Define Customer Hierarchy in SAP

This SAP SD (Sales and Distribution) tutorial, explains the step-by-step procedure to define the Customer
Hierarchyin the SAP system with the proper screenshots.

What is Customer Hierarchy in SAP?

A customer hierarchy in SAP SD is a flexible structure consisting of the level of customers in the SAp system.
Every customer with the exception of the uppermost (higher) customer refers to another customer at a higher
level in the hierarchy. The primary purpose of Customer Hierarchy is Pricing and Reporting.

How to Define Customer Hierarchy in SAP?

Define Hierarchy Types

In this IMG activity, you can define hierarchy types.

Note:

Only create a new hierarchy type if you:

need your own evaluations for customer hierarchies or

need different hierarchies for different business transactions.

The SAP System uses the partner concept to realize the customer hierarchy function. Individual points are
defined as partners and connected with a link to a higher-level partner.

The hierarchy type controls the following points:

• It specifies the purpose of a certain hierarchy.

• It specifies the default partner function.

Actions

If you want to define your own hierarchy types, proceed as follows:

1. Enter a one-character alphanumeric key and a description.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
1
Please follow the steps below to define the customer hierarchy in your SAP system:

Enter t-code SPRO in the SAP Command Field and then press Enter button to Execute.

Now on Customizing: Execute Project screen click the SAP Reference IMG button to proceed.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
2
Next, navigate to the following SAP IMG path:

SPRO > SAP Reference IMG > Investment Management > Sales and Distribution > Master Data > Business
Partners > Customers > Customer Hierarhy > Define Hierarchy Types

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
3
Next on the Change View "Customer Hierarchy Types": Overview screen, you will see the previously defined
customer hierarchies on your SAP system.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
4
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
5
Next, click the New Entries button to define a new Customer Hierarchy in your SAP system.

Now, provide the following details for the new Customer Hierarchy as shown in the image below:

• CustHtype: Enter a single character that defines the new customer hierarchy.
• Name: Enter the short name.
• PartFunct.: Choose the Partner Function for the new customer hierarchy.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
6
Once all the details are entered click the Save button to save the details of the new customer hierarchy.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
7
Set Partner Determination For Hierarchy Categories

When making settings for customer hierarchy, you must not only take hierarchy category into account. You
must also consider higher-level partner functions which are maintained in partner determination.

Depending on hierarchy category, special partner functions are determined during order processing for each
node on the hierarchy path. Starting with the initial partner function (in standard versions such as 1A), higher-
level partner functions are determined and assigned to nodes in the customer hierarchy path.

Partner functions 1A - 1C have been defined in the standard release with the initial partner function appearing
on the lowest level.

If you wish to use more than three customer hierarchy levels, you must first extend the partner functions
(Table TPAR). Keep in mind that the system can process only up to 26 hierarchy levels.

Note

Use at least the same amount of higher-level partner function levels as you use customer hierarchy levels.
During path determination and price determination only the same amount of customer hierarchy levels are
taken into account as there are higher-level partner function levels available. This is why there may be some
remaining customers not taken into account.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
8
Standard settings

In the SAP standard system, there is a hierarchy category as well as three partner functions which are set for
the customer hierarchy and are available for you to use.

1. If necessary, create additional partner functions in order to use additional hierarchy levels.
2. Assign the account groups to the partner functions.
The path to the account group assignment is: Partner functions -> Environment -> Account group
function assignment.
3. Maintain a partner determination procedure and assign order types and and billing types. You
should also make the following settings:
a) Cannot be changed
b) Mandatory function blank
c) Access: B for customer hierarchy

Transport

To initiate transport, select 'Partner - Transport' in the initial screen.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
9
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
10
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
11
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
12
Assign Account Groups

In this menu option, you assign the possible higher-level account groups to the account groups permitted for
each customer hierarchy type. Therefore, both the valid account groups for each hierarchy type are defined
and the higher-level account groups of the valid account groups.

This will prevent the system assigning a ship-to party above a sold-to party.

Actions

Assign the valid account group allocations to each hierarchy type.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
13
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
14
Assign Sales Areas

In this step, you assign sales areas to each other which allows you to determine whether a sales area uses its
own customer hierarchies or shares one with another sales area.

Activities

Determine which combinations of sales areas link with each other and which link to other sales areas.

You can only create customer hierarchies for the sales areas listed.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
15
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
16
Assign Hierarchy Type For Pricing By Sales Document Type

In this step, you can assign a hierarchy type relevant for pricing for each sales document type. This way you
can define the sales document types for which pricing data is taken into account if the data was determined
on a level higher than the customer.

For every hierarchy node which is selected as relevant for pricing, you can create condition records. During
pricing, the customer hierarchy allows the use of price and rebate agreements which were determined on a
level higher than the customer. If one or more hierarchy nodes in the hierarchy path of a sales order contain
pricing data, these are automatically taken into account in the sales order during pricing.

Requirements

If you want the pricing data of one or more hierarchy nodes in a hierarchy path to be taken into account
automatically during pricing, the following requirements must be fulfilled:

• You must have marked the hierarchy node as relevant for pricing in the master record.

• Condition records must exist for the hierarchy node(s).

