Sap sd important interview concepts

SAP SD by Mohit Amitabh
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What is Condition Technique?
Condition Technique is a configuration technique that is used to configure complex business rules.Consider it as a rules engine.
For example, in SD it is used across multiple functionalities – Pricing, Outputs, and Texts etc. In MM the same technique is
used to configure Schemas (Same as Pricing).
Condition technique is used when a complex, ever-changing set of business rules need to be configured as generically as
possible in the system. For example, in pricing, each organization has their own set of business rules including base price,
margins, discounts,taxes, surcharges,deals/promotions,price lists etc. For a single systemto be generic enough to cater to all
of these complex needs is a challenge in itself and that is exactly what condition technique tries to solve.
Condition Technique at a Very High Level
There are 7 key components of Condition Technique.
1. Field catalog
2. Condition Table
3. Access Sequence
4. Condition type
5. Pricing procedure
6. Pricing procedure determination
Field Catalog
Field Catalog consists of all the possible set of fields that play a role in determining the business rules.This transaction is
Cross-Client. If the business requires that new fields be available in the field catalog, then they need to be added to the
structures in either of the .INCLUDE or .APPEND components.
Order Type- AUART Material Group- MATKL
Customer- KUNNR Bill-to party- KUNRE
Material- MATNR
Access Sequence
Access sequence comprises of a sequence of condition tables prioritized in a particular order. An Access Sequence is
virtually a sequence in which the condition tables are accessed to determine which parameter to consider. For example, in
pricing, if you want the discount per material to over-rule the discount per customer, then you would position the discount per
material condition table above the discount per customer table.

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What is Exclusive in Access Sequence?
ANS: Exclusive indicator restricts the system to read condition record for particular Condition table if it finds condition
records for one condition table. That means it Stops search procedure with one condition table it finds condition records.
Select Access Sequence and click on Fields Control button and press enter.
Condition Table
Condition Table is an actual transparent database table that is created from the list of fields selected from the field catalog.
Condition type
Each condition type represents a logical component of the condition technique.For example, excise tax could be one of the
logical components of pricing and it could be represented using one condition type or a combination of multiple condition
types.
Pricing procedure
A procedure is a combination of multiple condition types.For example, in output determination procedure, all the sequence of
condition types might exist – Like EDI, Print, Fax etc.
Procedure Determination Transaction code: OVKK
Finally the procedure is assigned to the final document type that is affected by the business rule.-
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Proposed condition type for fast entry
The condition type that the systemautomatically proposes in the double-line entry screen during sales order processing.
Procedure
Enter a condition type. If you leave the field blank, the systemdisplays the active price condition during sales order processing.
The condition type you give in OVKK gets reflected in Sales order (Line item level). When you scroll towards right in Sales
Order you'll find the same Condition Type there, underCtyp column.

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Well,it can be any condition type right from PR00 till VPRS. It's justfor easy reference. If you leave the field blank,the system
displaystheactivepricecondition duringsales order processing.
Condition Type
Access sequence: [Ex: PR00]: Access sequence PR02 has been defined and assigned to condition type PR00. As every
condition type is associated with one access sequence that access sequence should be assign here.
Condition class: [B] = Prices
It is a classification of condition types as prices, taxes, discounts,etc. as PR00 is base price. So it has been classified as B.
Calculation type: [C] = Quantity
Calculation type for condition that is, how the calculation should be done for this condition type based on quantity or
percentage or fixed amount.
Ex: If it is K004 and K005 [B] = Fixed amount
If it is K007 [A] = Percentage
If it is KF00 [D] = Gross weight
Plus/Minus: [] Positive a
The value of this field determines the value of the condition type should be added or deducted.
Ex:
Condition category: A classification of conditions according to predefined categories. For example all conditions that is
related to freight cost.
Ex: KF00 = Freight
HD00 = Freight
Group condition: It indicates whether the systemcalculates the basis for the scale value for more than one item in a document.
Ex: If a sales order contains two items and both items belongs to the material group 01. The group condition indication typeset
in the definition of condition type for material group discount. [Ex: K020]. Then the condition record for material group 01
includes the following pricing scale like [From 1 PC 1% From 200 PC 2% ].
Then the order has been placed for 150 and 100 quantities for each material. Then systemtakes the total quantity as
250 and applies discount 2% as both materials belongs to same material. If those materials not belong to one group, then group
condition cannot be applied and systemcannot apply the discount value.

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Manual entries [C] = Manual entry has priority
The value of this field determines whether the condition type determined manually or not at sales order level.
Ex: AMIW has a value D not possible to process manually. The value of this field controls mandatory option indirectly.
Header condition: The value of the header condition applies to whole items in the sales order. Header conditions do not have
any access sequence.The values should be entered manually in the sales order level. Ex: HA00, BH00, HD00, etc.
Delete: This indicator enables to delete the condition type at sales order level.
Amount/Percentage: It specifies whether the amount or percentage for the condition type can be changed during document
processing.These changes will not affect the condition master data.
Value: Scope for changing the value. It specifies whether the value of the condition type can be changed during document
processing.
Calculation type: If you want to change calculation type this indicator should be set.
Ex: Normal calculation type is fixed amount and sales order level calculation type is percentage.
Pricing procedure
Alternative calculation type
Normally if you want to calculate a value you have to use a calculation type for determination of the value. This calculation
types are addition, subtraction or multiplication. Similarly SAP also has got a default calculation type in the control data of the
condition type. There you have the options of Qty based, Fixed Amount Based or Percentage based.
To calculate the PROFIT MARGIN we use the Calculation type as 11 which mean the difference of Base price and Cost price.
Condition type formula- the condition value is calculated by a formula in sap through a routine given by an ABAPER. Say
example selling Price (PR00) = cost price + profit.

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To calculate price same program which is called a routine should have a logic say the cost price will be taken from the material
master and the profit should get calculated with all the discounts taxes etc
4 —Net value + tax 1- Prof.margin w/rebate 2- Net Value
11—Profit Margin 3- Cash disc minus tax
16—rounding the total
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Alternative Condition base value
It will determine the BASIS for calculating the value of condition type alternatively to the Standard
Alternative formula for condition base value is used as a formula for determining the condition which can be used
alternative to the standard. It is again a Routine that is written by ABAP Consultant.
It is used as a basis to calculate value of the condition type instead of using it from the "FROM" column.
Ex.: Freight - KF00.
Freight is calculated based on weight, volume etc. and not on the base price. In pricing there is no entry of weight from which
the value can be referred like we do for discounts using base price. We have to get the value from the Material master. In th is
column we can mention the value as 12 - Gross Weight or 13 - Net Weight.
During pricing, the systemwill considerthe value that is mentioned in this column and determine the freight based on this
value.
The Header discount will be distributed to all the line items based on the value of item, but alternatively if you want to
distribute the value based on the Quantity you can define the routine and assign this to the CONDITION TYPE
1 Volume 11 Cash Discount Base
2 Net value 12 Gross weight
3 Net price 13 Net weight
4 Net value + tax
5 KZWI1
6 KZWI2
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Statistics
The statistic key is just for calculation/information purpose only. Any information posted to the statistical value will not effect
on GR/IR .In simple: statistical - it will appear on the screen but zero effect in pricing.
Statistical: It indicates the purpose of condition type is only for information purpose.The value of condition type will not be
taken into consideration in the net value calculation.
Ex: Condition type VPRS (cost)
As this VPRS copies cost of the material from the material (master) and deducts the value for items to calculate profit
margin. So the purpose of having VPRS is only to copy the cost of the material and it is not at all participating in calculation of
net value. So that it should be a statistical.
VPRS the subtotal is B (cost)
Question
A particular condition type should not add to net value in sale order / billing but should post to FI. I have come across people
who immediately say it is not possible even with user exit. But, IT IS POSSIBLE via standard configuration itself.
Solution
Go to V/06, select that condition type and execute. There, select the below tab and check the box for “Accruals”.
In your Pricing Procedure, don’t check the box for “Statistical” against this condition type BUT, have different Account Keys
assigned at the last two columns viz Account Key and Accruals. Finally, in VKOA, assign the required G/L Account in the last
two columns for both the Account Keys.
Now try to create a sale order and billing and check the FI posting.
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SUBTOTAL
These determine that the condition value or the condition rate of the condition or subtotal line is copied into a certain fie ld of
the KOMP structure or into certain internal auxiliary variables (XWORKD - XWORKM) whose contents are saved in the
document, which therefore makes the statistics update also available.
Subtotal field is used to store the intermediate calculation values.
For example after price we provide a discount to the customer so the price after discount gets stored in this field. Again if we

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provide rebate to our customer then the value stored in the subtotalwill be further considerfor next calculation.
Subtotal 1 tells that the value of that condition type is to be copied in KOMP-KZWI1.
Example
These condition amounts or subtotals are used as a starting point for further calculations. You may, for example, want a subtotal
of all the discounts included in the pricing of a sales order.
1 Value transfer to KOMP-KZWI1 7 Value transfer to KOMP-BONBA (Rebate basis)
2 Value transfer to KOMP-KZWI2 8 Value transfer to KOMP-PREVA (Preference value)
3 Value transfer to KOMP-KZWI3 9 Value transfer to KOMP-BRTWR (Gross value)
4 Value transfer to KOMP-KZWI4 A Price transfer to KOMP-CMPRE (Credit price)
5 Value transfer to KOMP-KZWI5 B Price transfer to KOMP-WAVWR (Cost) VPRS
6 Value transfer to KOMP-KZWI6 C Value transfer to KOMP-GRWRT (Statistical value)
E Value transfer to XWORKE D Value transfer to XWORKD
Rebates are stored in the Value 7 which stored in KOMP_BONBA.
So while Settling the Rebates, the values of the Customer Rebates will be settled from this Table and we can get info on what
amount was paid and what remaining is pending.
The corresponding logic is contained in the SAPLV61A program in the FORM XKOMV_BEWERTEN
(Include LV61AA55)
In Standard SAP there are only 6 subtotals are available which gets stored in the Database Tables. The remaining
subtotals are just for temporary use within the document.
For example - 5 SUBTOTAL are given below: -
o SUBTOTAL 1 = for Basic Price / price of material
o SUBTOTAL 2 = for Excise Base Amount
o SUBTOTAL 3 = Net Realization (it is Basic price all discounts and Surcharges)
o SUBTOTAL 4 = Fright
o SUBTOTAL 5 = Profit (it is Net realization - cost (VPRS))
All the SUBTOTAL VALUES are updated the item tables
o VBRP- Billing Document: Item Data
o VBAP- Sales Document: Item Data
Note: - Flowing four subtotals are permanently assigned in the SAP standard version pricing procedure RVAA01
In the Same way the CASH DISCOUNT amount is stored in D which will be carry forward to the Billing document based on
the PAYMENT TERMS and we can pay based on the accumulated value
If we want the HEADER DISCOUNT to be divided between the line items, we have to store those values in the SUBTOTAL.
So SUBTOTAL will accumulate the Values of the CONDITION TYPE and can be carrying over for the further calculation.
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Requirement
A routing that has been written by abapers according to the requirement of the client. It can be used for condition type that
excludes particular condition type while determining the net value. EX. routing no: 23, 24 only in billing document can be used
with the condition type ex: BI01, BI02, BI03 (condition for rebates) as this condition types should be activated only in the
billing document level. To include the condition type in our PP and systemde-activate at sales order level and activate in billing
document level. Systems take these requirements into consideration and activate and de-activate accordingly
PR00: As it is quite possible some items are not relevant for pricing, it is advisable to assign a requirement indicating this
condition type is not necessary for items not relevant for pricing. Assigning the requirement 002 to the requirement column can
do this.
K004, K005, K007: These condition types are only valid should the item in the sales order be relevant for pricing;thus assign
requirement 002 to the tree new discounts.
T.Code: VOFM. - Maintain Requirements & Formulas
The Routine 5 will check if any Exclusion indicator is set for the particular condition type.
When the Total price of the document is low then by using 5 requirements you can exclude the Condition exclusion if any set

