Selling to Customers - Sales Order

The sales order process shown in the figure above, General Sales Order process with DC fulfillment, shows the standard sales order process with merchandise shipping from a distribution center. The shipping process is started with generating an outbound delivery for the sales order. Then, after picking and goods issue posting, the invoice (billing document) can be created. It is also possible to have the merchandise shipped from the vendor to the customer directly. This third-party sales order process will be explained later.

There are many channels for placing sales orders. For example, customers transmit their orders by mail, fax, or telephone, they enter their order data online via the e-commerce system's (for example, from SAP Commerce Cloud) website or mobile app, or you can have the system upload the order data automatically using an EDI connection. Sales orders can also be maintained at stores using SAP Fiori applications.

Depending on the Customizing settings that have been made, when a sales order is created, your system executes functions like the following:

• Scheduling

  Various shipping activities are scheduled depending on the sales order document type.

• Availability check

  Depending on the schedule line category, the system checks availability on the staging date, which was determined beforehand by the scheduling function. If staging cannot be guaranteed, the system automatically generates new schedule lines.

• Item/schedule line category determination

  Your system determines an item category for each order item and a schedule line category for each schedule line for an order item.

• Quantity optimizing (at item or schedule line level)

  Quantity optimizing takes place at item level (or schedule line level when you are creating schedule lines manually) depending on the item category. The original quantity is retained and included in the documents belonging to the relevant sales order.

The sales order is the central document for selling merchandise (or services) to customers.

A sales order consists of a header and one or more items. The items can be broken down into schedule lines to enable partial deliveries. If the quantity of a sales order item is to be delivered in full, there is only one schedule line for the item.

Organizationally, each sales order is assigned to a sales organization, a delivery channel, and a division.

Customizing settings for the Sales Order document can be controlled by its associated sales order document type.

Depending on the item category in the sales order, the ordered goods will either be delivered from a site (item category TAN), or shipped from the vendor to the customer directly (item category TAS). This is often the case, for example, for custom-made or bulky merchandise.

A sales order can contain items that belong to different item categories.

Cross-channel sales scenarios can also be mapped in the system. For example, a customer may create a sales order in the Retailer's online shop, and instead of regular delivery from a DC, select merchandise pick up in a specific store (click-and-collect). Another example: In a store, a sales order could be created using a SAP Fiori app for either pick up in own store, or for pick-up in another store, or for delivery from a DC.

In the following, both the stock reduction process, and the third-party process will be introduced. At the end of the lesson, the click-and-collect process will be introduced.

Sales Order with Stock Reduction

To introduce the sales order process with the TAN item category, we will use the process variant sales order with stock reduction. Regularly, sales orders are processed in fulfillment centers (mainly distribution centers). This means that deliveries are generated for processing in the warehouse, where the merchandise is to be picked, packed, and shipped from the warehouse. Then, the customer invoices can be generated. In our example, a customer is in a home improvement (DIY) store and wants to buy an aluminum ladder. This item is not sold over the counter, but can be picked up from a separate issue counter. In this example, the sales order will be created, delivered, and billed by store associates using SAP Fiori applications. To make sales order processing as simple as possible, you can set up the system to automatically create the outbound delivery document for the sales order item. The store associate at the issue counter collects the merchandise and posts goods issue. Then, the invoice can be created.

In general, with item category TAN, the sales order item is relevant for delivery generation, which means the goods are picked and shipped from either a DC or a store. When the outbound delivery was processed including the goods issue posting, then the billing due list for delivery-related billing is updated. With that, the invoice can be created.

The documents in the sales and distribution process are connected by the document flow. This allows you to display the history and the status of your order in the sales and distribution process.

You can display the document flow as a list of interconnected documents. The sales order document flow shows the documents created referencing the order. The other documents also have a document flow display function, for example the outbound delivery, where you can see the sales order as a preceding document, as well as the subsequent documents, such as a picking request, and the goods issue material document.

From this list, you can display the relevant documents and status overview for the documents in question. This provides you with a quick overview of the status of your sales processes, thereby helping you to answer customer questions quickly and efficiently.

The sales order function is fully integrated in SAP Fiori. The SAP S/4HANA function Sales Order Create (transaction code: VA01) is available in your SAP Fiori business catalog for this training, and it is called Create Sales Order for Retail. It will be used to create the stock reduction -, the third-party -, and the click-and-collect sales orders. The Manage Sales Orders app, which will be introduced next, is also included in your SAP Fiori business catalog.

The SAP Fiori app Manage Sales Orders provides a comprehensive search function for sales orders. For each sales order, several options are available. For example, by clicking on the sales order number, you can choose to change the document, track the status, and so on. As shown in the figure SAP Fiori App: Manage Sales Orders, you can display the status by clicking on the Overall Status link. This view provides further functions For example, by clicking on the Outbound Delivery box, you can choose to change the document, or perform various subsequent processing steps, such as generate the picking document, or post goods issue.

