FI-SD Integration – Order to Cash Process
SAP ERP Sales and Distribution (SD) provides a complete sales management solution, which comprises Sales Order, Delivery, Post Goods Issue and Billing. It is a part of the logistics module, starting from quotations, sales order and all the way towards billing the customer. Besides Financials (FI) and Controlling (CO) it is tightly integrated with the Materials Management (MM) and Production Planning (PP).
The SD-MM-PP integration follows the flow of goods and Order to Cash Process (FI, CO integration) the flow of money.
To what extent should finance users know SD? Especially, when it is such a huge application. A good compromise is to recognize the integration points .
Two things are essential for the integration:
- Assignments of the SAP organizational structures
- Automatic Account Determination Rules
SD and MM organizational structures are assigned to financial stuctures. The Sales Organization is assigned to Company code. This controls, which Company will get the revenues and trade receivables. Delivering plant is also assigned to Company code. This controls the cost of goods sold posting.
The presentation below describes a simplified sales process (sales order -> delivery -> billing ). The integration points to finance and controlling are analyzed along the process.
The example is from SAP IDES Model Company ( IDES ECC607). This example can be repeated in SAP IDES. IDES is a static environment, where the user often runs into problems that are not easy to solve without previous knowledge of SAP. This is why I have described the errors that I encountered and how I solved them.
Sales Order Process from Accounting Perspective
1. Sales Order
2. Delivery
3. Billing
4. Accounting
Appendix: How to create stock coverage for the exercise?
Sales Order Process from Accounting Perspective