the sales order creation process

7/27/2019 The Sales Order Creation Process

1/12

The Sales Order Creation Process

Page 1 of 12


BY:Shirshendu Mukhopadhyay

Subject Matter Expert SAP SD

Dexler Information Solutions (P) LTD


2/12


Page 2 of 12

INDEX

Abstract - 3

Introduction to Organizational Units in Sales and Distribution - 4

Assignment of Organizational Units in Sales and Distribution - 5

Creation of Sales Area - 5

Master Data in sales and distribution - 7

Sales Order Creation - 10

Structure of sales order - 11

Conclusion - 13


3/12


Page 3 of 12

Abstract

This white paper provides information on the process of sales order creation. It explains the various

organizational units used in Sales and distribution, their assignment, and the creation of sales order. This

paper also gives a brief overview of how to create the required Master data in sales and distribution, once

the sales area is generated, that helps in Sales order creation.

Introduction to Organizational Units in Sales and Distribution

Company code

In simple terms, a company code represents a company. It is a legal entity and an independent accounting

unit. This is defined by the FI module. This is mainly done for statutory purposes. At company code level,

you can create the balance sheet required by law and the profit and loss statement.

Sales Organization

A sales organization is an organizational unit in sales and distribution which groups the enterprise according

to the requirement of sales and distribution. It is responsible for distribution of goods and services,

negotiating sales conditions, product liability, and rights of recourse. In sales and distribution the sales

organization is the highest summation level and all sales and distribution documents, that is, all sales orders,outbound deliveries, and Billing documents are assigned to a sales organization.

Distribution Channel

It is the means through which the sales materials reach the customer. For example, wholesale trade, retail

trade, direct sales and so on.

Division

A division represents a product group. It can also be used to group material and services.

Sales Area

A sales area is a combination of sales organization, distribution channel, and division. It defines the

distribution channel that a sales organization uses to sell products of a certain division. Each sales and

distribution document is assigned to exactly one sales area.


4/12


Page 4 of 12

Plant

Plant is a location where relevant stocks are kept. In sales and distribution, a Plant represents the location

from which materials and services are distributed; it corresponds to a distribution center.

Shipping point

The Shipping point is the highest level of organizational unit of shipping that controls the shipping activities.

Each outbound delivery is processed by exactly one shipping point. The shipping point can be a loading

ramp, a mail depot, a rail depot or a group of employees responsible for organizing very urgent deliveries.

ASSIGNMENT OF ORGANIZATIONAL UNITS IN SALES AND DISTRIBUTION

Company code

Many to one

Many to one

Sales organization Many to oneMany Many to Many

to stribution Channel Sales Area

Many Many to Many Sales organization, Distribution

Division Channel, Division form the sales

Plant area

Many to Many Shipping Point

CREATION OF SALES AREA

The assignment between sales organization and Company Code is unique. The Company code is defined in

the system by FI. After that we define the sales organization and assign it to the company code. We define

the sales organization in customizing by following the menu path:


5/12


Page 5 of 12

SPRO -> Enterprise structure -> Definition -> Sales and Distribution -> Define, Copy, Delete, check sales

organization -> Define sales organization.

To assign the sales organization to Company code, we follow the menu path:

SPRO -> Enterprise structure ->Assignment -> Sales and Distribution ->Assign Sales organization to

Company Code

Many Distribution Channels can be assigned to many sales organizations. The Distribution channel is

defined in Customizing using the menu path:

SPRO -> Enterprise structure -> Definition -> Sales and Distribution -> Define, Copy, Delete, check

Distribution Channel ->Define distribution Channel

The assignment of Distribution channel to sales organization is carried out in customizing by following thegiven menu path:

SPRO -> Enterprise structure -> Assignment -> Sales and Distribution -> Assign Distribution Channel to

Sales Organization.

There is no organizational assignment between Division and Distribution. Division is assigned to Sales

Organization and this is not a unique assignment. Division is also defined in Customizing by following the

menu path:

SPRO -> Enterprise structure -> Definition ->Logistic General -> Define, Copy, Delete, Check Division.

Division is assigned to the Sales organization in customizing by following the menu path:

SPRO -> Enterprise structure ->Assignment -> Sales and Distribution -> Assign Division to Sales

Organization.

Once the Sales organization, Distribution Channel, and Division has been defined and assigned, the sales

area can be set up. The Sales area is set up in customizing by following the menu path:

SPRO -> Enterprise structure ->Assignment -> Sales and Distribution -> Set up Sales Area.

The Plant is defined by materials management and is assigned to the company code. In Sales and

distribution, we assign the Plant to the sales organization in customizing by following the menu path:

SPRO -> Enterprise structure ->Assignment -> Sales and Distribution ->Assign Sales organization >

Distribution Channel > Plant.


