SD_Blue_Print.doc

Table of Contents 1SALES ORGANIZATION 4 1 1BUSINESS REQUIREMENT 4 1 2BUSINESS BLUEPRINT 4 1 2 1Sales Organization Structure 5 1 2 1 1Sales Organization 5 1 2 1 2Distribution Channel 5 1 2 1 3Division 5 1 2 2Shipping Organization 5 1 2 2 1Plant 6 1 2 2 2Shipping Point 6 1 2 2 3Storage Locations 6 2CUSTOMER DivisionDescription 02Cigarettes IncotermsDescription CFRCosts and freight CIFCosts insurance Material Account Assignment Group Acct Assignment Group DescriptionUsage 01Local ManufacturedLocal manufactured Cigarettes 02ImportedImported Cigarettes 06Non TobaccoMerchandizing materials 07JV BrandEastern Corporation brand Viceroy Customer Account Assignment Group Acct Assignment Group DescriptionUsage 01Domestic RevenuesDomestic customers Figure 2 9 Account Assignment Groups There is no Internal ABC customer for ABCE 3Sales and Distribution Business Processes 3 1BUSINESS REQUIREMENT ABCE captures all domestic sales and sales returns via Fanous All handheld sales by sales representatives are created as invoice documents with payment received in the form of cash or cheques Cash sales average 5000 per day and credit sales averages 100 per day There are currently approximately 200 sales reps in ABCE On a daily twice weekly weekly bi weekly or monthly basis sales reps will make sales visits to customers At this time sales are entered directly into the handheld system During sales visits the following occurs 1 Sales rep takes the order from the customer 2 Invoice details are entered into the handheld 3 An Invoice is printed and given to customer 4 If it is a cash customer sales rep will collect the cash 5 If it is a credit customer sales rep will issue an invoice and obtain customer s signature Cash or cheques are collected on due dates 6 Products are delivered to the customer At the end of the sales visit day sales rep will go back to the depots and dock their handheld systems to download all sales information into RP32 They will also deliver the cash collected from customers to the cashier in the warehouse Post dated cheques received from credit customers are treated as payment to clear off invoices This will immediately reduce the customer s outstanding credit exposure Sales reps will bear all discrepancies between stocks and cash receipts A cash sale to sales reps will be created to offset the discrepancies All returns of stocks will be entered into Fanous as returns invoice A Credit Note will be issued to customers for the stocks returned Stocks returned by one customer may be sold to another customer if it is still good stock Damaged stocks will be transferred to a damage warehouse location and will be written off and destroyed ABCE has 300 to 400 returns per year There is no requirement for credit or debit note processing The following are variations on the standard sales process Sales of combo packs For sales of cigarettes with promotional items e g radios by law the radio must be sold and cannot be issued free Merchandizing materials will be sold at a loss In Fanous the issues of combo packs are as individual items in the same invoice The merchandizing items are entered as service items Service tax of 10 is included in the sales price for merchandizing items Price Discounts A sales price with taxation will be charged and a discount will be applied The taxation applied is Sales Tax Health Tax and Add On Tax The difference between Actual Sales Price to customer and Standard Sales Price is the price discount provided to customer FOC Discounts FOC discount is a quantity of stocks given to customer free of charge FOC items will be given to customer together with standard items sold in an invoice Taxation for FOC items is to be expensed to brand spend Service Contract FOC ABCE also issues FOC cigarettes to customers as part of the service contract terms In the handheld system cigarettes will be issued together with a service item that acts like a non stock return to negate the total price of the cigarettes material price plus taxes The service item in Fanous is created as a material with a material code This scenario is only applicable for Kent and Rothmans brands Taxation for Service Contract items is to be expensed to brand spend Staff Issues For cigarettes allowance to staff stocks are transferred to a FOC warehouse and issued out Adjustments to stock balances are adjusted at period end Sales of Cooperation Brands Viceroy is a co op brand which is being sold via the handheld system The following is the