SAP AR Dilip Sadh

Sales Cycle & Documents
Sales is a component of the Sales & Distribution module that supports the sale, delivery, and billing of materials and/or services to the customers of the organization. In keeping with the systems Document Principle, the steps in the Sales Cycle are represented by various documents, which are produced in the Sales & Distribution and Financial Accounting modules. Chapter Objectives Provide an overview of how the system supports an integrated Sales Cycle and a description of the purpose and functionality of each document created in the system in support of the Sales Cycle.
Think Tree Technologies, Inc.
17.1Sales Cycle
A/R Cash
Inquiry / Quotation
Sales Order Credit Check (SD)
Receive Payment (FI)
Credit Check
Delivery Note (SD) Authorization to Ship
Invoice Sent
FI
X
Billing Document (SD)
Credit Check
FI Goods Issue (MM) Inventory COGS

X X
A/R Sales Revenue
17.2 Sales Documents

Inquiry Quotation Sales Order Credit & Debit Memo Requests
Inquiry
Customer Seller
?
Inquiry
Quotation
Inquiry
Quotation
Customer
Sales Order
Price
Sales Order
Quantity
Delivery Dates
Delivery Note
Delivery Note
Initiates Shipping Activities Forms the basis for Goods Issue & Billing
Goods Issue
Sales Order Stock
Goods Issue
Billing Due List
Inventory COGS
Delivery Quotation Order
Updated
Billing Document
Delivery Note Billing Document
A/R Sales Revenue
Accounting Document
Invoice
Customer
Incoming Payment
Accts. Receivable
Cash
Receipt of payment
17.3Accounts Receivable in the Sales Cycle
FI Accounts Receivable (A/R)
Create Customer Master Records Credit Management
Display Customer Account Balances
Incoming Payment Processing Dunning
Display / Change Customer Line Items
Sales Cycle
A/R Cash
Inquiry / Quotation
Sales Order Credit Check (SD)
Receive Payment (FI)
Credit Check
Delivery Note (SD) Authorization to Ship
Invoice Sent
FI
X
Billing Document (SD)
Credit Check
FI Goods Issue (MM) Inventory COGS

X X
A/R Sales Revenue
Sales Cycle & Documents Chapter Summary

Key Terms Sales Cycle Sales Documents Inquiry Quotation Sales Order
Sales Cycle & Documents Chapter Summary

Key Terms Shipping Documents Delivery Note Goods Issue Movement Type Billing Document
Chapter 18 Automatic Account Assignment

To ensure a real-time, integrated Sales Cycle, the system contains functionality which will automatically determine the proper General Ledger Accounts to be posted to when a Goods Issue and a Billing Document is created. Chapter Objectives Gain an understanding of the configuration used in automatic account assignment for Accounting Documents created in the Sales Cycle.
Material Account Assignment Overview
Goods Issue
Account Assignment Area
Inventory COGS
What is Valuation?
Stock Value Stock Quantity Material Price
$120
4 Pieces
$30 / Piece
$120
4 Pcs.
$30 / Pc.
Selecting the Valuation Level

Valuation Level
Valuation Area is a Plant
Valuation Level is Company Code
Accounting Data in the Master
Material
1 2
Valuation Class Price Control Price
Raw Material Finished Product Standard or Moving Average Price Current, Previous Month, Previous Year, Future
Valuation Grouping Code

Case 1: Valuation Area = Company Code Valuation Grouping Code 0001 Company Code Chart of Accounts
0001 0002 GKR
0002 0003 0003 0004 IKR

Valuation Grouping Code

Case 2: Valuation Area = Plant Valuation Grouping Code 0001 Valuation Area 0001 0002 0002 0003 0004 0003 0005 0004 IKR
Company Code 0001 0002 0003
Chart of Accounts
GKR
Linking a Material Type to a Valuation Class

Material Type FERT Account Category Reference 0001 Valuation Class 7900 3000 HALB 3010 HAWA ROH1 0002 0003 3020 3030 3040 ROH2 ROH3 0004 3100 3200
Transaction / Event (Process) Keys
BSX - Inventory Posting
GBB - Offsetting Entry to the Stock Posting
How Does the System Find the Relevant G/L Accounts?