6/12


Page 6 of 12

Once the Sales Area is created, we can create the Master Data in sales and distribution.

MASTER DATA IN SALES AND DISTRIBUTION

The commonly used master data in sales and distribution are: 1) Customer master data 2) Material Master

data 3) Condition master data 4) Customer material info record, and 5) Output master data.

Customer Master Data

A customer master data contains all information regarding a customer. The information in a customer masterdata is mainly maintained in three tab pages: General Data, Company code Data, and Sales area Data.

In the Customer create initial screen, if you enter the company code you will be able to maintain the

company code data. Similarly if you enter the sales area information you will be able to maintain the sales

area data. The account group determines the partner function of the customer.


7/12


Page 7 of 12

A customer can be extended to other sales area as well. The customer master can be created in SAP easy

access screen and the path for creating the Customer master record is as follows: Logistics -> Sales and

Distribution -> Master Data -> Business Partner -> Customer -> Create -> Complete/Sales and Distribution.

For creating complete Customer master record the transaction code is XD01 and for sales and distribution it

is VD01.

Material Master Data

A material master data can be created based on different views through which the material master gets

created in different organizational levels. The different organization levels at which the material master can

be created are sales organization, Distribution channel, Plant, storage location and warehouse number.

The material master record is created by using the following menu path in SAP EASY access screen:

Logistics -> Sales and Distribution -> Master Data -> Products -> Materials -> Trading goods -> Create. The

transaction code is MM01.


8/12


Page 8 of 12

Condition master Data

The condition master data includes information about prices, surcharges and discounts, freights and taxes.

The condition master data can be created based on customer and material.

Once the Customer master, Material master, and Condition master records are created, we can create the

sales order.

SALES ORDER CREATION

Based on the customers enquiry, a Quotation is created and sent to the customer. The Customer then

sends us the Purchase order based on which the Sales Order is created. In the system, we can create the

quotation by following the menu path: Logistics -> Sales and Distribution -> Sales -> Quotation create.


9/12


Page 9 of 12

The Sales order can be created with/without reference to a Quotation. When we create a sales order with

reference to a quotation, the Sold-to-party, ship-to-party, requested delivery date and item information get

copied from the quotation to the Sales order. A standard sales order contains information related to

Customer and Material, Price, Delivery dates and Delivery Quantities, Shipping and Billing.

The menu path for creating a standard order is as follows: Logistics -> Sales and Distribution -> Sales ->

Order -> Create or else we can also use the transaction code VA01.

In the Create Sales order: Initial screen, we need to enter the order type. The commonly used order type is

Standard order (OR). In this screen it is not essential to enter the organizational data like Sales

Organization, Distribution Channel, Division, Sales Office and Sales Group. When we enter this data, the

sales area for the sales order is determined from it.

STRUCTURE OF SALES ORDER

A Sales document is divided into three levels: Header, Item, and Schedule line. In the Create Sales Order:

initial screen, once we enter the Order type and press Enter, we reach the Create : Overview

screen.


10/12


Page 10 of 12

When we enter the sold-to-party field, the Ship-to-party and Sales area is determined from the Customer

master.

In this screen, the requested delivery date is determined from the Lead time field in the Sales order type. We

can change this date as per the customers requirements. If we enter the sales area data in the Create

Sales Order: Initial screen, then system determines this date, based on the Factory calendar and the Lead

time in days, from the Order type.

To create a complete sales order, the necessary fields that we need to enter are: Sold-to-party, Purchase

order, Requested Delivery date, Material, and the Order Quantity.

Fields like Item Description, Item Category, Plant, Amount, Currency, Product hierarchy, Division (Item

Division), Storage Location, Shipping point, Net Weight, and Gross Weight are determined from the Material

master record. All these are at the Item level.

In the header level, Field like Net weight is determined from the Material master record.

The Partner functions in the Partner tab page of the header and item level is determined from the customer

master record.

The schedule line is determined based on the customer-requested delivery date. One of the main objectives

of scheduling is to determine the material availability date.


11/12


Page 11 of 12

Once the Sales order is created, we can create the delivery document. The delivery is created based on the

schedule line date. It is created on or after the Confirmed material availability date in the schedule line.


12/12


Page 12 of 12

CONCLUSION

This White Paper described the necessary steps to be followed before creating the sales order.

A sales order can be created only when the organization units in sales and distribution are defined and

assigned appropriately to create the sales area. Once the sales order is created, we need to create the

necessary master data according to the sales area or the sales organizations and then we can create the

sales order.

Once the sales order is created, the delivery process can be initiated.

---------------

the sales order creation process

Documents