FI-SD Integration

1. Sales Order –((Tcodes: VA01, VA02, VA03,)

A customer orders some items from your company by creating a Sales Order
(Tables: VBAK, VBAP etc).

2. Outbound Delivery Document -(TCodes: VL01N, VL02N, VL03N)

Your company decides to deliver the items ordered by the customer. This is recorded by
creating an Outbound Delivery document (with/without Order reference) (Tables:
LIKP, LIPS etc).

3. Post Goods Issue (PGI) (Tcode: VL02N)

Once the items are available for sending to the customer, you Post Goods Issue (PGI)
which reduces your inventory and puts the delivery in transit. This will create a material
document. You will post goods issue using VL02N but the material document created
will be stored in tables MKPF, MSEG.

4. Shipping Document - (Tcodes: VT01N, VT02N, VT03N)

You will then create Shipment Document to actually ship the items. (Tables: VTTK,
VTTP etc).

5. Sales Billing Document – (SD -TCodes: VF01, VF02, VF03) (FI-Tcode: Sales Invoice –
F-22/FB70)
You finally create a Sales billing document. (Tables: VBRK, VBRP etc). This will have
a corresponding accounting document created that will be in BKPF, BSEG tables.

6. Customer Payment Invoice –(Incoming Payment – F-28)

When Customer Payment invoice, it will directly hit your AR account in FI.

SD Cycle:

Quotation >> Sales Order >> Delivery Note >> Invoice (Billing)>>Payment

FI Entries in SD cycle:
1. Sales Order Created
---No Entry---

2. PGI done (Post Goods issue) –

Cost of Goods Sold (COGS) Dr (Configured in OBYC GBB T-Key)
To Inventory Account Cr

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3. Billing document released to Accounting (Sales Invoice – f-22/fb70)
Customer Account Dr
To Sales Revenue Account Cr (ERL T-key in Pricing procedure)
Note: The GL account is assigned to this ERL in VKOA

4. Payment Received (Incoming Payment Invoice – f-28)

Bank Clearing A/c Dr
To Customer A/c Cr

Configure Steps
FI - SD
1. Define Condition Types
Condition Types represents the Price elements in SAP system. Price elements can be, for
example,
1. Prices
2. Surcharges
3. Discounts
4. Taxes or
5. Freight, which are stored in the system in condition records.
We can, for example, define whether a discount is calculated as a percentage or a fixed amount
using the condition type.
Note:
 The pricing procedure groups all condition types together which the SAP system is to
automatically take into account during pricing for a business transaction.
 We can only specify manually in a document those condition types which are contained
in the pricing procedure.
Condition table
All Condition types are stored in the Condition table. A combination of fields that defines the
key of a condition record.

2. Define Access Sequences

The access sequence is a search strategy, which the SAP System uses to search for condition
records valid for a condition type. The access sequence tells the system where to look for
relevant condition records for a particular condition type.
For example, we can define for a price that the SAP System first searches for a customer-specific
price and then for a price list price.
Note:
 If you define your own access sequences, the key should start with the letter Z since SAP
reserves this letter for the standard system.
 Do not change access sequences contained in the standard SAP R/3 System.
Access Sequence Access Fields

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3. Define and Assign Pricing Procedures
Pricing procedure contains Condition types, where we define which condition types should be
taken into account and in which sequence. During pricing, the SAP System automatically
determines which pricing procedure is valid for a business transaction and it takes the condition
types contained in it into account one after the other.

A standard pricing procedure is defined in the standard SAP system. It contains conditions most
commonly used. These include material prices, discounts, and surcharges, such as freight, or tax.

a) Document Procedure: (to determine pricing procedure)

The key that specifies the pricing procedure for this type of sales document.
Use
During pricing, the system determines the pricing procedure by taking into account
1. The sales area
2. The pricing procedure key in the header of the sales document type
3. The pricing procedure key in the customer master record
The pricing procedure determines how the system carries out pricing for a particular sales
document (for example, which pricing condition records it accesses and in which sequence).

b) Pricing procedure assigned to this customer

Determines which pricing procedure the system should apply when you create a sales
document for the customer.
Use
You can define different pricing procedures for your system. A pricing procedure determines the
type and sequence of conditions that the system uses for pricing in, for example, a sales order.

4. Define Tax Determination Rules

Here we define the rules for tax calculation.

5. Define Regional Codes

 Country-specific regional codes (county codes)
 Country-specific city codes

6. Assign Delivering Plants for Tax Determination

Here we allocate the plants to a country, and if appropriate to a geographical region, a
county/state code as well as a city code. The allocation always depends on the countries in which
you are using the SAP System.

Using the country key, the SAP System recognizes which tax type is valid for a plant and thus
which taxes are relevant when creating an SD document.