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and discounts can be taken into consideration. The Routine 6 will check if the net price of the document is not set X which is
the net price of the document and void all the Discounts conditions.
1 Different payer 13 Rounding as perT001R
2 Item with pricing 21 invoice list control
3 Foreign currency doc 22 inter company
4 Cost 23 only in billing document
5 No condit.exclusion 24 only in billing document
6 Cond.exclusion <>'X' 25 Only in RebatBillDoc
7 Domestic Business 55 Free goods pricing
8 Export Business 661 Cost VPRS subtotalB Stastical
9 Qualif.f.cash discnt
10 Plant is set condition type - ZCES JLST JCST JIVP
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Condition Exclusion for Groups of Conditions
If several condition records are valid for pricing in a document item, you can define rules that specify which condition records
are included or excluded.
You control condition record exclusion using exclusion groups.An exclusion group is a list of condition types which are
compared with each otherduring pricing and result in the exclusion of an entire group or individual condition types within a
group. Thus,the result of pricing can be influenced with regard to a required criterion (for example, best price) by excluding
certain condition types while others are taken into account during pricing.
There are four possible methods of using condition exclusion groups –
A – Best condition between the condition types
B – Best condition within the condition types
C – Best condition between the two exclusion groups
D – Exclusive
E – Least favorable within the condition type
F – Least favorable within the two exclusion groups
First step is to define a ‘condition exclusion group’ by using a four character alpha numeric key.
Next step is to “assign the relevant condition types” to the exclusion groups such as discount condition types,freight condition
types.
After completing the assignment of the condition types to the exclusion group, proceed with assigning the condition exclusion
group to the relevant pricing procedure.
When using the condition exclusion group to find the best condition record in a condition type – only use one condition type
per exclusion group. The most important thing to remember here is to “deactivate” the Exclusive Indicator on the access
sequence assigned to that condition type. Otherwise, the systemwill merely find the first condition record and stop searching
for other records.

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Define and assignaccount keys
Account keys, you group together similar accounts in financial accounting. Using the account key, the SAP System finds
the desired G/L accounts.
Separate account key is assigned to each condition type within a pricing procedure which helps to implement detailed revenue
account determination.
For example, you can allocate a freight condition to a freight revenue account,or a surcharge for packaging costs to a
corresponding account for packaging revenues.
The following account keys are predefined in the standard SAP R/3 System:
 ERL revenues
 ERS sales deductions
 EVV cash settlement
 MWS sales tax
 ERF freight revenues
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Accrual key
The accrual key in pricing procedure is used for accumulating the values.
For example freight charges paid to the vendorfor every invoice is generally paid later. Then the freight charges for that v endor
for a period of let’s say 3 months will get accumulated in a key (Accrual) for all the invoices in that period. Further this key is
linked to a GL account.So at the end of a period they will settle the amount to the vendor.
Main difference is account key posts into revenue account or consumption account Accrual key posts into Accrual
account. Accrual entry is passed when cost or revenue are accrued but not paid or billed.
ERB is the account key used for rebate processing and it is a sales deduction.ERU is the accrual key used in pricing for reb ate
processing it is used for difference in sales revenues.
ERB is sales deduction and ERU is the accrual amount. Both amts are same but posted to diff GL
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Print indicators in the pricing procedure
New print indicators in the pricing procedure have been provided for issuing conditions lines when printing documents such as
order confirmations and invoices.
The following print indicators are available in releases prior to 4.0:
 ' ' : Condition line not printed
 'X' : Condition line printed at item level
 'S' : Condition line printed in totals block
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Counter: Counter is used to show a second mini – step within an actual step.
For example, you may have all your freight surcharges assigned to step 100; however, there may be three condition types,each
representing a different freight surcharge.Thus, you can assign a freight condition type to step 100, counter1; anotherto step
100, counter2; anotherto step 100, counter 3; and so on.
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Condition supplement
A condition supplement is a supplement for a particular condition type.
For example, you can include a supplement every time you apply a material price. The supplement can contain various
discounts.During pricing, the systemautomatically applies the discounts defined in the supplement every time it accesses a
material price. You define the condition types for which you want to use condition supplements in Customizing for Sales.
To include a condition supplement choose:

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Goto -Condition supplement on the overview screen of the condition record. You can then enter the data for each discount in
the condition supplement. You can only enter a condition supplement if the condition type you are working with has already
been defined in Customizing for Sales to include condition supplements.
Default Condition Supplements
You can select a default condition supplement by choosing Default condition supplement the systemautomatically proposes all
the discounts that are defined for the condition type you are working with. You can then enter the appropriate amounts or
percentage discounts that apply to the discounts in the condition supplement.
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Revenue Account determination
Revenue account determination is carried out using the condition technique. It is maintained at tcode - VKOA
1. Chart of accounts
2. Sales Organization
3. Account assignment group for customer from customer master--billing tab.
4. Account assignment group for material sales org 2 view.
5. Accounts key pricing procedure
6. Appropriate G/L accounts.
Tcode – VKOA
KOFI - Account determination with FI (No Cost assignment, posting accounts to FI)
KOFK - Account determination with CO (Cost Assignment i.e. WBS; Posting Accounts to FI & CO)
Tcode-OVK8 account assignment group
KOFI100 is a procedure which will have condition types KOFI and KOFK. We assign the KOFI100 in billing type.
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What is the purpose of shipping point determination not menu path
So that Shipping Point is determined automatically once the settings for the same are done.
What and where types of copy controls we change
Copy Control: is basically meant so that Data is copied from preceding Document to subsequent one.What subsequent

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Document is required is to some extent determined by Customer Requirements as well as Document Types.e.g. In general case
of Standard Order, it will be Copy Control (Order to Delivery) from OR to LF .
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Movement type in SAP
Movement type in SAP control vital parameter on each and every goods movement.
Without movement type no goods movement possible and every movement of goods is followed by a movement type only and
which makes possible goods movement. The concept is movement type is there as standard movement type or created (tcodes:
OMJJ) as needed.
G/L account assignment and G/L account assigned to transaction event key (OBYC).Furthermore movement type is used for
with account modifier to break down account determination for example: GBB-VBR, GBB-INV, GBB-BVO, and GBB-BSA.
1. Updating the quantity fields
2. Updating the stockand consumption accounts
3. Selection of the fields used for entering documents
4. Printing goods receipt/issue slips
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Sales document type
Every sales document is made up with three tiers:
Header level category (VBAK)
Item level category (VBAP)
Schedule line category (VBEP)
Header level category: [VBAK]: In each and every sales document data that belongs to whole document captured into header
level. Ex: Sold – to – party, Ship – to – party, Bill – to – party, Payer (Partner functions) and, sales area order value, etc. The
data that going to be stored at header level captured into VBAK table. Header level category controlled by document type Ex:
IN, QT, OR CS, etc.
Item level category: [VBAP]: At item level category data that is going to be stored belongs to a particular item in the sales
order. Ex: Net value, plant, storage location, shipping point, route, etc. Item level category is controlled by item category itself.
Ex: TAN (Standard item), TANN (Free of charge item), TATX (Text item). The data that is going to be stored at item level
captured into VBAP table.
Schedule line category: [VBEP] Schedule lines are nothing but customer intended delivery date plus (+) quantity to be
confirmed (for a line item in the sales order).Every line item in the sales order must have one or more than above schedule lines.
The schedule line category of line item forms basis for a delivery document. Schedule line category is controlled by schedule
line category itself.
Ex: Deterministic MRP CP
No MRP CN
Question: What are the sales document control parameters?
Answer: Every Sales document controlled by:
Header level category (Ex: OR)
Item level category (Ex: TAN)
Schedule line category (Ex: CP)
Sales document type: OR [AVART] Standard order
1. Sales document category: [C] = Order
A classification of different types of documents Ex: IN, QT, OR.

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A Inquiry M Invoice
B Quotation N Invoice cancellation
C Order O Credit memo
D Item proposal P Debit memo
Use: The document category determines how the systemstores and keeps track of document data. It enables the systemto
provide status information about delivery processing,billing processing and about the documents that were used as a reference
documents for this sales document type. Ex: IN, QT.
2. Sales document block: [] = No block
If we want to block this sales document for processing at client level.
Section number systems
3. Number range internal assignment: [01]
Number range external assignment: [02]
We can define number ranges in IMG and we can assign those number range keys in number range systemsection. System
gives the priority for internal assignment if we assign the value otherwise end userhas to assign a value externally form th e
specified number range. As soon as,the end usersaves the document systemassigns the number
4. Item number increment: [10]: We can assign a number in this field. So that systemgenerates numbers for all items in the
sales order by incrementing specified number.
Sub – item increment: []: We can assign a number for sub – item. So that systemgenerates accordingly.
General control Section
5. Reference mandatory: [] = No reference required.
We can specify the reference document as a mandatory for this document processing.The document does not have
a mandatory reference before an order can be created, such as reference to a quotation is mandatory.
No reference required
A With reference to an inquiry
B With reference to a quotation
C With reference to a sales order
E Scheduling agreement reference
G With reference to a quantity contract
M With ref.to billing document
6. Probability: [100]: The probability of the customer confirming the inquiry or quotation as a part of sales order.
Use: The systemuses the probability and net value of each item to calculate total expected order value for the sales document.