current process of co op brands 1 EC issues stocks to ABCE 2 ABCE receives stocks into FG Warehouse 3 Transfer stocks from FG Warehouse to depots 4 Transfer stocks from depots to vans 5 Sales reps create Co op Invoice in Fanous In the Co op Invoice the price of the materials include excise Both ABCE brands and Viceroy is in the same invoice 3 2BUSINESS BLUEPRINT A standard sales and distribution process consists of the creation of sales order delivery order and billing order Each order creation in SAP is by using different document type Each document generated will have unique SAP document number assigned All document numbers are internally assigned by the system 3 2 1 TYPES OF BUSINESS PROCESSES 3 2 1 1OTB Order to Billing Sales Process Sales to domestic customers will be made directly into Fanous the handheld system by ABCE s sales reps On a daily basis the sales information in Fanous will be interfaced into SAP OTB sales process is depicted in figure below Figure 3 1 OTB Sales Process Sales invoices are placed into Fanous at the time of sales reps visits to customers On a daily basis sales information will be interfaced into SAP A daily ABCch Run will be scheduled in SAP to trigger the OTB process with the sales information received SAP will automatically create sales orders create delivery orders perform goods issue and generate invoices Cash sales will be consolidated by customer group type wholesaler or retailer and sales district These sales will be interfaced to SAP and be created as one sales order for cash customer type per depot Sales to credit customers will be interfaced individually The Incoming Payment process will clear all invoices with payments received Variations in OTB Sales Process 3 2 1 1 1Sales of combo packs Merchandizing items in a combo pack will be interfaced into SAP as individual items A generic set of service materials will be created in SAP to represent different merchandizing materials In the sales order item price and item value will be interfaced in from Fanous No pricing will be maintained for merchandizing items in SAP 3 2 1 1 2Price Discount Both Standard Sales Price and Actual Sales Price will be interfaced in from Fanous The difference between Standard Sales Price and Actual Sales Price is treated as a price discount and post according to accounting 3 2 1 1 3FOC In the interface file from Fanous there will be an indication to identify FOC items in an invoice The Actual Sales Price for FOC items is set as zero All taxation for FOC items will be expensed to brand spend 3 2 1 1 4Service Contract FOC In SAP cigarettes will be interfaced from Fanous with prices The service item will be mapped into SAP as a service material The price of the service material will be equalled to the price of the cigarettes plus all taxes Taxation will be expensed to brand spend 3 2 1 1 5Staff Issues Staff allowances will be issued out from warehouse in SAP via IM module Manual journals will be created to expense out the cost of the materials 3 2 1 1 6Co operation Brand Sales of ABCE brands Rothmans Cash discounts which can be on value quantity or monthly target Free of charge products ABCE is legally restricted from giving anything for free In the case of free of charge sales a sales invoice with priced items will be issued together with FOC items Sales Tax Health Tax and Add on Tax are applicable in standard sales These taxes are fixed values and are paid on a monthly basis except for Add on Tax which is paid on a quarterly basis Sales Tax Health Tax and Add On Tax are payable by customers as total excise These taxations are applicable for finished goods and service contract items Service tax is applicable for service items such as merchandizing items In Returns order all taxes are reclaimable Below is an example of the current ABCE s pricing structure for Rothmans KSFF Actual Pricing Structure Price ElementValueDescription Retail Selling Price5 500Price to end consumer Retail Margin0 225Retail margin to customer Ex factory Price5 280Total price to customer Excise1 750Sales Tax Health Tax Accounting entries Account KeyDescription of account posted DRDiscount Own Manufacture External Domestic Cigarette CRCustomer 4 2 1 5Additional Discount Additional Discount is the additional discount that may be given to customer This price will be interfaced into SAP by Fanous The condition type is Condition TypeDescriptionKey Combination ZEG5Additional DiscountManual entry via Interface The accounting entries at the time