SD Terminologies and Definitions

Enterprise Structure

 

• It is a structure used to represent the legal and organizational units of the company. 
• Enterprise structure forms a framework in which all business transactions can be processed.
• The organization in SD is represented by the elements sales organization, distribution channel and division.
• The highest-level element of all organizational units is the Client.

 

Company

 

A company is an organizational unit in Accounting which represents a business organization.

 

Company Code

 

Company code is an independent accounting unit in enterprise structure.  All the accounting happens at company code level.

• It is the central organizational element of Financial Accounting.

• You can set up several company codes per client.

• At least one company code must be set up in each client.

• The balance sheet and the P & L statement required by law are created at this level.

 

Sales Organization

 

Sales organization is an organizational unit that is responsible for all the sales happening under a company code.

• A sales organization is assigned to exactly one company code.

• A sales organization is assigned to one or more plants.

• Each sales organization has its own master data, for example, its own customer and material master data as well as condition records.

 

Distribution Channel

 

Distribution channel is the means through which a product reaches customer.

• Customers can be served through one or more distribution channels within a sales organization.

• Wholesale trade, sales through dealers, direct sales from a plant are typical examples of distribution channels.

 

 

Division

 

It is a product group that can be defined for a wide ranging spectrum of products.

• The system uses divisions to determine the sales areas and the business areas for a material.

• A product or service is always assigned to just one division.

 

Cross-division sales

 

We can control the following in customizing, according to the sales document type:

• Whether it is possible to enter multiple materials with various divisions for an order.

• The way the system responds (with or without a warning message).

• Whether the division on item level is copied from the material master record or whether the division in the document header is also copied into the item.

 

Sales Area

 

A sales area is a combination of sales organization, distribution channel and division.

• Sales documents, delivery documents, and billing documents are always assigned to a sales area. 

• Within a sales area we can carry out analyses.  For example, the sales within a sales area can be analyzed.

 

Sales Office

 

Geographical aspects of the organizational units are defined using sales office. 

• Sales offices are assigned to sales areas.  A sales office can be assigned to more than one sales area.

• If you enter a sales order for a sales office within a sales area, the sales office must be assigned to that sales area.

 

Sales Group

 

Staff of a sales office can be sub-divided into sales group. 

• Sales groups are assigned to sales offices.

 

Sales Person

 

A sales group consists of a certain number of salespersons.  A salesperson is assigned to a sales office and group in the sales employee master record.

 

Plant

 

A plant can either be a location for production and material requirements planning (MRP) or it may simply represent one or more material stock locations.

• Each plant is assigned to a unique company code.

 

Credit Control Area

 

The credit control area is an organizational unit that specifies and checks a credit limit for customers.

• A credit control area can include one or more company codes.

• It is not possible to assign a company code to more than one credit control area.

• Within a credit control area, the credit limits must be specified in the same currency.

 

Business Area

 

A business area is an organizational unit within accounting that represents a separate area of operations or responsibilities in a business organization.

• In a client, you can set up several business areas to which the system can assign the postings made in all company codes defined in this client.

 

 

Controlling Area

 

It is the central organizational unit of the Controlling (CO) component. You use the controlling area to carry out cost accounting.  You must assign a controlling area to your company code to ensure that data is forwarded to Controlling for further processing for cost accounting.