Order to cash (SD)

Order to cash in SAP SD mirrors procure to pay from the seller’s side. In fact, your customer’s purchase order becomes your sales order:

Step	T-code	What happens	Finance posting
Inquiry, quotation (optional)	VA11, VA21	Customer asks for price and availability; you send a binding offer	None
Sales order	VA01	Pricing, availability (ATP) and credit checks; requirement passed to MRP	None
Outbound delivery	VL01N or VL10	Shipping document created from the order	None
Picking and packing	VL02N (or WM/EWM tasks)	Goods staged for the customer	None
Post goods issue	VL02N, movement type 601	Stock leaves; ownership passes	Dr Cost of goods sold / Cr Inventory
Billing	VF01 or VF04	Customer invoice	Dr Customer / Cr Revenue (and tax)
Incoming payment	F-28	Payment clears the open invoice	Dr Bank / Cr Customer

Every sales document belongs to a sales area: sales organization + distribution channel + division. A customer must be set up for the sales area you sell through, which is a common source of “customer not defined for sales area” errors.

Pricing uses the condition technique: a pricing procedure lists condition types in sequence, such as base price, discounts, freight and tax, and SAP looks up condition records for each one (maintained with VK11). The choice of condition type matters. A percentage discount calculated on the net price instead of the gross price gives a different invoice amount.

The document flow (visible from VA03) links inquiry, quotation, order, delivery, goods issue, invoice and payment, so you can trace any order end to end.

What a sales order is made of

• Sales document type: such as OR (standard order), QT (quotation), IN (inquiry), RE (returns), CR (credit memo request).
• Item category: determined from the document type and the material’s item category group, such as TAN (standard), TANN (free of charge) or TAS (third-party). It controls pricing, delivery and billing relevance.
• Schedule line category: such as CP, which passes requirements to MRP, or CN, which doesn’t. It decides whether an order creates demand for planning.
• Copy control: rules for creating one document from another (quotation to order, order to delivery, delivery to invoice).

Pricing procedure determination

The pricing procedure for an order is found from three keys: the sales area, the document pricing procedure (from the document type) and the customer pricing procedure (from the customer master). This determination is configured in OVKK. Each condition type in the procedure, for example the base price (PR00 in ECC, PPR0 in S/4HANA), material and customer discounts (K004, K007), percentage discounts (RA00, RA01) and freight (KF00), has an access sequence that searches condition records from the most specific to the most general.

Gross price 1,000; an absolute discount of 50 earlier in the procedure leaves 950. A 5% discount then gives:

• RA00 (percentage from net): 5% of 950 = 47.50.
• RA01 (percentage from gross): 5% of 1,000 = 50.00.

The difference is 2.50 a unit, or 12.50 on five units. Choosing the condition type decides which base the percentage applies to, which is how an invoice can change by a small amount that looks like a rounding error but isn’t.

Checks at order entry

• Availability (ATP): controlled by the material’s checking group and the checking rule for the transaction.
• Credit: in S/4HANA, SAP Credit Management checks the order against the customer’s credit limit and blocks it if needed; blocked orders are released by credit management.
• Incompleteness: the incompletion log lists missing data, such as a missing purchase order number or delivery date, that blocks follow-on steps.

Revenue postings

Billing posts revenue to accounts found by revenue account determination (VKOA), using keys such as ERL for revenue and ERS for sales deductions, combined with the customer’s and material’s account assignment groups.

Special sales processes

• Consignment: stock at the customer’s site remains yours until used: fill-up (KB), issue (KE), pick-up (KA) and returns (KR).
• Third-party orders: item category TAS creates a purchase requisition so the supplier ships directly to the customer.
• Returns and credit memos: a returns order (RE) brings goods back; credit memo requests (CR) and debit memo requests (DR) correct invoices.
• Cash sales (BV) and rush orders (SO): delivery and billing happen immediately or the same day.
• Intercompany sales: one company code sells while another delivers, with internal billing between them.

Advanced ATP and product allocation

S/4HANA’s advanced ATP adds:

• Product allocation: quotas by customer, region or channel, consumed by orders.
• Alternative-based confirmation: checking other plants or substitute products.
• Backorder processing: re-confirming open orders by priority when supply changes, with rules such as “win”, “gain”, “redistribute” and “fill” for different customer groups.

Rebates in S/4HANA

Classic SD rebate agreements are replaced in S/4HANA by condition contracts in settlement management, which handle accruals and settlement of rebates and other incentives.

The tables behind the flow

Orders are stored in VBAK and VBAP (header and items), deliveries in LIKP and LIPS, billing documents in VBRK and VBRP, and the links between them in VBFA, the document flow. Knowing them helps when building reports or tracing what happened to an order.

Troubleshooting stuck orders

• Order won’t save or is incomplete: check the incompletion log.
• Order blocked: credit block, delivery block or a missing approval.
• No delivery created: no stock confirmed by ATP, a delivery block, a wrong shipping point or route, or the delivery date not yet due.
• No billing: billing block, delivery not goods-issued, or the item isn’t billing-relevant.
• Invoice not in accounting: revenue account determination failed; fix VKOA and release the billing document to accounting (VFX3).