SAP SD Tutorial

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SAP SD (Sales and Distribution) is one of the significant modules of SAP ERP. It is used to store the
customer and product data of an organization. SAP SD helps to manage the shipping, billing, selling and
transportation of products and services of a company. The SAP Logistics module 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. This is an introductory
tutorial that covers the basics of SAP SD and how to deal with its various modules and sub-modules.

Audience
This tutorial will be extremely useful for professionals who aim to understand the basics of SAP SD and
implement it in practice. It is especially going to help consultants who are mainly responsible for
implementing sales, billing, and transportation of products.

Prerequisites
It is an elementary tutorial and you can easily understand the concepts explained here with a basic
knowledge of how an organization deals with their customers and products. However, it will help if you have
some prior exposure to inventory and how to deal with billing and shipping.

SAP SD - Introduction
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SAP Sales and Distribution is one of the key components 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 a 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.

Key Components in SAP SD

The key components in SAP Sales and Distribution module are −
  Customer and Vendor Master Data

 Sales Support

 Shipping of Material

 Sales Activities

 Billing related

 Transportation of products

 Credit Management

 Contract Handling and Management

 Foreign Trade

 Information System

SAP Sales and Distribution Cycle

SAP SD - Organizational Structure

SAP provides many components to complete SAP Sales and Distribution
organizational structure like Sales Areas, Distribution Channels, Divisions,
etc. The 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 top of this organization structure in the SD module, sales organization
is at highest level and is responsible for distribution of goods and services.
SAP recommends to keep the number of sales organization in an
organizational structure to be minimum. This will help in making the
reporting process easy and ideally it should have a single sales
organization.

The next level is distribution channel, which tells the medium by which the
products and services are distributed by an organization to its end users.
Division in an organizational structure, which 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 comprises of sales organization, distribution channel and a
division.

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

a company code. Then the distribution channel and divisions are assigned
to sales organization and all of these comprise to make a sales area.

In the first step of an SD organizational structure, sales organization is

assigned to a company code and then is to define a distribution channel
and then division to a sales organization.

The following diagram shows the organizational structure of a Sales and

Distribution module −

Material management
Material Management is one of the key modules in SAP ERP System and
covers the day to day business operations related to inventory and
procurement. This module is closely integrated with other modules of R/3
systems like Finance Accounting and Controlling, Sales and Distribution,
Quality Management, Product Planning.

Integration with Sales and Distribution SD Module

Consider an example of creating a sales order in SAP SD, it involves
copying the details of items from Material Management. Availability check
of the item and price details are also taken from MM, but this can be
controlled in the SD module. To create inbound and outbound delivery of
goods for a sales order, shipping details, loading point etc. also comes
from the Material Master.

The item that is placed using a Sales order must be extended to the sales
area of an organization to sales order/customer, otherwise it won’t be
possible to transact with this material. This confirms that there is a link
between SAP SD and MM module, when a sales order is created and
fulfilled. Similarly, there are many other links between two modules.

Finance and Accounting

SAP FI stands for Financial Accounting and it is one of the important
modules of SAP ERP. It is used to store the financial data of an
organization. SAP FI helps to analyze the financial condition of a company
in the market. It can integrate with other SAP modules like SD, PP, SAP
MM, SAP SCM etc.

For SAP FI-MM, use T-code: OBYC

In case of a 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. This
shows the integration between SAP SD, FI and MM module.

Document Flow
This shows how a transaction in one system effects the details in other
systems of an SAP module.

Consider the following transaction −

For SAP FI-MM, use T-code: OBYC

Whenever there is a delivery created with reference to a sales order, goods

movement takes place in the system.
Example
In case of a standard sales order in the SD module, you create an outbound
goods delivery to the customer. Availability check and retail price of that
product is checked in the MM module. Here, movement 601 takes place.
This movement is configured in the MM and movement of goods hit some
G/L account in FI. Every such movement of goods hits General Ledger
account in FI.

The accounts posting in FI is done with reference to the billing documents

like credit and debit note, invoice etc. created in SD and hence this is the
link between SD and FI. This shows the document flow between different
modules.

Process Chain
SD module is closely integrated with other SAP modules. The following
tables will give you a brief idea on how SD is linked with other modules −
Sales Order
Link Points Module Involved

Availability Check MM

Credit Check FI

Costing CO/MM

Tax Determination FI

Transfer of Requirements PP/MM

Billing
Integration Point Module

Debit A/R FI/CO

Credit Revenue FI/CO

Updates G/l (Tax,discounts,surcharges,etc) FI/CO

Milestone Billing PS

Goods Delivery and Issue of goods

Integration Module

Availability Check MM

Credit Check FI

Reduces Stock MM
 Reduces Inventory FI/CO

Reduces Eliminated PP/MM

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SAP SD - Customer & Material Master Data

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Master data is one of the key factors in Sales and Distribution module. There are two levels of masters in
SD.

The first level master includes −

 Customer Master

 Material Master

 Pricing Conditions

While, the second level master is −

 Output condition
Create a Customer Master Record
The customer master data contains the information about business transaction and how transactions are
recorded and executed by the system. A Master contains the information about the customers that an
organization uses to do business with them.