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Ex: A quotation contains two items. Item 1 has a value of 100/- Rs and the probability is 100%. Item 2 have a value of 200/-
and the probability is 25%. Then the systemcalculates that probability as follows:
(Rs 100 X 100% + Rs 200 X 25%)/300 = 50%. That means the probability of this quotation resulting in sales order is 50%.
7. Check credit limit: [D] = Credit management: Automatic credit control.
In SAP we have an option to configure credit management features for particular customer. As in every business, credit sales
are more or less mandatory. When the credit sales exist it is essentialto monitor credit risk of particular customer. We can
configure two kinds of credit checks. Those are:
(A) Simple credit check
(B) Automatic credit check
NOTE: Credit management can be configured at order, delivery, PGI level not at billing level
No credit limit check
A Run simple credit limit check and warning message
B Run simple Credit limit check and error message
C Run simple credit limit check and delivery block
D Credit management: Automaticcredit control
8.Credit group: [01] = Credit group for sales order
It specifies the document credit group for a particular sales document.
Use: The document credit group enables us to combine different sales document types for the purpose of credit management for
credit exposure.
Output application: [V1] = Sales.
Output determination: In SAP by using condition technique we can configure output for a particular document for which SAP
follows output determination procedure. We can generate and send output of document by e – mail, fax, and telex or by local
printer.
9. Item division: This indicator enables the systemto go to material master of line item and it copies its division and proposed
into sales order. If you do not check it then systemtreats all items in the sales order as a headerdivision item.
10. Read Info record: [Customer Material Info record]: We can create customer material info record master data to
maintain the customers own description for the particular material. The customer can place the order by specifying his own
description. Then systemcopies the material description from customer material info record and places the relevant material in
the sales order. In addition to customer own description we can maintain plant delivery priority etc. System gives the top
priority for customer material info record. If you maintained customer material info record, then this indicator enables the
systemto read that customer material info record, while raising sales order of this sales document type.
11. Purchase order number: No check.
System checks whether the purchase order number existed or not for this sales document type.
12. Enter purchase order number: This indicator checks for the purchase order number and if the purchase order number not
existed then systemtakes sales order number as a purchase order number.
It is a key that controls how the commitment quantities should be calculated for sales document type.
Use: The commitment date is calculated using the delivery time for releases to contracts with delivery times (OR) sales order
that refers to quotations containing delivery times. The committed quantity results from the agreed delivery time or confirmed
quantity according to the calculation rule that we set here.
Transaction flow Section

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13. Screen sequence group: [AU] = Sales Order
This screen sequence group specifies the systemto display the screens for this sales document type and specify the sequence in
which they have to be displayed.
14. Incompletion procedure: [11] = Sales order
SAP has provided a feature that is called incompletion procedure by which systemreminds the end user about the fields in
which the values has not been maintained, while saving the document as these fields will have a influence on proceeding
documents that are deliveries and billing documents. If the end user does not maintained the values in those important fields
then it cannot process subsequent documents that are dependent on the values of these fields. So that systemreminds the end
user about the missing of the data subsequently end usercan maintain the data in those fields before saving this document. SAP
follows incompletion procedure to which incompletion log has been assigned.
15. Document pricing procedure: [A] = Standard
System takes the value of this field into consideration to determine pricing procedure for this sales document type by
considering anothertwo factors that are sales area and customer pricing procedure (VD01).
A Standard I Price Increase
B Broker Indirect M Co-Man/Misc
C Samples P Promotion Payment
D Donations T Transfers
E Promotion Credit U Unsalables
FAQ: How systemdetermines pricing procedure?
ANS: System determines pricing procedure by taking three factors into consideration:
(A) Sales area (that the end userenters) plus
(B) Document pricing procedure (Ex: VOV8 of OR) plus
(C) Customer pricing procedure (VD01)
Shipping section
Delivery type: [LF] = Delivery
Delivery document type “LF” has been assign to sales document type “OR”. So systemautomatically proposes these delivery
document type “LF” when we raise the sales order document type “OR”.
Delivery block: [] It indicates if an entire sales document is blocked for delivery.
Process: Systemproposes delivery block at header level. This block applies to whole items in the sales order. We can propose
header level delivery block for sales document type like free of charge deliveries where it is important that someone should
check before shipping.

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If we use credit limit check, the systemcan automatically block the delivery.
Shipping conditions: [] We can maintain shipping conditions for this sales document type Ex: 01, 10, etc. We maintain the
shipping conditions in the customer master as well as sales document type. If we maintain in the both areas systemgives the
priority for sales document type.For sales document type “CS” shipping condition 10 is must.
Immediate delivery: [] = Create delivery separately.
We can specify the value in this field by which systemautomatically creates delivery document for the sales do cument as soon
as the end. User saves the document value “X” is most relevant for sales document type “CS” as cash sales document should
create delivery document as soon as the end usersaves the document type “CS”.
Billing section
Delivery related billing type: [F2] = Invoice
Order related billing type: [F2] = Invoice
Billing document type F2 has been assigned to this sales document type. So that systemautomatically proposes the billing
document for this sales document type.
Intercompany billing type: [IV] = Intercompany billing.
We assign the inter company billing type to the sales document type. So that when the inter company billing process takes pla ce
for this order so that the systemautomatically proposes this intercompany billing document type “IV”.
Billing block: [] It indicates if the item is blocked for billing. Systemautomatically proposes a billing block for sales
documents that must be checked before billing Ex: RE, G2, and L2. System proposes the block for all items.
If one item has two schedule lines then block applies to each item.
Billing plan type: [] We can assign billing plan type for this sales document type as an Ex: Standard billing, periodic billing
(for rented or maintenance contract). The entire value to be billed is billed in each billing plane date.

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Item categorytype

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Item categories are defined to provide additional control functions for the sales documents.
Completion rule: Not relevant for completion
(It is for quotations and contract items). We can specify that a quotation is complete only after its quantity has been fully
referenced by subsequent document. Copy control Quotation to sale order – VTAA
A Item is completed with the first reference
B Item is completed after full quantity has been referenced
C Item is completed after the target qty is fully referenced
D Item is referenced via contract release
E Item is completed after full target value is referenced
Billing relevance: [A] = Delivery related billing document.
The value determines what kind of billing document it has to generate for this item. That is order related billing document o r
delivery related billing document
Blank -Not relevant for billing
A Delivery-related billing document
B Relevant for order-related billing - status acc.to order qty
C Relevant for ord.-related billing - status acc.to target qty
D Relevant for pro forma
Billing plan type: [] We can assign billing plan type for this particular item that is standard billing, periodic billing and
milestone billing.
Billing block: [] The billing block indicator is used to block each item of this category for billing.
1 Calculation Missing 8 Check Credit Memo
2 Compl Confirm Missing 9 Check Debit Memo
3 Prices Incomplete 10 Issue Check-Cr Memo
4 Check Terms of Payment 11 Over $ limit-Cr Memo
5 Check Terms of Dlv
Pricing: [X] = Pricing standard
It indicates whether the systemautomatically carried out pricing for this item. Ex: For text item it is grade out.
blank No pricing
X Pricing standard
A Pricing for empties
B Pricing for free goods (100% discount)

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Statistical value: [] = System will copy item to headertotals.
It indicates whether the systemtakes the value of an item into account when it determines the total value of document.
blank System will copy item to header totals
X No cumulation - Values cannot be used statistically
Y No cumulation - Values can be used statistically
Business item: It allows the business data at headerlevel differs with item level business data.
If ticked Indicates whether, during sales order processing,the business data that you enter for an item is allowed to differ from
the business data in the header.
Business data: Business data is nothing but sales, shipping and billing data that is called as a business data.Ex: We maintain
payment terms in customer master. When we raise the sales order for this customer the payment terms are copied into the sales
document header from customer master. If we do not maintain payment terms in the customer and we maintain payment terms
in the sales document header manually then those payment terms applies whole item in the sales order. If we have number of
items in the sales order and if we want to change payment terms for particular line item, systemallows us to do so,if business
item field has been checked. Otherwise systemwill not allow changing the payment terms at item level.
Schedule line allowed: It indicates whether we can create schedule lines for the item. Sales order items always will have a
schedule lines. The items like credit memo request and contracts do not have any schedule lines. The items that have a schedu le
lines will be copied into the delivery document. The only one item category that is text item has an exemption. For text items
with or without schedule lines we can create delivery documents.
Item relevant for delivery: It indicates whether a text or value item is relevant during delivery processing.The item itself is
not delivered. But it serves only for information purpose in delivery documents.
Returns: It indicates the item is return item Ex: REN
Weight/volume relevant: This indicator enables the systemto calculate weight and volume of materials.
Credit active: This indicator enables to configure credit management functions for this item.
Determine cost: This indicator enables the systemto calculate cost of the material of this item category (condition type VPRS
is used to calculate the cost price).
Revenue recognition
The R/3 standard method for revenue recognition consists ofrevenue recognition at the time of billing.
Companies use standard revenue recognition, if they want to post revenues in Financial Accounting,as soon as an invoice is
created.
It is determined differently for different Item categories the necessary settings are determined in CO-PA based on requirement
In revenue recon. You can create yourbilling documents and they will be passed to accountings.But in this case your custome r
account would be debited and deferred accounts would be credited.
The purpose of revenue recognition is that you can post all the revenues from a deferred account to sales revenue account for a
particular period togetherfor all the docs.through transaction VF44.
If you can see your sales doc’s no. in VF44, then your revenue recognition is successful.Press on collective processing inside
VF44 for posting the revenues from differed acc to sales revenue account.
Sales and Distribution  Basic Settings  Account Assignment/Costing  Revenue Recognition.
Determining the revenue recognition method
The method of revenue recognition is determined by settings in the item category

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● For time-related revenue recognition, you also make settings for the Accrual Period Start and for Revenue Distribution.
● For service-related revenue recognition, you specify the Revenue Event.
Revenue recognition categories
Option Description
No value Standard revenue recognition
The value of this item is recognized at the time of invoicing (standard).
A Time-related revenue recognition
The value of this item is recognized in equal proportions based on the accrual period of the
item (sales document-based).
B Service-related revenue recognition
The value of this item is recognized on the basis of business transactions,such as goods receipt
for delivery-relevant items or posting of sales orders for items that are not relevant for delivery.
D Billing-based time-related revenue recognition
The value of this item is recognized in equal proportions based on the accrual period of the
item (sales document-based).Only amounts that have already been billed are recognized.
E Billing-based service-related revenue recognition (IS-M)
The value of this item is recognized on the basis of business transactions,such as goods receipt
for delivery-relevant items or posting of sales orders for items that are not relevant for delivery.
This option is designed specifically for the Media component (IS-M).
F Credit/debit memos with reference to predecessor
The value of this item is recognized from a credit or debit memo with reference to the SD
document.
General control section
Automatic batch determination: This indicator enables the systemto determine batch automatically of this item category.
Rounding permitted: If you check it systemrounds of the quantity of the material for this item category type.
Order quantity = 1: If you check it systemenables one quantity for line item. it does not accept more than one quantity.

