42971700 SAP SD Study Material

SAP R/3 Sales and Distribution: Subject Listing and Exercises

1 INTRODUCTION TO SAP R/3 AND THE ERP CONCEPT 4

1.1 VIEWS WITHIN SAP R/3 41.2 R/3’S SALES AND DISTRIBUTION MODULE 51.3 SD ORGANIZATIONAL STRUCTURES IN R/3 6

2 CREATE A BASIC ORDER IN R/3 7

2.1 ORDER TYPES 82.2 CHECKING AVAILABLE STOCK 82.3 CREATE A SECOND SALES ORDER 92.4 RE-CHECKING AVAILABLE STOCK 10

3 CREATING DELIVERIES 11

3.1 PICKING, PACKING, AND POST GOODS ISSUE IN DELIVERIES 133.2 CHECKING AVAILABLE STOCK 14

4 PARTNER FUNCTIONS 15

4.1 EXAMINE BUSINESS PARTNERS 15

5 BILLING 16

5.1 CREATING A DELIVERY-RELATED BILL 16

6 APPLYING PAYMENTS 17

6.1 APPLY A CUSTOMER PAYMENT 17

7 FREE ITEMS 19

7.1 INCLUDE A FREE ITEM 19

8 EXAMINING TRANSACTION TYPES IN THE IMG 21

8.1 VIEWING THE ORDER TYPE, OR 218.2 CHANGING THE BEHAVIOR OF THE STANDARD ORDER 22

© Dr. Bay Arinze (unauthorized copying prohibited) 1

9 CASH SALES AND RUSH ORDERS 23

9.1 CREATE A CASH SALE 239.2 BILLING FOR A CASH SALE 249.3 RUSH ORDERS 259.4 CREATE A RUSH ORDER 259.5 BILLING A RUSH ORDER 26

10 INQUIRIES AND QUOTATIONS 28

10.1 CREATING AN INQUIRY 2810.2 CREATE AN ORDER REFERENCING THE INQUIRY 2910.3 PARTIALLY REFERENCE A SECOND INQUIRY 3010.4 CREATING A QUOTATION 3110.5 CREATE AN ORDER REFERENCING THE QUOTATION 3210.6 PARTIALLY REFERENCE A SECOND QUOTATION 33

11 PACKING IN DELIVERIES 35

12 DELIVERY DUE LISTS 36

13 QUANTITY CONTRACTS AND SCHEDULING AGREEMENTS 39

13.1 WHAT ARE QUANTITY CONTRACTS 3913.2 CREATE A QUANTITY CONTRACT 3913.3 WHAT ARE SCHEDULING AGREEMENTS 4213.4 CREATE A SCHEDULING AGREEMENT 4213.5 TESTING THE SCHEDULING AGREEMENT 44

14 PRICING 45

14.1 PRICING PROCEDURE 4514.2 CONDITION TYPES 4614.3 CONDITION TYPES AS DEFINED IN THE IMG 4714.4 ACCESS SEQUENCES AND CONDITION TABLES 4814.5 HOW PRICING PROCEDURES ARE USED IN ORDERS 50

15 CUSTOMER COMPLAINTS: RETURNS AND CREDIT MEMOS 52

15.1 RETURNS 5215.2 RETURN DELIVERY 5315.3 CREDIT MEMOS 5515.4 BILLING 57


1 INTRODUCTION TO SAP R/3 AND THE ERP CONCEPT

The concept of Enterprise Resource Planning (ERP) software. ERP is a

form of Client/Server software that integrates different functional areas.

These include:

Sales and Distribution (SD)

Materials Management (MM)

Production Planning (PP)

Financial Accounting (FI)

Controlling (CO)

Asset Management (AM)

Quality Management (QM)

Human Resource Management (HR)

Reporting, and others

The architecture of R/3-based systems is an interesting contrast to typical

organizational 2-tier and 3-tier systems. The functionality and integration in

R/3 reduces the need for extensive interface development between different

functional software, as in many older systems.

R/3 achieves integration of different business processes through the following

ways:

Integration using a single database and data model;

Integration between different applications i.e., the functional modules;

Integration with 3rd-party software and desktop applications, such as

Access, Word, and Excel; and

Integration using object-oriented Business APIs (or BAPIs).

1.1 VIEWS WITHIN SAP R/3

There are several views of SAP R/3, from both the developers’ and the users’

perspectives. These views include the:

Functional view: which is enables the user to access and use the

functions within R/3.


The “Configuration” view: which is mostly accomplished through R/3’s

Implementation Guide (IMG). This is used primarily used by R/3

consultants in configuring R/3.

The ABAP Workbench: is used by developers to create code routines in

the ABAP language that add new functionality to R/3.

1.2 R/3’S SALES AND DISTRIBUTION MODULE

The Sales and Distribution Module covers the path of an order from

initiation (and even pre-initiation), to order fulfillment. All the different

processes of the order life-cycle are linked within SD and to relevant

processes outside SD e.g., Financial Accounting and Materials Management.

Characteristics of SD are:

Multilingual/Multicurrency: Several languages can be used.

Conversion between currencies is automatic and connecting to SAP's

realtime currency rate database in Germany enables operational use.

Customization. R/3 allows you to customize the product to meet the

specific requirements of your organization. This is done through the IMG

(Implementation Guide) and other functions.

Pricing Flexibility. In SD, you can create complex pricing schemes that

are dependent on customers, goods sold, special promotions etc. Rebate

processing options are also very sophisticated and comprehensive.

Simple Order Entry. The user enters basic order details all on one

window. From this window, there is simple access to all the levels of the

order, namely header, item, and schedule line information.

Comprehensive Reporting. The Sales Information System (SIS) allows

data to be stored, consolidated, and reported upon by the user in a variety

of formats.

Flexible Batch Processing of Orders. Orders, deliveries, shipments,

invoices and other sales documents can be generated in batch form,

based on order types (e.g., incomplete orders) or customer, or material.

Processing of batched orders can also be made to run as background

tasks to balance processing load.


1.3 SD ORGANIZATIONAL STRUCTURES IN R/3

R/3 is extremely configurable and able to model many types of organizational

structure. However, these must be defined in R/3 terms, involving Business

Process Reengineering (BPR) and organizational restructuring (or redefining).

The following are R/3's SD-related organizational structures.

Client. This is one instance of R/3, representing a company. Usually, an

organization will have a minimum of 3 active clients. All clients can be active

simultaneously. They are:

1. The Development Client: This client is an instance of the organizational

processes and data that is used during development.

2. The Test Client: The development client is 'transported' to the Test Client,

a separate instance, where it is tested.

3. The Production Client: Following testing, the test client is migrated to the

production client, which is the one that users see and use.

