SAP SD Implementation - Sales Organization, Sales Office, Company Code etc

22 September, 2020


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SAP SD Implementation

The Implementation Guide is used to collectively group the areas that must be customized, as well as to form a structure for documentation. Additional information may be added to the guide to make navigation more simple. The figure below shows the standard of my SAP Implementation Guide.


If you select the menu path (Additional Information Application Components) you can see the application to which the SAP Customizing Implementation Guide node is assigned, as shown in the below Figure.


One is also able to see the Release Notes icons (shown here) attached to the area of the SAP Customizing Implementation Guide where SAP standard documentation exists for the latest release of SAP.

We start by implementing the Sales and Distribution organizational elements. In all instances, unless specifically stated otherwise, it is advisable to copy an existing configuration element as opposed to creating a new element and assigning the sub-elements manually. For example, as a tip, when creating a company code, it is best to copy the company code 0001 and change the newly copied key to xx01 (where xx is the ISO code for the country). This will ensure the relevant sub-settings are also copied and the structural integrity of the new company code remains. This will save you a lot of time and get your new company code working immediately. Later, you can change any sub-settings if you wish.

Defining a Sales Organization

Here is how you define your sales organizations.

Menu path SAP Customizing Implementation guide Enterprise Structure Definition Sales and Distribution Define, Copy, Delete, Check Sales Organization

One is able to see the menu path in the SAP Customizing Implementation Guide

Note A sales organization can belong to only one company code. You can also define your own sales document types to be limited to within a sales organization. Later we will assign sales offices to a sales organization.

Defining a Distribution channel

Here is how you define your distribution channel.

Menu Path SAP Customizing Implementation Guide, Enterprise, Structure, Definition, Sales, and Distribution, Define, Copy, Delete, Check Distribution Channel.


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Sales Offices and Sales Groups

Inside every organization is a team responsible for the sales. This team can be complex, allowing its own structure to be determined in order to optimize its functions and reporting based on their actions. This internal organization structure has the following elements.

Sales Office

Your organization may require your sales teams to be structured along with the geographical aspects of the organization. These geographical groups are easily created using the term sales office. A sales office is in turn assigned to a sales area. A sales office may be assigned to more than one sales area. For example, when you create a sales order for a sales office, that sales office must be assigned to the same sales area the sales order is assigned to.

Sales Group The staff of a sales office may be subdivided into sales groups. For example, sales groups can be defined for individual divisions within the sales team.

Salespersons individual personnel master records are used to manage data about salespersons. You can assign a salesperson to a sales group in the personnel master record.

Sales office and sales groups are optional organizational elements; you do not need to configure them if you have no use for them. In this case, make sure that the sales office and sales group fields are not marked as mandatory on the customer master or the order entry screens. Otherwise, the users will be required to enter a value that you have not maintained.

Defining a Sales Office in SAP

Here is how you define your sales offices, as shown in the below figure


Menu Path SAP customizing implementation guide enterprise structure definition sales and distribution maintain sales office.

Defining a Sales Group in SAP

Here is how you define your sales group, as shown in the below figure


Menu Path SAP SAP customizing implementation guide enterprise structure definition sales and distribution maintain sales group.

Organizational Structures in Accounting

Your business can have one or more company codes. Each company code is its own legally independent unit and entity in accounting. One or more sales organizations are assigned to a company code. It is best to configure a company code by selecting the company code 0001 has a country-specific setting for Germany. However, there are over 40 country templates delivered in my SAP ERP. Prior to any configuration taking place, you can localize to the USA. The localization of these units will overwrite any settings already carried out in these units.

This localization of the organizational unit is vitally important for countries that have complicated business processes, such as Brazil. It is advisable to install the country version as well as refer to the country template. (The country template is a range of customized settings for a country that are generally by all businesses that operate within the country.

Defining a Company code

Here is how you define a company code, as shown in the below figure


Note: SAP customizing implementation guide| enterprise| structure| definition| financial| accounting| edits| copy| delete, check company code

Organizational structures in Logistics

A plant is a logistics organizational unit where materials are produced or goods and services are provided. It is where production, procurement, and materials planning is executed. A material may exist within more than one plant. Also, the stock is delivered to a customer from a plant, the availability check is carried out in a plant, and requirements are passed from the sales requirements) of a plant.

A storage location defines a storage area for the stock in a plant. One or more plants are assigned to a company code. And one or more storage locations are assigned to a plant.