1 Chart of Accounts 550000 2 Transaction Key (Process Key) 81000 231000 140000 4 Account Grouping (Account Modifier) 3 Valuation Grouping Code
5 Valuation Class
Performing a Simulation of the Account Assignment

Movement Type: 231 Plant: CSPL Material: RES-A Plant CSPL Valuation Grouping Code Posting Strings: Transaction Key BSX GBB G/L Acct - Dr. 300000 191100 G/L Acct. - Cr. 300000 191100 Material RES-A Chart of Accounts Valuation Class Movement Type 231 Value String
Revenue Account Assignment Overview
Billing Document
ACCOUNT ASSIGNMENT CRITERIA

A/R Sales
Interface to Financial Accounting

SD
Billing Document
FI
Accounting
Billing Document
Posting Block
Accounting
Release
Account Assignment Criteria in the Billing Document

Billing Document Chart of Accounts Sales Organization Customer Account Assignment Group Material Account Assignment Group Account Key
Company Code Assigned to Payer Master Record Material Master Record Pricing Procedure Price 100.00 ERL Discount 10.00 ERS
G/L Account
Account Key ERL = Revenue ERS = Sales Deduction

Revenue Account Determination

Acct. Determination Procedure KOFI Condition Type: KOFI Access Sequence: KOFI Specific Billing Document Type
Item 10 Price $10 Discount (10%) $1
Sales Deduction
1
Material Acct. Group
Condition Tables
1. Charts of Accounts 2. Charts of Accounts 3. Charts of Accounts 4. Charts of Accounts 5. Charts of Accounts Sales Organization Sales Organization Sales Organization Sales Organization Sales Organization Account Key Account Key Account Key Account Key Customer Acct. Group Customer Acct. Group Material Acct. Group
General
Records for Condition Type KOFI No valid record exists Valid record exists (search ends)
Account Sales Deduction

Automatic Account Assignment Chapter Summary

Key Terms Valuation Area Valuation Class Valuation Grouping Code Account Category Reference Transaction / Event Key (Process Key) Account Modification code Account Determination Procedure
Automatic Account Assignment Chapter Summary

Key Terms Condition Type Access Sequence Condition Tables Account Assignment Group (Customer) Account Assignment Group (Material) Account Key
Chapter 19 Credit Management

Credit Management is the process of establishing customer credit limits, establishing credit checking policies and monitoring Customers against those criteria. It is configured in both the Financial Accounting (FI) and Sales & Distribution (SD) modules. Chapter Objectives Provide an understanding of how credit limits are set and maintained for customers. Provide an understanding of the hierarchical relationships between Credit Control Area, Company Code, and Customer. Identify and understand the functionality of monitoring credit limits for Customers using Automated Credit Checking in FI and SD.
Credit Management
Used to Set and Control Credit Limits for Customers Customer
Sales Order Check
Customer Sales Rep.
Customer Credit Limits
Credit Check
Customer Credit Information
Accept Order Accept Order / Block Delivery Refuse Order
Credit Control Area

Client Credit Control Area
Client
Company Code
Customer
Example:
PepsiCo.
Credit Control Area
Credit Control Area
CCAA
Company Code Company Code
CCBB
Company Code
123 Customer A Customer B
456 Customer A Customer C
999 Customer A
19.1Defining a Credit Control Area

Step 1: Define a Credit Control Area
19.1Defining a Credit Control Area

Step 2: Assign Company Codes to the Credit Control Area
19.2Assigning Credit Limits Per Customer

2 levels of credit limit: Globally across all Credit Control Areas Per Credit Control Area
Example: Customer A Global Limit: $2,000,000.00 Client PepsiCo.
Credit Control Area CCAA Company Code 123 Credit Control Area CCCH Company Code 999
Credit Control Area Limit: $500,000.00
CCAA < = $ 500,000.00 CCCH < = $ 500,000.00 CCAA + CCCH < = $ 2,000,000.00
Customer A
Customer A
Maintaining Credit Limits Per Customer