of billing are as follow Accounting entries Account KeyDescription of account posted DRDiscount Own Manufacture External Domestic Cigarette CRCustomer 4 2 1 6Sales Tax Advance Sales Tax Advance is an amount of sales tax already paid by ABCE to the tax authorities at the time of cutrag purchase This amount will be recovered from customer at the time of invoicing This is a fixed amount per pack to be paid by customers for Finished Goods The condition type is Condition TypeDescriptionKey Combination ZEG6Sales Tax AdvanceMaterial The accounting entries at the time of billing are as follows Accounting entries Account KeyDescription of account posted DRCustomer Account CRAdvance Payment Sales Tax 4 2 1 7Sales Tax Payable Sales Tax Payable is the remainder sales tax amount to be paid to the tax authorities by customer This is a fixed amount per pack to be paid by customers The condition type is Condition TypeDescriptionKey Combination ZEG7Sales Tax Payable Material The accounting entries at the time of billing are as follows Accounting entries Account KeyDescription of account posted DRCustomer Account CRSales Taxes 4 2 1 8Health Tax Health Tax is a fixed amount per pack to be paid by customers The condition type is Condition TypeDescriptionKey Combination ZEG8Health TaxMaterial The accounting entries at the time of billing are as follows Accounting entries Account KeyDescription of account posted DRCustomer Account CRHealth Tax 4 2 1 9Add On Tax Add on Tax is a tax to be paid by customers and is applicable for Finished Goods It is calculated at 1 of Net Factory Price The condition type is Condition TypeDescriptionKey Combination ZEG9Add On TaxMaterial The accounting entries at the time of billing are as follows Accounting entries Account KeyDescription of account posted DRCustomer Account CRAdd On Tax 4 2 1 10 Net Std Price Net Standard Price is the Standard Price less all taxation This amount is a calculation and will be posted to accounting as the revenue amount The condition type is Condition TypeDescriptionKey Combination ZEGANet Std PriceFormula The accounting entries at the time of billing are as follows Accounting entries Account KeyDescription of account posted DRCustomer Account CRSales Own Manufactured External Domestic Cigs 4 2 1 11 Rvsl Sales Tax Adv Reversal Sales Tax Advance is used to reversed out the Sales Tax Advance and expense out the amount to brand spend This condition is only applicable for FOC items The condition type is Condition TypeDescriptionKey Combination Z001Rvsl Sales Tax Adv Material The accounting entries at the time of billing are as follows Accounting entries Account KeyDescription of account posted DRBrd Trade Free of Charge CRAdvance Payment Sales Tax 4 2 1 12 Rvsl Sales Tax Pay Reversal Sales Tax Payable is used to reversed out the Sales Tax Payable and expense out the amount to brand spend This condition is only applicable for FOC items The condition type is Condition TypeDescriptionKey Combination Z002Rvsl Sales Tax Pay Material The accounting entries at the time of billing are as follows Accounting entries Account KeyDescription of account posted DRBrd Trade Free of Charge CRSales Taxes 4 2 1 13 Rvsl Health Tax Reversal Health Tax is used to reversed out the Health Tax and expense out the amount to brand spend This condition is only applicable for FOC items The condition type is Condition TypeDescriptionKey Combination Z003Rvsl Health TaxMaterial The accounting entries at the time of billing are as follows Account KeyDescription of account posted DRBrd Trade Free of Charge CRHealth Tax 4 2 1 14 Rvsl Add On Tax Reversal Add On Tax is used to reversed out the Add On Tax and expense out the amount to brand spend This condition is only applicable for FOC items The condition type is Condition TypeDescriptionKey Combination Z004Rvsl Add On TaxMaterial The accounting entries at the time of billing are as follows Account KeyDescription of account posted DRBrd Trade Free of Charge CRAdd On Tax 4 2 1 15 Merchandizing Price Merchandizing Price is the selling price to customer for merchandizing items This price includes 10 service tax This price will be interfaced into SAP from Fanous This is a statistical condition without any postings to accounting The condition type is Condition TypeDescriptionKey Combination ZEGBMerchandizing PriceManual entry via Interface The accounting entries at the time of billing are as follows Account KeyDescription of account posted DRCustomer CRNon Tobacco Other Revenue 