Discover how determination procedures in SAP SD streamline sales processes by automating item category, schedule line, plant, and pricing determinations for efficient operations.
Introduction
In the SAP Sales and Distribution (SD) module, determination procedures play a crucial role in automating various processes within the sales cycle. These procedures help in defining how different elements such as item categories, schedule lines, and pricing conditions are determined and integrated into sales documents. This comprehensive guide delves into the various Determination Procedures in SAP SD, providing insights into how they function and their significance in streamlining sales operations.
Determination Procedures in SAP SD
| Determination | Description | Table |
| Availability check (OVZ9) | Checking Group (OVZ2) + Checking Rule (OVZ9) | T441V |
| Batch Determination | Define condition table, Batch Determination access sequence, Batch Strategy type , Batch search procedure, Batch search Procedure activation | |
| Business Area determination | Plant/Valuation area or sales area or Item division Plant | |
| Credit Management (OVA8) | Credit Control Area + Credit group + risk category | T691F |
| Item category determination (VOV4) | Sales doc type + Item category group + Item usage + Higher level item category | T184 |
| Output determination (NACE) | Output determination at sales doc level, delivery level, billing level | NAST |
| Plant Determination | CMIR , Customer Master , Material Master | |
| Pricing determination (OVKK) | Sales Area + Customer pricing procedure + Doc pricing procedure | T683V |
| Requirement type determination | Strategy Group in MRP3, MRP Group in MRP 1, MRP + Item Category, Item Category | |
| Revenue Account determination (VKOA) | Chart of accounts + Sales org + Customer account group + Material account group + Account key | C001 |
| Route determination (OVAR) | Departure Country + Departure zone + Shipping condition +Transportation group + Destination Country +Transportation zone | TROLZ |
| Sales Area | Sales Organisation + Division + Distribution channel | TVTA |
| Sales Line | Sales Org + Distribution Channel | TVKOS |
| Schedule line category (VOV5) | Item category + MRP type | TVEPZ |
| Shipping point determination (OVL2) | Shipping condition + Loading group + Plant. (Shipping condition in on VOV8 and XD03) | TVSTZ |
| Storage location -OVL3 (MALA) | Shipping point + Storage condition + Plant | TVKOL |
| Storage Location (MARE) | Situation + Storage condition + Plant | TVKOL |
| Tax Determination – VOTXN | Destination country +Departure country +Tax classification for customer +Tax classification of material. | |
| Warehouse determination | Warehouse Number + Plant + Storage location |
Sales Document Determination
A sales document in SAP SD is uniquely determined by the combination of:
- Sales Organization
- Distribution Channel
- Division
This triad ensures that the sales process is aligned with the specific organizational units, allowing for precise tracking and reporting of sales activities.
Item Category Determination
Item categories define the characteristics and processing of items within a sales document. The determination of the item category is influenced by:
- Sales Document Type
- Item Category Group (from the material master)
- Higher-Level Item Category (for sub-items)
- Usage (specific scenarios like free goods, text items)
Key Point: The correct item category ensures that the system processes the item appropriately, whether it’s a standard item, free-of-charge item, or a third-party item.
Schedule Line Category Determination
Schedule line categories define delivery dates and quantities for items in a sales order. The determination is based on:
- Item Category (e.g., TAN for standard items)
- MRP Type (e.g., PD for planning)
Availability Check
For the system to perform an availability check, the following prerequisites must be met:
- Requirement and Availability must be checked in the Schedule Line Category settings (Transaction
VOV6). - Checking Group must be assigned in the material master (Sales/General Plant View).
- Requirement Class must have the Availability and Requirement indicators set (Transaction
OVZG). - Requirement Type must be determined.
Third-Party Items
In third-party sales, special settings are required:
- Order Type:
NB(generates a purchase requisition upon sales order creation). - Item Category:
5(indicates non-stock item; no inventory accounting is generated during goods receipt). - Account Assignment Category:
1(controls whether inventory accounting documents are generated).
Common Schedule Line Categories:
- CS: Used for third-party items.
- CP: Standard sales orders.
- RE: Returns.
Requirement Type Determination
The Requirement Type is essential for the planning and availability checks. It is determined by:
- Strategy Group (from the material master).
- MRP Group (Material Requirements Planning group).
- Combination of Item Category and MRP Type.