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.
Schedule line category: Transaction code: VOV6
Delivery block: We can specify delivery block that the systemapplies automatically during processing.
Ex: We can specify delivery block for all free of charge deliveries as these documents have to be approved before processing.
Movement type: [601] = GD goods issue:delivery.
Inventory management for goods movement into different purposes uses this movement. Goods movement is nothing but a
physical or logical movement of materials leading to a change in stocklevels is resulting in the consumption of the material.
Movement type 1 – step: [] It is used for inter company billing movement type.
Order type: [] It is a purchase order type. Ex: Document type NB can be assigned.In individual purchase order and third party
sales order systemautomatically creates purchase requisition. So as to create it automatically purchase requisition document
type should be assigned here.
Item category: [] We can specify the item category for purchase requisition documents.
Ex: “0” for individual purchase orders and “5” for third party orders.
Account assignment category: [] We can assign account assignment category for third party and individual purchase order
transactions.So that respective accounts get updated.

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Check item relevant for delivery: It indicates the document item is relevant for delivery and it causes to create delivery
document.
Purchase requisition delivery schedule: In third party and individual purchase orders the vendorsupplies materials to the end
customer through the company or directly. When the vendorhas to send the materials the business requires certain time for
goods receiving process.The time can be specified as a delivery schedule lines in purchasing documents. This indicator creat es
those schedule lines in purchase requisition documents.
Transaction flow section
Check transfer of requirements (Req. / Assembly): Requirements of sales document whether individual or summarized
should be transfer to MRP by systemautomatically to create demand.
Check availability check: If the systemhas to carryout availability check for materials and quantities in the sales order it
should be checked.
Product allocation: Through product allocation we can allocate products for customers evenly.
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In how many places we can block the Sales Document?
1. In VOV8 At the header level – the sales document type can be blocked.
2. At scheduling agreement level – delivery block. If the tolerance limit was not met or excided.
3. At Shipping level – delivery block. Entire sales document is blocked for delivery. If you use a credit check the system
will automatically block delivery.
4. Billing Block- The systemcan automatically propose a billing block for sales documents that must be checked before
billing (for example, returns, credit and debit memo requests).
5. At item category VOV7 – Billing can be blocked
6. At schedule line category VOV6- default delivery block
You can specify delivery block for the following :
(1) Sales document Type
(2) Scheduling line category
(3) Delivery type
The delivery blocks can be specified for free of charge deliveries.
Delivery Documents
Document types
Name Delivery type
Outbound delivery LF
Outbound delivery without reference LO
Returns delivery LR
Replenishment delivery NL
Replen.Cross-company NLCC
Outbound deliveries from projects LP
Outbound delivery for subcontractor LB

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Tables
HeaderLIKP ItemLIPS
Delivery Document Item Category
Delivery document type (+)
Item category group (+)
Usage (+)
Higher level item category
LF + NORM + NIL + NIL = DLN
LF + NORM + CHSP + NIL = TAN
LF + NORM + CHSP + KLN = KLN
LF + NORM + CHSP + TANN = TANN
LF + NORM + PACK + NIL = DLN
LF + VERP + PACK + NIL = DLN
LF + NORM + PSEL + TAX = TAPS
Usage:
PACK = For generating Packaging item
CHSP = For Batch item
PSEL = For Product selection
Define Delivery Document OVLK
NR internal assignment & NR external assignment: Number that determines how documents are to be numbered by the user.
It indicates which number range is relevant for a document type.
Item number increment: The increment by which you want the item numbers is a sales,delivery, or billing document, to
increase when the systemautomatically generates item numbers.
Order required [X] = Sales order required
Indicates whether a delivery that has no reference to an existing sales order is allowed.
For LO delivery order this field is left blank.
B-purchase order required
R- Return delivery to vendor
Default order type [DL] = Default order type for deliveries without reference to order
When you create delivery documents that do not refer to existing orders, you must provide some of the control criteria that are
normally copied from a sales document header into the delivery document. Here we assign delivery order type for deliveries
that are creating without reference to order. It is called as PSEUDO document. We can define PSEUDO documents types in
table TVAK.

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A delivery document, for example, needs information about which item types need to be defined.
You can define a pseudo order type in Table TVAK. When you create a delivery that does not refer to an existing order, the
systemautomatically uses the pseudo order type.
Item requirement [202] = Requirement for item that does not refer to a sales order.
It identifies a requirements routine for a delivery item that does not refer to a sales document. The delivery item must meet the
requirements of the routine before it can be further processed.
Storage Location Rule [MARE]: It specifies how the systemdetermines the picking location when you create a delivery
without entering a storage location for the items.
In our case its MALA
MALA Shipping point / plant / storage condition
RETA Plant / situation (SITUA) / storage condition
MARE MALA, then RETA (backup procedure)
MSRE Advanced Returns Inbound (Considers Follow-Up Activity)
Document statistic group []: It specifies a statistics group for this sales document type and helps determine which
data the systemupdates in the logistics information system.
We can assign statistics groups to:
Item category
Sales document type
Customer
Material
Route determination [A] = New route determination without check
It specifies whether, during delivery processing,the systemuses the route that is determined during sales order processing or
whether it determines a new route.
A-New route determination without check
B-new route determination with check
C- No new route determination
Specifies whether, during delivery processing,the systemuses the route that is determined during sales order processing or
whether it determines a new route
Delivery split Warehouse Number: It enables delivery spilt according to warehouse number.
Delivery split Partner: This indicator controls the systemis split behavior when delivering preceding documents that are
assigned to different partner functions. Set the indicator if different partner functions in the preceding items to be delivered
should always cause the systemto perform a delivery.
Output determination procedure [V10000] = Header output
It defines the output categories that are allowed in a document and the sequence in which the output categories appear in the
document.
Output type [LD00] = Delivery note
If specifies the kind of output to be produced

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Define Item category for deliveries: Transaction code: OVLP
Material number 0 allowed: It controls whether it makes sense to enter an item in the SD document with this item category
without specifying a material. It allows to create a delivery document for a line item with 0 quantity.
Use: It would make sense to set this indicator for text items.
Item category statistics group [1] = Order, debit memo
It specifies a statistics group for this item category and helps determine which data the systemupdates in the Logistics
Information System.
Check quantity 0 [A] = Note about the situation
It specifies when we create an item that has a 0 quantity. In this situation how systemshould give message. It is useful for the
items that are creating without order.
Check minimum quantity [A]: Note about the situation
It specifies whether systemhas to check minimum delivery quantity and systemreactions when the minimum delivery quantity
has been to yet reach. This field works according to the customer material info record, and material master record. Systemgives
warning or error message.
Check over delivery: It specifies how the systemreacts whether warning or error message during delivery processing when
original order quantity exceeds delivering order quantity.
It works according to customer material info record.
Availability check off: It is the control to switch on/off availability check for delivery items.
Rounding: This indicator specifies rounding rules for whole number unit of measure. It is useful for BOM items.
How can you trigger automatic print after PGI?
Go to - IMG - Logistics Execution - Shipping - Basic Shipping Functions - Output Control - Output Determination - Maintain
Output Determination for Outbound Deliveries - Maintain Access Sequences
Here select the Access Sequence you are using & from left side select - Accesses
There is a Requirements column. Currently it would be "0" or blank... Assign Requirement - 1 - Delivery GI posted here.
Go to VV21 select the output type for delivery LD00 .
Press key combination – select the appropriate option .
As per my system

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Next screen
Now maintain the conditions appropriately
Now Goto va01 – create a sales order
Goto vl01n – create delivery and do PGI
Once the delivery is saved the Gods receipt is automatically printed.
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Billing Documents
The header data of the billing document defines how the invoice is to behave.Billing document uses only internal number
range assignment.
Header VBRK Item VBRP
Billing document types:
F1 = Standard invoice for sales order RE = Credit for returns
F2 = Standard invoice for delivery S1 = Cancellation invoice
F5 = Proforma invoice for sales order S2 = Cancellation credit memo
F8 = Proforma invoice for delivery IV = Intercompany billing
G2 = Credit memo
L2 = Debit memo
Define Billing types: Transaction code: VOFA
Number range internal assignment [19]: Number that determines how documents are to be numbered by the user.
It indicates which number range is relevant for a document type.Here number range is only internal.

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Item number increment: The increment by which you want the item numbers is a sales,delivery, or billing document, to
increase when the systemautomatically generates item numbers.
SD document category [M]: That defines what type of document the systemis using.
A Inquiry M Invoice
B Quotation N Invoice cancellation
C Order O Credit memo
D Item proposal P Debit memo
E Scheduling agreement Q WMS transfer order
F Scheduling agreement with external service agent R Goods movement
G Contract S Credit memo cancellation
H Returns T Returns delivery for order
I Order w/o charge U Pro forma invoice
J Delivery V Purchase Order
K Credit memo request
L Debit memo request
Document type []: The document type classifies accounting documents.As invoice generates FI document type RV (Billing
data transfer) we have to assign in the document type field under general control section.
RV Billing doc.transfer
RX SD Document Transfer
Negative posting [A] = Negative posting for same period
This indicator causes the transaction figures to be reset for a document item. If the indicator is set, then the transaction figure
update is changed.A correspondingly set posting on the debit side reduces the credits side of the account.A credit posting
reduces the debit side of the account.
Use: The indicator can be entered in billing types for credit memos and cancellations. It only has the required effect in FI, if the
company code permits negative posting.
Posting block: If you check it billing document is going to be blocks automatic transfer of the data from invoice to FI
document. Manually the invoice has to be released.
Statistics: the value of the billing document is going to be updated in LIS. It indicates whether the systemstores information
from billing documents of this type for the purposes of statisticalanalysis.
Relevant for rebate: This indicator is one of the pre – requisite to process rebates.This indicates whether billing documents of
this type are relevant during rebate processing.

