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SD flow delivery before invoicing or after?

Former Member
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Hi,

May i know at which point biling is done against the goods delivered?

Is it not the case of billing at the time of goods delivery?

Is it also the case that customer has received the goods and then only we issue billing to the customer?

Can anybody clarify my doubts?

Thanks,

Ravi

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

hi,

in the normal scenario billing is done after delivery is done

but if you want to make sure that the customer has received the goods and then if you wish to make the billing you can use proof of delivery in the shipping tab in the customer master data

pls reward points if the answer is helpful

REgards,

Murali

Answers (6)

Answers (6)

Former Member
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Sales & Operations Planning (SOP) is a flexible forecasting and planning tool with which sales, production, and other supply chain targets can be set on the basis of historical, existing, and estimated future data. Rough-cut planning can also be carried out to determine the amounts of the capacities and other resources required to meet these targets.

Use SOP to streamline and consolidate your company’s sales and production operations.

SOP is particularly suitable for long- and medium-term planning.

Integration

SOP constitutes the planning functionality of the LIS information systems.

You pass on SOP plans to Demand Management (PP-MP-DEM) in the form of independent requirements. In turn, this data is fed to Master Production Scheduling (PP-MP-MPS) and Material Requirements Planning (PP-MRP).

An interface with Profitability Analysis (CO-PA) allows you to use CO-PA data as the basis for sales planning in SOP.

You can also pass on the results of SOP to Profitability Analysis (CO-PA), Cost Center Accounting (CO-OM-CCA), and Activity-Based Costing (CO-OM-CCA).

For more information please visit the following link:

http://help.sap.com/saphelp_erp2005/helpdata/en/a5/632f3b43a211d189410000e829fbbd/frameset.htm

Procurement Process consist of:

Purchase Requisition - A purchase requisition is a request or instruction to Purchasing to procure a certain quantity of a material or a service so that it is available at a certain point in time.

Request For Quatation - A request for quotation (RFQ) is an invitation extended to a vendor by a purchasing organization to submit a quotation (bid) for the supply of materials or performance of services.

Purchase Order - Formal request or instruction from a purchasing organization to a vendor or a plant to supply or provide a certain quantity of goods or services at or by a certain point in time.

Outline Agreement with vendors

a. Outline Purchase Agreement - An outline purchase agreement is a longer-term agreement between a purchasing organization and a vendor regarding the supply of materials or the performance of services within a certain period according to predefined terms and conditions. (Outside SAP, such agreements may be referred to by a number of terms, including "blanket", "master", "framework" or "umbrella" agreements)

b. Contract - In the MM Purchasing component, a contract is a type of outline purchase agreement against which release orders (releases) can be issued for agreed materials or services as and when required during a certain overall time-frame. (In the literature and in practice, similar concepts may also be referred to by a number of other terms, such as "systems contract", "blanket order agreement", "blanket contract", and "period contract".)

c. Schedulilng Agreement - A form of outline purchase agreement under which materials are procured on predetermined dates within a certain time period.

Goods Receipt - If your company uses the MM Purchasing component, deliveries from vendors are most likely the result of purchase orders initiated by the purchasing department.

The purchase order is not only the document with which the purchasing department orders goods from the vendor; it is also an important planning and tracking tool for the following departments: Purchasing, Material Requirements Planning (MRP), Inventory Management, and Invoice Verification.

Quality Inspection - If an inspection at the time of goods receipt has been defined for the material, the system automatically creates an inspection lot when the goods receipt is posted. Quality Management uses this inspection lot to carry out the inspection.

Confirmation - Working with confirmations has the advantage that Materials Planning does not have to depend solely on the delivery dates and quantities set out in purchase orders or the delivery schedules of scheduling agreements.

Confirmations enable you to plan more exactly, since during the time-span between the order date and the desired delivery date you receive increasingly more reliable information from the vendor regarding the anticipated delivery.

Receipt of Vendor Invoice - Document from an invoicing party containing the payments to be made based on business transactions performed in Purchasing and Inventory Management. An incoming invoice can be an invoice or a credit memo.

Invoice Verification - Logistics Invoice Verification is a part of Materials Management (MM). It is situated at the end of the logistics supply chain that includes Purchasing, Inventory Management, and Invoice Verification. It is in Logistics Invoice Verification that incoming invoices are verified in terms of their content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial Accounting.

Sales

Inquiry - A customer’s request to a company that they provide a quotation or sales information without obligation. An inquiry can relate to materials or services, conditions and if necessary delivery dates. The sales area that accepts the inquiry becomes responsible for further processing.

Quotation - A quotation presents the customer with a legally binding offer for delivering a product or providing a service within certain fixed conditions. This offer is legally binding for the company within a specified time period. A sales area can reply to a customer inquiry with a customer quotation or use it to refer to a business partner contact.

Sales Order - Request from a customer to a company to deliver a defined quantity of products or provide a service at a certain time.

The sales area that accepts the inquiry is responsible for completing the agreement.

