What is SAP Sales and Distribution (SD) Module?
Last updated on 05th Oct 2020, Artciles, Blog
What is SAP SD- Sales and Distribution Module
SAP ERP (Enterprise Resource Planning) system consists of a number of modules. Each of the modules covers a certain business area of a company that uses SAP. These modules include Finance Accounting, Controlling, Production Planning, Materials Management, Business Intelligence, Human Resources, etc.
SAP SD (Sales and Distribution) is one of the worth noting modules of SAP ERP. It encloses all the information regarding customer and services. In an organization, it deals with shipping, selling and transportation of goods and services.
SAP SD is specially designed to facilitate the following business processes in an enterprise:
- Customer Master and Material Master data
- Sales Orders
- Credit Management
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SAP ERP Sales and Distribution is a component of the logistics module and it assists the customers in issues related to the quotations, sales order and billing. It is in collaboration with the MM and PP modules. It enables organizations to update their sales price, and observe open orders and other forecast.
SAP SD Modules
Sales & Distribution (SD) is one of the prominent modules of SAP R/3 services. This module comprises of several constituents called sub-modules. These include:
SAP-SD-MD (Master Data): SAP SD user has a master data that tracks each and every transaction within the data. The SD master data comprises of both customer and material data, record of price conditions, and credit management. This module includes processes of order and cash.
SAP-SD-BF (Basic Functions): SAP SD configuration results in an effective process across all basic functions involved in sales and distribution area. Here, examples of the basic functions can be pricing, output, etc. The amount of pricing used for a particular sale and the output result from the same and so on.
SAP-SD-SLS (Sales): As the term suggests, SAP SD sales handle the minute details of every sale that is taking place. From recording the product to customer details, pricing, feedback and the sales process, everything is tracked through this module.
SAP-SD-SHP (Shipping): Sales are closely related to shipping and delivery. A Product needs to be rightly shipped and delivered to the customer. There are different methods of shipping and this module tracks each product used for each delivery. The entire process from being shipped to delivered or return back is recorded through this module.
SAP-SD-TBA (Transportation): This component works hand in hand with the shipping. The mode of transportation for each product differs and this module keeps track of all the transportation data.
SAP-SD-FTT (Foreign Trade): This component helps a department to handle the data related to foreign trade including both imported and exported products. This module works best for enterprises involved with trade across nations.
SAP-SD-BIL (Billing): Billing is the key part in any transaction. Consumers prevail the choice of either paying through online media or else through cash on delivery. This particular module keeps track of all the billing data in an appropriate manner.
SAP-SD-CAS (Sales Support): From selling a product to maintaining it for a process, customers constantly interact with the sales team. The data exchanged between the sales team and customers while delivering support for a product is recorded and reported through this module.
These are some of the multiple components involved in SAP SD user for effective process work within sales and distribution area.
Below are some of the key areas covered by the above modules:
- Pre-sales actions, comprising of Inquiry and Quotation creation.
- Sales Order processing, viz. Sales Order (SO) creation.
- Shipping, including Outbound Delivery document creation.
- Billing, which takes into count both Billing document and invoice creation.
The characteristics of SD include:
- Implements business processes used in selling, and billing of goods and services.
- Integrates data flow to the remaining modules of SAP.
- Multilingual/Multicurrency: Several languages can be used. Conversion between currencies is automatic and connecting to SAP’s real-time currency rate database in Germany enables operational use.
- Adaptable functionality. R/3 customizes the product through the IMG function.
- Pricing Flexibility. In SD, you can create complex pricing schemes that are dependent on customers, goods sold, special promotions, etc. Rebate processing options are also very sophisticated and comprehensive.
- Simple Order Entry. The user enters basic order details all on one window. From this window, there is simple access to all the levels of the order, namely header, item, and schedule line information.
- Comprehensive Reporting. The Sales Information System (SIS) allows data to be stored, consolidated, and reported upon by the user in a variety of formats.