Plant Determination
The plant is determined in the sales document based on the following priority:
- Customer-Material Info Record (CMIR): Maintained via Transaction
VD51. - Customer Master: Plant specified in the shipping data.
- Material Master: Plant specified in the material data.
Shipping Point Determination
The shipping point is a critical element in the delivery process. It is determined using the following parameters (Transaction OVL2):
- Delivery Plant: From plant determination.
- Shipping Condition: Maintained in the customer master (shipping tab).
- Loading Group: Maintained in the material master (Sales/General Plant View).
Note: The shipping condition reflects how the customer wants the goods to be shipped, while the loading group indicates the method of loading based on the material’s handling requirements.
Storage Location Determination
Storage locations are determined in the delivery document based on rules defined in Transaction OVL3. The storage location rule is specified in the delivery document type (Transaction OVLK).
- MALA Rule: Considers Shipping Point, Storage Condition, and Delivery Plant.
- RETA Rule: Considers Situation, Storage Condition, and Delivery Plant.
- MARE Rule: MALA is prioritized; if not applicable, RETA is considered.
Route Determination
Routes are essential for logistics and transportation planning. Route determination (Transaction OVAR) is based on:
- Departure Country
- Departure Zone
- Shipping Condition
- Destination Country
- Transportation Group (from the material master)
- Weight Group
Purpose: Determines the most efficient path for goods to reach the customer, considering transit times and transportation methods.
Revenue Account Determination
Revenue account determination integrates SD with FI, ensuring that financial postings are correctly made during the sales process (Transaction VKOA).
Key Elements:
- Sales Organization
- Chart of Accounts
- Customer Account Assignment Group (from customer master)
- Material Account Assignment Group (from material master)
- Account Key (assigned in pricing procedure)
Process:
- During Goods Issue (PGI): Inventory accounts are credited, and Cost of Goods Sold (COGS) accounts are debited.
- During Invoicing: Customer accounts are debited, and revenue accounts are credited.
Account Keys in Pricing:
- ERL: Sales Revenue
- ERS: Sales Deductions
- ERF: Freight Revenues
- MWS: Output Tax
- ERB: Rebates
- ERU: Accruals
Note: Account keys link pricing conditions to G/L accounts, enabling accurate financial postings.
Credit Management
Credit management controls the credit exposure of customers, integrating SD with FI. It ensures that sales orders are processed within the customer’s credit limits.
Simple Credit Check
- Characteristics:
- Basic check performed during order processing.
- No risk categories or credit groups involved.
- Considers only open receivables.
- Outcome: If the credit limit is exceeded, the system can block the customer at the delivery level.
Automatic Credit Management (Transaction OVA8)
- Characteristics:
- Advanced check with risk categories and credit groups.
- Considers open orders, deliveries, invoices, and receivables.
- Configuration:
- Credit Control Area
- Risk Category
- Credit Group
Credit Groups:
- 01: Check at Sales Order level.
- 02: Check at Delivery level.
- 03: Check at Goods Issue level.
Risk Categories:
- High Risk: Customers blocked at order level.
- Medium Risk: Customers blocked at delivery level.
- Low Risk: Customers blocked at goods issue level.
Credit Control Area Types:
- Centralized Credit Control: One credit control area for multiple company codes.
- Decentralized Credit Control: Separate credit control areas for each company code.
Update Groups in Credit Control Area:
- 12: Updates open orders, deliveries, invoices, and items.
- 15: Updates deliveries, invoices, and items.
- 18: Updates open orders, invoices, and items.
Availability Check and Transfer of Requirements
Availability Check ensures that requested goods are available to fulfill sales orders.
Prerequisites:
- Checking Group: Maintained in the material master (Sales/General Plant View).
- Checking Rule: Determines where the availability check occurs (e.g., sales order, delivery).
Checking Groups:
- 01 (Daily Requirements): Cumulates requirements per day in one line in the stock/requirements list (Transaction
MD04). - 02 (Individual Requirements): Each requirement is listed separately.
Transfer of Requirements (TOR):
- Ensures that sales requirements are passed to Material Requirements Planning (MRP).
Pricing Procedures
Pricing in SAP SD is based on the condition technique, allowing flexibility in determining prices.
Key Components:
- Condition Tables: Define the combination of fields for condition records.
- Access Sequences: Search strategies to find valid condition records.
- Condition Types: Represent pricing elements (e.g., price, discounts, taxes).
- Pricing Procedure: Sequence of condition types defining the calculation steps.
