PTP-Procure to Pay

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Project Enterprise

SAP Basics for Order to Cash

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This document’s objective is to provide you an overview of:

Procure to Pay (PTP) Core Processes.

PTP Foundational Elements:

PTP related SAP Organization Structures PTP related SAP Master Data Records Key Interrelationship between SAP Organization

Structures, Master Data Records and PTP Core process SAP Document Types, Structure and Flow

Objective

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Order to Cash Overview

PTP Foundational Elements:

SAP Organization Structure

SAP Master Data

SAP PTP –Document Types, Structure and Flow

ABC of PTP Summary

Agenda

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Order To Cash - an OverviewOrder to Cash (PTP) is a fully integrated PROCESS AREA encompassing the following PROCESSES:

Sales Order Processing

Outbound Delivery & Shipment processing

Billing

The above PROCESSES are handled within the fully integration SAP system across various SAP

system modules. When working within SAP it is important to always bear in mind the strong “integrated

nature “ of SAP and how certain processes may or may not impact each other.

Key Characteristics:

All processes occur within common Company SAP Organizational Structures - predefined for all

sites.

Accuracy of master data set-up in advance of processing greatly impacts the efficiency of PTP

processes.

Key integration points are between Order to Cash and Manufacturing, Procurement and Operational

Planning.

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BillingSales Order Processing

Delivery & ShipmentProcessing

Capture the Customer’s demand for goods or services.

Delivery of goods or services from Company to Customer.

Charge the Customer for the goods or services received.

Order To Cash - An Overview

SAP Document Flow – document types created with reference to one another.

Key Processing Activity

Core Processes

Master Data

Customers Materials Prices

Sales

Order

Billing

Invoice

Delivery

Shipment

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Agenda

• Order to Cash Overview

• PTP Foundational Elements:

• SAP Organization Structure

• SAP Master Data

• SAP PTP –Document Types, Structure and Flow

• ABC of PTP Summary

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SAP Organisation Structures – an Overview

SAP Organization Structures set the framework in which Company PTP processes

are to carried out. Company SAP organization structure definitions and concepts

have been defined specific to Company operational requirements.

The following “Company SAP Organizational Structure Concepts” have been

considered:

Sales Area Concept

Plant Concept

Warehouse Concept

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Company SAP Organisation Structure – Sales Area

Concept

Client

Distribution

Channel

Company

Code

Sales

Organization

Division

Organizational Element Description

Client The highest organizational level. Commonly the name of

the SAP system on which the business is running.

Company Code Independent accounting unit with SAP. Commonly equates

to a single legal entity.

Sales Organization The selling unit in the legal sense. Within Company there

is a one-to-one relationship between Sales Organization

and Company Code.

Distribution Channel Typically defined to represent markets. Company will

operate using only one Distribution Channel for all Sales

Organization.

Division Commonly used to represent product groups. Company

will operate using only one Division for all Sales

Organization.

Sales Area Sales Organization/Distribution Channel/Division are

collectively known as “Sales Area”

The structure below reflects the SAP organizational elements and relationships as they relate to the Company Sales Area Concept.

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Client

Shipping

point

Transportation

planning

point

Company

Code

Plant

Company SAP Organisation Structure – Plant

Concept

Organizational

Element

Description

Client The highest organizational level. Commonly the

name of the SAP system on which the business is

running.

Company Code Independent accounting unit with SAP. Commonly

equates to a single legal entity.

Plant The location where materials are produced, or

goods and services are provided. This location

can be a physical or virtual location.

Shipping Point The physical location responsible for scheduling

and processing deliveries to internal and external

customers.

Transportation Planning

Point

Used to represent a group of people responsible

for planning and processing transportation

activities.

The structure below reflects the SAP organizational elements and relationships as they relate to the Company Plant Concept.

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Storage

location

Storage

location

Client

Company

Code

Plant

Storage

type

Warehouse

Storage

type

Company SAP Organisation Structure- Warehouse Concept

Organizational

Element

Description

Client The highest organizational level. Commonly the name

of the SAP system on which the business is running.

Company Code Independent accounting unit with SAP. Commonly

equates to a single legal entity.

Plant The location where materials are produced, or goods

and services are provided. Many be a physical or

virtual location.

Storage Location The organizational element allowing differentiation

between the various stocks of a material in a plant.

e.g. Finished Goods vs Returns Goods.

Warehouse The complete physical warehouse used to manage

one or more individual warehouse buildings that,

together, form a complete warehouse complex.

Storage Type A physical or logical subdivision of a warehouse

complex that is characterized by its warehouse

technique, the space used, its organizational form, or

its function.

The structure below reflects the SAP organizational elements and relationships as they relate to the Company Warehouse Concept

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• PTP Foundational Elements


• SAP Master Data



Agenda

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SAP Master Data

SAP Master Data records refer to centralized information that may be

shared during SAP processing.

Key PTP related master data records include:

Customer Master Data

Material Material Data Record(this record could refer to services or

products as well)

Pricing

Each of these master records stores different kinds of data relevant to

specific SAP processes.

