SAP Sales and Distribution (SAP SD) is a key module of the SAP ERP system, designed to manage the selling, shipping, billing, and transportation of products and services within an organization. The module focuses on managing customer relationships, covering processes from raising a quotation to creating sales orders and generating invoices.
Key Components of SAP SD
The main components of SAP SD that help streamline sales and distribution processes include:
🔹 Customer and Vendor Master Data – Centralized information about customers and vendors.
🔹 Sales Support – Handles inquiries, quotations, and pre-sales activities.
🔹 Sales Activities – Manages sales orders and related processes.
🔹 Shipping of Material – Oversees deliveries and transportation of goods.
🔹 Billing – Manages invoice creation and payment processing.
🔹 Credit Management – Monitors customer credit limits and risks.
🔹 Contract Handling and Management – Manages sales contracts and agreements.
🔹 Foreign Trade – Handles international sales and compliance.
🔹 Information System – Provides reports and analytics on sales performance.
SAP SD ensures seamless execution of all sales-related processes, making it easier for organizations to manage orders, deliveries, and customer interactions efficiently.
SAP SD Organizational Structure
At the top of the organizational structure in the SAP SD module, the Sales Organization is at the highest level and is responsible for the distribution of goods and services. SAP recommends keeping the number of sales organizations in an organizational structure to a minimum. This helps make reporting easier, and ideally, there should be a single Sales Organization.
The next level is the Distribution Channel, which defines the medium through which products and services are distributed to end users.
The Division represents a product or service line within a single organization.
A Sales Area is an entity required to process an order in a company. It comprises a Sales Organization, Distribution Channel, and Division.
In the SAP SD organizational structure, each Sales Organization is assigned to a Company Code. The Distribution Channel and Divisions are then assigned to the Sales Organization, forming the complete Sales Area.
In the first step of the SD organizational structure, a Sales Organization is assigned to a Company Code, followed by defining a Distribution Channel, and then assigning Divisions to the Sales Organization.
Step-by-step hierarchy:
- Sales Organization – Assigned to a Company Code; responsible for sales and distribution.
- Distribution Channel – Defines how products/services reach customers.
- Division – Represents a product or service line.
- Sales Area – Combination of Sales Organization, Distribution Channel, and Division to process orders.
Conclusion
SAP SD (Sales and Distribution) is an essential module for managing end-to-end sales processes. From quotations and sales orders to deliveries and billing, it helps organizations maintain smooth operations, efficient customer management, and timely order fulfillment.
Mastering SAP SD equips professionals with the skills to handle complex sales processes digitally, making it a valuable asset for SAP careers.
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