Sales & Distribution (SD) in SAP handles everything from taking a customer's order to collecting their payment. The end-to-end process is called Order-to-Cash (O2C), and it's one of the most cross-functional processes in SAP — it touches SD, MM, FI, and CO.

The five steps of O2C

1. Sales Order (SO)

The customer places an order. You create a Sales Order in SAP that captures what the customer wants, at what price, delivered where, by when.

Transaction: VA01 (create), VA02 (change), VA03 (display)

2. Delivery

The warehouse picks and packs the goods. A Delivery document is created in SAP to record what's being shipped. The actual goods issue (removing stock from inventory) is posted at this step.

Transaction: VL01N (create outbound delivery), VL02N (change), VL03N (display)

3. Billing

Once goods are shipped, the billing department creates an Invoice (billing document) to charge the customer.

Transaction: VF01 (create billing), VF02 (change), VF03 (display)

4. Accounting posting

Billing automatically generates an FI document — it debits the customer account (accounts receivable) and credits the revenue account. This is the SD-FI integration point.

5. Payment

The customer pays. The payment is posted in FI (@@F-28@@) and clears the open receivable.

Key master data in SD

• Customer Master / Business Partner — customer's address, payment terms, credit limit
• Material Master (Sales views) — item category group, delivering plant, sales unit
• Pricing Conditions — the price lists, discounts, and surcharges that determine what the customer pays (VK11, VK12, VK13)
• Customer-Material Info Record — customer's own material number and description (used when the customer orders using their part numbers)

The Sales Area

Every SD transaction happens within a Sales Area — the combination of:

• Sales Organisation — the selling entity (maps to a company code)
• Distribution Channel — how you sell (retail, wholesale, direct, etc.)
• Division — product line or business unit

The Sales Area must be set up in configuration and assigned to the customer. If a customer isn't extended to a Sales Area, you can't create a sales order for them in that area.