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Cancellation billing type [S1] = Invoice cancellation
It specifies the default cancellation for this billing type. For canceling the invoice the billing type [S1] can be proposed for F2
and [SV] for BV.
Use: If you enter the number of an existing billing document in the document field on the initial screen for creating a billing
document, the systemautomatically creates a cancellation document of this billing type.
Account determination procedure [KOFI00]: It specifies the condition types that the systemuses for a particular type of
document (Ex: Invoice) to determine the G/L Accounts to which amounts should be posted.The values of the invoice are going
to be posted in respective G/L Accounts through this field assignment.
NOTE: For proforma invoices Ex: F5 and F8 do not contain any value. Due to this assignment,systemcan understand whether
it has to transfer the billing data from invoice to FI module. Proforma invoices only used for information purpose.They do not
carry the any information from invoice to FI.
A Standard
C Samples
M Co-Man/Misc
T Transfers
Account determination reconciliation account []: It determines the condition types that the systemuses for determining the
reconciliation account that the systemuses for a certain document type Ex: Invoice.
If a G/L Account is determined here, then the reconciliation account stored in the customer master record is ignored.
Output determination procedure [V10000] = Billing output
It defines the output categories that are allowed in a document and the sequence in which the output categories appear in the
document
Item output procedure []: It is the combination of output categories that you are allowed to use when you process output at
the item level in a document
Ex: Output for a sales order item.
Output type [RD00] = Invoice
It specifies the kind of output to be produced
Header partners [FK] = Billing document
It specifies which group of partner functions the systemautomatically proposes at the header level in this type of billing
document.

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You define partner determination procedures in table TPAER
Item partners [FP] = Billing item
It specifies which group of partner functions the systemautomatically proposes at the item level in this type of billing
document.
The number range forthe document number
The billingtype that canbe usedto cancel the billingdocument
The transfer status of the billingdocument:
Transferredto financial accounting
Blockedfrom transfer
Not transferred
The procedure for account assignment in Financial Accounting
The allowedoutput fora business transaction andthe procedure for output
The partnerfunctions allowedat header level
The partnerfunctions allowedat itemlevel
Billing document & Accounting document number should be same.
This is a standard requirement from many clients which can be achieved through config itself and not through userexits
Say your billing type is F2 and the accounting doc type is RV
First define a number range say Z1 in t code VN01 say from 1 to 100 assign this Z1 in VOFA for F2 (which you will do
normally)
In t code FBN1 define a number range same description Z1 say from 1 to 100 and mark it as external (most important)
This Z1 what you have defined in FBN1 assign it to RV (RX) document type in t code OBA7
That’s the entire configuration
Wheneveryou create an invoice say if the no is 50 then the accounting doc of that billing doc will also be 50
The internal no of billing systemtakes as an external no of accounting and generates the same number internally during
accounting doc creation
External here does not mean that we have to give externally for accounting doc no
For billing document create no. range by Tcode-VN01 and assign it to in Tcode-VOFA
For accounting document create no. range by Tcode-FBN1 and activate the External Field and assignit to in Tcode-
OBA7
But Assign the same no. range to both Document types for exp 1000000 to 1999999.
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Batch Management
1. Create material master by specifying checking group of availability check in Sales: General/Plant data as [CH]
2. Check Batch Management in Sales: General / Plant Data
1. Specify batch level and activate status management
Batch can be activated at 3 levels.
a. Client Level

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b. Plant Level
c. Material Level
2.Activate document management for batches: Transaction code: ODOC
3.Activate internal batch number assignment: Transaction code: OMCZ
4.Maintain internal batch number assignment range: Transaction code: SNUM
5.Define batch search procedure allocation and check activation
Batch search procedure allocation and check activation
Allocate SD search procedure/activate check
Go to new entries
Specify our sales area, document type [OR], Assign search procedure [SD0001]
SD0001 = Standard SD search procedure
Save and Exit
6.Activate automatic batch determination in SD
a. Automatic Batch Determination for Sales Order Item:
Choose Item Category “TAN” and check Automatic Batch Determination.
b. Activate Automatic Batch Determination for Delivery Item Category:
Choose Item Category “TAN”“DLN” and check Automatic Batch Determination.
7.Create Batch: Transaction code: MSC1N
1. Specify Material
2. Batch (Internal Assignment)
3. Plant
4. Storage Location
8.Define batch determination: Transaction code: VCH1
1. Batch determination
2. Batch search strategy
3. For sales and distribution
4. VCH1 – Create
5. Specify strategy type SD04 = Customer/Material
6. Click on key combination and © Select Customer/Material
7. Specify customer number, validity periods and materials
8. Save and Exit
Go to MB1C and initialize the stock along with batch
Go to MMBE to check the stock overview
Go to VA01 and raise the sales order
Specify batch material number and check the status on the status bar
INTERCOMPANY / CROSS COMPANY SALES
Intercompany sales are the sales transaction between 2 company codes 2 plants and 2 sales organizations.
The ordering plant and the delivering plant. In this case the delivering plant raises the sales order, subsequently it will deliver
the goods directly to the end customer, and issue on INTER COMPANY BILLING to ordering plant. Then the ordering plant
raises the standard invoice in favor of end customer.
Delivering Sales Area initiate Outbound Delivery (LF) in favor of end customers of ordering 2200/10/00 subsequently it raises
Inter Company Invoice (IV) in favor of “Inter Company Customer” who represents 2200/10/00
The systemchecks the company codes of the sales organization and of the delivering plant and automatically carries out
intercompany billing processing if they are different.
Create customer by using Transaction code XD01 with the account group 0001 under Sales Area Ordering company code IN24

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Step 1. Define order type for the intercompany billing
In this step we assign the sales order type with the inter company billing type IV
Step 2.Create intercompany customer
One customer should be created under delivering sales area 1000 – 12 – 00, and should be assigned to Ordering sales area 2200
– 10 – 00.
Step 3. Define the internal customer number by sales organization
Specify Ordering sales organization 2200
Assign intercompany customer
Step 4. Assignorganizational unit by plant
The delivering plant 1200 must be assigned to the ordering sales organization.
organization – Distribution channel – Plant
– 10
I. The material to be sold must exist in the original & delivering plant.
II. The copy control rules must be defined between the standard invoice, such as F2, & the inter company invoice, such as IV.
III. The standard systemhas the following condition types:
 To represent the Intercompany price as quantity-dependent.
 To represent the Intercompany condition as percentage.
The ordering sales organization is represented as internal customer of Supplying company code.This internal customer number
has to be assigned to the ordering sales organization. Hence, the systemAutomatically picks up this internal customer number
whenever there is Intercompany billing
This PR00 is for the customer who is actually ordering the Material.
Sales Organizations and Plants are uniquely assigned to Company codes.It is not possible to assign either a plant or a sales
organization to more than one company code.
Sales organizations and plants assigned to each other need not belong to the same company code.
In other terms,
A plant belonging to Company code A & assigned to Sales Organization A can also be assigned to Sales Organization B of
Company Code B.
Raise the sales order by using Transaction code VA01 under 2200 – 10 – 00 sales area and maintain all the relevant data in the
sales order, and check which plant systemdetermined automatically for a line item.
– System determines 2200 plant.
– So as to process the intercompany sales, we have to change the plant as 1200.
PRICING IN INTERCOMPANY:
Here goods are delivered from a Plant which belongs to other company code under the same client/group.
In this process,two Billing documents are created,

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1. Customer billing document F2 – Sales invoice
2. Inter-company Billing document (Supplying Company code raises an Invoice to Ordering Company code)
Both the Billing documents are created with reference to the Delivery created to the end customer.
We need to maintain two pricing procedures RVAA01 & ICAA01. Pricing procedure RVAA01 represents condition type PR00
& any other discounts orsurcharges that are meant for end customer.
We assign Pricing procedure RVAA01 to combination of Sales area (Of Ordering company code) + Document Pricing
Procedure of Sales document type+ Customer Pricing Procedure of END CUSTOMER
Condition records for PR00 are maintained using organizational elements of Ordering company code,end customer & the
Material.
E.g.: Sales Org. of Ordering company code + End customer + Material.
We assign pricing procedure ICAA01 to a combination of Sales Area (of supplying company code) + Document pricing
Procedure of Billing document type IV + Customer Pricing Procedure of the INTERNAL CUSTOMER
PI01 condition type represents costs to Ordering company code (in other words revenue to supplying company code). It is
statistical condition type & meant for information purpose only.
Condition records for PI01 are created with the following key combination:
Condition records - Ordering sales Org + Supplying Plant + Material
Pricing Procedure ICAA01is determined at Intercompany billing processing level.
PI01 represented underpricing procedure RVAA01 is reference condition type for IV01 and the same is defined in the
condition type IV01. Due to this these two condition types represent same value.
The condition type IV01 in intercompany billing document represents revenue to the Supplying Company. But its
corresponding condition type PI01 in the billing document to the end customer is shown as a statistical item meant for
information purposes.
Condition Type VPRS in the intercompany-billing document indicates cost to the supplying company code.
The use of two different condition types in Intercompany billing is necessary to ensure that data is transmitted correctly to the
financial statement (Component CO-PA).
ILLUSTRATION:
STEP 1: Create Sales Order
Manually Enter the Delivery Plant of the Supplying Company Code
OBSERVE CONDITIONS SCREEN FOR ITEM:
PR00 represents Price to the end customer (in other words, revenue for the ordering company).
PI01 represents cost to ordering company (in other words, revenue for the supplying company). It is represented as statistical
item.
DELIVERY:
Delivery is carried out from the supplying point & hence we can observe that it is done from shipping point assigned to the
supplying point. Subsequently,Picking & PGI are carried out.
BILLING TO END CUSTOMER:
T-Code: VF01

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Create Intercompany Billing:
T-code: VF01
OBSERVE THE CONDITIONS SCREEN OF THE INTERNAL INVOICE:
IV01 Condition type represents revenue for the supplying company code.
VPRS condition type represents cost to the supplying company code.
PR00 in intercompany billing document displays amount billed to the end customer. It serves as just an information item.
Invoice F2 output type RD00, which is then sent to the Payer.
Intercompany billing type IV output determination procedure V40000 output type RD04
Condition type
Condition types PI02 for condition rates to be determined in percent and PI01 for condition rates with fixed amounts have bee n
included for calculating intercompany billing prices.
Pricing procedure - RVAA01
Pricing procedure RVAA01 – has condition type PI01 in V/08.
IV01 not available in the RVAA01 – pricing procedure
Pricing procedure – ICAA01
IV01 is available in the pricing procedure ICAA01 – in v/08
But PI01 not available.

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Reference condition type
A condition type which can be used as a reference so that you only have to create condition records once for condition types
that are very similar.
You may need to use different condition types for the same condition. These can differ in the access sequence,the description,
the reference stage of the pricing procedure or the calculation type, for example.

