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Contracts in SAP SD
Contracts in SAP SD View more from Magna Training Contracts in SAP SAP Training Sam !e "ecor#e# Vi#eo

Contracts in SAP SD Exercises Conce t $

Contracts are agreements %etween the Customer an# Ven#or to su !& materia!s'services for a s ecific rice %etween a fi(e# erio# of time) Man& ossi%!e t& es of contracts

e(ists %ase# on the t& es of contracts) *or e(am !e+ there are maintenance contracts+ service contracts+ ,uantit& contracts+ va!ue contracts a!! of which we wi!! %e #iscussing over the course of this artic!e) The %ottom !ine however remains the same A contract is an agreement %etween the Customer an# ven#or to su !& goo#s'materia!s'services of s ecific ,uantit&'va!ue for a s ecific rice over a s ecifie# erio#) Let-s #iscuss the #ifferent t& es of contracts)
Quantity Contract

A ,uantit& contract is an agreement to su !& a fi(e# ,uantit& over a erio# of time) Since the customer romises to %u& the fi(e# ,uantit& of goo#s'services+ the& wi!! get a #iscounte# rice)

The #ocument t& e in SAP for ,uantit& contract is .C) *or e(am !e+ in this e(am !e+ the ,uantit& contract is for ,uantit& /00 of sa& materia! M10/) "e!ease or#ers are or#ers create# with reference to the contract to consume the ,uantities in the contract) So the first re!ease or#er is for ,uantit& 20 which consumes 20 3 of the ,uantit& in the contract) Simi!ar!&+ the rest of the re!ease or#ers consume the remaining ,uantit& in the contract) Document f!ows shou!# e(ist %etween the contract an# the re!ease or#er t& es) There are 2 rimar& reasons wh& ,uantit& contracts are use#) /) When .uantit& is Limite# When the ro#uction ,uantities are !imite# in num%ers+ then customers are a!!ocate# a s ecific ,uantit& %& time 1 erio# 4 sa& a month+ or a ,uarter 5 ) An# customers cannot !ace a#1hoc or#ers+ %ut have to first sign a contract for a fi(e# ,uantit& an# a!wa&s or#er via re!ease or#ers that s ecifica!!& refer to the contract) 2) When Ven#ors want to Loc61in Customer ,uantities Some times to give #ee #iscounts+ sa!es fo!6s re,uire that customers commit to %u&ing a fi(e# ,uantit& over a time1 erio#) This satisfies the sa!es figures )
Service Contract

A service contract is norma!!& create# for service1oriente# items e(am !es are annua! service contracts+ annua! maintenance contracts)

*or e(am !e+ when &ou %u& an internet connection from comcast+ the& are rovi#ing services to &ou for a fi(e# erio# sa& / &ear or 7 months) An# for rovi#ing those services+ the& charge &ou month!&) 8n this case+ there are no re!ease or#ers %ecause in case of service since there are no !ogistics o erations+ #irect!& the customers are invoice# with reference to the contract) 8n this case+ the customer is charge# 9/00 a month for /2 months with a tota! of 9/200) The items in these t& es of contracts fo!!ow %i!!ing1 !an) "e airs a!so fo!!ow service contract metho#o!og&)
Master Contract

A master contract is use# when a articu!ar t& e of contract is create# regu!ar!& for a customer an# &ou want a!! the hea#er #ata to %e consistent across a!! of the contracts) :orma!!&+ the hea#er #ata of a sa!es #ocument contains #ata from the Customer master)

*or e(am !e+ if a contract is create# for a customer sa& /;00+ 6e& #ata !i6e inco1terms+ a&ment terms+ #e!iver& references+ ta(a%i!it& etc f!ow from the customer master #ata for that sa!es area for customer /;00) <owever+ if &ou consistent!& change the #ata in the contract to a fi(e# va!ue+ sa& the inco1terms shou!# a!wa&s %e *=> Destination for a!! contracts+ whi!e regu!ar sa!es or#er have C8P Phi!a#e! hia+ &ou can create a master contract for customer /;00 an# change the inco1terms in the master contract to *=> Destination) A!! su%se,uent contracts that refer to this master contract wi!! have the inco terms as *=> Destination)
Value Contract

