SAP Upgrade, Rejuvenation & Expansion

Order to Cash (O2C)

O2C 1.1 ! "#

End User Training Manual

for

SAP SD – Sales and Distribution

Process Name: Annual Rate Contract

Process No: TRF/O2C/1.1

Control Copy No: TRF/O2C/1.1/

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Doc Version Description Prepared by Date Reviewed by Approved by
00 Original Srinivas T 24.12.2009 Rajiv K Shukla &
&Srinivas S Gautam Kumar
 Introduction

Enterprise Order to Cash process in TRF has the following business processes.

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For each of the above processes, a separate End User Training Manuals is available

This document covers sl. No. 6 of the above list, that is Annual Rate Contract
process..

This End User Training manual on Annual Rate Contract Process consists of the
following sequence of sub-processes as listed under the contents heading (next page)

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CONTRACT (ARC) PROCESS ............................................................................................. 4
Explanation of Quantity contract ........................................................................................ 4
TRF SALES ORDER PROCESS FOR ANNUAL CONTRACT RATE:................................... 5
Creation of Quantity Contract in SAP.VA41 .......................................................................... 6
Changing the contract VA42 ............................................................................................... 16
Displaying the contract VA43 .............................................................................................. 19
List of seeing all the contracts VA45 ................................................................................... 21
TRF- SPARES SALES ORDER PROCESS ........................................................................ 23
Creation of Spares Sales Order .......................................................................................... 24

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Numerous business relationships relate to contracts or agreements with customers
And the represented business, based upon material, price, and quantity over a fixed period
of time. Contracts facilitate planning on behalf of the business and guarantee a fixed price
Agreement with the customer .In SAP the term “contracts” is represented as quantity
contracts, value contracts, service contracts.
Let’s discuss about, what is Quantity Contract.
Quantity Contract: The quantity contract is a contract that happens after the quotation but
before an order.
Quantity contracts are used mainly to limit the quantity the customer can buy and to offer
special pricing. Generally, quantity contracts are used when the demand for a material is
greater than the available supply, and the business has to implement measures to limit the
supplied quantity evenly between its customer base.
The SAP standard sales document type for quantity contracts is KM or CQ -Tcode-VOV8.
Note: The quantity contract does not transfer requirements. This means that:
• It does not create a requirement for stock within the plant and subsequently there is no
confirmation of stock within the plant for the contract.
• It does not require production to make the stock to satisfy the contract.
• It does not require material management to purchase the stock to satisfy the contract (If it
is a trading good).
The requirement is placed on the plant when the release order is created with reference to
the quantity contract. The contract itself has no schedule lines. It does have a validity date.
The contract allows the customer to have a special price per material for a limited quantity.
This quantity decreases each time an order is made by the stock ordered.
Once the contract validity date expires or the customer has purchased the full quota of stock,
the contract expires, and a new one must be created.
Quantity contracts have no schedule lines or specific delivery dates, as they are not
delivered. An order from a contract is called a release order; the delivery is done from the
For example, a contract is made with a quantity of 1,000 items. Then each order the

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Customer places with reference to this contract will decrease the available quantity of this
Contract. So if the customer places an order for 100 units, the open contract quantity
becomes 900 units.

Note that this only applies if you have set the Update Document Flow checkbox as enabled
on the item category in the copy control rules. If this is not set, the customer can
Order as much as he would like, without regard to the contract quantity being updated.

Quantity contracts can be used to limit the customer’s purchasing; you can block the
standard order type for a customer and so force him to use an order type that must be
created with reference to a quantity contract. Thus, this customer is limited to only ordering
1,000 items.
A quantity contract has validity periods and can have cancellation rules.

Sales order will be created with reference to quotation or inquiry.

Prerequisite

Master data should exist before creation of sales order for project. Customer master data
For required sales area & company code, customer excise details. Material master data.
Customer Purchase order number, letter of intent, Go ahead letter as per the customer
detailed requirement/delivered quantity basis sales order will be released and processed for
manufacturing.

Transaction Code-VA41

Users create Annual Rate Contract.

