60177280 basics-of-sap-sd

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............................................................................................................4
1.2 R/3’S SALES AND DISTRIBUTION MODULE...............................................................................5
1.3 SD ORGANIZATIONAL STRUCTURES IN R/3.............................................................................6
2 CREATE A BASIC ORDER IN R/3........................................................................................7
2.1 ORDER TYPES.............................................................................................................................8
2.2 CHECKING AVAILABLE STOCK.................................................................................................8
2.3 CREATE A SECOND SALES ORDER............................................................................................9
2.4 RE-CHECKING AVAILABLE STOCK.........................................................................................10
3 CREATING DELIVERIES.....................................................................................................11
3.1 PICKING, PACKING, AND POST GOODS ISSUE IN DELIVERIES..............................................13
3.2 CHECKING AVAILABLE STOCK...............................................................................................15
4 PARTNER FUNCTIONS........................................................................................................16
4.1 EXAMINE BUSINESS PARTNERS...............................................................................................16
5 BILLING..................................................................................................................................17
5.1 CREATING A DELIVERY-RELATED BILL................................................................................17
6 APPLYING PAYMENTS.......................................................................................................18
6.1 APPLY A CUSTOMER PAYMENT..............................................................................................18
7 FREE ITEMS...........................................................................................................................20
7.1 INCLUDE A FREE ITEM............................................................................................................20
8 EXAMINING TRANSACTION TYPES IN THE IMG........................................................22
8.1 VIEWING THE ORDER TYPE, OR............................................................................................22
8.2 CHANGING THE BEHAVIOR OF THE STANDARD ORDER........................................................23
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9 CASH SALES AND RUSH ORDERS...................................................................................24
9.1 CREATE A CASH SALE ............................................................................................................24
9.2 BILLING FOR A CASH SALE.....................................................................................................25
9.3 RUSH ORDERS..........................................................................................................................26
9.4 CREATE A RUSH ORDER..........................................................................................................26
9.5 BILLING A RUSH ORDER.........................................................................................................27
10 INQUIRIES AND QUOTATIONS.......................................................................................29
10.1 CREATING AN INQUIRY..........................................................................................................29
10.2 CREATE AN ORDER REFERENCING THE INQUIRY...............................................................30
10.3 PARTIALLY REFERENCE A SECOND INQUIRY .....................................................................31
10.4 CREATING A QUOTATION......................................................................................................32
10.5 CREATE AN ORDER REFERENCING THE QUOTATION..........................................................33
10.6 PARTIALLY REFERENCE A SECOND QUOTATION ...............................................................34
11 PACKING IN DELIVERIES................................................................................................36
12 DELIVERY DUE LISTS.......................................................................................................37
13 QUANTITY CONTRACTS AND SCHEDULING AGREEMENTS................................40
13.1 WHAT ARE QUANTITY CONTRACTS.....................................................................................40
13.2 CREATE A QUANTITY CONTRACT.........................................................................................40
13.3 WHAT ARE SCHEDULING AGREEMENTS...............................................................................43
13.4 CREATE A SCHEDULING AGREEMENT..................................................................................43
13.5 TESTING THE SCHEDULING AGREEMENT.............................................................................46
14 PRICING................................................................................................................................47
14.1 PRICING PROCEDURE.............................................................................................................47
14.2 CONDITION TYPES.................................................................................................................48
14.3 CONDITION TYPES AS DEFINED IN THE IMG......................................................................49
14.4 ACCESS SEQUENCES AND CONDITION TABLES ...................................................................50
14.5 HOW PRICING PROCEDURES ARE USED IN ORDERS ...........................................................52
15 CUSTOMER COMPLAINTS: RETURNS AND CREDIT MEMOS................................54
15.1 RETURNS.................................................................................................................................54
15.2 RETURN DELIVERY................................................................................................................55
15.3 CREDIT MEMOS.......................................................................................................................57
15.4 BILLING .................................................................................................................................59
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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.
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• 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.
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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.
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2 CREATE A BASIC ORDER IN R/3
The path is:
LogisticsSales and Distribution  SalesOrderCreate
(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.
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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:
LogisticsMaterials ManagementInventory
ManagementEnvironmentStockStock 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?
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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.
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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:
LogisticsMaterials ManagementInventory Management 
Environment  StockStock 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?
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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:
LogisticsSales and Distribution Shipping and Transportation 
OutBound DeliveryCreate  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:
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Re-examine the order using the following path:
LogisticsSales and Distribution  SalesOrderChange
5. Go to the document flow for the order: EnvironmentDocument 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.
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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 DeliveryChange
• 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?
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• 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.
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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:
LogisticsMaterials ManagementInventory Management 
Environment  StockStock Overview
Field Value
Material R-1150
Plant 30GG
• How much stock is now scheduled for delivery?
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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:
LogisticsSales and Distribution OrdersChange 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.
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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.}
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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.
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• 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.
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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
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• 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.
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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.
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• 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.
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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
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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 DeliveryChange
• Go to <OverviewPicking> 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:
Create.
• Change the delivery number to the order number for order-related billing.
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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.
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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:
LogisticsSales and Distribution ShippingDeliveriesChange
Delivery
• Go to <OverviewPicking> 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:
Create.
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• Change the delivery number to the order number for order-related billing.
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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
LogisticsSales and Distribution  SalesInquiryCreate
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
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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
LogisticsSales and Distribution  SalesOrderCreate with Reference
toInquiry
• 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.}
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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:
toInquiry
• 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#.
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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:
toInquiry
• 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:
LogisticsSales and Distribution  SalesQuotationCreate
Field Value
Inquiry Type QT
Division 00
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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:
toQuotation
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• 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:
toQuotation
34

• 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:
toQuotation
• 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.
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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:
• LogisticsSales and Distribution Shipping and Transportation 
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 Value
Shipping 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?
36

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
37

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
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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 EditDeselect 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.}
39

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
40

• 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:
41

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.
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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
43

• 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
44

• 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.
45

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.
46

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:
47

SAP 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.
48

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 ItemPricing 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:
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.
49

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
50

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  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.
51

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:
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Tools AcceleratedSAP  Customizing  Project Management  SAP
Reference IMG  Sales and Distribution Basic Functions  Pricing 
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.
53

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 Value
Order 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
54

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
55

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:
Create.
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:
56

This takes you to the <Post Incoming Payments: Header Data> screen and
form.
Enter the following data:
Field Value
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.
57

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 Value
Order 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.
58

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:
Create.
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:
This takes you to the <Post Incoming Payments: Header Data> screen and
form.
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Enter the following data:
Field Value
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.
60

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