Company Code. A company code is an independent accounting unit that

represents an individual company. It has a set of Profit/Loss Statements and

one balance sheet.

Sales Organization. This represents a selling unit, as defined by R/3. That

is, the organizational unit responsible for a sale, returns, and product liability.

A company code can have several sales organizations.

Distribution Channel. This is the means by which the product is supplied to

the customer. Examples of distribution channels are wholesale, retail,

catalog, web-based, etc.

Division. This represents a company's product line. So for example,

personal computers might represent one product line, minicomputers another.

However, corporations have great flexibility in defining divisions and other

elements.

Sales Area. A sales area is a unique combination of sales organization,

distribution channel, and division.

Plant. A plant is a location where goods are manufactured or stored. A plant

can be used by several sales areas.

Other organizational units, such as salesgroups will be defined later.


2 CREATE A BASIC ORDER IN R/3

The path is:

LogisticsSales and Distribution SalesOrderCreate

(Transaction Code: VA01)

Order Type OR

Sales Organization 3000

Distribution Channel 10

Division 00

Hit <Enter> to proceed to the order entry screen. GG represents the instructor-

assigned number of your group. Group 1 is 01, group 2, 02, and so on.

Customer # 8GG

Order Date today's date

Customer PO# po-ex1-GG

Item 1 Material R-1150

Item 1 Quantity 10


Item 2 Quantity 5

In this order, the customer is ordering a quantity of 10 of material R-1150 and 5

of material R-1151. The order date is today and the purchase order number is

assigned by the customer. R/3 performs no checks on the PO#.

Click on <Header> to see details at the header level of the order, such as the

total price, sold-to party, the document currency, and the pricing structure for

the entire order.

Click on <Item> to see details of each item in the order. Data includes the

material number, item pricing, plant and storage locations, and the ship-to

address.

Click on <Schedule Lines> to see details of multiple schedule lines for an

item. Information provided includes delivery dates for each part of the item

quantity e.g., 10 items now and 10 later. It shows schedule line quantity and

confirmed quantity also.


Click on the <Save> Button to save the order. Record the assigned order #.2.1 ORDER TYPES

There are several types of orders in R/3. In addition, the systems analyst can

create customized order types that behave in desired ways. The most common

type of order is the OR order type or standard order. Another order type is the

CS order type, which is a cash sale. Each order behaves differently in regard to

delivery times, billing, payments etc.

2.2 CHECKING AVAILABLE STOCK

The various modules of SAP R/3 are interconnected, so that changes made in

one module "ripple though" to other modules. Checking available stock before

and then after the order is made is a way to demonstrate these interconnections.

To do so, use the path:

LogisticsMaterials ManagementInventory

ManagementEnvironmentStockStock Overview

(Transaction Code: MMBE)

Field Value

Material R-1150

Plant 3800

How much stock is available for orders and how much stock is scheduled for delivery?


2.3 CREATE A SECOND SALES ORDER

The objective of this exercise is to create a sales order, comprising two items: R-

1150 and R-1151. (GG is the group number.)



Field Value

Sales Order OR (standard order)


Distribution Channel 10 (final sales)

Division 00 (cross division)

In the materials form, enter the two materials and quantities (15 and 5):

Material Quantity

R-1150 15

R-1151 5

1. Click on the save icon to save the sales order.

2. Record the sales order number that appears at the bottom of the window.

3. Using the path: Header Business Data, record the payment terms.

4. Using the path: Item Business Data, record the plant and route.

5. Using the path: Item Schedule Lines, record the scheduled delivery

dates.

6. View the document flow using the path: Environment Document Flow.

A Plant is a place where goods are made or distributed, while a Shipping Point

is a point from which goods leave the plant for the customer. It is also the start of

the route. Each plant can have many shipping points.


2.4 RE-CHECKING AVAILABLE STOCK

Create and/or go to an alternate session to re-check inventory. Checking

available stock after the order is possible using the path:

LogisticsMaterials ManagementInventory Management Environment

StockStock Overview


Field Value

Material R-1150

Plant 30GG

How much stock is now available for orders and how much stock is scheduled

for delivery? Does this differ from your initial inventory levels and why?


3 CREATING DELIVERIES

In the Customer Order Management (COM) Cycle, there are two ways to create

a delivery after the order is created. You may proceed through the main menu:

LogisticsSales and Distribution Shipping and Transportation

OutBound DeliveryCreate Single Document With Reference to a

Sales Order

(Transaction Code: VL01N)

Alternatively, within the order, go to:

Sales Document Deliver

This takes you to the delivery screen. There are three fields that must be

entered, namely, shipping point, selection date, and the order number.

Field Value

Shipping Point 30GG

Selection date {10 days from today}

Sales Order Order No. {should default to order #}

The selection date is the date up to which you are looking for a delivery to be

made from the order. The standard order type in R/3, OR, is configured with a

delivery time of seven days, so the date must be pushed out to "catch" the

order's delivery.

The next activities in the creation of the delivery are to save and record the

delivery, and then examine the document flow of the order to see how the

delivery has been recorded by R/3.

1. Click on the <Save> Button to save the delivery.

2. A delivery number is generated and displayed at the bottom of the screen.

Record this number.

3. Create and/or switch to another session.

4. Pull up the order being processed using its order number:


Re-examine the order using the following path:

LogisticsSales and Distribution SalesOrderChange


5. Go to the document flow for the order: EnvironmentDocument Flow .

What is the current status of the order? What is the status of the delivery?

The order should be Completed, while the Delivery should be labeled: Being

Processed.


3.1 PICKING, PACKING, AND POST GOODS ISSUE IN DELIVERIES

After the delivery has been created, three activities are needed to complete the

delivery process within R/3. They are:

1.Picking. Here the factory personnel physically transfer the ordered goods

out of their storage location in readiness for shipping to the customer and

record this activity within R/3. Picking is mandatory for deliveries.

2.Packing. Some materials require packing within boxes, cartons, or other

enclosures prior to shipment to the customer. Packing within R/3

documents this activity. This process is optional, as not every item requires

packing.

3.Post Goods Issue. This is the last of the three stages and occurs when the

goods leave the plant through a shipping point. At this stage, an accounting

document is created that is used for the next stage in Order Management,

Billing. Post Goods Issue is mandatory for deliveries.

Return to your delivery screen using the following path:


OutBound DeliveryChange


Go to the picking screen using the following path:

Subsequent Functions Transfer Order

Hit <Enter>

Check the following pick quantities in the Transfer Order:

Material Pick Quantity

R-1150 15

R-1151 5

Click on <Enter> and then <Save>.

In another session, pull up the order and examine document flow using the

path: Environment Document Flow. What is the new activity shown in

the document flow?


