Sales Order for Free Goods

[Former Member]

Dear All

We have a scenario where goods that are given for free to the charities need to be maintained in sales,however my client wants to treat charitable trust as Customer and they want to put a credit limit of 1000 SAR,so whenever the delivery of goods to the trust exceeds 1000 SAR system needs to block.

Please any body guide me in configuration for the above scenario.

Thanks

Malik

[former_member184555 · Accepted solution]

Hi

You can follow your standard business process and set the credit limit for this customer as 100 SAR. You can raise the sales orders as done for other customers and whenever the limit is reached, the order should be blocked as in the normal process. The company will raise a credit memo to this charity customer to clear this receivables. It is the decision of the business whether to issue the credit memo immediately after reaching the credit limit or at the end of the specified validity period (by which the customer many not use the complete 1000 SAR).

If necessary, you should do customisation for blocking the customer for this sales area, as soon as they reach the credit limit. This will ensure that further orders cannot be created and there is no chance of somebody releasing the block (even by mistake).

Thanks,

Ravi

[Former Member · Accepted solution]

Dear Ravi

As i mentioned above i am using FD sales Order type for Customer who has already been set acredit limit of SAR 1000 but the problem is i cannot process VA01 by using FD as sales order type,where do i exactly assign FD (sales order type)KLN (Item Category)Schedule line CP and pricing procedure.

Thanks

Malik

[former_member184555 · Accepted solution]

Can you explain the reason for using the Delivery Free of Charge process?

The charity made by your client is not by way of donating specific quantities of one or more materials. It is in terms of value which will be given as a credit note after some time.

Hence, you need not think/consider the sale as FREE. Let the sales process happen as happening for a normal customer....and instead of the customer paying the outstanding amount, the company will issue a credit not considering the amount as charity.

Thanks,

Ravi

[Former Member · Accepted solution]

The charity made by your client is not by way of donating specific quantities of one or more materials. It is in terms of value which will be given as a credit note after some time.

yes it is in terms of value,what would be the effect of credit note on the customer accounts to whom i have to set acredit limit.

u mean this process can be map with standard sales process and later on issuing credit note, can u put some light on it....

Malik

[former_member184555 · Accepted solution]

Hi

Create the charity beneficiary as a customer (maintaining a unique customer group). You have to maintain the credit limit for the customer which is nothing but the charity amount sanctioned.

The orders can be created as done for all the other customers and whenever the credit limit reaches, the orders will be blocked due to credit check.

Create a credit memo request with appropriate order reason (charity) for the amount due (maximum 1000 SAR as per your example) and on approval, create the credit memo which will clear the customer dues.

Thanks,

Ravi

[jignesh_mehta3]

Hello Malik,

This is normally done in many industries. Companies will always want to control value of Free of Charge Deliveries. .

Normally they block the Free of Charge Sales Order with Delivery Block & authorized person removes the block.

Now coming to your requirement, you need the Free of Charge Sales Order credir checked for limit of 1000 SAR.

For this activate Credit Management by

1. go to VOV8 & select your Order Type & enter detials in fields - Check Credit limit & Credit Group.

2. go to VOV7 & select your Item Category & mark it Credit Active.

Now go to FD32 & set the Customers Credit LImit as 1000 SAR.

Now whenever you create the Sales Order, system will check Credit LImit (1000 SAR) & block the Order accordingly.

Alternatively you can also go for Z-Developement. With help of ABAPer, write a custom-code in User Exit - USER_EXIT_SAVE_DOCUMENT in program MV45AFZZ. Mentioned in the Exit that Sales Order should be blocked for Delivery & give authorization to a concerned person to remove the block.

Hope this helps.

Thanks,

Jignesh Mehta

[Former Member]

What would be the effect after delivery in Accounts (free of cost) where the amount is posted...because this kind of sales will not generate any profit to the company.

[Former Member]

Basically after delivery Inventory account will be credited and COGS will be debited in this process also.

So if you want to show this as expenses create an another GL account and assign it Instead of COGS account.

Consult your FI and MM consultants to do this.

Thank you,

[jignesh_mehta3]

Hello Normally the AccountingEntry at time of Delivery is

COGS A/c Dr.

To Inventory Account Cr.

But in this case accounting entry would be:

Sales Promotion Entry A/c Dr.

To Inventory A/c Cr.

Hope this helps,

Thanks,

Jignesh Mehta

[Former Member]

What would be my Pricing Procedure Determination for FD Sales Order Type (free of charge delivery) because already there is a determination for normal Sales order type.

So when i am trying to process VA01 system gives a msg for Pricing procedure determination

Thanks

Malik

[Former Member]

Hi,

I think you need to go for enhancement:

use Exit : MV45AFZZ - USEREXIT_PRICING_PREPARE_TKOMK.

you can wright logic like, where VBAK - AUART = X (your charity document type) and VBAK - NETWR is > 1000 it should go for block,where some authorized person release the document for farther processing.

Regards

Ram

[Former Member]

Dear Malik,

You can map this scenario by free of charge delivery and credit management

For your understanding:

Configuration:

order type FD,Item category-KLN,Schedule line-CP

Delivery type LF

Billing type F8 (delivery related proforma)

Sales cycle:

Va01>vl01n>vf01>j1iin

Along with this configure credit management.

Let me know for further clarifications.

Thank you,