A plant can only exist within one company code. The plant, its buildings, equipment, and stock all belong to the legal entity represented by the company code.

A plant may be assigned to more than one shipping point ( A shipping point may also be assigned to more than one plant) A shipping point is a place where deliveries are processed within the plant.

The assignment of plants to company codes is depicted in the below figure


 Shipping points are defined in the sales and distribution application components. They are configured in the SAP customizing implementation guide under logistics execution as described in the next section.

Defining a Shipping Point

A shipping point is assigned to one or more plants and can be divided into several loading points. However, deliveries are created for shipping points.

Generally, companies create deliveries using a background job, running the delivery duelist. The shipping point is used as a criterion for delivery creation, so if you have express shipping and want the background job to run more frequently for these deliveries, it is advisable to have an express shipping point. This shipping point may be used for the scheduled background job and may be executed more frequently (for example, every 15 minutes) than the other shipping points.

You can configure the shipping point to be defaulted automatically in the sales order or delivery based upon the plant (used in the sales document), loading group (of the material), and shipping condition (of the customer master). For example, for a plant in Southern California, if the loading group is air transport and the shipping condition is express, use the Express Air Transport Shipping Point. The person responsible for processing these deliveries will see the delivery in their delivery due list when the sales order is saved.

If the plant is in Northern California and the shipping condition is express and the loading group is road transport, another shipping point will be proposed. So the delivery will appear in another delivery duelist.

Here is how you define your Shipping point.

Menu Path SAP Customizing Implementation Guide I Enterprise Structure I Definition I Logistics Execution I Define, Copy, Delete, Check Shipping Point

A shipping point is the top level of organization in shipping. Deliveries are always initiated from exactly one shipping point. A shipping point can be subdivided into several loading points. A loading point is a voluntary entry, merely a subdivision of a shipping point. It is manually entered into the header data of the delivery. For example, if a shipping point has five loading bays, you may create five loading points in SAP to represent each one.

Now that the organizational units have been defined, we can assign the units into an organizational structure.

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Assignment of Organizational Units

In the assignment of the organizational data, you link the different modules in the system by defining how the structures relate to one another. This is best shown by the association of sales organizations and plants. A plant is always linked to one company code and can be linked to several sales organizations. This means that the plant is owned by the company code and can only take orders from and make deliveries to customers in its sales organization. This is shown in the below figure


In the above figure  Plants 1, 2, and 3 belong to Company code 1. Sales organization 1 uses Plants 1 and 2. Sales organization 2 uses Plants 2 and 3. Sales organizations 1 and 2 can make cross-company sales for goods from Plants 4 or 5.

After you have defined your data, and the other application components have defined theirs (such as the company codes having been defined by FI and the plants by MM), it is time to assign the SD organizational data.

The assignments are extremely easy settings to make once you understand how the structures should be built up (as explained previously). They are assigned in the following structure paths in the SAP Customizing Implementation Guide:

  • SAP Customizing Implementation Guide I Enterprise Structure I Assignment I Sales and Distribution
  • Assign sales organization to company code
  • Assign distribution channels to the sales organization.

Plant association with sales organizations

  • Assign division to the sales organization.
  • Set up sales area.
  • Assign sales office to the sales area
  • Assign sales group to the sales office
  • They assign a sales organization, distribution channel, and plant
  • Assign sales area to the credit-control area. 
  • SAP Customizing Implementation Guide I Enterprise Structure I Assignment I Logistics Execution:
  • Assign shipping point to plant.

Shipping points are assigned to the plant here, but their determination is not defined bow_ Please refer to Chapter 6 for information about shipping point determination.

After the assignment, you should have a business organizational structure similar to the figure


Business Area

A business area is a subdivision of a company code for accounting purposes. You can draw financial reports based on the business area. If the Fl (Finance) team decides to use business areas, every transaction in SAP is assigned to a business area in the same way it is assigned to a company code.

For example, Company Acme produces and sells widgets from two different plants. They want to draw financial reports for each plant. You would define two business areas and then make the assignment based on the plant. Whenever a sale happens out of one of the plants, the transactions are assigned to its sales area. You can review the financial reports for each of the plants separately, or together for the company.

Business areas can be assigned based on the plant and division, or based on the sales area. You need to choose one way of assigning the business area. Then you can assign the business area created in the FI module to either the plant and division or to the sales area. Business areas are assigned from the following menu path:

Menu Path  IMG 1 Enterprise Structure I Assignment 1 Sales and Distribution J Business Area Account Assignment.

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