7. Define Tax Relevancy of Master Records

We define the tax relevance for customers and materials for each tax category.
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8. Check Master Data Relevant for Account Assignment
We can set the system so that account determination is dependent upon the following master
data fields:
1. Account group for material in the material master record
2. Account group for customer in the customer master record

9. Define and Assign Account Keys

We define account keys in this menu option and allocate them to the condition types in the
pricing procedures.

With the account keys, we group together similar accounts in financial accounting. Using the
account key, the SAP System finds the desired G/L accounts.
This way we can allocate a separate account key to each condition type within a pricing
procedure to implement detailed revenue account determination.

For example, you can allocate a freight condition to a freight revenue account, or a surcharge for
packaging costs to a corresponding account for packaging revenues.

Define the account keys in agreement with financial accounting (FI System).

10. Assign GL Accounts (VKOA)

We allocate G/L accounts for revenue account determination. You have to make the allocation
for every access sequence you have defined beforehand.
A variety of criteria is valid for a G/L account, depending on the key combination. For the key
combination "Customer account determination group/Account key" a G/L account depending
upon the following criteria, is given:
1. Application - V (Sales & Distribution)
2. Condition type - KOFI (Account Determination)
3. Chart of accounts (from module FI)- 1105
4. Sales organization - 1105
5. Account Assignment group for Customer - 01 (Domestic Revenue)
6. Account Assignment Group for Material - 03 (Finished Goods)
7. Account Key - ERL (Sales Revenue)
8. GL Accounts - 300000 (Sales Revenue G/L account)

Some of Standard Account Keys

1. ERF - Freight Revenue
2. ERL - Sales Revenue
3. ERS - Sales Deductions
Important Note:
SAP provides the following six ways of determining the Gl accounts in SD.
1. Application (key for the Sales and Distribution application)
2. Account determination type

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 3. Chart of accounts (from the FI System
4. Customer account assignment group
5. Materials account assignment group
6. Account key

11. Assign Shipping Point

We allocate the shipping points, you have to define plants, shipping points, shipping conditions,
and loading groups.

12. Set up Partner Determination

The rights and responsibilities of each partner in a business transaction.
Partner functions in Sales and Distribution include:
1. Sold-to party
2. Ship-to party
When Customer master record creation, the SAP system proposes the allowed partner functions
for maintenance. The partners are copied from the sold-to party's customer master records into
the sales documents, according to the rules you have defined.

13. Maintain Company Codes for Material Management

In this IMG activity, we maintain your company codes. There are two situations in which we do
1. When setting up company codes for materials management
2. When changing the Allow backposting or Disallow backposting indicators

14. Define Attributes of Material Types

Whenever we create a material master record, we must assign it to a material type. This requires
you to first define the attributes of each material type. You do this in this IMG activity.
Material types are used in the following neighboring areas, where they are also configured in
Customizing:
 Profit Center Accounting
 Product Cost Planning
 Sales and Distribution ( availability check)
 Valuation and Account Assignment ( valuation classes)
 Production:
o Bills of material
o Routings

15. Define Material Groups

We define material groups. With material groups we group materials with the same Attributes
or Characteristics.

16. Plant Parameters

We make the general plant settings for Inventory Management.

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17. Group Together Valuation Areas
We assign valuation areas to a valuation grouping code.
The valuation grouping code makes it easier to set automatic account determination. Within the
chart of accounts, you assign the same valuation grouping code to the valuation areas you want
to assign to the same account.

18. Configure Automatic Postings

We enter the system settings for Inventory Management and Invoice Verification transactions
for automatic postings to G/L accounts.

What are automatic postings?

Postings are made to G/L accounts automatically in the case of Invoice Verification and
Inventory Management transactions relevant to Financial and Cost Accounting. We can then
check the settings using a simulation function.

Before you maintain automatic postings, you must obtain the following information:
Valuation level ( plant or company code)
Establish whether the materials are valuated at plant or at company code level
When valuation is at plant level, the valuation area corresponds to a plant.
When valuation is at company code level, the valuation area corresponds to a company code.

19. Creation of Finished Goods Material (MM01)

Through steps we can create Material and material number is created.
Path:
SAP easy access LogisticsMaterial Management Material Master Material Create
(General) MM01 – Immediately

20. Maintain Condition Records (VK11)

The condition type indicates, for example, whether, during pricing, the system applies a price, a
discount, a surcharge, or other pricing elements, such as freight costs and sales taxes. For each of
these pricing elements, there is a condition type defined in the system.
Ex:
1. Price (PR00)
2. Material discount (K004)
3. Tax (Input & Output)

21. Creation of Sales Order (VA01)

After saving the order the display the message - “Standard Order 11762 has been saved”

22. Goods Receipt posting (Entry of Stock Balance)