SAP Sales and Distribution (SAP SD)

Module: Installation and Configuration


The SAP Sales and Distribution (SAP SD) module, serving as a cornerstone of the SAP ERP Central Component (ECC), furnishes businesses with an enhanced, efficient system for overseeing their sales, distribution, pricing, billing, and other pertinent business processes together. This core functional module enables organizations to store securely and effectively manage both customer-centric and product-related data.
Indeed, SAP Sales and Distribution (SAP SD) forms an integral part of the supply chain. As a crucial module of SAP’s Enterprise Resource Planning (ERP) suite, SAP SD empowers organizations to store and manage data related to customers and products securely and effectively. This includes key data like pricing conditions, production records, customer information, credit monitoring data, and more.

With this data at their disposal, businesses can track sales orders from the moment they are placed to when payment processing occurs, as well as manage related documents batch-wise depending on order types. Moreover, the Implementation Guide (IMG) feature of SAP R/3 allows for the creation of intricate pricing schemes for sales transactions that might depend on various factors such as the customer, the goods sold, or specific promotions.

Further enhancing its supply chain functionality, SAP SD includes the Sales Information System (SIS). This feature enables users to store, consolidate, and report data in numerous formats, providing a holistic view of their supply chain operations.

The main functions of SAP Sales and Distribution (SAP SD) include:

1. Order Management: This feature enables organizations to organize the entire sales process from the initial order entry, delivery, billing, pricing, and credit management of customer orders. SAP SD also offers a number of features that help streamline this entire process, such as automatic account determination, availability checks against stock balances, transportation lane optimizations, and more.

2. Pricing & Condition Management: The condition-based prices in SAP SD allow users to set up discounts easily and special promotions for customers depending on multiple factors such as product type, quantity ordered, or customer loyalty status. This can be further enhanced to include rate tables with step pricing or tiered discounts based on complex conditions.

3. Billing & Invoicing: The billing capabilities of SAP SD allow businesses to carry out invoicing operations for both goods and services with ease. It also provides functionality for issuing pro-forma invoices along with payment processing and dunning processes in cases where payment is overdue.

4. Credit Management: One of the key benefits of using SAP SD is its ability to monitor credit limits for customers on an individual basis as well as against specific criteria such as country or region-wise. This helps organizations mitigate risks by flagging any excess usage before it becomes an issue while allowing them to maintain a good relationship with their customers at the same time.

5. Integration with S/4HANA: For those utilizing S/4HANA, one of the more significant advantages they have over competitors is their ability to integrate their sales operations into the larger system’s framework via SAP’s Sales & Distribution module. This gives them full control over order capturing processes and allows them to manage any related documentation quickly and accurately without having to switch systems between tasks—all while leveraging data stored within S/4HANA for additional insights into customer behavior or sales performance metrics.

In S/4HANA, the SAP SD module is different because it has a modern user interface so things work faster and it can show more information to help make better decisions. Additionally, the functionality allows for greater visibility over order-to-cash processes and supports automation of manual activities. S/4HANA also offers advanced analytics capabilities which can be used to track performance and make decisions faster than before.

Finally, SAP SD in S/4HANA is cloud ready and mobile compatible, making it easier for businesses to access their data anytime anywhere with real-time insights. This allows them to make better decisions on the go while also ensuring customer satisfaction at all times. With these innovations, SAP Sales & Distribution (SAP SD) is set to revolutionize sales processes within organizations.

Characteristics of the SAP SD Module

  • Business process implementation: Facilitates selling, shipping, and billing of goods and services.
  • Data integration: Seamlessly integrates with other SAP modules for efficient data flow.
  • Multilingual/Multicurrency support: Allows usage of multiple languages and automatic currency conversion, with real-time currency rate updates from SAP’s database in Germany.
  • Adaptable functionality: Customizes product features through the IMG function to fit specific business needs.
  • Pricing flexibility: Offers complex pricing schemes based on customers, products, promotions, and more, along with sophisticated rebate processing options.
  • Streamlined order entry: Provides a single window for entering basic order details and easy access to header, item, and schedule line information.
  • Comprehensive reporting: Utilizes the Sales Information System (SIS) for data storage, consolidation, and diverse report formatting.
  • Effective batch processing: Allows batch processing of orders, shipments, and sales documents based on order types, customers, or materials.