A va!ue contract is ver& simi!ar to a ,uantit& contract e(ce t that instea# of a fi(e# ,uantit&+ the va!ue of the contract is fi(e# 4 ie the #o!!ar amount of the contract is fi(e# 5 whi!e the materia!s that the customers rocure cou!# come from either a fi(e# %as6et of materia!s or a sing!e materia! on!&)

*or e(am !e+ in the e(am !e shown a%ove+ the t& e of contract is a va!ue contract for a s ecific materia! ?W@2A) Bssentia!!&+ this contract is !imiting the va!ue of the contract to a fi(e# #o!!ar va!ue an# the customer can re!ease mu!ti !e re!ease1or#ers referring to the va!ue contract for that s ecific materia!) 8f the customer wants to create contracts for s ecific va!ue an# not !imit them to a articu!ar materia!+ then an assortment mo#u!e can %e use#) The t& e of va!ue contract that refers to an assortment mo#u!e is ?W@/A)

An assortment mo#u!e is a %as6et of materia!s 4 a fi(e# set of materia!s 5 without an& s ecific ,uantities or rices) When some of the materia!s in the assortment mo#u!e nee#s to %e use# in the va!ue contract+ the assortment mo#u!e is searche# for 4 %& name or num%er 5 an# the materia!s in the assortment mo#u!e are se!ecte# an# ,uantities s ecifie#) Price can %e either manua!!& s ecifie# or automatica!!& #one) We wi!! #iscuss more on this #uring the configuration section) Configuration The configuration ath for Contracts s ecifica!!& 4 other than #ocument t& es 5 is C SP"= 1D 8ME 1D Sa!es an# Distri%ution 1D Sa!es 1D Sa!es Documents 1D Contracts F

The configuration for master contracts is shown %e!ow) The chi!# contracts 4 contracts that refer the master contracts 5 are ca!!e# referencing sa!es #ocuments) We have to first #efine the contract #ocument t& es that can reference a articu!ar master contract #ocument) The stan#ar# master contract #ocument t& e in the 8DBS s&stem is E@)

The chi!# contracts that reference the master contracts are %oun# %& the referencing re,uirements) The referencing re,uirements are s ecifie# in the reference roce#ure SDE@) The fie!#s that can %e reference# in the !ower !eve! contract are s ecifie# as technica! fie!#s 4 Ta%!e+ *ie!# com%ination 5 a!ong with the co & ru!e an# message) As shown in the icture %e!ow+ the reference co & ru!es can %e ?A- Chec6 for Agreement+ ?>- A!wa&s co & or ?C- Co & on!& if agrees) These co & ru!es are use# to over1ri#e customer master #erive# #ata 4 incoterms+ a&ment terms+ ta(a%i!it& etc 5 %& the #ata in the master contract hea#er) The message f!ag is use# if a warning message shou!# %e shown in case #ata #iffers) <owever+ this message cannot %e change# to error in configuration)

Contract Profile

A contract rofi!e rimari!& s ecifies the automatic ru!es for #etermining #ates 4 start #ate+ en# #ate an# va!i#it& erio# 5 an# cance!!ation roce#ure) Some of the reasons wh&

the& are use# cou!# %e to automatica!!& o u!ate the #ates for some contract t& es) *or e(am !e if a articu!ar contract #ocument t& e a!wa&s is use# for a erio# of 2 &ears+ then a contract rofi!e with a va!i#it& erio# categor& of 2 &ears can %e assigne# to the #ocument t& e in Sa!es #ocument t& e configuration CV=VG F) The va!i#it& erio# for e(am !e can %e #efine# as fo!!ows)

As shown+ the va!i#it& erio# categor& of ?HIA in#icates that he contract rofi!e is va!i# for I Jears 4 -;A is the va!i#it& erio# unit for &ears 5) This fina!!& comes together in the Date #etermination ru!es) *or e(am !e+ the #ate #etermination ru!e -0GA sa&s the contract en# #ate shou!# %e com ute# %ase# on the contract start #ate 4 as o ose# to another #ate+ sa& goo#s acce tance #ate or %i!!ing #ate 5 K the contract va!i#it& erio#)

Contract Creation DEMO

CVA;/F or CSa!es an# Distri%ution 1D Sa!es 1D Contract 1D Create F) Bnter the contract t& e from the #ro #owns) The t& ica! contract #ocument t& es in a stan#ar# 8DBS s&stem are E@ Master Contract .C .uantit& Contract .P "enta! Contract W6/ Va!ue Contract W@2 Materia! re!evant va!ue contract SC Service an# Maintenance Contract etc