• You must check whether the partner functions in the system are sufficient for the hierarchy levels
which you require. If necessary, create new partner functions.

Actions

Specify for each sales document tpye a hierarchy type relevant for pricing for which you want to take pricing
data into account when determining prices.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
17
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
18
Define Groupings and Assign Number Ranges

Short text

Define Business Partner Groupings

Use

In this activity, you define groupings for business partners.

Example

Requirements

The number ranges for business partners are defined.

Standard settings

The following groupings are supplied by SAP:

• 0001

• 0002

Activities

1. Check the standard groupings and change them if necessary.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
19
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
20
Define Number Assignment for Direction BP to Customer

Short text

Assign account groups to customer master records, to update customer at

Use
In this IMG activity you assign account groups for the customer master record to business partner groupings,
to ensure that the customer is updated at the same time as the business partner is processed as part of
customer integration. With this assignment you can choose whether the customer master record is created
with an account group with internal or external number assignment or with identical numbers.

Requirements

• You have defined and assigned number ranges and groupings for the business partner. You make these
settings in the following IMG activities:

o Define Number Ranges

o Define Groupings and Assign Number Ranges

• You have determined the account groups and the number ranges assigned to the account groups for
creating customer accounts in Customizing for Financial Accounting. You make these settings in the
following IMG activities:

o Define Account Groups with Screen Layout (Customers)

o Create Number Ranges for Customer Accounts

o Assign Number Ranges to Customer Account Groups

Note that account groups that are also used for consumers or retail sites cannot be synchronized.

Activities

1. Choose the Grouping for the business partner and assign the required account group for the
customer master record from Financial Accounting.
2. If you want to use the same number as the business partner number that is currently being
processed when you create the customer master record, set the Same Numbers indicator.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
21
 3. If you want to enable flexible handling of account groups and customer numbering, set the Flexible
Groupingindicator.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
22
Creating Customer Hierarchy Nodes

Use
You use customer hierarchy nodes as customers in a customer hierarchy, if you require an element to which
data can be defined specifically for the customer hierarchy (for example, pricing or rebate relevance) but
which does not take on an active role in order processing such as for example, a goods recipient.
You can define restricted, customer hierarchy specific data in the master record of a customer hierarchy node,
but no data that is necessary for overall sales and distribution processing or for accounting.
In terms of creating and maintaining master data for nodes in a hierarchy, you proceed just as you would with
customer master data. For further information, see Creating a Customer Master Record.

Procedure
To create a master record for a customer hierarchy node, proceed as follows:
1. In the SD Master data screen, select, Business partners Hierarchy nodes Create .
2. You reach the entry screen for creating a customer master record. The account group Hierarchy
nodes (0012) is automatically proposed.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
23
 Alternatively you can choose Business partner Customer Create from the Sales Master
Data screen and then select the Hierarchy nodes (0012) account group.
3. Enter the sales area, but leave the Customer field blank (in the standard version, the customer
number is assigned automatically by the system). Press ENTER.
You reach the General Data view for customer master maintenance. Enter the following data on the tab
pages:
• Address
Name and address data
• Marketing
Assignment to the sales information system (SIS) and profitability analysis (CO-PA)
• Contact person
If required, name and other data to contact persons
In the sales and distribution view, enter on the
• Billing document tab page
Whether the node is relevant for pricing and rebate processing
1. Save your work.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
24
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
25
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
26
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
27
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
28
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
29
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
30
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
31
Calling Up Customer Hierarchy Maintenance

Procedure
1. From the Sales and distribution – Master Data menu, choose Business partners Customer
hierarchy Edit.
2. The selection screen for displaying the customer hierarchy appears.
3. You must enter the following data in the selection screen:
• the required customer hierarchy type
• a validity date
• a customer number, which is assigned to the hierarchy

Note
The following points are recommended:
• To display the complete customer hierarchy, enter the number of the highest node. If you only
want to edit part of the hierarchy, enter the number of a customer on the corresponding lower
level.
To improve performance, we recommend that you enter a customer at the lowest possible hierarchy level.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
32
 • There is a search help which automatically takes into account the hierarchy type and the validity
date entered. It only displays customers that are valid at a given time for the hierarchy type.
• If you want to create a new customer hierarchy, then enter a customer in the Customer field, which
you want to assign to the hierarchy.
If you do not enter a sales and distribution area, the system determines one automatically.
1. Choose Execute .

Result
The screen Maintain customer hierarchy screen.
In the left-hand side of the screen the customer hierarchy is displayed in an overview tree:
The customer entered in the selection screen appears with all higher-level and lower-level nodes, that are
valid at a given point. Customers on the same hierarchy level as the customer entered and customers on a
different level, that are not directly connected to the originally entered customer are not displayed.
In the right-hand side of the screen you can see detailed information on the customer selected such as the
sub-ordinate customers assigned to it and the validity period.
In the right lower part of the screen you can see the application log in which the system messages are collected
and displayed during processing of the customer hierarchy.

MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
33
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
34
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
35
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
36
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
37
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
38
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
39
MICKAEL QUESNOT🎯🇪🇺
Directeur BU SAP SCM & CONCUR
https://www.linkedin.com/in/mickaelquesnot/
40