SAP Sales and Distribution (SAP SD) - A Detailed Understanding

 

 SAP Sales and Distribution (SAP SD) - A Detailed Understanding 

What is SAP SD?

SAP Sales and Distribution (SAP SD) is a core functional module in SAP ERP Central Component (ECC) that allows organizations to store and manage customer- and product-related data. Organizations use this data to manage all of the sales ordering, shipping, billing, and invoicing of their goods and services.

It works closely with other SAP modules towards effective process work. SAP SD is part of SAP ECC's Logistics function and integrates with other modules, including Production Planning (PP), Plant Maintenance (PM), Quality Management (QM), Materials Management (MM), Finance and Controlling (FICO), and Human Resources (HR).

Note: SAP SD configuration requires adequate knowledge on handling SAP developed software products. It is widely advised by experts to undertake SAP SD training in order to build a strong base on SAP SD user. SAP SD module has multiple components that integrate different processes within the job area.

Features of SAP SD module

Here are some important features of the SAP SD module:

• Price and Taxation: It helps you to evaluate the price of goods and services under various conditions like rebate or discount, which is granted to a customer.
• Availability Check: Check the availability of a product in the warehouse of an organization.
• Billing & Invoice: Helps you to generate bills or invoices.
• Material Determination: Helps you to determine the details of materials on the basis of a certain condition.
• Credit Management: It is a method of managing the credit limits of the customers. It can be figured in two different ways simple credit check and automatic credit check.
• Account Determination: Helps you to determine the details of customers on the basis of a given condition type.

Components or Sub-Modules of SAP SD Module

• SAP-SD-MD (Master Data): SAP SD user includes master data and the process involves tracking each and every transaction within the data. The sales and distribution master data include customer master data, material master data, pricing conditions record, output records, and credit management. From order to cash process, the entire flow is being recorded in this module.
• SAP-SD-BF (Basic Functions): SAP SD configuration results in an effective process across all basic functions involved in the sales and distribution area. Here, examples of basic functions can be pricing, output etc. The amount of pricing used for a particular sale and the output result from the same and so on.
• SAP-SD-SLS (Sales): As the term suggests, SAP SD sales handle minute details of every sale that is taken place. From recording the product to customer details, pricing, feedback, and the sales process, everything is tracked through this module.
• SAP-SD-SHP (Shipping): Sales are closely related to shipping and delivery. A Product needs to be rightly shipped and delivered to the customer. There are different methods of shipping and this module track each one used for each delivery. The entire process from being shipped to delivered or return back is recorded through this module.
• SAP-SD-TBA (Transportation): This SAP SD component works closely with the above shipping module. A product can be either couriered or manually delivered. The mode of transportation is different for each one and is being tracked through this module.
• SAP-SD-FTT (Foreign Trade): This component helps a department to handle the data related to foreign trade including both imported products and products exported outside. This module works best for enterprises involved with trade across nations.
• SAP-SD-BIL (Billing): Billing is a major part in sales. Customers can pay either online using debit or credit card, through cash on delivery, or by using pay pal account and so on. To maintain a proper track for future reference, each bill detail is recorded through this module.
• SAP-SD-CAS (Sales Support): From selling a product to maintaining it for a process, customers constantly interact with the sales team. The data exchanged between the sales team and customers while delivering support for a product is recorded and reported through this module.

 
SAP SD - Organizational Structure

SAP provides many components to complete SAP Sales and Distribution organizational structure like Sales Areas, Distribution Channels, Divisions, etc. The SAP SD organization structure majorly consists of two steps −

• Creation of Organization elements in SAP system, and
• Second is to link each element as per requirement.

On top of this organization structure in the SD module, sales organization is at highest level and is responsible for distribution of goods and services. SAP recommends to keep the number of sales organization in an organizational structure to be minimum. This will help in making the reporting process easy and ideally it should have a single sales organization.

The next level is distribution channel, which tells the medium by which the products and services are distributed by an organization to its end users. Division in an organizational structure, which represents a product or service line in a single organization.

A sales area is known as entity, which is required to process an order in a company. It comprises of sales organization, distribution channel and a division.

In SAP SD organizational structure, each sales organization is assigned to a company code. Then the distribution channel and divisions are assigned to sales organization and all of these comprise to make a sales area.

In the first step of an SD organizational structure, sales organization is assigned to a company code and then is to define a distribution channel and then division to a sales organization. 

Advantages of SAP SD Configuration in Enterprises, but not limited to:

• Track of sales transactions
• Record or pre-sale and post-sale process
• Tracks sales data along with team performance
• Defined process for sales and distribution
• Categorization of diverse sales and process
• Effective management of sales documents in a unified system

The SAP SD module is adopted by a huge number of enterprises across the globe and today it is one of the most popular ERP systems globally used. As organizations are moving towards SAP implementation, the need for SAP training is growing immensely among professionals.