Return to the Delivery in the previous session. Use Deliveries Change

Delivery.

Click on <Post Goods Issue>. Write down the document number for the

accounting document generated.


3.2 CHECKING AVAILABLE STOCK

Checking available stock after the delivery is completed to check if the amount of

stock slated for delivery has changed. To do so, use the path:

LogisticsMaterials ManagementInventory Management Environment

StockStock Overview


Field Value

Material R-1150

Plant 30GG

How much stock is now scheduled for delivery?


4 PARTNER FUNCTIONS

R/3 refers to entities involved in a transaction with your company as partners or

'business partners'. Each customer may represent several functions, each of

which is specific to accomplishing part of the transaction. These 'personalities' or

functions are thereby referred to as partner functions. The different partner

functions are stored within the customer master record. There are four (4)

business partners that are mandatory for a customer, namely:

Sold-to party. The sold-to party (or partner function)is the central partner

function through which all the other functions are referenced. The sold-to

party is the party that places the order and to whom sales and product prices

are recorded against (e.g., for reporting purposes).

Ship-to Party. The ship-to party is the party (and address) to whom the order

is shipped. Can the ship-to differ from the sold-to? Yes, the ship-to party

could be at a totally different location e.g., at a shipping/receiving location.

Bill-to Party. The bill-to is the party to whom the bill is sent. Again, the bill-to

can differ from the sold-to and ship-to. For example, it might be the accounts

payable department at the customer's company.

Payer. The fourth mandatory partner is the payer. The payer is the party that

pays the bill. This could again be an entity distinct from any of the three

parties, with a unique address.

4.1 EXAMINE BUSINESS PARTNERS

This exercise involves identifying the business partners for customer 13GG. To

do so, create and/or use a new session and use the path:

LogisticsSales and Distribution OrdersChange Order


Menu: <GoTo> Header Partner

Examine and list the four major partner functions and any others that appear.

Use the matchcode to see the whole range of partner functions.


5 BILLING

The next stage in the COM (Customer Order Management) Cycle is billing. In

R/3, it is possible to perform order-related billing, delivery-related billing and

other types of billing. In billing, you can also:

Cancel created bills,

Issue debit and credit memos,

Generate pro-forma invoices,

Issue rebates, and

Transfer accounting information to the FI (Financial) module.

5.1 CREATING A DELIVERY-RELATED BILL

The object of this exercise is to create a delivery-related bill for the customer and

transfer it to FI. The steps are as follows:

In one session, pull up the order and examine document flow using the path:

Environment Document Flow. Note the different processes shown in the

COM cycle.

Proceed to delivery related billing using the following path:

Logistics Sales and Distribution Billing Billing Document Create.

(Transaction Code: VF01)

This brings up the Create Bill screen, with the delivery number shown in the

leftmost column. This is the column that holds the name of the document from

which the bill is created (in this case, the delivery).

Click on <Enter> to go to the bill creation screen. On this screen, the amount

of the bill and the items billed are displayed.

On the bill creation screen, click on the <Save> button to create the invoice.

The bill number is shown at the bottom of the screen.

Return to the order screen and check the document flow one more time.

What has changed? {Answer: A bill has been generated for the order.}


6 APPLYING PAYMENTS

The final stage in the COM Cycle is payments. Payments are not applied in the

SD module, but more appropriately, in Financial Accounting (FI). In the FI

module, payments may be applied to one invoice or to several. Overpayments

and underpayments are also handled in different ways, as defined in

configuration.

6.1 APPLY A CUSTOMER PAYMENT

To apply a customer payment, use the following path:

Accounting Financial Accounting Accounts Receivable Document Entry Incoming Payment.

(Transaction Code: F-28)

This takes you to the <Post Incoming Payments: Header Data> screen and

form.

Enter the following data:

Field Value

Document Date {Today’s date}

Document Type DZ (customer payment)

Company Code 3000

Posting Date {Today’s date}

Currency/Rate USD

Bank Data: Account 100000 (dummy Checking Account)

Value Date {Today’s date}

Open Item Selection: Account 8GG

This takes you to the <Post Incoming Payments: Process Open Items>

screens. This shows the list of open items, i.e., open invoices requiring payment.

There should be one invoice requiring payment in the Open Items list. If there is

more than one invoice listed, make all the other invoices inactive in order to pay

on the relevant invoice. The process is as follows:

In the Open Items list, click on the line with the item to be made inactive.


Click on <Select Beginning> and then on <Select End>. Finally, click on the

<Inactive> Button.

Repeat the above process until only the desired open item remains active.

The total in the Assigned field should now equal the total of the open item,

and the Number of Items should equal 1.

The Amount Entered should equal the value in Assigned. If it does not, the

difference will appear in Not Assigned. A negative number means that the

customer has underpaid and this difference is still owed. A positive number

represents an overpayment, which is owed to the customer.

Enter the same value in Difference Postings. This represents an additional

customer payment or a refund to make up the difference.


7 FREE ITEMS

In sales, promotions are frequently run that give the customer a free item for the

purchase of a fixed number of items. In addition, sales representatives may have

the latitude to include a free item with a substantial purchase by a customer.

Sample items might also be included as free items within a purchase.

R/3 allows the salesperson to manually include a free item within order entry.

This is done by “attaching” the free item to another, paid item in the order using

the <higher-level item> field. In the example below, one free item, the MSI CD-

RW Drive(Material R-1151) is given free with the purchase of an MSI CD-ROM

Drive (Material R-1150).

7.1 INCLUDE A FREE ITEM

To include a free item in a purchase, use the following path:

Logistics Sales and Distribution Sales Order Create.



Field Value

Order Type OR {standard order}



Division 00

Hit <Enter>


Field Value

Customer # 8GG

Order Date today’s date



Item 1 Quantity 1


Use the path, Overview Double-line Entry to go to an alternative screen

for order entry.

For the second material, enter the item number for the first material (in this

case, 10), in the higher-level item field. For the material, enter R-1151 and

for the quantity, enter 1.

Hit <Enter>

Viewing the order shows that no pricing has been performed for the additional,

free item. To view pricing, click on the second item check box, and click on the

Pricing icon. Confirm that the price is $0.

Save the order and record the order number.


8 EXAMINING TRANSACTION TYPES IN THE IMG

The standard order we have used in the preceding sections represents a sales

document that behaves in a specific way and has certain attributes. For

example, when an order (type OR) is created, a delivery interval of 7 days is

proposed. When the order is saved also, the assigned order number falls within

a specific range. This range is also different from number ranges used by

deliveries (LF) and other document types. These ranges are stored within a

schema of document types in the IMG.

This chapter examines the structure of the order type, OR, as stored in the IMG

to better understand its configuration details and how they may be reconfigured

in response to business requirements.