Total limit already assigned across all Credit Control Areas Highest limit already assigned for an individual Credit Control Area
Maximum amount that can be assigned per Credit Control Area
Maximum sum amount that can be assigned across all Credit Control Areas
Monitoring Credit Limits for Customer

Special G/L Transactions such as down payment
Receivables from sales
Open Sales Orders, Deliveries and Billing Docs.
Postings: Increase these amounts Clearings: Decrease these amounts
Total receivables, Special G/L Trans. and outstanding order value

19.3Credit Checking
SALES ORDER TYPE

Check Credit Limit (Select One) A: WARNING MESSAGE B: ERROR MESSAGE C: WARNING MESSAGE WITH DELIVERY BLOCK D: AUTOMATIC (AUTOMATED CREDIT CHECKING) STATIC or DYNAMIC
STATIC ONLY
19.4Static Credit Check

OPEN SALES DOCUMENTS
OPEN DELIVERY DOCUMENTS
+
OPEN BILLING DOCUMENTS
CREDIT EXPOSURE
+
OPEN ITEMS (A/R)
Dynamic Credit Check

Static Component
OPEN DELIVERY DOCUMENTS
Dynamic Component
+
OPEN BILLING DOCUMENTS
+
OPEN ITEMS (A/R)
OPEN SALES DOCUMENT WITHIN HORIZON
Credit Exposure
19.5Automated Credit Checking Features

Credit Checks
STATIC CHECK
DYNAMIC CHECK ON BASIS OF MAXIMUM DOCUMENT VALUE WHEN CHANGES ARE MADE TO CRITICAL FIELDS ON DATE OF NEXT INTERNAL REVIEW ON BASIS OF OVERDUE OPEN ITEMS AGAINST HIGHEST DUNNING LEVEL
System Reaction
WARNING WARNING WITH BLOCK ERROR
19.5 Automated Credit Checking Configuration in FI

Credit Control Areas (CCA)
EURO CCCS Europe North America
Customer Credit Management Area

Customer Credit Control Area Risk Category Credit Representative Group Credit Limit : 6 : EURO : R02 : 001 : 10,000 USD
Risk Categories
RO1 RO2 RO3 High Risk Medium Risk Low Risk
Credit Representative Groups Credit Representative

001 002 Europe North America Part Func. KB Pers.No. 012 Mail Jones
Automated Credit Checking Configuration in SD

Document Credit Groups 01 02 03 Sales Order Delivery Goods Issue Item Categories Active TAN AGN
X
Yes
Sales Document Types OR D . . .
= Automated Check Factors influencing credit: Credit + Risk + Document Control Category Credit Area Group
19.6Reviewing and Releasing Credit Holds

Credit Control Area CCXX Credit Rep Group US
Credit Account Customer A Customer X Customer Y Order 351 567 595 Credit Value 1000.00 200.00 50000.00
Blocked SD Orders
Risk Medium High Low Status Dynamic Chk Dynamic Chk Static Chk
Release the order(s)
19.7 Risk Management

Risk Management Payment Cards Letters of Credit Export Credit Insurance Credit Management
Static/Dynamic Checks Manual Checks
Sales Order 101 Sold-to #6 Net value $1000 XYZ 10 ABC 20 500 500 2. The system determines that letters of credit are allowed and finds one for this customer valued at $600.
Letter of Credit for customer 6 of $600
3. System performs a credit check against remaining $400 of the sales order.
1. At sales order entry, the sytem determines what types of payment guarantees are allowed for the payer and document type.
19.8 Credit Control Area Determination Options

First
A User Exit at the Header Level
Order of checks for determining the Credit Control Area
Billing View of the Payer Master Record
The Sales Area of the transaction Company Code of the Sales Organization
Last
19.9 Early Warning List
Creates a report on customers who are likely to become critical The Early Warning List derives its information from the A/R Summary. It is necessary to run the A/R Summary on a timely basis to ensure up to date information. Management can use the results of these reports to determine a course of action on clients. Automatic actions can also be set in customizing.
19.10 A/R Summary in distributed and nondistributed systems

Report: RFCMCRCV
SD Creating SD - Documents
Non distributed systems: CHECK a) performance+ Distributed systems: CHECK a)
FI
Creates
Report: RFDKLI42 CHECK
A/R Summary
b)
b)performance?
Actual Data
via RFC
19.11AR Summary
It contains all credit information for an account in compact form Can be used for SD credit checks both in distributed and non-distributed credit management Increases efficiency in nondistributed systems as repeated read of open items is avoided
Preliminary settings are done here.