The SAP Sales and Distribution (SAP SD) module is an integrated part of the SAP ECC and possess several features that make it a powerful solution for businesses, such as:

  1. Order-to-Cash Process Automation: SAP SD helps automate the entire order-to-cash process including order processing, pricing, shipping, invoice creation and payment collection. This can help reduce manual errors while simultaneously increasing efficiency.
  2. Comprehensive Reporting & Analytics: With real-time reporting capabilities, users are able to quickly analyze sales performance data for any given period of time and take action accordingly in order to drive better decisions—all from within one platform.
  3. Credit Management & Risk Mitigation: The credit management feature allows organizations to define credit limits on an individual or group basis in order to ensure that customers pay their dues on time. This helps reduce risks associated with late payment and defaulting customers.
  4. Effective Sales & Distribution Planning: SAP SD makes it easy to plan for sales activities and forecast future demand for products/services, based on historical data. This provides organizations with a competitive edge in terms of being able to offer the right products at the right prices when needed.
  5. Integration with Other Modules: With its ability to integrate seamlessly with other modules such as Logistics Execution (LE) or Material Management (MM), businesses are able to enjoy an end-to-end view of their operations from within one platform—helping them gain better control over their processes while driving efficiency throughout the organization.

These are just some of the features that make SAP SD an invaluable tool for businesses looking to streamline their sales and distribution processes. With it, organizations are able to gain greater control over their operations, mitigate risks associated with bad debt and credit management, as well as enjoy powerful analytical capabilities to measure performance metrics and take appropriate actions based on real-time data.

What Are the Sub Modules of SAP SD?

The sub modules of the SAP Sales and Distribution (SAP SD) module include:

  1. Sales: This module is used to process customer orders for both goods & services, provide customer details, discounts/pricing information and manage payment collection & dunning processes.
  2. Delivery: The delivery component helps organizations manage shipment activities for goods, as well as invoice printing and delivery note preparation.
  3. Billing: This sub module is used to manage invoices & credit memos, process payments & dunning letters from customers and post customer payments in the system.
  4. Pricing: The pricing component allows users to set up discounts/rebates along with other value-based pricing models across different types of products/services.
  5. Credit Management: This feature helps organizations define credit limits on an individual or group basis in order to minimize risks associated with bad debt and late payment collection.
  6. Material Determination: With this component, businesses are able to determine which materials should be connected to each order based on a set of predetermined rules & criteria.
  7. Output Determination: This sub module is used to generate documents such as labels, delivery notes and invoices automatically based on certain predefined parameters & conditions.

SAP SD Modules List

SAP Sales & Distribution (SD) is a crucial module in the SAP R/3 framework, comprised of various sub-modules:

  1. SAP-SD-MD (Master Data): This sub-module handles all transaction tracking within the data, including customer and material data, price conditions records, and credit management.
  2. SAP-SD-BF (Basic Functions): This sub-module ensures an efficient process across all primary functions in the sales and distribution area such as pricing and output.
  3. SAP-SD-SLS (Sales): This sub-module manages detailed information related to each sale, like product details, customer data, pricing, feedback, and sales process.
  4. SAP-SD-SHP (Shipping): This sub-module oversees the shipping and delivery of products, tracking various shipping methods and the complete process from shipping to delivery or return.
  5. SAP-SD-TBA (Transportation): This sub-module maintains all the transportation data, working closely with the shipping component.
  6. SAP-SD-FTT (Foreign Trade): This sub-module manages data related to foreign trade, including imports and exports, essential for businesses involved in international trade.
  7. SAP-SD-BIL (Billing): This sub-module manages all billing data, tracking customer’s payment methods, whether online or cash on delivery.
  8. SAP-SD-CAS (Sales Support): This sub-module records and reports the data exchange between the sales team and customers during product support interactions.