8.1 VIEWING THE ORDER TYPE, OR

To view the structure of the order type, use the following path:

Tools AcceleratedSAP Customizing Project Management SAP

Reference IMG

(Transaction Code: SPRO)

This takes you into the customizing area of R/3, where many of the maintenance

and configuration options of R/3 are to be found.

The SAP Reference IMG represents the initial unconfigured state of R/3’s

structures and document types and is not changed in configuration. The SAP

Reference IMG is modified to meet the unique needs of the organization.

To examine the structure of the OR document, use the path:

Sales and Distribution Sales Documents Sales Sales Document

Header Define Sales Document Types

Click on <Position> and Type OR in the Sales Document Type field.

Hit <Enter> and the OR document is listed as the first entry.

Click to the left of the OR entry to highlight the entire line.


Click on GoTo Details to go to the OR entry.

The shown view illustrates various elements of the standard order document and

its behavior. The entries are arranged into eight major groups, as listed below:

1. Number Systems.

2. General Control.

3. Transaction Flow.

4. Scheduling Agreement

5. Shipping.

6. Billing.

7. Requested Delivery Date/Pricing Date.

8. Contract.

These configuration groups specify various options that can be changed to

conform to the organization’s specific processes and activities. For example,

<Item No. Increment> in Number Systems sets the increment by which

subsequent line item numbers increase e.g. an increment of 10 will result in line

items 10, 20, 30 and so on.

Also, in General Control, <Check Credit Limit> for example determines

whether the limit of credit is checked for this order type. The credit group is also

specified as are export license details and checking of the line item’s division.

The next exercise demonstrates how changing the order configuration in the IMG

changes the behavior of the order.

8.2 CHANGING THE BEHAVIOR OF THE STANDARD ORDER

In this exercise, we have the following business scenario: Due to increased

efficiencies in managing materials, the business can now deliver standard orders

in 6 days and need the order type to reflect this. In addition, to retain consistency

with the old system, the business wants items to be listed in the order in

incremens of 5, not 10, as in the default.


9 CASH SALES AND RUSH ORDERS

Orders we have entered until now been the standard order type, OR. This has a

preset delivery duration, such as seven days. However, R/3 also includes other

order types to handle many other types of transactions, such as credit memos,

returns, product exchanges, and cash purchases. In this exercise, we will use

the cash purchase order type, CS as the order type for our transaction.

In a cash transaction, the customer must have an immediate delivery, as they will

be leaving the store with the ordered material. Therefore, a cash transaction

automatically generates a delivery, unlike the standard order type, OR.

9.1 CREATE A CASH SALE

To enter a cash order, create a new session or backtrack to the top of R/3’s

menu structure and use the following path:



Field Value

Order Type CS



Division 00

Hit <Enter> to proceed to the order entry screen.

Field Value

Customer # 8GG




Item 1 Quantity 1


In this particular order, the customer is ordering a quantity of 1 of material R-

1150. The order date is today. Hit <Enter>. What message does R/3 give at

the bottom of the screen?

R/3 creates a delivery automatically with the order. The delivery number is

given, along with the order number.

Proceed through the main menu on a different screen to examine the

delivery. Use the following path:


OutBound DeliveryChange


Go to <OverviewPicking> and pick one item, corresponding to the order.

Click on <Post Goods Issue>

At this stage, work in the delivery phase is completed. Billing follows.

9.2 BILLING FOR A CASH SALE

Billing works much differently in a cash sale (BV) than in a standard order. In the

latter case, delivery-based billing is used as freight charges and other transport-

related charges are required from the delivery. However, with a cash sale, an

invoice is automatically produced. This is in fact, a cash receipt for the customer.

To bill, use the following path:






Change the delivery number to the order number for order-related billing.








9.3 RUSH ORDERS

Another order that is used within R/3 is the rush order, RO. This order is used

when a company must have the material right away, but wants the billing process

to follow the regular pattern. It is different from the cash order, BV, because,

although the material is picked up right away and a delivery created, no receipt is

generated for the customer. Billing occurs later using individual billing or a billing

due list.

In this exercise, we will use the rush order type, RO as the order type for our

transaction.

9.4 CREATE A RUSH ORDER

To enter a rush order, create a new session or backtrack to the top of R/3’s menu

structure and use the following path:


Field Value

Order Type RO



Division 00

Hit <Enter> to proceed to the order entry screen.


Field Value

Customer # 8GG




Item 1 Quantity 3

In this particular order, the customer is ordering a quantity of 3 of material R-

1151. The order date is today. Hit <Enter>. What message does R/3 give at

the bottom of the screen?

R/3 creates a delivery automatically with the order. The delivery number is

shown, along with the order number.

Proceed through the main menu on a different screen to examine the

delivery. Use the following path:

LogisticsSales and Distribution ShippingDeliveriesChange Delivery

Go to <OverviewPicking> and pick the item that corresponds to the order.

Click on <Post Goods Issue>

At this stage, work in the delivery phase is completed. Billing follows.

9.5 BILLING A RUSH ORDER

Billing works similarly to that of a cash sale, BV, in that order-based billing is

used. Freight charges and other transport-related charges are not required as the

customer already picked up the item. However, unlike a cash sale, no invoice is

automatically produced.

To bill, use the following path:







Change the delivery number to the order number for order-related billing.








10 INQUIRIES AND QUOTATIONS

In the normal course of selling, customers contact the organization to make

inquiries or to request quotations for specific quantities of materials. In R/3, there

are several transaction types used to record these transactions.

The purpose of having inquiry and quotation transaction types is twofold. First is

simply to record the specific customer transaction. Second, if customers place

orders in the future, information from inquiries and quotations may be imported

into the order, reducing data entry. Third, customers may use quotation to obtain

guaranteed pricing on quoted materials. Lastly, they provide a means of

evaluating future income from sales represented by past inquiries and

quotations. In the following exercises, we examine the two transaction types.

10.1 CREATING AN INQUIRY

To create an inquiry, create a new session or backtrack to the top of R/3’s menu


LogisticsSales and Distribution SalesInquiryCreate


Field Value

Inquiry Type IN



Division 00

Hit <Enter> to proceed to the inquiry data entry screen.

Field Value

Customer # 8GG

From Date today's date

To Date end of the month


Item 1 Quantity 1


In this transaction, the customer is placing an inquiry for a quantity of 3 of

material R-1150 (a CDROM Drive).

Examine the PRB field. What probability is assigned to the inquiry?

Examine the Expected Order Amount field. How is this number calculated? {It

is the probability multiplied by the inquiry total $ amount.}

Click on the <Save> Button to save the inquiry. Record the assigned inquiry #.