- Effective Batch Processing of Orders, shipments, and other sales documents based on order types, customer, or material.
The SD module is used in almost all industries that have a sales division. It is widely used in industries worldwide to maintain and categorize customer information, material information, inquiry and quotation management, contracts and schedule agreements, sales processes, delivery and shipment creation, and credit management.
It covers all aspects of Sales, Orders, and Distribution Processing, helping businesses maximize profits and bringing positive sales figure improvements. This SAP module assists in the execution, implementation, and customization of the main sales and delivery processing business procedures.
In addition, SAP SD also performs other sales management practices such as product promotion, publicity, advertisement, pricing, etc. The SAP SD is highly useful for streamlining the distribution of orders, packing, billing, order processing, risk management, and shipment of goods.
Sales and Distribution Data Types
In all businesses and industries, data plays an important role in performing transactions and predicting the forecast. This applies to all modules in SAP ERP ranging from SD, MM, PM, PP, FI to CO. In SAP all data transactions are categorized into two sections:
- Master data
- Transactional data
Like all other SAP modules, the SAP SD module also revolves around master data and transactional data. Master data in the SD module includes materials, prices, and consumer data. The master data is used in SAP ECC to create transactional data such as sales order, maintenance record, purchase order, or production order which are part of SD, PM, MM or PP modules respectively.
Customization of data is created when an entity customizes SD to suit its unique needs. The master data includes vendor-customer master data, material master data, and pricing master data. The SAP SD end-user uses master data and each transaction within the data is monitored. The entire order-to-cash process flow is being recorded in this module.
Sub-Modules of SD
The SAP Sales and Distribution (SD) is one of the most important modules among all other modules in SAP. The SD module comprises of many sub-modules and few noteworthy ones are listed below:
- Master Data
- Sales Support
- Foreign Trade
The end-user has master data tracks every transaction within the data. The SD master data comprises of both customer and material data, a record of price conditions, and credit management. This module includes processes of order and cash.
From recording the product to customer details, pricing, feedback, and the sales process, everything is tracked through this module.
Sales are closely linked to distribution and shipping. A product needs to be shipped and delivered correctly to the customer. This module documents the entire process from shipment to delivery or return.
The SAP SD module works closely with the shipping module. A product can be either delivered by courier or manually. The mode of transportation for each is different and will be monitored via this module.
Customers interact constantly with the sales team from the sale of a product to the maintenance of it. The data exchanged between the sales team and customers is collected and documented in this module when providing product support.
The billing is a major part of sales. Customers can pay by debit or credit card online, by cash on delivery or by using pay pal account, etc.
This component helps a department to handle the data related to foreign trade including both imported products and products exported outside.
Why SAP SD? – The Present & the Future
The SAP Sales and Distribution module is advantageous in many ways. It offers Flexibility in sales order pricing, managing customer accounts, applying sales policies, integrating data flow in other SAP modules, ensuring effective orders, shipments, and other sales documents batch processing, implementing business processes in selling and billing of products, and much more.
SAP SD helps all the industries across the verticals to streamline their business processes. With the introduction of SAP S/4HANA with a high-performance HANA database, SAP has increased the efficiency of ERP and enhanced the functionality of Sales and Distribution subcomponents.
This greatly helped SD consumers to leverage the SAP S/4HANA product either on-premise or cloud for doing business transactions. The SAP SD is for the present and the future. With the advancements of technology and innovation, SAP SD has changed the way customer perform business transactions and the demand for SAP SD professionals is increasing tremendously.
More businesses and different industry sectors around the world are moving towards the incorporation of SAP modules into their systems. With Michael Management’s SD courses, you can gain exposure to Sales and Distribution through our specialized SAP training programs. You will also gain unprecedented access to SAP systems and learn in-depth SAP skills. We focus on providing aspirants with a deep understanding of SAP configuration and implementation to maximize the potential of SAP modules.
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