These sub-modules form the foundation of SAP SD, ensuring effective processes within the sales and distribution domain.

SAP SD is also compatible with the latest SAP S/4HANA technology, allowing businesses to take advantage of all the new features including modern user interface, faster processing times and better analytics capabilities.

SAP SD and Master Data

The SAP SD system is responsible for monitoring transactions and data sets related to sales and distribution. This primarily involves managing customer and material master data, price conditions, production records, and credit monitoring data. The system captures all transactions from order placement to payment processing.

According to SAP’s Help Documents:

Master Data in Sales and Distribution


Sales processing is based on the following basic structures:

  • Every company is structured in a certain way. In order to work with the SAP System your company structure has to be represented in the system. This is done with the help of various organizational structures.
  • In sales and distribution, products are sold or sent to business partners or services are performed for them. Data about the products and services as well as about the business partners is the basis for sales processing. Sales processing with the SAP System requires that the master data has been stored in the system.
  • In addition to sales and distribution, other departments of the company such as accounting or materials management access the master data. The material master data is stored in a specific structure in order to allow access from these different views.
  • The processing of business transactions in sales and distribution is based on the master data. In the SAP System, business transactions are stored in the form of documents. These sales and distribution documents are structured according to certain criteria so that all necessary information in the document is stored in a systematic way.


Overview of the Life Cycle of SAP SD

The SAP SD module life cycle consists of five main stages, each with distinct tasks and stakeholder involvement.

  1. Design: Business analysts collaborate with stakeholders to outline business requirements and design a project blueprint.
  2. Implementation: Developers customize and configure the system based on the design blueprint.
  3. Testing: The system undergoes rigorous testing for errors and bugs prior to deployment.
  4. Deployment: The system is launched and made available for daily user operations.
  5. Support: Project managers supervise performance and offer ongoing maintenance to ensure smooth operations.

Stakeholder roles in the life cycle are as follows:

  • Business Analysts: Design solutions based on user requirements.
  • Developers: Customize and configure solutions based on specifications.
  • Project Managers: Supervise development stages and provide necessary guidance.
  • End Users: Give feedback on system functionality to allow for quick issue resolution.

Installation of the SAP SD module requires specific steps:

  1. Run the SAP Installer and select the desired installation option.
  2. Download software and support package files through the Launchpad or SAP for Me.
  3. Follow a guide to install the latest version of SAP Netweaver.
  4. Download and install IDES for practice, following an online guide.
  5. Install SAP ECC 6.0 by first setting up a database (Java JDK 1.4 or higher required) and then copying the software to your local drive for installation.

Common Issues During Installation & Configuration

When installing or configuring your SAP SD system there are some common issues that can arise. These include compatibility issues between different software components or versions of those components; incorrect settings when configuring user accounts; incorrect data entry when creating customer profiles; errors when setting up payment methods; etc. It is important to be aware of these potential issues so that they can be avoided or quickly resolved if they do occur.


Are you in need of a dependable and experienced business service provider to assist you with the implementation and configuration of SAP SD (sales and distribution)? Your search ends here with FirstCall Consulting.

“We have been working with FirstCall Consulting for the past 6 years and they have been instrumental in our SAP projects and ongoing support. Their expertise and industry knowledge have helped us stabilize our environment and align our business processes with SAP’s capabilities. Thanks to their guidance, we have been able to maximize our use of SAP and reduce our support costs by over 60%. We highly recommend FirstCall Consulting as a valued business partner in the SAP Support and Managed Services space.”

Al Furman, Director of IT, Madden Communications, Inc.

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