight charges of 1%.
Execute a sales scenario for the above said process up to quotation.

Solution:

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 Conclusion

So the problem given to us explains that we need to find out an inquiry for 100 cycles up to
quotation level. They are giving discount of 10% and the value added tax @14.5% along with
freight charge of 1% hence I have followed the certain steps to get the solution.

First we create inquiry and in that we should enter the sales organization code and distribution
channel and division after completion of the entry the details of the sold-to-party and ship-to-
party details and material number, how much quantity we are having, we should enter this in
second step. After that we should go to create quotation enter the same as we enter above, next
create : item data, here we should enter the tax and less the discount after completion of above
steps there we get a result of not completion after we get the result of that we should enter the
valid date of quotation. These are the steps we followed to solve the case.

By this we come to know that SAP software is helpful to reduce the manual work. SAP helps the
organization run smoothly.

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