19.12 AR Summary - Aging Settings

A/R Summary aging settings in SD
A/R Summary aging settings in A/R

Credit Management Chapter Summary

Key Terms Credit Management Credit Control Area Credit Limit Automated Credit Checking Static Credit Checking Dynamic Credit Checking Risk Category
Credit Management Chapter Summary

Key Terms Document Credit Group Risk Management Early Warning List A/R Summary
Chapter 20 Incoming Payment Processing
The receipt of payment from a customer is the final step in the integrated Sales Cycle. The system provides full functionality for processing customer payments, clearing open items in the Customer Account and resolving any payment differences. Chapter Objectives Provide an understanding of how the system processes incoming payments. Provide an understanding of how the system processes payment differences. Provide an understanding of Payment Advice functionality and its uses.
20.1 Post Incoming Customer Payment
Mandatory Dates
Defaulted Information: Document Type (for payment) Account Type (for Customer)
Bank Account & Amount paid
Customer Account
Entering the Customer Payment
Parameters for Open Item Selection
20.2.Selecting Open Items to Be Cleared
Activated Open Item
Entered & Assigned Amount
20.3.Partial Payment / Residual Payment

If a payment amount doesnt match the open item amount, it can be processed as a partial payment or residual payment.
Partial Payment Leaves original invoice intact (full amount) Credits the Customer Account for the payment amount No items are cleared Residual Payment Clears the original invoice Creates a new invoice for the remaining amount The new invoice has a new Document Date and Baseline Date; although it is changeable
20.4.Payment Advice
Structure: Header Date Amount 1/27/98 Item 1 Amount 100 Item 2 Amount 600 ... 700 Cur. USD Cur. USD
Payments
Currency USD Doc. # 123 Doc. # 999

Match
Documents: Doc. # 123 456 789 999 627 Amount 100 500 200 600 235 Cur. USD DEM USD USD SFR
Usually by Document Number
Invoices
Sending and Receiving Payment Advices

Customer: Receives Goods Sends Payment
Execute Payment Program
Payment Advice Generate Clear
Cleared Documents
Seller: Receives Payment Sends Goods

Types of Payment Advices

Types delivered with the system:
EDI Account Statement Bank
Lockbox
Manual
20.5Automatic Handling of Payment Differences
How to Handle the Difference:
Payment Difference Detected
Write off to a G/L Expense Account (Charge Off Indicator is set)
Reason Code
Or Generation of a New Item (Charge Off Indicator is not set)
20.6 Lockbox Processing

Bank:
Checks
Lockbox File (Format)

BAI: Bank Administration Institute
Payment Advice Database
Cleared Documents
A Payment Advice is created for each check.

Lockbox Processing
Key Reports:
RFEBLBT1: RFEBLB00: RFEBLB20: RFEBBU00: Generates pre-programmed test data (for internal use only) Imports data into lockbox processing BAI format processing Post account statement / check deposit listing
Key Tables:
T049A: Destination and origin definition (Who) T049B: Format definition (of EDI, BAI, etc.) (How) T049C: Evaluation of Autocash Tapes (creation date and time) (output - results) T049L: Link to House Bank table for Lockbox Master
20.7.Interest Calculation
The R/3 Interest Calculation program calculates and books interest on customer/vendor accounts in arrears resulting from items that are not yet paid or were paid too late. User definable correspondence for the recipient is generated specifying the details of the transaction. Configuration options determine timing and rates of interest.
Chapter 20 - Incoming Payment Processing Chapter Summary