10.2 CREATE AN ORDER REFERENCING THE INQUIRY

Some time after making an inquiry, the customer may call back to place an order

that may be based on the inquiry. They may not remember their inquiry number.

In that case R/3 automatically brings up stored inquiries (and quotations also). In

the next example, we will assume that the customer remembers the inquiry

number.

To create an order that references the inquiry, backtrack to the top of R/3’s menu


LogisticsSales and Distribution SalesOrderCreate with Reference

toInquiry


When prompted, enter the inquiry number.

Click on <Copy> to copy all the items and quantities into the order.

When the order form comes up, make sure the material R-1150 has been

pulled up with a quantity of 1.

Enter the purchase order number, po-in1-GG.

Click on the <Save> Button to save the inquiry. Record the assigned

inquiry#.

Check the document flow for the order. What does it show? {It shows that

the order was created from the Inquiry.}


10.3 PARTIALLY REFERENCE A SECOND INQUIRY

Return to the <Inquiry> option in the Sales screen and create another inquiry

using the following data.

Field Value

Customer # 8GG




Item 1 Quantity 3


Item 2 Quantity 2

In this case, the customer is placing an inquiry for 3 CDROM drives and 2 CD-

RW Drives. The object of this exercise is to determine the effect of partially

referencing an inquiry.

Create an order that partially references the inquiry using the following path:


toInquiry




When the order form comes up, change the material quantity for material; R-

1151 from 3 to 2, as the customer indicates they now require only 2

headlights.

Check the box to the left of the Material 2 (CR-RW Drive), and select <Edit>

and <Delete Line Item>. This ensures the second material is not referenced.

Enter the purchase order number, po-in2-GG.

Click on the <Save> Button to save the inquiry. Record the assigned inquiry#.


Performing these actions means that the first line item in the Inquiry has only

been partially referenced. There should be a quantity of 1 remaining in that line

item. The second material (the CR-RW Drive) has not been referenced at all.

To attempt to reference the inquiry again, create another order that references

the inquiry using the path:


toInquiry




Did the first material come up?

Did the second material come up?

In R/3, partially referencing an inquiry’s line item completely references that line

item, regardless of remaining quantities. However, other line items in the inquiry

may be referenced if they have never been referenced before. This behavior is

unique to inquiries, as we will see in the next section on quotations.

10.4 CREATING A QUOTATION

To create a quotation, create a new session or backtrack to the top of R/3’s

menu structure and use the following path:

LogisticsSales and Distribution SalesQuotationCreate


Field Value

Inquiry Type QT



Division 00


Hit <Enter> to proceed to the quotation data entry screen and enter the following

data:

Field Value

Customer # 8GG




Item 1 Quantity 2

In this transaction, the customer is requesting a quotation for a quantity of 2 of

material R-1150 (a CDROM drive).

Examine the PRB field. What probability is assigned to the quotation?

Examine the Expected Order Amount field. How is this number calculated? {It

is the probability multiplied by the quotation total $ amount.}

Click on the <Save> Button to save the quotation. Record the assigned

quotation #.

The probability of a quotation is generally assumed to be higher than that of a

more casual inquiry i.e., 70% vs. 30%. In truth, they will differ from company to

company and are arrived at by a study of historical data, such as how many

inquiries and quotations were later referenced by orders.

10.5 CREATE AN ORDER REFERENCING THE QUOTATION

Similar to an inquiry, the customer may call back to place an order referencing

the quotation. Again, they may not remember their quotation number, but again,

we assume that the customer remembers the quotation number.

To create an order that references the quotation, use the following path:


toQuotation



When prompted, enter the quotation number.


When the order form comes up, make sure the material R-1150 has been

pulled up with a quantity of 2.

Enter the purchase order number, po-qt1-GG.


quotation#.

Check the document flow for the order. What does it show? {It shows that

the order was created from the Quotation.}

10.6 PARTIALLY REFERENCE A SECOND QUOTATION

Return to the <Quotation> option in the Sales screen and create another

quotation using the following data.

Field Value

Customer # 8GG




Item 1 Quantity 4

In this case, the customer is placing an quotation for 4 headlights. The object of

this exercise is to determine the effect of partially referencing a quotation.

Create an order that partially references the quotation using the following path:


toQuotation





When the order form comes up, change the material quantity for material; R-

1151 from 4 to 2, as the customer indicates they now require only 2

headlights.

Enter the purchase order number, po-qt2-GG.


quotation#.

Performing these actions means that the material in the Quotation has been

partially referenced. There should be a quantity of 2 remaining in that line item.

To attempt to reference the quotation again, create another order that references

the quotation using the path:


toQuotation




Did the first material come up? In what quantity?

In R/3, partially referencing an quotation’s line item, does not completely

reference that line item. This behavior is different from that of the inquiry

transaction. Quotations can therefore be reused until the quantities are

exhausted or the <Valid To> date is past.


11 PACKING IN DELIVERIES

Three of the major activities in deliveries are picking, packing, and post goods

issue, as earlier discussed. Packing is optional within deliveries, but is often

required for items that cannot be shipped as is. This section illustrates how

packing is accomplished within R/3.

In packing, a packing material is selected and then used to pack the ordered

item. In the above example, the customer ordered a motorcycle that came with a

free headlight. The objective of this exercise is to pack the headlight in a carton

(material PK-100) for delivery.

Create a delivery for the last order using the following path:


OutBound Delivery Create


Enter the order number for the last order.

Push the date out by 7 days or more so the delivery can be created.

Press <Enter> to go to the Delivery – Overview:Quantities screen.

Click on the Item 20 checkbox and select the path:

Edit Pack

This takes you to the <Pack Items> screen, where we will select the MSI

Carton (Material) as the packing material.

Enter the following data in the All Shipping Units groupbox:

Field ValueShipping Material PK-100

Hit <Enter> Highlight the first rows of the Shipping Unit and Item group boxes.

Select menu option <Edit><Pack Item> to pack CDROM into the carton.

Save the delivery and examine the order or delivery document flow.

What is the Status assigned to Packing?


12 DELIVERY DUE LISTS

Up until this point, we have individually created deliveries for our entered orders,

for illustration purposes. One of the advantages of R/3 however, is the ability to

batch process creation of documents, which makes sense in an actual business

environment. Deliveries are seldom created at the same time as their associated

orders (an exception is cash orders). Instead, it is more efficient to create all

deliveries from outstanding completed orders at predetermined times.

The function is R/3 that is used to batch process delivery creation is the Delivery

Due List. This function collates all outstanding completed orders and creates

deliveries for them. To improve efficiency further, orders that have the same

ship-to and delivery dates are put together in the same deliveries.

