SAP SD business process

In the previous article we have explained about the relationship between SAP SD module with SAP FICO, MM, PP, and WM modules.In this article we will explain more about the general business processes covered by SD and other related modules, which are:
  • Pre-sales activities
    When a client (existing customer or new customer) asks or requests information (can be through a phone call, an email, or a Request For Quotation (RFQ) document) about the products or services he needs, the sales personnel can input that request into SAP SD module by creating an Inquiry document.In SD module, an Inquiry is an internal document that records the information about request from prospective customer for internal use only. In an inquiry, we record some information such as: which customer that request information, what products or services customer needs, how many products or services customer needs, etc. By creating inquiry, we can reduce the sales opportunity lost, especially when we need some extra time or procedures before we can reply the customer request.If we can immediately reply the customer request (if we have a standard products or services that the price and other condition are fixed), we don’t need the inquiry document, we can just create a Quotation document to reply the customer’s request.
    But if we can’t, we should create an Inquiry document, so when we have determined the price and other condition to be offered to the customer, we can create a Quotation document that refers to the inquiry document.
    We can create Inquiry with “VA11” t-code.

    In SD module, a Quotation is a document that legally attached for us who issued it, that contains information about the offering to the customer, such as: which customer that been offered, what and how many products or services that been offered to the customer, how much the price of the products or services, when the delivery date of the products or services, how the term of payment that been offered to the customer, the validity date of the offering, etc. A Quotation can be created by referring to the Inquiry document (if any) or not, depends on the business scenario defined.
    We can create Quotation with “VA21” t-code.

    From the above explanation, it is clear what the differences between Inquiry and Quotation in SD module are.
    Both of them are SD document in pre-sales activities.

  • Sales Order processing
    After we send the quotation to the customers, they will do their own purchasing procedure to determine from where they will purchase the products or services. If needed, they may negotiate with us about our quotation in terms of price, terms of payment, delivery date, or something else. We may send an updated quotation based on the negotiation. If they decide to purchase the material or service from us, they will send us a Purchase Order (PO). Then we create a Sales Order (SO) that refers to the Quotation sent to the customers before. We can put the customer’s PO number in our SO.
    Depends on business scenario and configuration, in SAP R/3 system we can also create an SO without referring to a Quotation. For example if we have a products or services catalog that can be used by customers as reference for their PO.An SO must contain the information of:
    • Customer
    • Materials or services sold to the customer
    • Quantity of materials or services
    • Pricing condition of materials or services
    • Delivery dates
    • Shipping processing, such as the incoterms, etc.
    • Billing processing, such as terms of payment, etc.

    We can create Sales Order with “VA01” t-code.

  • Inventory Sourcing
    To fulfill the products requirement from an SO at the required date, we can obtain them by one of these options:

    • Taking from Available stock at warehouse, if needed triggering a stock transfer between warehouses.
    • Triggering a production order to produce the products in-house.
    • Triggering a purchasing order to purchase the products from vendor (in case of third-party business transaction).

    There is no sales document in these activities. They are done on other modules such as Production Planning (PP) and Material Management (MM).

  • Shipping
    Once the products are available at warehouse, the sales personnel can start shipping activities by creating an outbound delivery document (Delivery Order/DO). A DO can be created by referring to an SO. A DO will trigger warehouse personnel to prepare the products.
    We can create Delivery Order with “VL01N” t-code.If we use Warehouse Management (WM) module, a DO can trigger a Transfer Order.
    When the products are ready to be sent, the warehouse personnel posts the Goods Issue (GI) transaction that refers to the DO. The GI transaction will reduce the inventory level of products.
    We can post the Goods Issue that refers to a DO with “VL02N” t-code.
    Then the warehouse personnel sends the products to the customer by transportation mode that has been determined in SO document.
  • Billing
    The customer will receive the products at the delivery date promised in SO document.
    The finance department will generate a billing document and send an invoice form to the customer. The invoice will request the customer to pay the products we have sent at the price condition and terms of payment we have agreed in SO document.
    We can create Billing document with “VF01” t-code.

12 thoughts on “SAP SD business process

  1. I am looking at scenario where I want to do drop shipment to customer. The scenario is …

    1. Customer places order inquiry with us
    2. Sales order is created for the customer order
    3. Inventory is checked and found that they need to purchase from parent company (This company is setup in SAP as different company code in the same client)
    4. Purchase order is raised for parent company (Which is referred to as internal vendor)
    5. We want to trigger this PO as SO to parent company

    Do you have any idea on how to do that?

    Thanks for any suggestion.


  2. Hi Subhendra

    This situation is of a STO ( intercompany stock)
    Now in this there are few requistes to be carried
    Now once the customer palces the order with you you in turn need to place the order with the parent compnay let us assure that that is palnt .These are the settign you need to carry
    Frist secenario
    In the enterprise structure you will have Sales are associated to PALNT A& PALNT B
    In the shipping condtion you will have delivery palnt at palnt b i.e . shipping point ; loading group + palnt B
    Now in the materila master you will have delivery section as Plant B i sales area of mm
    The condtiion table will be having pio1 or pgo1( Plant b- plant A ) as one section and the other section as PR00 ( From you to customer) and PRICING Proccedurte will be icaoo1and RVA001
    then create sales order in vao1 and do delivery with order( Nl or NLCC) fallowed with PGI
    The order type will be or and inteAm category will be tan but you wiL H have schdule lines as NN & NC and movement types will be 301; 311 ; 303; 315
    Once you ar done with Pgi do billing with IV ( INTERCOMPANY BILLOING )
    Once you are done with it carry out the normal sales order too

    In such case the system will take only thoses values that you will biull to custoemr for account purpose as mandotary and otehr will be staticatical one

    For any otehr query please mail me at

  3. Respected sir,
    Recently i have joined SD module,i have exp in pharma marketing for 7+yrs is it suitable for me to do?
    can i get jobs?

Leave a Reply to anil Cancel reply

Your email address will not be published. Required fields are marked *