Create Delivery:a. Picking - The picking process involves taking goods from a storage location and staging the right quantity in a picking area where the goods will be prepared for shipping.

b. Packing - Packing is part of delivery- and shipment processing. When you process a delivery, you can select delivery items for packing and assign them to handling units (HUs).

c. Goods Issue - As soon as the goods leave the company, the shipping business activity is finished. This is illustrated using goods issue for outbound deliveries.

Billing - Billing represents the final processing stage for a business transaction in Sales and Distribution. Information on billing is available at every stage of order processing and delivery processing.

Reward points if this is helpful.

regards,

Rajesh Banka

Former Member
0 Kudos

SD Configuration:

Enterprise Structure:

1. Maintaining Sales Organization

Sales Organization is an organizational unit responsible for the sale of certain products or services.

IMG -> Enterprise Structure -> Definition -> Sales and Distribution -> Define, copy, delete, check Sales organization

2. Assigning Sales Organization to Company Code

This assignment ensures all the sales made through this Sales Organization are accounted for in the assigned Company Code (Company Code is created by FI Consultant).

IMG -> Enterprise Structure -> Assignment -> Sales and Distribution -> Assign Sales Organziation to Company Code

3. Maintaining Distribution Channel

Distribution Channel is the way, in which Products or Services reach Customers.

IMG -> Enterprise Structure -> Definition -> Sales and Distribution -> Define, copy, delete, check distribution channel

4. Assigning Distribution Channel to Sales Organization

This assignment ensures, a Sales Organization can supply Materials to Customers through this Distribution Channel.

IMG -> Enterprise Structure -> Assignment -> Sales and Distribution > Assign distribution channel to sales organization

5. Maintaining Division

Division is a way of grouping materials, products, or services.

IMG -> Enterprise Structure -> Definition -> Logistics - General -> Define, copy, delete, check division

6. Assigning Division to Sales Organization

IMG -> Enterprise Structure -> Assignment -> Sales and Distribution -> Assign division to sales organization

7. Setting up Sales Area

All the sales are made from a particular sales Area. For creating a Sales Order Sales Area is compulsory.

IMG ->Enterprise Structure -> Assignment -> Sales and Distribution -> Set up sales area

8. Assigning Sales Organization- Distribution Channel- Plant

Plant is created ny MM Consultant.

IMG -> Enterprise Structure -> Assignment -> Sales and Distribution -> Assign sales organization - distribution channel - plant

9. Define Shipping Points

Shipping Point is the Organizational element, which is responsible for shipping the Materials to the Customers.

IMG -> Enterprise Structure -> Definition -> Logistics Execution -> Define, copy, delete, check shipping point

10 Assigning Shipping Point to Plant

This assignment ensures that goods from different Plant can be dispatched from different Shipping Points.

IMG -> Enterprise Structure -> Assignment -> Logistics Execution -> Assign shipping point to plant

Note: Ensure to do the undermentioned configuration also though it is not in Customizing node of Enterprise Structure.

11. Defining Common Distribution Channels for Master Data

Use

The purpose of this activity is to define distribution channels which have common master data..

Procedure

Access the activity using one of the following navigation options:

IMG Menu -> Sales and Distribution -> Master Data -> Define Common Distribution Channels

Transaction Code: VOR1

12. Defining Common Divisions for Master DataUse

The purpose of this activity is to define distribution channels which have common master data..

Procedure

Access the activity using one of the following navigation options:

IMG Menu -> Sales and Distribution -> Master Data -> Define Common Division

Transaction Code: VOR2

Pricing Procedure

In SD, Pricing Procedure is determined based on Sales Area (Sales Organization + Distribution Centre + Division) + Customer Pricing Procedure + Document Pricing Procedure. Sales Area is determined in Sales Order Header Level. Customer Pricing Procedure is determined from Customer Master. Document Pricing Procedure is determined from Sales Document Type / Billing Type (if configured). Once the pricing procedure is determined, Condition records are fetched. If appropriate condition records are found, the price is determined. If Mandatory pricing condition is missing, system will through an error message.

In SD, the steps to configure Pricing procedure are as under:

Step 1:

Condition table: If existing condition table meets the requirement, we need not create a new condition table. Considering the requirement for new condition table, the configuration will be done in spro as follows: IMG --> Sales & Distribution --> Basic Function --> Pricing Control --> Condition Table (select the required fields combination, which will store condition record).

Step 2:

Access Sequence: If existing access sequence meets the requirement, we need not create a new access sequence. Considering the requirement for new sequence, the configuration will be done in spro as follows: IMG --> Sales & Distribution --> Basic Function --> Pricing Control --> Access Sequence (Access sequence is made up of Accesses (Tables) & the order of priority in which it is to be accessed. Here we assign the condition table to access sequence.

Step 3:

Condition Type: If existing condition type meets the requirement, we need not create a new condition type. Considering the requirement for new condition type, the configuration will be done in spro as follows: IMG --> Sales & Distribution --> Basic Function --> Pricing Control --> Condition Type. It is always recommended to copy an existing similar condition type & make the neccessary changes. Here we assign Access sequence to Condition type.