Configuration Steps:
- Create Condition Tables (Transaction
V/03): Select fields and generate tables. - Define Access Sequences (Transaction
V/07): Assign condition tables. - Define Condition Types (Transaction
V/06): Assign access sequences. - Define Pricing Procedure (Transaction
V/08): List condition types and set calculation rules.
Pricing Procedure Determination (Transaction OVKK):
- Based on the combination of:
- Sales Area
- Document Pricing Procedure (from sales document type)
- Customer Pricing Procedure (from customer master)
Common Condition Types:
- PR00: Base Price
- K004: Material Discount
- K007: Customer Discount
- K005: Material/Customer Discount
- MWST: Output Tax
- VPRS: Cost Price
- NRAB: Free Goods
Delivery Scheduling
Delivery scheduling calculates the delivery dates and confirms quantities.
Components:
- Pick/Pack Time: Maintained in the shipping point (Transaction
OVXD). - Loading Time: Also maintained in the shipping point.
- Transportation Lead Time: Maintained in routes (Transaction
OVAV). - Transit Time: Maintained in routes.
- Replenishment Lead Time (RLT): Maintained in the material master (MRP View).
Purpose: Ensures timely delivery by considering all time factors involved in processing and transporting goods.
Background Activities in Sales Order Creation
When a sales order is created, SAP performs several background activities:
- Partner Determination: Assigns partners like sold-to, ship-to, bill-to, and payer.
- Listing/Exclusion: Determines if the material is allowed or excluded for the customer.
- Material Determination: Substitutes materials if required.
- Free Goods Determination: Applies free goods policies.
- Delivery Scheduling: Calculates delivery dates.
- Availability Check: Confirms product availability.
- Pricing: Determines the price based on conditions.
- Credit Management: Checks customer’s credit limit.
- Text Determination: Retrieves texts associated with the order.
- Output Determination: Sets up documents to be sent (e.g., order confirmation).
- Transfer of Requirements: Sends requirements to MRP.
Post Goods Issue (PGI) Activities
During PGI, the system performs the following:
- Inventory Accounting Document Generation:
- Financial Entries: Inventory Account Credit, COGS Account Debit.
- Update Logistics Information System (LIS): For reporting and analysis.
- Credit Management Update: Adjusts credit exposure.
- Billing Due List Update: Marks items ready for billing.
- Document Flow Update: Tracks the sales process stages.
- Stock Updates: Reduces physical inventory.
Invoice Creation Activities
When an invoice is created, SAP performs these background activities:
- Accounting Document Generation:
- Financial Entries: Customer Account Debit, Revenue Account Credit.
- Profitability Analysis Document Generation: For margin analysis.
- Cost Center Document Generation: Allocates costs to cost centers.
- Update LIS: Enhances reporting capabilities.
- Document Flow Update: Maintains a record of the transaction steps.
- Credit Management Update: Adjusts customer’s credit exposure.
Split Criteria for Deliveries and Invoices
Deliveries and invoices may be split based on certain criteria to ensure proper processing.
Split Criteria for Deliveries:
- Ship-to Party: Different delivery addresses require separate deliveries.
- Shipping Point: Goods shipped from different locations are processed separately.
- Routes: Different transportation paths necessitate separate deliveries.
- Incoterms: Different terms of delivery affect shipping processes.
- Delivery Date: Different requested delivery dates lead to separate deliveries.
Split Criteria for Invoices:
- Payment Terms: Different payment conditions require separate invoices.
- Payer: Different billing parties necessitate separate invoices.
- Billing Date: Invoices generated on different dates are processed individually.
Conclusion
Understanding the determination procedures in SAP SD is essential for configuring the system to meet business requirements effectively. These procedures automate crucial aspects of the sales cycle, ensuring accuracy, efficiency, and integration between different modules like FI and MM. By mastering these concepts, SAP professionals can optimize sales processes, enhance customer satisfaction, and contribute to the organization’s overall success.
Key Takeaways:
- Determination procedures automate and streamline sales processes.
- Correct configuration ensures accurate financial postings and inventory management.
- Credit management safeguards the company against credit risks.
- Understanding the split criteria is vital for efficient logistics and billing operations.
References:
- SAP Official Documentation
- SAP Transaction Codes (
VOV6,OVL2,VKOA,OVA8,OVZ9,V/08, etc.) - SAP Community Network