From a process view, the first step in the MTO process for The Bike Company is to create a sales quotation for the customer. Creating sales quotations is part of the pre-sales activities in a company.
The creation of a sales quotation is triggered by a customer inquiry. For example, whether you can deliver a certain product, how much it will cost, or whether the product will be available for a certain date. The sales quotation, in turn, is the response to a sales inquiry and represents an offer to the customer for the supply of goods or the provision of services under specific fixed conditions. This offer is legally binding for the company within a specified time period and provides information for the customer to make purchasing decisions.
The relevant information that needs to be maintained when creating a sales quotation includes:
Partners
Validity of the Quotation
Material (Product)
Material Quantity
Delivery Date
Price
This information is maintained in the sales quotation’s header and items.
Sales Document Structure and Main Elements
Sales quotations, as well as sales orders, are sales documents. Each sales document is made up of a document header and any number of items. Header data is valid for the entire document, whereas item data is only valid for one item.
Additionally, header data often acts as a template. That is, you only enter specific data (such as the requested delivery date or the incoterms) once in the header. When you create a sales document item, this data is used by default.
The header stores general data, such as:
- Validity of the Sales Quotation
- Partners
- Payment Terms
- Price Elements
- Requested Delivery Date
Partners are business parties that are relevant to your sales process or your specific sales document. They can have various functions depending on the role they play in the process.
If your customer wants you, for example, to deliver goods to an address that differs from the one for the sold-to party, you need two partner functions: a sold-to party and a ship-to party.
Payment Terms specify when the customer needs to pay and defines any discounts available for early payment.
Payment terms are derived from the business partner master record.
Price Elements are used to calculate prices (for external use, such as for customers) and costs (for internal purposes, such as cost accounting).
Price elements are either price conditions or subtotals. Price conditions (with a specified condition type) represent a set of circumstances that apply when a price is calculated. Subtotals sum up condition types that, for example, belong to the same category (such as all surcharges).
When you create a sales document, the header price elements are determined automatically based on the pricing procedure that has been determined for the sales document. This is influenced by the settings you made in the implementation activities of your system. You can also create additional price conditions and change or delete any manually created header price conditions.
Price conditions in the header include the following:
Automatically determined price conditions that are accumulated from the items
Manually created price conditions that are accumulated from the items
Manually created header price conditions
These price conditions are valid for multiple items by default (that is, they are distributed to the relevant items).
The price elements ultimately define how much you bill a specific customer for a specific quantity of a specific material.
Each sales document item contains data that applies to a material specified in the item and is therefore valid only for the specific item. The data can be, for example, the material, its quantity, partners or the item-specific price elements. As already mentioned, when creating an item, a lot of this data is copied from the sales document header. However, you can change this data and make it item-specific (that is, different from the header). An item can have one or several schedule lines (for example, when the ordered quantity is to be delivered in several partial deliveries or at different times).
Note
Schedule lines exist in sales documents that are relevant for delivery (for example, sales orders) or sales documents that are not relevant for delivery, but still need information about product availability and delivery times. Sales quotations do not have schedule lines.
In addition, in a sales document, you can check the status of the document or of a single item. The most important statuses are also displayed at the top of the screen for the sales document or a single item. This makes it easy to see, for example, if a sales document is complete or if you still need to add data, if an item has already been delivered, or if a sales document is blocked for billing.
The Manage Sales Quotations app is used to create a sales quotation.
Summary
The first step in the MTO process is to create a sales quotation for the customer.
A sales quotation represents an offer to the customer for the supply of goods or the provision of services under specific fixed conditions.
A sales quotation is structured so that it contains one or several items, and an item contains one or more schedule lines.
Different information is included on each level of the sales quotation structure. Some of the information must be entered manually and some is derived by the system.
Important information includes, for example, the sales quotation’s validity, partners, payment terms, price elements, delivery date, and material