4 2 1 16 Service Tax Service Tax is currently at charged at 10 of Merchandizing Price for all merchandizing items The condition type is Condition TypeDescriptionKey Combination ZEGCService TaxMaterial The accounting entries at the time of billing are as follows Account KeyDescription of account posted DRCustomer CRSales Tax Payable 4 2 1 17 Net Merch Price Net Merchandizing Price is derived from Merchandizing Price less Service Tax This price will be posted to accounting The condition type is Condition TypeDescriptionKey Combination ZEGDNet Merch PriceFormula The accounting entries at the time of billing are as follows Account KeyDescription of account posted DRCustomer CRNon Tobacco Other Revenue 4 2 1 18 Sales Tax JV brand Sales Tax JV brand is to capture the Sales Tax for Viceroy brand This is a statistical condition for PA reporting The condition type is Condition TypeDescriptionKey Combination ZEGESales Tax JV brand Material 4 2 1 19 Health Tax JV brand Health Tax JV brand is to capture the Health Tax for Viceroy brand This is a statistical condition for PA reporting The condition type is Condition TypeDescriptionKey Combination ZEGFHealth Tax JV brand Material 4 2 1 20 Add On Tax JV brand Add On Tax JV brand is to capture the Add On Tax for Viceroy brand This is a statistical condition for PA reporting The condition type is Condition TypeDescriptionKey Combination ZEGGAdd On Tax JV brand Material 4 2 1 21 CPTO CPTO is the Consumer Price Turnover price This is a statistical condition for PA reporting The condition type is Condition TypeDescriptionKey Combination ZEGHCPTOMaterial 4 2 1 22 Distribution Fee Distribution Fee is the outbound cost for the sale of Viceroy This is a statistical condition required by Product Costing PC module as per Global CORE The condition type is Condition TypeDescriptionKey Combination ZEGIDistribution FeeMaterial 4 2 1 23 VPRS VPRS is the Cost condition The value is automatically derived from the price in the Material Master The condition type is Condition TypeDescriptionKey Combination VPRSCostNot applicable 5Accounting Postings 5 1BUSINESS BLUEPRINT 5 1 1 ACCOUNTING POSTING Accounting Posting in SD takes place during Delivery Processing and Billing Processing 5 1 1 1Goods Issue During delivery processing posting of goods issue generates an accounting posting Accounting entries are as stated below Goods Issue accounting entries Account KeyDescription of account posted DRCost of goods sold CRInventory Figure 5 1 Goods Issue accounting entries Costs of goods sold and Inventory accounts are dependent on the product group For Viceroy a different valuation class will determine the different accounting postings during goods issue The following are the costs of goods sold accounts Cost of goods sold accounts COGSMarketOriginGL AccountsDescription CigarettesLocalLocal415000Variable Cost Goods Other Manufacturing CigarettesLocalImported 415001Variable Cost Imported Finished Goods ViceroyLocalLocal390102Non tobacco Clearing Figure 5 2 COGS GL Accounts Inventory accounts GL AccountsDescription 143000Own Manufacture Finished Goods Cigarettes 144000Goods for Resale Cigarettes 144400Trading Goods for Resale for Viceroy Figure 5 3 Inventory Accounts 5 1 1 2Invoice Billing At the time of billing processing postings to accounting are automatically processed by the system Accounting entries are stated below Standard Sales Account KeyDescription of account postedGL Account DRCustomer Account1xxxxx DRDiscounts own manufacture external domestic cig344100 CRSales Own Manufactured External Domestic Cigs324100 CRAdvance Payment Sales Tax127103 CRSales Taxes207100 CRHealth Tax201003 CRAdd On Tax Payable207103 Sales of Viceroy Brand Account KeyDescription of account posted DRCustomer Account1xxxxx CRNon Tobacco Clearing390102 Sales of Merchandizing item Account KeyDescription of account posted DRCustomer Account1xxxxx CRNon Tobacco Other Revenue390101 CRSales Taxes207100 Free of Charge item Account KeyDescription of account posted DR Dr Brd Trade Free of Charge549008 CRAdvance Payment Sales Tax127103 CRSales Taxes207100 CRHealth Tax201003 CRAdd On Tax Payable207103 Service Contract Item Account KeyDescription of account posted DRSales Own Manufactured External Domestic Cigs324100 DR Dr Brd Trade Free of Charge549008 CRCustomer Account1xxxxx Credit for Returns Account KeyDescription of account posted DRSales Own Manufactured External Domestic Cigs324100 DRAdvance Payment Sales Tax127103 DRSales Taxes207100 DRHeal