Key Terms: Clearing Partial Payment Residual Payment Payment Advice Reason Code Lockbox Processing
Chapter 21 Dunning
Dunning is the process of notifying customers that an unpaid obligation has become past due. Chapter Objectives Understand the functionality and configuration of a Dunning Procedure and how it is executed in the Dunning Program. Understand the Organizational Structure of Dunning Levels within a given Dunning Program and how parameters can be set for each of them. Understand how to send dunning correspondence to customers and vendors through Dunning Letters. Run the Dunning Program.
21.Dunning
Organizational Structure related to Dunning: Client CLAA
Company Code CCAA
Company Code CCBB
Dunning Area DA01
Dunning Area DA01
Dunning Area DA02
The Dunning Area is an optional unit in the Organizational Structure used to group Customers / Vendors for dunning. Each Dunning Area can represent different dunning policies or Organizational Units responsible for dunning.
21.1Dunning Run -Overview

Run date Identification
Status Maintain Parameters Parameters entered Schedule dunning run Dunning Run has finished Change dunning notices Dunning data has been changed Start dunning printout Printing of dunning notices has been terminated
21.2.Dunning Program Configuration

The Dunning Procedure contains the configuration of a Dunning Program. The Dunning Procedures can be tied to Dunning Areas or to a Customer / Vendor master record.
Dunning Procedure Dunning Program
Configuration
Execution
Dunning Levels
Minimum Amounts
Dunning Charges
Dunning Texts
Basic Parameters of the Dunning Procedure

21.2Assigning the Dunning Procedure in the Master Record
Master Record Company Code Data Correspondence Tab
21.2Configuring the Dunning Procedure

Frequency for running
Days in arrears after which a Dunning Notice will be sent
Items that are overdue less or equal to the grace period will not be dunned (works like a bonus period) Grace Period Minimum Days in Arrears # Days in Arrears
10
11
12
21.2.Selecting Open Items to be Dunned

Grace Period: 4 Days Minimum Days in Arrears: 8 Days
Items:
Due 1) 2) 3) 4) -6 +3 +6 +10 Amt. 1,500 350 800 5,400 Status Not Overdue Within Grace Period Within Min. Days in Arrears Overdue 10 Days
Result:
Items 3 and 4 will be dunned. You will dun the account for Item 3 because there is another item that is overdue more than the minimum days in arrears. If Item 4 did not exist, then item 3 would not be dunned.
21.2. Dunning Levels
21.2Minimum Amounts
Minimum Amounts define an overdue threshold of the total Account Balance, which must be exceeded to reach a Dunning Level.
Dunning Level
Minimum Amount Minimum Percentage Minimum Amount for Interest
Example: Total Account Balance: USD 25,000,00 Configuration of Dunning Level 1: Min. Amount = USD 15.00 and Min. Percentage = 5% Dunning Balance Level 1: USD 500.00 Will be dunned? No, because USD 500.00 >= Min. Amount but USD 500.00 < Min. %
21.2.Dunning Charges
For each Dunning Level, it is possible to define an amount to be charged if the minimum amount for dunning is exceeded. A Dunning Charge is used to cover the postage and handling of Dunning Letters. Dunning Charge: Static amount to be charged Dunning Level
Dunning Charge %: Percentage to be applied to the total of all overdue items in the Account to determine the Dunning Charge
21.2.Dunning Texts
Dunning Level
Dunning Form
A form is set up using SAPScript and can be shared by more than one Dunning Level.
21.3 Parameters for the dunning run

The Dunning Program examines the open items of a Customer / Vendor and, if overdue items exist, produces the appropriate notice.
Dunning Date Documents Date Company Code, Range of Customer / Vendor Numbers
21.3 Parameters for the dunning run

Its possible to create an additional log to analyze the dunning run.
A range of customer and vendor accounts has to be specified
21.4.Selecting the Dunning Level

New Level = Old Level + 1
Overdue Item
Old Level
The Dunning Letter
21.4. The dunning run