Key tables in Customer Master

Table Name Key Description

KNA1 KUNNR General Information

KNB1 KUNNR,BUKRS Company Code

 KNVV VKOGRG,VTWEG,SPART,KUNNR Sales Area

KNBK KUNNR,BANKS,BANKL,BANKN Bank Data

VCNUM CCINS,CCNUM Credit Card

VCKUN CCINS,CCNUM,KUNNR Credit Card Assignment

KNVK PARNR Contact Person

KNVP VKORG,VTWEG,SPART,PARVW,KUNNR Partner Functions

Main Transaction Codes in a Customer Master

S.No Transaction Codes & Description

1 XD01, XD02, XD03

Used to create/change/display customer centrally

2 VD01,VD02,VD03

Used to create/change/display customer sales area

3 FD01,FD02,FD03

Used to create/change/display customer company code

4 XD04

Display change documents

5 XD05

Display change documentsUsed to block Customer − Global, order, delivery, billing,

sales area, etc.

6 XD06
 Used for deletion

7 XD07

Change Account Group

8 VAP1

Create Contact Person

Creating a Customer Master Data

To create a customer master data, you need to use an Account group.

T-Code: XD01/VD01/FD01
Note that if you use −

 XD01 − This Includes sales area in the customer master and data is stored in tables KNA1, KNB1
and KNVV.

 VD01 − This includes sales area & data, which will be stored in tables KNA1, KNB1 and KNVV
and there is no company code data in this.

 FD01 − This is company code level & data is stored in tables KNA1 and KNB1.

Then a new window will open. Enter the following details −

 Select the Account Group from the list.

 Enter the customer number and select the company code.

Then you can enter the Sales Area details like −

 Sales Organization
  Distribution Channel

 Division

In case you want to take reference from an existing customer to create customer master, you can use the
reference option.

Once all the details are selected, click the Tick mark.

A new window will open to enter the customer master data. This customer master data has 3 key sections
−

 General Data like Title, Name, Address, etc.

 Company Code Data and

 Sales Area Data.

Note that this region fields define the tax calculation like VAT, CST, etc. The next step is to go to Control
Data and enter the following details.

Then you have to enter the particulars in Payment Transaction tab and enter the details of – Bank City,
Bank Key, Bank Account and Account Holder Name. You can also add more details by clicking on the
Bank data button.
The next step is to go to the Sales Area data and enter the details – Shipping Data, Customer Pricing and
Partner Functions, etc.

Next is to click on the Save icon at the top and you will get a confirmation that the customer has been
created with #.

If you have to make any further changes to the customer’s master data, you can use T-Code: XD02.

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 SAP SD - Create Partner Function
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Partner function allows you to identify which functions a partner has to perform in any business
process. Consider a simplest case, where all the customer functions are performed by the partner
customer. As these are mandatory functions, they have to be defined as obligatory functions in a
SD system.

These functions are categorized as per partner type in Sales and Distribution system. The below
partner types are Customer, Vendor, Personnel, Contact Person and common partner functions
as per these partner types are −

 Partner Type Customer

o Sold-To-Party

o Ship-To –Party

o Bill-To-Party

o Payer

 Partner Type Contact Person

 Partner Type Vendor

 Forwarding Agent

 Partner Type Personnel

 Employee Responsible

 Sales Personnel

The following tables show the main partner types and their corresponding partner function in
Sales and Distribution −

Note that if a partner belongs to a different partner type, in this case you need to create a master
records for that partner.

Partner Type Partner Function Entry from System Master Record

 Sold-to Party(SP)

Customer(CU)
Ship-to Party(SH) customer master
Customer number
record
Bill-to Party(BP)

Payer(PY)

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

agent)

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

Contact Contact Person(CP) Contact Partner number (created in customer

Person(CP) master record,no
master record of its
own)

Creating a Partner Function

Use T-Code: VOPAN

A new window will open. Select the Partner Object and click the Change button.
It will open a new window with the name Partner Determination Procedures. Go to New Entries.

Enter the name and partner determination procedure and double click on Partner Function in left
pane.

Click the New Entries button.

Enter the Partner function details − Name, Type, etc. KU- stands for Customer.

Next is to click on the Partner Function under Partner Determination Procedure node and enter
the details Partner Det. Procedure, Name, Partner Function.

Then, we need to assign this partner determination procedure to the Partner Object. The Partner
Object would be a Customer for this example. Then Click on Account Groups and Select the
Account group name from the list. Once it is done, Click Save, it will save the partner function.

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SAP SD - Create Material Stock

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Suppose you have implemented SAP in your company and now you want to put all your stocks in the SD
system. For this, use T-Code: MB1C Movement Type: 561 this is for Good receipts without reference.

Movement Type: 501 − this is used for receiving goods with a Purchase Order.

A new window will open. Enter the document date, Plant and storage location, Movement type, etc.

Select the Movement type from the list and Press Enter after selecting all the details.
A new window will open. Enter the material code and quantity for which stock needs to be created and then
click Save.

A message Document 300045646 posted will be displayed.

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