To process the delivery due list, you need to have more than one completed

order. Create two completed orders using the following data:

Field Value

Order Type OR



Division 00

Order 1:

Field Value

Customer # 8GG




Item 1 Quantity 3


Order 2:

Field Value

Customer # 8GG

Order Date Today's date



Item 1 Quantity 2

After the two orders above have been successfully entered, proceed to the

creation of the delivery due list using the following path:

Logistics Sales and Distribution Shipping and Transportation

Outbound Delivery Create Collective Processing of Documents Due

for Delivery Sales Orders

(Transaction Code: VL10A)

At this point, the delivery due list data form comes up. Enter the following

data in it:

Field Value

Shipping Point 30GG

Delivery Creation Date (start) {Today's date}

Delivery Creation Date (end) {10 days from today}

Ship-To 8GG

To ensure that the list is being prepared for the correct sales area, click on the

<organizational data> button. When the popup window appears, enter the

following data:

Field Value



Division 00


Select menu option <Program><Execute> to see the delivery due list. The two

orders you created (along with other completed orders) is then displayed in a list.

The small boxes to the left of the screen shows all the orders highlighted,

meaning that they will be processed.

If you want to process only selected orders, go to EditDeselect All, then

select the orders you want delivered by clicking on the small box on the left of

each order.

Click on the <Save> icon to run the delivery due list.

In the log for delivery run screen, how many deliveries were created? Why?

(A single delivery was created, combining the two orders.}


13 QUANTITY CONTRACTS AND SCHEDULING AGREEMENTS

13.1 WHAT ARE QUANTITY CONTRACTS

Quantity contracts are agreements between the customer and your company to

order specific quantities of a product within a set timeframe. The customer does

not provide any information about delivery dates, only the start and end date of

the contact. Quantity contracts are usually agreed to at discounts from totals if

priced individually.

A quantity contract is fulfilled when the customer places orders against it in the

contract period. These orders are known as release orders or ‘call-offs’.

However, they are standard orders that automatically reference the customer’s

quantity contract and reduce the remaining amount of product to be ordered

under the contract.

If the customer supplies delivery dates for the product, then it is preferable to use

a scheduling agreement, instead of a quantity contract. This is described in the

following section.

13.2 CREATE A QUANTITY CONTRACT

To create a quantity contract, use the following path:

Logistics Sales and Distribution Sales Contract Create


Enter the following data and hit <return>.

Field Value

Contract Type NMS {quantity contract}



Division 00


In the screen <Create Contract: Overview – Single-Line Entry>, enter the

following data:

Field Value

Customer # 8GG



Valid-from {today’s date}

Valid-to {three weeks from today}


Item 1 Quantity 10

Save the quantity contract and record the contract number.

Now that the quantity contract has been created, to view how it is affected by

orders, it is necessary to create release orders against the quantity contracts. To

create the first order, use the following path:



Field Value

Order Type OR



Division 00

Click on the <Ref. To Contract> button to create the order with reference to

the quantity contract.

In the popup window, enter the quantity contract number in the <contract>

field and click on <copy>.

In the <Create Standard Order> window, enter the following:


Field Value

Customer # 8GG




Item 1 Quantity 4

Click on <save> to save the order. Record the order number.

Go back and create a second order with the following data:

Field Value

Customer # 8GG




Item 1 Quantity 12

Cllck on <save> to save the order. What message do you get? Why?

The message says that the quantity contract has been fully exhausted. Adding 6

from the first order to 12 in the second order gives 18, which is 8 more than the

quantity on the initial contract. However, the order is not refused. The quantity

contract is exhausted, and another 8 of the items are added from inventory to the

order.

Try to open a 3rd order, referencing the quantity contract. Does it work? {No,

because the contract has been exhausted.}

Examine the document flow for the quantity contract or any of the orders that

reference it.


13.3 WHAT ARE SCHEDULING AGREEMENTS

Scheduling agreements are similar to quantity contracts in that they are

agreements between the customer and your company to order specific quantities

of a product. However, while the quantity contracts do not contain the delivery

dates for the materials, scheduling agreements do.

A scheduling agreement is fulfilled when the customer places deliveries against it

in the agreement period. Thus, scheduling agreements do not have orders

placed against them. Instead, if the <delivery due list> function is run on the

same day as one of the deliveries is due, then it is used to directly create a

delivery. After the delivery is created, the quantity in the scheduling agreement is

correspondingly reduced.

If the customer cannot supply specific delivery dates for the product, then it is

preferable to use quantity contract, and refer orders to this contract when they

are created.

13.4 CREATE A SCHEDULING AGREEMENT

To create a scheduling agreement, use the following path:

Logistics Sales and Distribution Sales Scheduling Agreement Create


Enter the following data and hit <return>.

Field Value

Scheduling Agreement Type DS {scheduling agreement}



Division 00


In the screen <Create Scheduling Agreement: Overview>, enter the

following data:

Field Value

Customer # 8GG


PO# po-ex10-GG

Valid-from {today’s date}

Valid-to {three weeks from today}


Item 1 Quantity 12

This specifies that the material R-1151 is required for a target quantity of 12 I the

scheduling agreement. The remaining task is to specify in the agreement the

exact dates on which the material should be delivered and in what quantities.

This is done by going to the schedule lines and entering the data there, as

follows:

Click in the box to the left of the item number.

Use the menu: GoTo Item Schedule Lines

Enter the following data on line 1:

Field Value

Date Type D

Delivery Date Four days from now

Quantity 7

Enter the following data on line 2:

Field Value

Date Type d

Delivery Date Ten days from now

Quantity 5


Hit <Enter>. What happens? {Delivery is rescheduled for the first date to

the earliest available delivery date}.

Click on <Save> to save the scheduling agreement. Record the agreement

number.


13.5 TESTING THE SCHEDULING AGREEMENT

The next assignment is to exhaust the scheduling agreement quantities by

creating deliveries. Create a delivery that references the scheduling agreement

by using the following data:

Field Value

Shipping Point 30GG

Selection Date Twelve days from now

Order {scheduling agreement #}

Note that you are using a delivery date that encompasses both schedule lines

in your scheduling agreement. How many deliveries were created and why?1

Save the delivery and note the delivery number.

Create a second delivery with the same data as above; save that delivery and

record the delivery number too.

1 Only one, because the delivery lines in the scheduling agreement have different dates.


14 PRICING

Pricing is a very important function in R/3. It can also be very difficult to grasp,

but the underlying concepts are fairly straightforward. Prices for items are

determined primarily by a process called the condition technique. The

condition technique is so called because it works using a set of conditions or

elements that work together to determine the overall price for an item.

In R/3, the condition technique is used to organize and manipulate the main

elements that determine a material’s pricing to result in an overall price that

includes the basic price, discounts, surcharges, and taxes.