Billing

Invoices can be created in SAP Retail in the following two ways:

Create an individual billing document for a specific sales order or delivery for which you want to create an invoice. Select several reference documents for which invoices are to be created from the billing due list. The documents can be selected according to various criteria, such as the ordering party and the destination country.

If an outbound delivery was created with reference to the sales order to ship the merchandise from a retail site (DC or store) to the customer, delivery-related billing is used. This means for creating the invoice, the system uses the conditions of the sales order, and the goods issue quantity of the outbound delivery to determine the invoice amount. If the invoice for a third-party sales order has to be created, sales-order related billing is used. This means, the system uses both the conditions and the sales order quantity to determine the invoice amount. It is also possible to use a proof-of-delivery (POD), so the invoice can only be created once the customer confirmed the merchandise receipt.

A billing document (for example, an invoice, credit memo, or debit memo) is assigned to a company code and a billing type to control the document. For example, billing types are F1 = invoice, G2 = credit memo, and L2 = debit memo. For more information, see Customizing.

A billing document consists of a header and one or more items.

When a billing document is generated, an accounting document is generated in financial accounting as well. The system determines the relevant accounts (automatic account determination), which are then debited accordingly.

This sales order process variant is about a direct delivery from the vendor to the customer. This scenario is for example used for non-stock items, which are only ordered upon customer request, and which are then directly shipped from the vendor to the customer. The system generates a purchase requisition for the third-party item, which can then be converted to a purchase order. The vendor delivers the merchandise to the customer, we receive the vendor invoice and perform logistics invoice verification, and then we bill the customer.

Item category TAS has been defined for third-party order items (direct delivery). This definition results from a combination of sales document type, item category group, and two further control options in Customizing. The item category group is assigned in the article master.

Additionally, you can assign alternative item categories, which you can then select manually in the sales order item. For example, to switch between the third-party and delivery processes.

With item category TAS, based on customizing settings, a purchase requisition will be created automatically for the sales order item. The purchase requisition has to be converted to a purchase order to the vendor, and the delivery address in the vendor purchase order is the customer's address (direct delivery). The vendor invoice is then created in the system, and lastly the invoice is created for the customer (billing document).

It is also possible to use the proof-of-delivery (POD) function in sales orders, which means that the customer invoice will only be created after the POD confirmation is sent, for example via EDI message (IDoc).

The previous figure, Document Flow in the Sales Order (TAS), shows the document flow for a sales order item with item category TAS. It displays the documents created referencing the sales order. For the other documents, it is possible to display their preceding and subsequent documents. For example, in the purchase order, the purchase requisition number (which was created automatically for the third-party sales order item) appears in the item table, as well as in the item details, on the Delivery Schedule tab. The vendor invoice is available in the purchase order history view of the item details.

The previous figure, Manage Sales Orders - TAS, displays a sales order with item category TAS with the overall status Completed.

Purchase orders are generated from purchase requisitions for third-party order processing.

When a purchase order is created, the system automatically copies the recipient's address from the relevant sales order and uses it as the delivery address for the purchase order. You can create a purchase order text for every third-party item in the sales order. The texts are automatically copied to the purchase order when it is created.

The purchase order number that is generated appears in the sales order document flow. You can then access the purchase order from here.

Changes that are made to the quantities and delivery dates in the purchase order, are automatically copied into the sales order. This type of change is necessary, for example, when the vendor confirms different delivery dates and quantities for the purchase order.

The Click-and-Collect, or Online Order Fulfillment process, allows customers to order products online and pick them up in a predetermined location, for example their nearby store. For such a store pickup order in SAP Retail, automatically also a store picking request is generated.

Store picking requests represent a picking container, such as a bag or a box, which is used by store associates to pick the products and place them in the handover shelf. It is possible to set weight and volume limits for the creation of store picking requests. The store manager may use the Maintain Picking Sequence app to predefine the picking sequence based on merchandise categories, or article hierarchy nodes.

For the store associate, the click-and-collect process starts with the app Process Picking Requests. The data in this app is automatically updated once a store pickup order was created. It allows the employee to pick the items, and place them to the handover shelf. The next app, Hand Over Orders, provides an efficient way to identify and verify the right products for the customer for handover.

In the 2021 system release, the click-and-collect process is rather a click-and-reserve process, as with the handover of the ordered items, the sales order items are rejected. This scenario is for example relevant in fashion retailing, when customers order a selection of items online, which they then want to try on in the store. There, they will for example only buy those items that fit, at the regular checkout (POS). With system release 2022, it is possible to decide if this click-and-reserve process should be implemented, that is with the sales order being rejected, or if the store pickup orders actually remain active. They can then of course also be paid for already online, so that the customer only has to pick up the items, and can then leave the store again right away. This click-and-collect scenario is for example specifically useful in food retailing.