Dunning can be started at a specific date and time or it can be started immediately.
Dunning notices can be created immediately after the dunning run. If this parameter is set it is no longer possible to change the dunning proposal manually or to delete it.
21.4The dunning run
Dunning Block Reasons are used to block a Customer / Vendor or an item from being dunned. The user specifies the Dunning Block Identification and a Description.
Dunning Keys are used to mark items that should not trigger a higher Dunning Level. The user specifies the Dunning Key Identification and the Maximum Level that can be triggered.
21.4. The dunning Run

Dunning run can be divide in to three steps: 1. The program checks which accounts shall be considered in the dunning run according to the parameters and configuration. 2. The system checks which line items are overdue in the selected accounts and which dunning level should be applied. 3. The system checks whether payments have to be dunned for an account and ,if so,which dunning level should be used.
21.5. Editing the dunning proposal

Dunning items Accounting Overview Dunning data Dunning data Dunning data Account Clerk Dunning Area Dunning Level Dunn Block Account Items Item 1 Dunning Level Dunn Block Item2 . Customer Document Items Item 1 Correspondence Company code Dunning data Correspondence
21.6. Printing dunning notices

This image cannot currently be display ed.
A payment coupon may be attached to a dunning letter or account statement. Payment coupons can also be printed in a separate spool on dedicated forms.
21.6Cross Company Code Dunning
This feature enables users to create one dunning notice that covers business partners that exist in different company codes. Likewise, data that would normally be spread over several company codes (and hence several correspondence letters) can now be grouped into one correspondence letter.
Sending Correspondence to Customers / Vendors
Pre-Defined Action
Trigger
Correspondence
Chapter 21 - Dunning Chapter Summary

Key Terms: Dunning Dunning Area Dunning Procedure Grace Period Dunning Level Minimum Amount Dunning Charge
Chapter 21 - Dunning Chapter Summary

Key Terms: Dunning Letter Dunning Program Dunning Block Reason Dunning Keys

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Sales Cycle & Documents

Think Tree Technologies, Inc.

Sales Order Credit Check (SD)

Receive Payment (FI)

Delivery Note (SD) Authorization to Ship

Billing Document (SD)

FI Goods Issue (MM) Inventory COGS

A/R Sales Revenue

Think Tree Technologies, Inc.

17.2 Sales Documents

Think Tree Technologies, Inc.

Think Tree Technologies, Inc.

Think Tree Technologies, Inc.

Think Tree Technologies, Inc.

Delivery Quotation Order

Think Tree Technologies, Inc.

Think Tree Technologies, Inc.

17.3Accounts Receivable in the Sales Cycle

FI Accounts Receivable (A/R)

Create Customer Master Records Credit Management

Display Customer Account Balances

Incoming Payment Processing Dunning

Display / Change Customer Line Items

Think Tree Technologies, Inc.

Sales Order Credit Check (SD)

Receive Payment (FI)

Delivery Note (SD) Authorization to Ship

Billing Document (SD)

FI Goods Issue (MM) Inventory COGS

A/R Sales Revenue

Think Tree Technologies, Inc.

Sales Cycle & Documents Chapter Summary

Think Tree Technologies, Inc.

Sales Cycle & Documents Chapter Summary

Think Tree Technologies, Inc.

Chapter 18 Automatic Account Assignment

Think Tree Technologies, Inc.

Material Account Assignment Overview

Think Tree Technologies, Inc.

Think Tree Technologies, Inc.

Selecting the Valuation Level

Valuation Area is a Plant

Valuation Level is Company Code

Think Tree Technologies, Inc.

Accounting Data in the Master

Valuation Class Price Control Price

Think Tree Technologies, Inc.

Valuation Grouping Code

0001 0002 GKR

0002 0003 0003 0004 IKR

Valuation Grouping Code

Company Code 0001 0002 0003

Linking a Material Type to a Valuation Class

Transaction / Event (Process) Keys

BSX - Inventory Posting

GBB - Offsetting Entry to the Stock Posting

Think Tree Technologies, Inc.

How Does the System Find the Relevant G/L Accounts?

Performing a Simulation of the Account Assignment