Identify the Enterprise Structure in SAP S/4HANA Sales

Objectives
After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

  • Identify the enterprise structure in SAP S/4HANA Sales

Enterprise Structure in Sales and Distribution – Overview

Organizational units in the SAP system represent the structure of a company. In other words, they correspond to the legal and/or organizational units of an enterprise. SAP provides organizational units for all areas of your company (such as accounting, purchasing, production, and warehousing). In this unit, we focus on the elements that are relevant for sales and distribution processes.

The organizational units of the enterprise structure are used as the basis for authorization within an SAP system.

Organizational Unit: Sales Area

The most important organizational unit in sales is the so called sales area.

With the help of the sales area you control the authorizations within sales as who can sell, how and what. In sales, the who is represented by the sales organization, the how is defined by the distribution channel, and the what is defined by the division which represent the products or services you are allowed sell.

For some examples of sales areas, start the video.

Sales employees are assigned to sales areas or, even better, are authorized to maintain data for one or several sales areas.

A sales area can belong to only one company code which guarantees the integration to Finance. This relationship is realized by assigning the corresponding sales organization to the relevant company code. At least one sales area must be defined in the system to execute sales and distribution processes.

When processing sales and distribution documents, the system accesses various master data depending on the sales area. This master data includes customer master data, material master data, and pricing information. The system also performs a number of validity checks on certain entries based on the sales area.

Note

If you want a deep dive on the organizational units needed and how they are defined, please continue with the next videos of this unit. Here you learn more on company code, sales organization, distribution channel, and division.

Hint

Even without knowing all the details, you can continue with next unit Navigating the Order-to-Cash Process in SAP S/4HANA Sales.

The choice is yours.

Organizational Unit: Company Code

A company code can, for example, represent a company within a corporate group, or a subsidiary. The company code is relevant for sales and distribution processes because the revenues of the sales department have to be assigned to the company code.

Organizational Unit: Sales Organization

To use the sales and distribution functions in the system, you need at least one sales organization. In sales statistics, the sales organization is the highest summation level. All sales and distribution documents, including orders, outbound deliveries, and billing documents, are assigned to a sales organization.

Note
At least one sales organization must be defined in the system and each sales organization must be uniquely assigned to a company code. However, more than one sales organization can be assigned to a single company code.

Organizational Unit: Distribution Channel

The distribution channel characterizes the way in which goods and services are distributed.

Distribution channels have to be assigned to at least one sales organization (multiple assignments are possible). To use the sales and distribution functions, you must define at least one distribution channel in the system.

You can use different distribution channels to do the following:

  • Define responsibilities

  • Carry out flexible price structuring

  • Differentiate sales statistics

Organizational Unit: Division

With the help of the division as organizational unit, you can group materials and services.

A division can represent a certain product group. Therefore, you can restrict price agreements with a customer to a particular division. You can also perform statistical analysis by division.

One reason to use divisions within the sales structure could be that some people in your sales department are very familiar with a certain product group (for example, tools for metal processing), while others have technical knowledge about a different product group (for example, tools for polymer processing). When setting up your sales structure, you can use the corresponding divisions to reflect this.

Now you know the organizational units that are relevant for sales and distribution processes. To see how this concept is implemented in the sales processes, please continue with next unit.

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