This order will be created W.R.T Quotation.
As per the customer detailed requirement /delivered quantity basis sales order will be
released and processed.

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Following data will be copied from quotation while creating scheduling agreement
Customer Number, Material Number, quantity, Commercial value against each material
number
Users will enter respective delivery dates and quantities for the contract upon saving system
will issue internal number by successful checking of incompletion log.

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Enter the tcode-VA41 in command tool bar

Command tool bar

Next press enter

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Screen appears as
Enter Contract type-EA01-Annual.Contr.Inc. (E)(TRF-SBU) and requires Sales Area Data.

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After entering above details press enter, screen appears as below,
Input values for sold to party, PO number, and Material Number

Next press save

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Screen displays showing all the incomplete logs.

Note: To save the document enter all the incomplete things, by highlighting missing data and
click complete data. It will take you to the respective field.

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 After selecting
missing data click
on complete data

Select Missing
Data
One by one

After entering the entire missing data click save screen appears as Annual contract inc
(E) 1220000004 has been saved.

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 Contract number
1220000004

This completes creation of contract.

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Note: Creation of sales order w.r.t to contract
Use the Tcode-VA01 in the command tool bar
Next screen appears as

Click on create with

reference

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Next screen appears as

Enter contract number

created 1220000004 and
click copy button at bottom
of the screen

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Screen appears with incomplete logs, enter all the missing data and save the document

Save

Message showing
document complete after
entering all the incomplete
data.

After showing status as, document is complete press save

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 Order number 1210000067
created with reference to contract

Next delivery and billing should be processed with reference to this sales order number.
Delivery process and Billing will be discussed below.

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 # $ $ # !%
We will see how to change the Contract if any changes required

Use the tcode-VA42 in the command tool bar, press enter

Next screen appears as

Enter the contract number

to
Be changed, next press
enter screen appears

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Now do the changes, based on your requirement and click save.
Next screen displays with the same document number 1220000004.

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Use the tcode-VA43 in the command tool bar and press enter, screen displays as below

Enter the contract

number to be displayed
and click enter next
screen displays as

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How to see, list of contracts with respect to Sold-to party, material,

Note: Open contracts, all contracts, my contracts (These are the selection criteria’s)
Next screen appears as
List of all Contracts with respect to Material, and selection criteria as Open Contracts

Enter material number which you want to see and press enter

Enter material number

Selection criteria as
Open Contracts

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Screen appears as

Like the above procedure we can view for sold-to party also.
Or we can also view exclusive of Sold-to party and Material. By only selecting open
Contracts, or All Contracts, or My Contracts

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 *

This process describes how we handle the Spares Sales to our customers.
Spares sales will be identified with different sales order document type, by these changes
following things are going to happen, they are separate identification & number range given
to track spares sales documents.
Spares revenue will hit to different revenues accounts.
Reporting will be available through different sales areas.

Prerequisite
Customer and Materials has to be extended to spare sales area.
Document flow
Sales Order Delivery Billing (commercial Invoice, Excise Invoice) A/R.
Sales Order Process: Sales Document Type is (EP01Spares Inc. (E)).T CODE- VA01.
Delivery process- T Code- VL01N
Picking & PGI Process: maintain the picking quantity and press the Enter.
Select the PGI tab in menu bar, press the enter for create outbound delivery.
Invoice Process: T Code – VF01.maintain the Billing Type & Date enter and save .
The Invoice Document.Billing Type- (Spares Invoice -E)/ F2. Go to change mode select the
flag button for release to accounting.
Excise Invoice process (excise invoice (E)): T code- J1IIN.
Here, maintain the from billing Tab and enter required fields and press enter and save.
Note: Material type for Spare sales in TRF is Spare Parts

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 & ' +

Enter the Tcode-Va01 in command tool bar, Next screen appears as

Enter Sale organization, Distribution

Channel, Division

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In Sales order, we have to maintain required fields, such as Sold to Party, PO number,
Material, Quantity and enter all incomplete missing as explained above for scrap sales. Next
screen appears as

After document status

shows complete click
save

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Next screen appears as

Sales order for spares process

created with number 1009

End of document - ' ($ )#) ! "

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