PTP related master records as well as the documents used in processing

are entered in dependency with the organizational structures.

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PTP Organization Structure Dependencies

Client

Distribution

Channel

Company

Code

Sales

Organization

Division

A COMPANY’s SALES ORGANIZATION processes

a specific SALES ORDER DOCUMENT TYPE for a

specific CUSTOMER requiring a specific MATERIAL

or

SERVICE at a specific PRICE - all happening within

a specific

SALES AREA (area shade in grey).

Sales

Order

Document

Type

Customer

Master

Record

Material

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PTP Master Data Records

Customer Material Prices

Material Master Record

stores information

related to materials or

services:

• Purchased

• Produced

• Stored

• Sold

Price Master records

Store information on:

• Prices

• Discounts

• Freight cost

• other charges that

might appear on an

invoice.

Customer Master Records

stores information on

Business Partners:• SOLD TO PARTY – to whom we

sell

• SHIP TO PARTY – to whom we

deliver

• BILL TO PARTY – to whom we

send the invoice

• PAYER - who pays the invoice

SAP Client

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BillingSales Order Processing

Delivery & ShipmentProcessing

PTP Master Data Records

Master Data:

Customer

Material

Prices

• Delivery Priority

• Number of deliveries

allowed

• BILL TO PARTY address details

• Customer tax liability• Terms of payment• Currency

• SOLD TO PARTY

address data

• Payment Terms

• Material Number

• Material

Description

• Base unit of

measure

• Commodity Code

• Material tax liability

• Payment Terms

• List prices

• Sales unit of

measure

• Sales tax %

• Accruals

• Freight surcharges

PTP processes are driven by data from PTP Master Data Records

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PTP Foundational Elements


• SAP Master Data



Agenda

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SAP PTP - Document Types Structure and Flow

PTP document types created with reference to one another are collectively know as

“DOCUMENT FLOW”. This flow offers the user a full audit trail of process steps executed.

A DELIVERY is

created with reference

to a SALES ORDER

A delivery can take

place in: one

complete delivery or

multiple partial

deliveries.

A SALES ORDER is

a contractual agreement

between a Sales Organization

and a customer.

Details include :

– Products or services to

be sold

– Sales quantities

– Selling prices and

– Delivery times

A SHIPMENT is

created for different

types of transport e.g.

air, sea and land.

A shipment can contain

multiple deliveries.

An INVOICE is created with

reference to processed

DELIVERY.

Pricing information contained in

the invoice are defaulted from

the SALES ORDER.

Sales

Order

Document type

Billing

Document Type

(Invoice)

Delivery

Document Type

Shipment

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Sub-Process – Additional material

Document Header

Item #1

Item #2

Item #3

Item #4

SAP Document Structure

SAP follows a standard document structure which includes a

HEADER and ITEM level data.

The benefits of this document structure are:

Changes made at header level affect the entire document at

the time of saving.

Changes made at item level are independent of changes

made at header level

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Sub-Process – Additional material

Sales Order Document Structure

Schedule line 1

Item 1

Schedule line 1

Item 2

Schedule line 2

HeaderSold-to-party

Standard Order

Ship-to-party

Item Material Qty

10 XXXXX 25kg

1 01 Nov 25kg

20 XXXXX 100kg

1 01 Nov 50kg

2 01 Jan 50kg

Sold-to-party

Standard Order

Ship-to-party

Item Material Qty

10 XXXXX 25kg

1 01 Nov 25kg1 01 Nov 25kg

20 XXXXX 100kg

1 01 Nov 50kg1 01 Nov 50kg

2 01 Jan 50kg2 01 Jan 50kg

Sales Order Document: Structure

Delivery

Ship-to-party

Item Material Qty

10 XXXXX 25kg

20 XXXXX 25kg

Delivery

Ship-to-party

30 XXXXX 25kg

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Order to Cash Overview

PTP Foundational Elements

SAP Organization Structure

SAP Master Data

SAP PTP –Document Types, Structure and Flow

ABC of PTP Summary

Agenda

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ABC of PTP SummarySAP PTP FOUNDATIONAL ELEMENTS to remember:

SAP ORGANISATION STRUCTURES are the framework in which PTP processes are carried out .

PTP MASTER DATA records refer to centralized information that may be shared during SAP processing.

PTP DOCUMENT TYPES created with reference to one another are collectively know as “DOCUMENT FLOW”. This flow offers the user a full audit trail

of process steps executed.

Sales

Order

Document

Type

Billing

Invoice

Client

Distribution

Channel

Company

Code

Sales

Organization

Division

A COMPANY’s SALES ORGANISATION processes

a specific SALES ORDER DOCUMENT TYPE for a

specific CUSTOMER requiring a specific MATERIAL or

SERVICE at a specific PRICE - all happening within a specific

SALES AREA (area shade in grey).

Customer

Master

Record

Material/

Service

Delivery

Shipment

SAP DOCUMENT FLOW

Price

PTP core processes

Documents

PTP-Procure to Pay