SAP SD End-to-End Sales Cycle: From Inquiry to Payment
SAP SD (Sales and Distribution) is one of the most widely used modules in SAP ERP. It is designed to handle the complete sales cycle of an organization, beginning from when a potential customer inquires about a product and ending with payment receipt. In today’s competitive business environment, companies cannot afford delays or inefficiencies in their sales processes. A structured sales and distribution cycle ensures that customers receive timely service, accurate billing, and smooth delivery of goods.
The SD module integrates seamlessly with other SAP modules such as MM (Materials Management), FI (Financial Accounting), and PP (Production Planning). This integration ensures that every sales-related transaction has a direct effect on inventory and finance, enabling end-to-end visibility.
This article will explain the basic flow of SAP SD, including the key T-codes, the function of each step, real-time business examples, and how companies can benefit from mastering this flow.
Purpose
The purpose of understanding the basic flow in SAP SD is to gain clarity on how a sales process is executed in the system. For consultants, it provides a foundation to configure or troubleshoot processes. For business users, it provides a clear picture of how their daily sales activities fit into the overall company workflow.
Some key reasons why the SD flow is important:
Process Standardization: Ensures that all sales teams follow a uniform process for creating inquiries, quotations, orders, deliveries, invoices, and payments.
Customer Satisfaction: A smooth flow minimizes delays and errors, improving customer trust.
Integration with Finance: Every activity—delivery, invoicing, or payment—creates accounting postings automatically, ensuring accuracy in financial reporting.
Real-time Data: Managers can track the status of sales orders, deliveries, and customer payments at any point in time.
Compliance and Control: The flow enforces business rules, such as credit limits, delivery deadlines, and pricing conditions.
In short, the purpose of mastering the SD basic flow is to bridge the gap between customer needs and company efficiency.
Common Issues in SD Basic Flow
Even though the flow is straightforward, users often face some common challenges:
Missing Pricing Conditions
Sales orders may not calculate prices correctly if condition records are missing.
Solution: Maintain proper pricing conditions in VK11/VK12.
Credit Limit Exceeded
Orders may be blocked if the customer exceeds their credit limit.
Solution: Review credit management in FD32 and release blocked orders.
Delivery Block
Deliveries may not be created if the sales order has a delivery block.
Solution: Check sales document type and remove the block if valid.
Stock Availability Issues
Delivery cannot be processed if stock is not available.
Solution: Perform ATP (Available-to-Promise) check in the sales order.
Invoice Errors
Errors may occur due to tax configuration or missing billing types.
Solution: Validate configuration in pricing and billing settings.
Payment Differences
Sometimes the customer pays less or more than the invoice amount.
Solution: Post partial payments, residual items, or adjustments in F-28.
T-Codes in SD Basic Flow
SAP transactions are executed using Transaction Codes (T-codes). Below are the main T-codes used in the SD basic flow:
VA11 – Create Inquiry: Used when a customer asks for information about a product.
VA21 – Create Quotation: Used to provide the customer with pricing and terms.
VA01 – Create Sales Order: Used to record a confirmed customer order.
VL01N – Create Delivery: Used to process delivery, including picking, packing, and posting goods issue (PGI).
VF01 – Create Invoice: Used to generate a billing document and post revenue.
F-28 – Incoming Payment: Used in Finance to record customer payment against open invoices.
Each T-code represents a milestone in the sales process and links commercial activities with financial transactions.
Key Tables in SAP SD
For backend data analysis and troubleshooting, certain tables are very important in SD:
Sales Documents
VBAK – Sales order header data
VBAP – Sales order item data
VBEP – Schedule lines
Delivery Documents
LIKP – Delivery header data
LIPS – Delivery item data
Billing Documents
VBRK – Billing header data
VBRP – Billing item data
Customer Master Data
KNA1 – General data
KNB1 – Company code data
Material Master Data
MARA – General material data
MVKE – Sales data for material
Partner Functions
VBPA – Partner data for sales documents
Basic Flow: SD
1. Inquiry (VA11)
An inquiry is the very first step when a customer shows interest in a product. In SAP, the inquiry is an internal document that records customer details, requested materials, quantities, and validity dates. It does not have a direct financial impact but serves as a reference for quotations and future sales orders.
Example Fields: Customer number, material code, requested quantity, validity period.
2. Quotation (VA21)
Once the inquiry is created, the sales team provides a quotation to the customer. This is an external document and includes key details such as product price, discount conditions, delivery timelines, and validity period.
A quotation can be created by referencing an inquiry, ensuring that customer requirements are carried forward. If the customer accepts the quotation, it is later converted into a sales order.
Business Relevance: The quotation builds customer confidence and avoids disputes later, as terms are clearly defined upfront.
3. Sales Order (VA01)
A sales order is a legally binding agreement between the company and the customer. It includes complete details such as customer name, delivery schedule, material quantity, pricing conditions, and terms of payment.
Sales orders can be created with or without reference to an inquiry/quotation. Once saved, the sales order triggers downstream processes such as availability check, credit check, and delivery scheduling.
Key Tables:
VBAK: Sales order header data.
VBAP: Sales order item data.
4. Delivery (VL01N)
After confirming the sales order, the next step is delivery creation. In this stage, three activities occur:
Picking: Identifying and collecting goods from the warehouse.
Packing: Ensuring goods are properly packaged for shipment.
Post Goods Issue (PGI): Goods physically leave the company premises.
When PGI is posted, the system automatically creates an accounting entry:
Debit: Cost of Goods Sold (COGS)
Credit: Inventory Account
This ensures that both stock levels and financials are updated in real time.
5. Billing (VF01)
After delivery, the company generates a billing document using VF01. The invoice is sent to the customer and also triggers automatic accounting postings:
Debit: Customer Account (Accounts Receivable)
Credit: Revenue Account
This step ensures that revenue is recognized in financial statements.
6. Customer Payment (F-28)
The last step in the cycle is when the customer makes payment via bank transfer, check, or another method. Using F-28, the incoming payment is posted and cleared against the open invoice.
The accounting entry is:
Debit: Bank Account
Credit: Customer Account
At this stage, the sales cycle is complete: goods have been sold, delivered, and billed, and payment has been received.
Sales and Distribution Flow with T-codes, Tables and Accounting entries
Basic Flow with Accounting Entries
Real-Time Examples
Example: Retail Business
A retail company receives an inquiry from a customer about bulk purchase of laptops. The sales executive creates an inquiry (VA11), then a quotation (VA21) offering volume discounts. The customer accepts the offer and places an order, recorded as a sales order (VA01). The goods are picked, packed, and shipped using VL01N. After PGI, an invoice (VF01) is sent to the customer. Finally, the payment is received and recorded using F-28.
Conclusion
The basic flow of SAP SD—from inquiry to customer payment—is the backbone of the sales process in organizations using SAP. Each step, supported by its own T-code, ensures that the transaction is properly documented, financially posted, and transparent for all stakeholders.
By understanding this flow, SAP consultants and end-users can:
Streamline business operations.
Improve customer relationships.
Ensure accurate financial accounting.
Gain insights into sales performance.
In addition, SAP SD does not work in isolation. It is tightly integrated with MM for inventory, FI for accounting, and PP for production. This ensures end-to-end visibility across the supply chain.
