Identifying Organizational Units in SAP S/4HANA Sales

Objective

After completing this lesson, you will be able to identify the organizational units in SAP S/4HANA Sales

Identify the Organizational Units in SAP S/4HANA Sales

All the business processes that you manage with SAP S/4HANA are based on the structure of an enterprise organization. In SAP S/4HANA, the structure of an enterprise organization is represented in organizational units. They correspond to the legal and/or organizational units of an enterprise (for example, accounting, purchasing, production, and warehousing). In this course, we focus on the order-to-cash process that is part of the Sales and Distribution (SD) application.

Watch the video to get an overview of the organizational units in SAP S/4HANA Sales.

Definition of Organizational Units in SAP S/4HANA Sales

The table below provides a condensed summary of the relevant organizational units in SAP S/4HANA Sales and what they represent.

Organizational UnitDescriptionExample
Company Code
  • Smallest and central organizational element of SAP S/4HANA Finance
  • Legal entity and independent accounting unit
  • For producing statutory financial statements such as balance sheet profit and loss statement
Germany, France, USA
Sales Organization
  • Central organizational element of Sales and Distribution
  • Responsible for distributing goods and services, negotiating sales conditions, and product liability and rights of recourse
Sales Org Germany, Sales Org North / South
Distribution Channel
  • A means through which sales materials reach the customer
  • Represents your strategies to distribute goods and/or services to your customers
Direct Sales; Wholesale Trade
Division
  • Represents a product line or group
  • Groups materials and services
Motor Cycles and Bikes, Spare Parts, Services, Cross Division
Sales Area
  • Combination of one sales organization, one distribution channel, and one division
  • With the help of the sales area you control the authorizations within sales as to who can sell, how and what
Combination: 1010 Sales Org Germany / 10 Direct Sales / 00 Cross Division
Distribution Chain
  • The combination of sales organization and distribution channel
Combination: 1010 Sales Org Germany / 10 Direct Sales
Plant
  • Central organizational unit in the context of production planning
  • Can manufacture products, distribute products, or provide a service
Hamburg, Dresden, Philadelphia
Shipping Point
  • Highest-level organizational unit of shipping that controls your shipping activities
  • Each outbound delivery is processed by exactly one shipping point
Vehicle Loading Ramp, Mail Depot, Rail Depot

How to Use Organizational Units in SAP S/4HANA Sales: System Demonstration

In the following system demo, you see an example of organizational assignments in the SAP system. The system set-up team has already configured the sales areas. It has been determined who is allowed to sell what and how. Identify what the allowed sales area combinations are.

DemoStart Demo

Note

If you have access to the SAP practice system, go to the practice system now and do the exercises Recap on Organizational Units in SAP S/4HANA Sales and Get to Know the Organizational Structure in the SAP Training System.

Summary for the System Set-up Team

As outlined, the entire process can only work with a proper system setup. The note below highlights the key points.

Note

  1. Sales employees are authorized to maintain data for one or several sales areas.
  2. A sales area consists of one sales organization, one distribution channel, and one division.
  3. At least one sales organization must be defined in the system.
  4. 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.
  5. Distribution channels have to be assigned to at least one sales organization (multiple assignments are possible).
  6. At least one division must be defined in the system. Several divisions can be assigned to a sales organization.

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