Step 4:

a. Pricing Procedure: It is recommended to copy a similar pricing procedure & make the neccesary changes in new pricing procedure. Pricing Procedure is a set of condition type & arranged in the sequence in which it has to perform the calculation. Considering the requirement for new Pricing Procedure, the configuration will be done in spro as follows: IMG --> Sales & Distribution --> Basic Function --> Pricing Control --> Pricing Procedure --> Maintain Pricing Procedure.

b. Pricing Procedure: After maintaining the pricing procedure the next step will be determination of pricing procedure. Configuration for determining pricing procedure in SPRO is as follows: IMG --> Sales & Distribution --> Basic Function --> Pricing Control --> Pricing Procedure --> Determine Pricing Procedure.

5. Condition record: Condition record is a master data, which is required to be maintained by Core team / person responsible from the client. During new implementation, the condition records can be uploaded using tools like SCAT, LSMW, etc.

Normal Sales Order Cycle:-

Step 1: Sales Document Type

IMG > Sales and Distribution > Sales > Sales Documents >

Sales Document Header:

1. Sales Document Type:The sales document types represent the different business transactions, such as Inquiry, Quotation, Sales Order, etc. To create new sales order type, always copy as with reference to similar sales order. If possible use standard sales order.

2. Define Number Ranges For Sales Documents: Maintain number range with discussion with core team.

3. Assign Sales Area To Sales Document Types:

A. Combine sales organizations / Combine distribution channels / Combine divisions: Ensure to maintain these, else Sales Order creation will give error.

B. Assign sales order types permitted for sales areas: Assign only required Sales Order Types to required Sales Area. This will minimize selection of Sales Order Type as per sales area.

Sales Document Item:

1. Define Item Categories: If possible use Standard Item Category. Incase if required to create new, copy as from standard & maintain New.

2. Assign Item Categories: If possible, use standard. Formula for deriving item category: Sales Document Type + Item Category Group + Usage + Higher Level Item Category = Item Category

Schedule Line:

1. Define Schedule Line Categories: If possible use Standard Schedule Lines. Incase if required to create new, copy as from standard & maintain New.

2. Assign Schedule Line Categories: If possible, use standard. Formula for deriving Schedule Line: Item Category + MRP Type / No MRP Type.

Step 2:

IMG > Logistic Execution > Shipping > Deliveries >

1. Define Delivery Types: If possible use Standard Delivery Type. Incase if required to create new, copy as from standard & maintain New.

2. Define Item Categories for Deliveries: If possible use Standard Item Categories for Delivery Type. Incase if required to create new, copy as from standard & maintain New.

3. Define Number Ranges for Deliveries: Ensure to maintain number range.

Step 3:

IMG > Sales and Distribution > Billing >

1. Define Billing Types: If possible use Standard Billing Type. Incase if required to create new, copy as from standard & maintain New.

2. Define Number Range For Billing Documents: Ensure to maintain number range.

3. Maintain Copying Control For Billing Documents: Maintain relevant copy controls such as Sales Order to Billing, Deliver to Billing, etc.

The configuration differs from scenario to scenario & requirement of the client.

Regards,

Rajesh Banka

Reward point if useful.

former_member227476
Active Contributor
0 Kudos

Dear ravi,

as per SAP standard process always after PGI only you will do billing.

but to say its all depends on the business in which way clint requires.

if it is a service industry there is no point of delivery, so here billing will be order related.

in some cases we will do the billing before delivery, take some FMCGs they will do the billing first once they received the payment then only they will deliver.

in some other senario like Govt org etc.. we will create profarma invoice before delivery stating that the billing amount will be this much, based on this they will get their internal approval ( mean to say from there budget concern minister has to sanction)

if u want to bill after the customer confirmation there is a column in customer master as POD proff of delivery based on this u can do this.

i hope u r clear now, still u have any doubt u r always welcome to get clarification.

rewards if it helps

siva

Former Member
0 Kudos

Hi Ravi,

It depends on the business billing requirements.

Some processes includes delivery related billng and order related billing ( service inustry).

Delivery related billing -

No billing document is created unless PGI is done.

It depends on customer and company understanding on billing time. The moment delivery is created, company is ready to bill to the customer. If credit period is maintained in te agreement, billing can be done as per the schedule.

POD scenario-

POD (Proof of Delivery) is going to be created unless the customer sends this doument. POD document is created after the customer sends the confirmation of goods recieved and billing is done on this basis.

Reward if helpful,

Regards,

PRaveen.

Former Member
0 Kudos

hai,

once PGI is done , the goods leave the plant, a proforma invoice is raised and subsequently a excise invoice is raised,the item falls in the billing due list,

it depends on when the billing has to be done by the buisness ,

usually the invoice is raised as and when goods are despatched and sent to the customer, the customer depending upon the payment terms keeps making the payment.

there is no hard and fast rule that only one goods reeived the invoive has to be sent.

reward points

regards

sriram.

Former Member
0 Kudos

Hi,

It all depends on the bussiness process client is following.

It is checked in system at copy control level in VTFL.

By the way you can do billing before PGI

With help of standard routine 11 in VTFL at item level.

In standard it is always after PGI you do billing.

Reward points if useful

Regards,

Amrish Purohit