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You can enter the condition type under which the condition records are created.
Example Condition
type MWSI only differs with condition type MWST in the calculation type. For this reason an entry is made in field
ReferenceCondTypeMWST for condition type MWSI . Now, condition records only need be created for condition type
MWST and not additionally for MWSI.
Table 55 – Sales Org/order/plant/material- condition type – PI01
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Third Party sales
In the third party order processing the business gets the orders from the customer and it passes to the third party vendorwho
delivers the goods to the customer, and bills the business.
In the process of third party order is controlled via material types.Material types define whether a material is produced on ly
internally can be ordered only from third party vendors or from both possibilities.
Ex: Trading goods (HAWA) can only be ordered from third party vendors.Third party items can be created automatically by
the systemor standard items can be changed manually by the end userby changing item category during sales order processing.
Ex: MM01 Item category group Item category
BANS TAS
NORM TAS
In standard SAP, item category TAS is used for this. The schedule line category is CS. Here you can see a field 'order type' with
value 'NB'. This triggers the automatic creation of the PR.
– If the Ship – to – party address changed in the sales order that changes passed on to the purchase requisition and purchase
order that are already created.
– We can see the Ship – to – party address in purchase order in the attributes of the item category.
– When we save the sales order that contains the third party item, then the systemautomatically creates purchase requisition in
purchasing (we can see the purchase requisition number in VA02 of sales order in schedule lines)

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Configuration steps:
1. Create customer master with XD01 by using account group 0001 under 2200 – 10 – 00 sales area.
2. Create a material master with MM01 with the material type “Trading goods” HAWA.
General item category group BANS
3. Create a vendorusing transaction code XK01
Specify vendornumber [ ] Here it is external
Account group [0001] and press ENTER
Go to Next screen option
Specify Reconciliation account number [ ] sort key [ ]
Cash management group [A1]
Order currency [EUR] (customer is from France)
Save and Exit
4. Go to VA01 and raise the sales order
Change the item category as TAS (from TAN to TAS)
. Save the document and note down the sales order number and Exit
Go to (sales order) VA03. Schedule lines and note down the purchase requisition number that has been displayed.
5. Raise the purchase order with reference to purchase requisition number by using Transaction code ME21
Specify the vendornumber [ ]
Purchasing group [005] = Standard
Again purchasing group [000] and press ENTER
6. Click on with reference to purchase requisition
Select line item and click on Adopts + Details push button on application bar
In this section we have to specify the net price (cost that we maintained in the material master).
[] Un – check GR (Goods Receipt)
If you uncheckGR, we can do the invoice verification based on the goods receipts.
Save the document and note down the number and Exit
7. Go to MIRO for invoice verification
Here we have to specify invoice date and purchase order number and specify purchase order number in p urchase order
Number field of PO reference tab and specify reference field and press ENTER
Then you can view balance amount from right side
The same amount should be specified in amount [ ] field and press ENTER
Then systemmakes balance amount 0 (zero). That means invoice verification has been done (completed).
Save the document and note down the number and Exit
8. Raise invoice to the customer [VF01]
Specify the standard order number and raise the invoice
Save and Exit
9. Go to VA02 (sales document) and observe the document flow
Plus in the material master also you need to do certain settings.
1) If you are always following a third party process for a material then you have to create the material using item category
group BANS. The procurement type should be marked as external procurement (F) in MRP 2 view of the material master
record.
2) If you are not always allowing third party order processing then you can create a material master record with item category
group as NORM and the procurement type should be marked as (X) meaning both types of procurement (in house
manufacturing and external procurement).
After receiving the delivery confirmation and invoice from vendor, company has to verify the invoice and this process is known
as invoice verification and is done in SAP through Tcode MIRO. Material using item category group BANS.

35
Step 1: If the material item category is NORM
The item category in the order should be manually changed as TAS.
For that you need to configure the item category determination
Order type + item cat group + usage + High level = Item cat + Manual item cat
OR + NORM + + = TAN + TAS
OR + BANS + + = TAS
Step 3)
Make sure that during the item category configuration for TAS you need to mark relevant for billing indicator as F.
F-Order-related billing doc. - status according to invoice qty
Step 4)
The schedule line category for this type should be CS.
Make sure that you mark subsequent type as NB - purchase requisition in this schedule line category as this will trigger the
purchase requisition order immediately after the creation of the sales order and the PO to vendor is created against this purchase
requisition.
Customize the third party sales in summary:
1. Create Vendor XK01
2. Create Material Type as "Trading Goods". Item category group as "BANS".
3. Assign Item Category TAS to Order type that you are going to use.
4. A sale order is created and when saved a PR is generated at the background
5. With reference to SO a PO is created (ME21N). The company raises PO to the vendor.
6. Vendor delivers the goods and raises bill to company. MM receives the invoice MIRO
7. Goods receipt MIGO
8. Goods issue
9. The item cat TAS or Schedule line cat CS is not relevant for delivery which is evident from the config and, therefore, there
is no delivery process attached in the whole process of Third party sales.
10. Billing
PGI
COST OF GOODS SOLD A/C DR
TO INVENTORY OF FINISHED GOODS A/C CR
1. Stock quantity is updated.
2. Values are updated in inventory accounting.
3. Status in all sales documents is updated.
4. Cost of goods sold is updated.
5. Requirements are updated.
6. Billing index is updated.
CIN TABLE Description
1 J_1IEXCHDR Excise invoice header detail
2 J_1IEXCDTL Excise invoice line item details
3 J_1IGRXREF Goods Receipt to Excise Invoice Cross Reference
4 J_1IPART1 Excise Part I details
5 J_1IPART2 Excise Part II details
6 J_1IRG23D RG23D register for the depot

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7 J_1IRGSUM RG23 Summary of receipts and issues
8 J_1IRG1 Excise RG1 details
9 J_2IEXTRCT Extract table
10 J_2IEXDATE Extract table
11 J_2IREGBAL Balance table
12 J_2IRG1BAL Balance table
Why do we need two company codes?
Company code of an organization is the legal entity which have separate Balance sheet and profit & loss A/C required by law
for the legal purpose so whenever an organizational unit have different Balance sheet and P/L A/c you can define a company
code.
Organizational Structure broadly refers to the way a company follows a set path of systems/hierarchies.
Different companies do have different structures and the differences in structures emanates basically from the strategies.
You should create a company code according to tax law, commercial law and other financial accounting criteria. As a rule, a
company code in the SAP systemrepresents a legally independent company. The company code can also represent a legally
dependent operating unit based abroad if there are external reporting requirements for this operating unit, which can also be in
the relevant local currency.
The sales organization represents the selling unit in the legal sense.It is responsible for example for product liability and other
rights of recourse; customer deliveries; business partnercontacts; and direct mailing campaigns. It also helps you to offset
business operations internally.
Different components use the sales organization object:
 G/L accounting (for account determination)
 Controlling (where the sales organization is used as a characteristic in profitability and market segment analysis)
 Quality management in shipping.
Each sales organization is assigned to exactly one company code to which sales must be posted.
If a sales organization and a plant are assigned to different company codes,the systemcarries out an internal billing between
the two company codes for each business transaction entry.
You can define your own master data within a sales organization. Each sales organization has its own customer and materials
master data, its own conditions and its own pricing policy.
Since a sales organization cannot share master data with other sales organizations, you must create master data separately fo r
each sales organization. However, you can create data for one distribution channel or division and then use it in others.
If there is more than one sales organization for the company code
Possible reasons for having more than one sales organization for each company code:
1. Different legal responsibilities, for example product liability
a. Unusual stipulations (for example legal), which make it necessary to distribute different product lines
separately – for example, products for medicine and veterinary medicine
b. The desire to separate completely the sales activities of different enterprise areas
2. Separate distribution responsibilities, each with their own Marketing and Pricing policy – for example, one for the
domestic market and one for export
3. Overlapping customer and product master records or the desire to maintain customer and product master data in a
specific, unusualway
4. Overlapping responsibilities for order entry, or for sales and distribution processing (sales authorizations)
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

37
Credit Management
Follow these steps:
1. Go to IMG - enterprise structure - definition - financial accounting - define credit control area.
2. Assignment of company code to credit control area & sales area to credit control area.
3. Go to OVAK select your sales document type and in the check credit column choose from A B or C. D is for automatic credit
control for which you have to maintain the credit group and risk categories.
4. In FD32 you select yourcustomer and click on STATUS icon and press enter. here u maintain the credit amount allowed. but
this is done by the Finance people.
5. Now when you create the sales order and if the amount exceeds the credit limit then u will get the message as you maintain ed
in the OVAK. Normally the systemstarts doing credit checks from the second sales.
order.
What are the different types of credit checks?
Credit Check can be:
1) Simple Credit Check
2) Automatic Credit Control
Automatic Credit Control can be at various levels:
1) Order
2) Delivery
3) Goods Issue
Automatic Credit Check is of many types :
1) Static
2) Dynamic
3) Maximum Document Value
4) Maximum Open Items in percentage
5) Oldest Open Item in number of days
6) Critical fields change
7) Highest dunning level, etc.
Credit Check happens only in SD module, never in FI. Because the stage of the check is in the sales cycle, which exists in SD.
Step 1. Define credit control area: Transaction code: OB45
Credit control area is an organizational unit that specifies and checks the credit limit for customers.A credit control area can
include one or more company codes.It means we can assign one credit control area to number of company codes.
NOTE: Within credit control area the credit limit must be specified in the same currency.
Update Group: The credit update controls when the values of open sales orders, deliveries, and billing documents are updated.
Open order value on time axis, delivery and billing document value. This field value controls when the values are open sales
orders, deliveries, billing documents are updated in LIS.
Note: The open order value is only updated for schedule lines that are relevant for delivery.
Step 2. AssignCompany Code to Credit Control area.
This indicator signifies that the posting of this credit control area applies to all the company codes that mean the credit limit that
we defined for new customers is an overall limit across all the company codes. Save it and exit.

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Step 3. Define risk categories: Transaction code: OB01
Here Customers are categorized for Credit Management and Assign to Credit Control Area.
Define our risk categories
Ex: 001 = High risk
002 = Medium risk
003 = Low risk
Assign ourrisk categories to our credit control area
Save and Exit
NOTE: Definition and assignment takes place in one step.
Risk Category
Enables the credit manager to classify customers according to commercial risk. Along with the document type, the risk category
helps to determine which kind of credit check the systemautomatically carries out. For example, you may want to carry out
stringent checks at order receipt for high risk customers, but waive a credit check for customers with a very strong payment
history.
Step 4. Define credit representative groups: Transaction code: OB02
Here company personnel can be defined as a Credit Representative Group and Assign to Credit Control Area. It can be used as
selection criteria to generate Credit List.
Step 5. Go to FD32
Overview: In this section we can have the overview of the customer’s credit related information like credit limit, credit
exposure, credit limit use, horizon, etc.
Click on  Next icon

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Address: In this view systemcopies address details from customer master general data section
Central data:
Maximum permitted credit limit
Maximum permitted credit limit
The value of this field specifies the overall credit limit that the customer may receive in all credit control areas.
Individual limit: The value of this field specifies the credit limit of the customer within specified credit control area.
Currency INR: We can specify the currency type that the particular customer makes a transaction from this credit control area.