The price of a line item (that is, a variable quantity of a material) is determined by

a combination of 5 elements. These are:

1. The sold-to

2. The document type

3. The sales organization

4. The division, and

5. The distribution channel

The combination of these elements with the material’s basic price determines the

total price of the items as sold to the user.

14.1 PRICING PROCEDURE

A price is determined for a material through the use of a pricing procedure, the

highest level element of pricing. Each item uses a specific pricing procedure,

determined by a unique combination of the five elements above. This selection

is set up in the Implementation Guide (IMG). To see how the pricing procedure

for transactions made in the sales area: 3000 (company code), 10 (distribution

channel), and 00 (division) is determined, use the following path:



Reference IMG Sales and Distribution Basic Functions Pricing

Pricing Control Define and Assign Pricing Procedures Define

Pricing Procedure Determination

(Transaction Code: OVKK)

Click on <Position>


Field Value



Division 00

Hit <Continue> or press <Enter>

What pricing procedure is shown?2

The pricing procedure is unique for the sales area, plus the document pricing

procedure key A, and the customer pricing procedure key 1. The document

pricing procedure key is in the header of the sales document, while the customer

pricing procedure key is in the customer master record. This adds up to the five

elements described previously. The field to the right of the pricing procedure is

the condition type automatically proposed by the system. We will deal with the

subject of condition types next.

14.2 CONDITION TYPES

The condition type is at he heart of the condition technique in SAP R/3.

Essentially, a condition represents a major aspect or representation in R/3 of

pricing activity in your organization. For example, there may be a condition type

for the basic price of a material, there may be another condition type to

determine a material discount, a customer discount, or a sales promotion. A

material’s price might then be determined by a combination of condition types

used within a pricing procedure.

2 The pricing procedure, YVA2US is shown.


To examine existing condition types, as used in an order, do the following:

Pull up a previously created order, one with the purchase order #po-10-2-GG.

Click in the box to the left of the item R-1151.

Select ItemPricing F7 from the menu.

Click on the <Analysis> button and examine the header of the next screen.

Which pricing procedure is being used?3

This selection illustrates the pricing for item # R-1151. In particular, the leftmost

column lists the different condition types used to price the material. Some of the

condition types shown are:

ZR00, a condition type that provides a basic or core price for the material.

K004, another condition type that provides a material discount.

Others that may be present include VPRS, SKTO, K005, K007. Each of

these speaks to a specific type of pricing discount. We will examine a more

comprehensive list of these condition types later.

14.3 CONDITION TYPES AS DEFINED IN THE IMG

Each of the condition types that may be used in sales documents is defined in

the IMG. For example, we may examine the PR00 condition type using the

following path:

Tools AcceleratedSAP Customizing Project Management SAP Reference IMG Sales and Distribution Basic Functions Pricing Pricing Control Define Condition Types Maintain

Condition Types

Click on <position>, type PR00 in the search field, and then press Return. This

takes you to the PR00 condition type. Highlight the entire line by clicking in the

<condition type> field, namely ‘Price’. Click on the <details> icon—the icon with

3 The RVAJUS pricing procedure.


the magnifying glass. This takes you to directly into the structure of the condition

type. The following elements can be seen:

The condition type: PR00

The access sequence associated with the condition type, also PR00. Each

condition has one associated access sequence. Unfortunately, R/3’s naming

conventions frequently give both elements similar names, as in this case.

The condition class, which denotes the nature of the condition type for pricing,

such as (core) price, surcharge or discount, tax etc. In this case, the type is

B, or price.

The calculation type describes how the value is measured e.g., by quantity,

by weight, or volume. The default for PR00 is C, signifying that the value is

quantity-dependent, not measured by volume or weight.

Based on the condition technique, a pricing procedure determines the price of a

material. Subsequently, the pricing procedure calls upon one or more condition

types in order to retrieve the material’s basic price, any discounts, surcharges,

and other important pricing factors. However, it does not end here. Several

other pricing elements in R/3 are used to enable the condition types to perform

their task. They are:

1. Access Sequences

2. Condition Tables, and

3. Condition Records.

We continue by examining Condition Tables.

14.4 ACCESS SEQUENCES AND CONDITION TABLES

To recap, a pricing procedure is the overall method that determines a price for a

material. Each pricing procedure has one or more condition types, which

individually determine an aspect of pricing e.g., core price, discounts and

surcharges.

If we focus our attentions on the core price condition type, PR00, for example, we

already know that it has the associated access sequence, PR00. This access

sequence is simply the order which R/3 searches for a stored record to fulfil a


condition type. So, for example, we may determine the core price of a product in

various ways, such as; cost plus a percentage, competitor’s price, and activity-

based costing. However, these would all be different prices, if stored within R/3.

An access sequence would specify how we searched for a core price throught

these three options. It might be (1) cost plus (2) ABC, and (c) competitor’s price.

If no data record was found for “cost plus”, then we would look for an ABC ‘core

price’. If no ABC price existed, then the competitor’s price might be sought out.

The sequence (1), (2), (3) represents the PR00 Access Sequence.

To examine the PR00 access sequence and the records searched by R/3, use

the following path:



Pricing Control Define Access Sequences Maintain Access

Sequences

(Transaction Code: V/07)

Click on <Position> and and enter <PR00> in the popup field.

Click to the left of <PR00> to highlight the entire line.

Click on the <Accesses> button in the <Navigation> group box.

Four accesses are shown in the list of accesses. They are accesses 10, 20, 30,

and 40. This implies that there are 4 possible records of ‘core prices’ in the R/3

system, determined in different ways. Each of these records is called a

condition record. Note that the actual record is not stored in the IMG, only the

structure is. The fields that comprise this record, i.e., the structure, are

collectively referred to as the condition table. To view the fields of the first

condition table, perform the following:

Click to the left of access number 10 to highlight the entire line.

Click on the <Fields> button in the <Navigation> group box.

Scroll to the left to view field descriptions.


For access 10, the customer/material access sequence, there are four fields that

comprise the structure of the condition table and will hold data values in the

actual condition record. These fields are:

1. Sales organization

2. Sold-to

3. Distribution channel, and

4. Pricing Reference Material (or material number)

If an actual condition record exists with an attached price, then this price will be

used first. However, if no record has been stored, then R/3 will check the record

represented by access #20.

{ What fields exist in the condition table for access #20?}

Answer : Sales organization, Sold-to, Price List Types, Document Currency,

and Pricing Reference Material (or material number}

14.5 HOW PRICING PROCEDURES ARE USED IN ORDERS

Pricing procedures determine the price for a material. In 14.1, we saw in our

pricing analysis that procedure RVAJUS was used to determine the price for the

order. This procedure had several attached condition types, each of which had a

single access sequence. The access sequences simply specified the order in

which the search was made for condition records.