The start an# en# #ates are either automatica!!& #etermine# 4 if there is a contract rofi!e with #ate #etermination ru!es assigne# to the contract #ocument t& e 5 or the& can %e manua!!& entere#) *or e(am !e+ in a ,uantit& contract+ the target quantity can %e entere# a!ong with the #ates)

"e!ease or#ers can %e create# with reference to the contract as fo!!ows) Jou can use ?=" stan#ar# or#er or &ou can use an& other custom #ocument t& e create# as a co & of =" or otherwise 4 however+ !ease %e a#vise# that there shou!# %e a co & contro! create# %etween that contract #ocument t& e an# the re!ease or#er #ocument t& e 5) When creating the re!ease or#er+ c!ic6 on LCreate with "eferenceM %utton on the !eft to corner) A o 1u wi!! o en u ) Se!ect the Contract ta%) Bnter the ,uantit& contract num%er there or search for it) >& #efau!t the entire consuma%!e ,uantit& in the origina! contract is co ie# over to the re!ease or#er) <owever+ the ,uantit& can %e change# in the re!ease or#er accor#ing to the re,uirements of the user) The ,uantit& reference# wi!! %e #eeme# as ?"eference#- in the item-s status of the ,uantit& contract) *or e(am !e+ in this e(am !e+ there are 2 re!ease or#ers /2N70 an# /2N7/ create# with reference to the ,uantit& contract ;000020N) The ,uantit& contract is for ,uantit& /00+ whi!e the re!ease or#ers have each re!ease# I0 an# 2I in ,uantit&) That is the reason wh& the status of the !ine item in the ,uantit& contract is in the state L>eing Processe#M)

<owever+ after the thir# re!ease or#er is %eing rocesse# for another 2I ,uantit&+ the item-s status in the contract is set to LCom !ete#M) This is a!so e( !aine# %etter in 8tem Categor& configuration in SAP)
Assort#ent Mo ule

To create an assortment mo#u!e goto CSa!es an# Distri%ution 1D Master Data 1D Pro#ucts 1D Va!ue Contract 1Assortment Mo#u!e F =" CWSV2F

Jou wi!! have to give a name 4 in this case Mo#u!e1/ 5+ enter the materia!s an# va!i#it& #ates) :ow &ou can use the assortment va!ue in the va!ue contract %& entering the assortment mo#u!e in the contract) To re!ease the contract however+ &ou wi!! have to se!ect the materia!s from the va!ue contract) The wa& &ou #o it is as fo!!ows) As usua! create the re!ease or#er with reference to the contract+ an# #uring the rocess of se!ecting the items in the o 1u + se!ect the !ine item an# c!ic6 on LB( an# AssortmentM

an# se!ect the materia!s an# ,uantities) De en#ing on the ,uantities se!ecte#+ the or#er wi!! %e rice#) Jou can #o the same using materia! s ecific contracts as we!! Oust that &ou #o not nee# an assortment mo#u!e to #o the same)
Service an Maintenance Contract

Service an# maintenance contracts t& ica!!& fo!!ow a %i!!ing !an that is t& ica!!& erio#ic) *or e(am !e+ if &ou choose the materia! "BPA8"PSB"V8CB in an i#es s&stem in sa!es area 4 /000+/;+00 5+ enter the !ine item an# c!ic6 on %i!!ing !an %utton)

&ou can see the %i!!ing %ro6en #own %& erio# 8n this case month in the %i!!ing !an ta% of the !ine item)

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$ %es&onses to 'Contracts in SAP SD(

siva Ou!& /Q+ 20// at 7$2/ am R Jou wou!# have to create mu!ti !e master contracts) <owever+ as #iscusse# in the c!ass+ #ivisions in SAP are a re!ic from the ast) The& Uust ma6e things inf!e(i%!e) Most %ig com anies Uust go with 0/ or 00 as the #ivision 4 even though the& have a wi#e variet& of ro#uct !ines 5) The

wa& the& #o their segregation're orting' ricing is either %ase# on materia! grou or sa!es materia! grou s or most im ortant!& ro#uct hierarchies)