40
Credit limit data
The amount that we enter here specifies an upper limit for the total receivables and the forcible (expecting) receivables from the
customers.
Credit horizon data: It is a date that the systemtakes to calculate credit exposure by using horizon period.
Internal data
Risk category 001 = High risk:Specify the risk category of customer that we defined in IMG.
Specify credit representative group and customer credit group
[] Blocked: We can block the customer for all credit management business transactions.
Ex: Order acceptance,delivery, goods issue.
But we still post that invoices for goods,which were already delivered
Payment history: In this screen systemshows the payment history of the particular customer for credit sales.
NOTE: Pre – requisite in XD01: In company code data of the customer master in payment transaction tab
Check payment history record
Step 6: Define credit limit check by sales document type: Transaction code: OVAK
Credit limit check for order types
Choose sales document type OR
Assign Check credit [D] = Credit management: Automatic credit control
Credit group [01] = Credit group for sales order
Save and Exit
Step 7 : Define credit limit check by delivery order: Transaction code: OVAD
Assign sales documents and delivery documents
Credit limit check for delivery types
Choose delivery document type LF from position button
Assign delivery credit group [02] = Credit for delivery
Goods issue credit group [03] = Credit group for goods issue
Save and Exit

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Step 8 : Define credit limit check by item category: Transaction code: OVA7
Determine active receivables per item category
Choose item category TAN from position button
Check credit active
Save and Exit
Step 9: Define credit groups: Transaction code: OVA6
We can define credit groups so as to group togetherdifferent business transactions in the same manner to carryout credit check.
NOTE: Use standard credit groups: 01 = Credit group for sales order
02 = Credit group for delivery
03 = Credit group for goods issue (PGI)
Step 10 : Define Automatic credit control: Transaction code: OVA8
Document controlling
Item check: It indicates that systemcarries out credit check not only when you save the document but also when we enter
single item or header data.System generates warning message only for first item.

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Credit limit seasonal factor
% [] = Seasonal factor in % :It specifies percentage tolerance limit up to which a customer’s credit limit may be temporarily
extended or reduced.
Ex: Specify 5% with a “minus”. If customer’s credit limit is 10,000/- then his limit is going to be reduced by 500/(5%)
(It becomes 9,500/).
Minus: It controls whether the credit limit may be increased or reduced by the specified percentage rate.
If you check it the percentage rate is going to be decreased.
From [] and To []: In this field we can specify the periods for season factors.
Checks
Here we define whether the systemhas to carryout static, dynamic or on maximum document value also.
Reaction Status/Block
[ ] Static
[ ] Dynamic
[ ] Document value
[ ] Critical fields
[ ] Open orders
[ ] Open deliveries
Horizon [1] [M] (Dynamic only)
Maximum document value [ ]
Check by giving different values in above fields.
Check by giving maximum document value and without maximum document value.
[] Static: It indicates whether systemhas to carryout static credit check.
[] Reaction [A] = Warning: Specifying the reaction of ht systemwhen systemcarries out the credit check.
Status/Block: System sets the credit status after carrying credit check.
[] Open orders: It takes the open order value.
[] Open deliveries: It takes the open deliveries value
[] Dynamic: It indicates whether systemhas to carryout dynamic credit check.
Reaction [A] = warning

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Check Status/Block
Horizon [1] [M] one month
[] Document value: It indicates whether systemhas to carryout credit check based on the document value.
Specify the Reaction, Status/Block and Maximum document value [ ]
It specifies the maximum document value for credit check based on the value of a sales order or delivery.
Use: It will be useful for new customers, for whom credit limits have not yet been established.That credit check
can be triggered by the risk category that we define especially for new customers.
[] Critical fields: It specifies whether systemhas to carryout credit check against critical fields (fixed value dates).
If you check this field the systemchecks whether critical fields have been changed.
Ex: Payment terms
Additional value dates
Fixed value dates
Specify the Reaction and Status/Block
NOTE: It is only useful for sales documents.
[] Next review date: It specifies whether systemhas to carryout credit check against next customer review date.
Use: The next credit review date is stored in the credit data in the customer master record.
When you process a document the next credit review date must not be beyond the current date.
NOTE: We can specify the time buffer for this type of credit check in the next field, and we can specify number of
days that are added to the next credit review date.
Specify the Reaction, Status/Block, and Number of days []
Open items: It specifies whether systemhas to carryout credit check based on the over due of open items.
Use: This type of credit check works in conjunction with two fields.
(A) Maximum percentage of overdue items in open items.
(B) Number of days,which the open items are overdue.
Specify the Reaction, Status/Block, Maximum open item % [] and Number of days for considering open items [ ]
[] Oldest open item: It specifies whether systemhas to carryout credit check based on the age of the oldest open item.
Use: The oldest open item must not be older than the number of days specified.
If you do not want to deliver to the customer even,when one invoice is overdue.
Check the Oldest open item
Specify 1 in the field “Days oldest [ ]” (It is number of days that are allowed for overdue of payment terms).
Use of this kind of check: If the userattempts to alter the order quantity of the released sales document that was previously
blocked, it would be re – blocked again by the system.
Specify Reaction, Status/Block
[] Highest dunning level: It specifies whether systemhas to carryout credit check against highest dunning level allowed.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
SD Configuration Settings
1. Specify Subtotal as a “A” for Credit Price:
Sales and Distribution Basic Functions
Credit Management / Risk Management
Credit Management / Risk Management Settings
Enter Settings
Conditions: Procedure
Choose our Pricing Procedure and Assign Sub-total as an “A” to Credit Price (A – KOMP / CMPRE)

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2. Configuration Setting: Assign Partner Functions KB and KM to Sales Document Header to exchange information as well as
to take certain decisions.
Partner Functions KB – Credit Representative, KM – Credit Manager should be defined and assigned.
Credit Manageris a superior to Credit Representative.
Configuration : Partner
Choose Sales Document Header
Click on change Icon
Choose Standard Partner Determination Procedure “TA”
Click on Partner Functions in Procedure control button underdialog structure
Check Mandatory option fir KB and KM.
3. Output Types (KRML): To exchange the information between Credit Manager and Credit Group output type
KRML should be configured with transmission medium 7 – Simple Mail.
Choose output type KRML – Credit Processing

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Maintain Condition Records (VV11)
Logistics controlling update
Maintain the SD update in Logistics Controlling. In the standard R/3 System, the information structure "S066" is set for
monthly update of outstanding ordervalues in Credit Management. You can change the parameters of the information structure
and change the period type from monthly to daily update,for example.
If you require further checks to those defined in the standard system,you can define them in the corresponding userexits
(LVKMPTZZ and LVKMPFZ1).
You can determine an automatic credit check for any combination of the following:
 Credit control area
 Risk class (classifying attribute for your customers from the viewpoint of credit risk which is maintained in FI
Customizing)
 Credit group
Credit Control Area
An organizational unit that represents the area where customer credit is awarded and monitored.
This organizational unit can either be a single or several company codes, if credit control is performed across several company
codes.One credit control area contains credit control information for each customer.
Risk category
Classification characteristic for customers with regard to the credit risk. The credit risk category controls all credit checks.
High , medium and low.
Define Credit Groups:
The credit group specifies which subsequent transaction can be blocked for processing,if the credit limits are exceeded.
SPRO -- > Sales & Distribution -- > Basic Functions -- > Credit Management and Risk Management -- > Credit Management --
> Define Credit Groups.
You can use the default credit groups or create new once.
http://scn.sap.com/docs/DOC-28086
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Diff between Commercial Invoice and Excise Invoice
Commercial Invoice - The document which you submit to your customer.

46
The more related to SD is Commercial Invoice.
Commercial Invoice contains information more specific to customer (Pricing, Tax, Payment terms), which becomes a part of
receivables.
For Commercial Invoice, there is no need for advance declaration of the Number Ranges for the Document.
Excise Invoice - The document which you submit to your Central Excise authorities.
Excise Invoice contains information related to excise duties which has to be payed to the Excise authorities and also other
statutory requirements.
For Excise Invoices, every manufacturing company has to declare the Number ranges (Per Excise Group/Series Group) to the
excise authorities beginning of the year.
1) Exports under Bond Exporters
are classified into two categories.
Manufacturer-Exporters who manufacture and export the goods in own name without payment of excise duty.
Merchant Exporters who buy the goods without payment of excise duty from a manufacturer and export the goods in his
name. For getting the goods without payment of duty,the merchant exporter has to necessarily execute a bond .The execution
of bond is to ensure that in case of non-fulfillment of obligation, the central excise duty amount liable to be paid on the goods
can be realized from him.
Normally the bond is executed for an amount equivalent to the duty amount payable on the goods that the exporter is planning
to export. Wheneverthe goods are cleared from the factory without payment of duty for export, the duty amount payable on
the goods will be debited from the Running Bond Account.
Wheneverthe goods are actually exported (after the proof of export is received from the Division/Maritime Commissioner), the
manufacturer will take credit of the duty amount debited earlier by him.
Though it is optional for a manufacturer-exporter to execute a bond for export clearances, it is very much necessary for
merchant exporters.
2) Exports under Letter of Undertaking
The manufacturer exporters have anotheroption for clearing their goods for export without payment of duty. They have to give
a letter of undertaking which is valid for a year. This procedure of giving a letter of undertaking was introduced as a
liberalization measure. The company will not have to follow the difficult legal procedures involved in executing a bond
(providing surety/security in the form of Bank Guarantee etc). It will be sufficient if he just gives the letter of undertaking in
the form prescribed.
3) Exports under Rebate
Export underrebate is the procedure in which the exporters first pay the central excise duty before clearing the goods from the
factory and subsequently get it back by applying for rebate after the goods are exported. They have to apply to the Division or
to the Maritime Commissioner (designated exclusively to look after all Export related issues)as the case may be, along with
the required documents (usually the Export Promotion copy of the Shipping Bill and Bill of Lading) to prove that their goods
had actually been exported.
Rebate can be claimed for both the inputs (purchased from indigenous markets and used in the manufacture of exported goods)
as well as for the final products.
Normally, rebate is being widely opted by non-excise company (for example garment exporters) who procure raw materials
locally, manufacture their final products and export them. It is similar to Drawback of Customs duties in respect of imported
raw materials.
With regard to number range for domestic and exports, you have to maintain a separate number range for each in T.Code
SNUM and the Objects are
- J_1IEXCEXP- Export excise invoice number range
- J_1IEXCLOC- Local excise invoice number range
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Same numbering on Proforma Invoice and Invoice
USEREXIT_NUMBER_RANGE (Module pool SAPLV60A, program RV60AFZZ)