In the next set of exercises, we make use of the condition types, PR00, K005 and

K007 to illustrate how R/3 pricing works in practice. The first task is to compare

the definition of the RVAJUS pricing procedure in the order with the one in the

IMG.

In one session, use the following path:




Pricing Control Define and Assign Pricing Procedures Maintain

Pricing Procedure

(Transaction Code: V/08)

Click on <Position>, enter RVAJUS in the presented field

Press <Enter>

Click to the left of RVAJUS

Click on the <Control> button

This takes you to the layout of the RVAJUS pricing procedure.


15 CUSTOMER COMPLAINTS: RETURNS AND CREDIT MEMOS

Customer dissatisfaction with some percentage of provided products and

services is an unhappy fact of life in organizations. When this happens, the

selling organization is required to provide remedies to the customer in a variety of

ways. In some instances, the customer may simply seek to return the product for

credit. In other cases, the product may have been damaged in transit and it is not

worth returning to the company. In this case, the customer may simply request

credit for the damaged material. Both scenarios are the subjects of the two

following exercises.

15.1 RETURNS When a customer requests for a return, it is treated as a type of order and

handled in R/3’s sales function. While products may be returned in R/3 without a

corresponding past order, in our example, we will assume that a previous order

has been placed and is being returned.

We will return the order created in Chapter 7, with the purchase # po-71-GG. To

begin the Returns process, use the following path:



Field ValueOrder Type RE



Division 00

Note that the order type is RE, not OR. Next, we connect the return to the

originating order, using the following path:


Sales Document Create With Reference To Order

Using the Matchcode and search help ‘A’, enter the purchase order number in

the appropriate field. Select the order number when it comes up. Press <Copy

All> and proceed to the Returns screen.

In creating a return, the customer may seek to return some or all the line items in

the original order. Of each line item, the customer may seek to return some or all

of the quantity ordered. In this particular case, the customer seeks to return one

of the two ordered items, but will keep the free item, which is acceptable to our

company.

Change the quantity of the line item 10 from 2 to 1. Go to Order Reason and

enter Reason 101 (Poor Quality). Before saving the return, notice the No. “08” in

the Billing Block field. Examine the matchcode for this field to see what “08”

means. It signifies “check credit memo’ and is an added level of verification to

ensure that returns are valid and must be explicitly approved by an organizational

representative. This representative will typically check to ensure the return was

based on an order and that it was approved, maybe with an RMA# (Return

Merchandise Authorization number). Save the Return.

15.2 RETURN DELIVERY

After a Return is created, a returns delivery transaction follows. We can go

directly to this using the path:

Sales Document Subsequent Functions Create Delivery

This saves the Return and creates a Returns Delivery document. Attempt to pick

using Subsequent Functions Transfer Order. What Happens?


We are not allowed to pick in a Returns Delivery, as the materials are being

received by us, not being sent out to the customer. The necessary step is simply

to Post Goods Issue, by clicking on the <Post Goods Issue> button or by

selecting: Edit Post Goods Issue, or by hitting F8. This completes the

Returns Delivery and denotes the material being received back into the

company’s plant. Write down the Returns Delivery number.

Next, we must go to Billing and create a credit memo, in order to give the

customer credit for the material return. From the topmost menu level in R/3, use

the following path:



If the Returns document number is not automatically selected, type it in (not the

Returns Delivery number). Execute the credit memo generation.

An error results. Examine the log to find out why a credit memo could not be

generated. {The reason is that is was blocked for billing in the Return

document.} In another session, go back to the Return document and remove the

“08” in the Billing Block field.

Execute the credit memo generation again and save.

Finally, the customer must be given the credit in Financial Accounting. In R/3,

note that customer credits as well as payments are handled in Accounts

Receivable. All supplier credits and payments, conversely, are handled in

Accounts Payable. Go to the appropriate location in FI from the top level of R/3

using:





form.


Field ValueDocument Date {Today’s date}


Company Code 3000


Currency/Rate USD





screen. In the list of open items, there should be one invoice requiring a credit in

the Open Items list. If there is more than one invoice listed, make all the other

invoices inactive in order to pay on the relevant credit memo. Thereafter, enter

the amount required to clear the credit memo. Note that it will have a –ve sign as

it is a credit to the customer.

15.3 CREDIT MEMOS

A credit memo is also treated as a type of order and handled in R/3’s sales

function. In this instance, the customer may have received a product that was

damaged or ruined on delivery. Hence, it makes little sense to return the actual


product or material, given that the customer’s version of events is accepted. We

likewise assume that a previous order has been placed and credit is being

sought.

We will return the order created in Chapter 8, with the purchase # po-81-GG.

Notice that the transaction needed is the Credit Memo Request transaction, or

CR. To begin the Credit Memo Request process, use the following path:



Field ValueOrder Type CR



Division 00

Note that the order type is CR, not RE. Next, we connect the credit memo

request to the originating order, using the following path:

Sales Document Create With Reference To Order

Using the Matchcode and search help ‘A’, enter the purchase order number in

the appropriate field. Select the order number when it comes up. Press <Copy

All> and proceed to the Credit Memo Request screen.

In creating a credit memo request, the customer may seek credit for some or all

the line items in the original order. Similar to a return, the customer may also

seek credit for some or all of the quantity ordered for each line item. In this

particular case, the customer seeks credit for all the ordered items, which is

acceptable to our company.


Go to Order Reason and enter Reason 104 (“Material Ruined”). The Billing

Block field. Is again filled in with a “08”, signifying “check credit memo’. This

forces explicit credit verification by an organizational representative. Save the

Credit Memo Request.

15.4 BILLING

Since no goods are being returned, we go directly to Billing and create a the

actual credit memo, in order to give the customer credit for the material return.

From the topmost menu level in R/3, use the following path:



If the Credit Memo Request document number is not automatically selected, type

it in and execute the credit memo generation.

An error results from the billing block. In another session, go back to the Credit

Memo Request and remove the “08” in the Billing Block field.

Execute the credit memo generation again and save.

Finally, the customer must be given the credit in Financial Accounting. In R/3,

note that customer credits as well as payments are handled in Accounts

Receivable. All supplier credits and payments, conversely, are handled in

Accounts Payable. Go to the appropriate location in FI from the top level of R/3

using:





form.



Field ValueDocument Date {Today’s date}


Company Code 3000


Currency/Rate USD





screen. In the list of open items, there should be one invoice requiring a credit in

the Open Items list. If there is more than one invoice listed, make all the other

invoices inactive in order to pay on the relevant credit memo. Thereafter, enter

the amount required to clear the credit memo. Note that it will have a -ve sign as

it is a credit to the customer.

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