47
However I feel it is not possible since the Proforma Invoice No. and Invoice No. both saved in same table VBRK where
VBELN (Document No.) is Primary Key. So it is not possible to save the same no. twice in the same table, once for Proforma
Invoice and then again for Commercial Invoice.
If require you can print the same no. for Output of Proforma Invoice and Commercial Invoice to fulfill the requirement of
documentation.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
During Billing Document
Customer Account Dr.
Sales Account Cr.
Cenvat Suspense Account Cr.
During Excise Invoice Creation
Cenvat Suspense Account Dr.
Cenvat payable Cr.
For TR6C Challan
PLA Account Dr.
PLA on hold Account Cr.
Stock Transfer Order
Accounting Entries for Stock Transfer through SD
(No Accounting entries for Performa Billing Document)
MIGO Goods receipt 101 moment type
BSX (inventory Posting) Stock account - Debit,
WRX (GR/IR account)- Credit
MIRO – IR invoice receipt.
GR/IR clearing account Dr
Cenvat clearing account Dr
VAT receivable account Dr
To Vendor a/c Cr
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

48
Intercompany Stock TransportOrder
Plant 1000 Receiving Plant
Plant 1200 Supplying Plant
When the stockis going to be moved between two plants or two storage locations that are under single company code called as
stocktransfer order business process.
Configuration steps:
1. Create Vendor: Transaction code: XK01
XK01 – Create
Company code 1000
Purchase organization 1000
Account group 0001
Save and Exit
2. AssignPlant to Vendor
Go to change mode of Vendor [XK02]
Specify Vendor number that we created in the previous step
Go to Extras  Add purchasing data
Here we assign supplying plant 1200 to vendor
3. Create customer master in XD01
Account group 0001
Company code 1000
Sales organization 1000
Distribution channel 12
Division 00
Plant in shipping data tab 1200 – supplying plant.
4. Define shipping data for plants
Here we have to assign customer number to receiving plant [1000]
The customer number is used in SD shipping processing to identify the goods recipient (ship-to party).
Setup stock transfer orders
Define shipping data for plats
Choose our plant from position button
5. Material should exist in both the plants (Delivering & Ordering)
As we are extending material from plant 1000 into 1200 plant, systemcopies all the data into the new plant.
So that we have to change the delivering plant in delivering plant field as 1200 in Sales: Sales organization data 1
view.
6. Create Purchase order: Transaction code: ME21N
Document type is UB – delivery type NL
7. Delivery : Transaction code: VL10B
8. Display stockin transit: Transaction code: MB5T
9. Goods receipt: Transaction code: MIGO
10. Stock movement types: INTRA and INTER

49
Determination of document type:
Supplying plant + Receiving plant = UB
1. Supplying plant + UB = NL
Internal customer should be assigned to the ordering plant (MM -> Purchasing -> Purchase Order -> Setup stocktransport order
-> assign the internal customer to the ordering plant and assign the Sales area of the internal customer.
1. Assign its Sales area to the delivering plant
2. Assign the document type and Delivery type NB and NLCC
3. Assign the Supplying plant --> Receiving Plant --> NB
4. Take the delivering plant and assign the sales area.
5. Vendor master has to be created and assign the supply source (Delivering Plant).
6. Create a purchase order ME21N ---> Save
7. Delivery VL10G/VL10B ---> Calculation rule (appropriate) --> Assign the purchase order number here and execute.
8. Select the Delivery creation line and do the background process.
9. Start the log display and see the delivery document number by the documents button
10. Goto VL02N --> do picking and PGI --> Then do the MIGO with
11. The Process Flow for Inter Company Stock Transfer is as below.
Difference between intercompany and Intra Company
Intra-Company document type is UB Schedule Line NN
Delivery document type is NL Item Category NLN
Goods Movement type: 641
Intercompany document type NB Schedule Line NC
Delivery document type NLCC Item Category NLC
Goods Movement type: 643
St. trnsp. ord. with SD St. trnsp. ord. with billing
Order type UB NB
Movement type GI: 641 GI: 643
MM-IM GR: 101 GR: 101
Delivery type SD NL-Replenishment Dlv. NLCC
delivery item category NLN NLC
Billing type SD F8 IV
Doc. type MM-IV - RE
Price Valuation price Pricing in SD and MM
Planning via... Purchase order Purchase order
Stock after GI Stock in Transit (Stock in transit CC)
Delivery costs yes yes
Cross-company-code Company code clearing Revenue account; GR/IR clearing
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Cash Sales Rush Order
Cash Sales- type cs Rush order type ro
billing-order related billing-delivery related
Invioce -printed immediately Given to customer Invoice -sent to customer later
Posting -made to cash A/c not Acc. Receivable Posting -made to Acc. Receivable
out type RD03 output type RD00
billing type BV related billing type F2
credit management
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50
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXSTOCK TRANSFER ORDER (STO)
When the stockis going to be moved between two plants or two storage locations that are under single or different company
code called as stock transfer order business process.
Stock Transfer can occur
a. Plant to plant in different company codes
b. Plant To Plant (Within Company Code)
c. Storage Location to Storage Location within one plant.
Stock Transfer can be carried out by following 3 methods
1. One Step Procedure: Stock updatation takes place between 2 destinations at a time automatically by using single movement
type.
2. Two Step Procedure: Stock Updatation should be takes place manually at supplying plant and receiving plant by using 2
different movement types.
3. Stock Transport Order: By using stocktransport order stock can be transferred .
Stock Transfer between Two storage locations within one plant.
One Step:
Storage Locations : 0001 (Supplying Storage Location)
0002 (Receiving Storage Location)
Create Material Masterunder 1000 / 10/00 Sales Area, Storage Location 0001 and extend it to Storage Location 0002.
Go to MB1C and initialize the stock under1000 /0001
Replenishing the stock by using one step procedure
Movement Type 311
Go to MB1B and
Specify Movement Type 311 – Transfer Posting Storage Location (One Step)
Specify Storage Location and Plant (Supplying)
Specify Receiving Storage Location
Specify Material with Qty
Press Enter and Save it.
Two Step:
Plant 1000
Supplying Storage Location 0001
Receiving Storage Location 0002
Movement Type 313 – Transfer Posting Storage Location to Storage Location remove from Storage.
MB1B and receive the stockin transfer into receiving storage location (0002)
Movement Type 315 – Transfer Posting Storage Location to Storage

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Stock Transfer between 2 Plants with in One Company Code.
Data:
Supplying Plant 1000 / 0001 Storage Location
Receiving Plant 1100 / 0001 Storage Location
One Step Procedure: Go to MB1B
Specify Movement Type 301 – Transfer Posting Plant To Plant (One Step)
Two Step Procedure: In Two Step Procedure
a. Stock Removal from Supplying Plant (1000)
Go to MB1B
Specify Movement Type 303 – Transfer Posting Plant to Plant – Remove from Storage.
Specify Movement Type: 305 – Transfer Posting Plant To Plant – Place in Storage.
Specify Receiving Plant and Storage Location
Stock transfer process
Create Vendor: Transaction code: XK01
Same plant number is created as vendor
AssignPlant to Vendor
Go to Extras Add purchasing data
Here we assign supplying plant 1200 to vendor
Create Customer Master by using XD01
Define shipping data for plants
Material management
Go to IMGMM Purchasing Purchase Order Set Up STO
Define Shipping Data for Plants

52
Choose Supplying Plant (1000)
Maintain Sales Area
Save it and Exit.
Choose Receiving Plant (1100) and Assign Customer Number.
Save it and go back.
Extend the material from 1000 to 1200
Create Purchase order: Transaction code: ME21N
Activities due for Shipping (Purchase order fast display): Transaction code: VL10B
Go to change mode of outbound deliveries (VL02N)
do the PGI
Go to MMBE and observe the stockin plant 1200
Stock is going to be reduced and will be displayed in the on order stock of the receiving plant
Display stock in transit: Transaction code: MB5T
Goods receipt: Transaction code: MIGO
Click on execute icon
Check item OK in the bottom of the page
Click on POST icon on the application tool bar
Now stock is posted
Go to MMBE to see the stock overview and observe the stockin the plant 1000
Stock movement types: INTRA and INTER
INTRA
Stand order type (Document type) = UB
Delivery type = NL
Movement types:
Issuing plant Receiving plant
Single step 647 101
Two step 641 101
INTER
Standard order type (Document type) = NB
Delivery type = NLCC
Movement types:
Issuing plant Receiving plant
Single step 645 101
Two step 643 101
NOTE: In single step method updations takes place in both plats simultaneously.
In two-step method updations should takes place manually.
Configuration for Purchase order
IMG MM  Purchasing  Purchsae order  Set Up stock transfer order
1. Define shipping data for plants.
Here you maintain the customer number of the receiving plant. Thise customer number is used in SD shipping
processing to identify the goods recipient.
With this data, the systemdetermines the shipping data for the material to be transferred

53
You als define the language in which the PO texts are to be maintained for the s upplying plant
2. Create Checking Rule
In this step,you create rules for the availability check in the case of stock transport orders.
This check enables you to find out whether the quantity requested is available in the supplying plant, for example, in
the case of materials that are to be transferred over longer distances from one site to another.
3. Define Checking rule
In this step,you specify which requirements and stocks are to be taken into account in calculating availability before
the stocktransfer is affected.
In the case of materials that are to be transferred from one site to another, you can carry out an availability check to
find out whether the requested quantity is actually available in the s upplying plant.

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4. Assign Delivery Type and Checking Rule
In this step,you specify whether an SD delivery is to be created in the case of a PO with a certain combination of supplying
plant and document type.You can also specify which delivery type is to be used.
5. Assign Document Type, One-Step Procedure, Underdelivery Tolerance
In this step, you define which document type is to be used for a certain combination of supplying plant and receiving plant.
If the supplying and receiving plants belong to the same company code, choose the document type 'UB' or a comparable
document type of your own. A physical stock transfer is then carried out without a billing document.
If the supplying and receiving plants belong to different company codes, choose the document type 'NB' or a comparable
document type of your own. A physical stock transfer is then carried out with delivery and billing document.
Stock Transfer According to One-Step Procedure
If you set the indicator for the one-step procedure, the goods receipt is posted
in the receiving plant at the same time as the goods issue is posted in the issuing
plant.
Indicator: Underdelivery Tolerance for Stock Transfers
If the indicator has been selected and the quantity at the time of goods issue
(taking the underdelivery tolerance into account) is sufficient, the "Outward
Delivery Completed" indicator (EKPO-EGLKZ) is set automatically.

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