SD Transportation

SD Functional Overview in SAP for Retail

SAP SD Tax Procedure

A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state.

There are many types of taxes, in Business Scenarios. The very relevant one are Input Taxes & Output Taxes

•  Input Taxes are during Purchasing Transactions
•    Output Taxes are during Sales Transactions

Every Country has its own set of Taxes levied when Sales takes place. The tax calculations are likely to be complex in nature and can have very adverse effect on the bottom line. Hence it is important to have clear understanding of relevant taxes What is sold, Where is it sold, How is it sold & When is it sold  can influence relevant taxes

• In US the taxes are at Jurisdiction Level
  In UK  the taxes are considered as VAT
  In India there are  Local Sales Tax and Central Sales Tax  & VAT

 Usages of tax

• Output Taxes are a type of a Sales Tax when Sales Activity takes place. 
• Output Taxes are of two Types:- Domestic Taxes  & Export Taxes
• When sales activity takes place, output taxes are levied to the customer. 
• The output Tax revenue is collected and then paid to the respective government authority as the case may be. 
• This functionality of output Taxes helps us in calculating the taxes for various types of scenarios, accounting of tax and payments to the government authority. 
• Customers are charged output Taxes depending whether the customer is a domestic customer or an export customer. 
• In most of the countries, the output Taxes for Exports are ZERO. 
• VAT is a type of an output Tax which is uniform in the entire country. 

Tax procedure

▪       Every country has its own set of output Taxes

▪       The challenges faced are to calculate the Taxes in these various scenarios

•          Like in the US, the taxes are at Jurisdiction  Level

•          In UK, the taxes are simple which is termed as VAT.

•          In India, there are states with  VAT and there are states with other local & central taxes i.e.  LST / CST

▪        The system should calculate the taxes properly and are to be paid to the government authorities, so this is a STATUTORY ACTIVITY.

▪        Proper maintenance of Master Data pertaining to Taxes

▪        Proper accounting of Taxes , GL accounts, Tax Codes.

▪        Statutory Reporting on Taxes

Output Taxes in Country

• Each country has its own set of rules for calculation of Output Taxes
• In this courseware, we shall cover the mapping of  Output Taxes in three countries:-

•          USA

•          UK

•          India

Tax in USA

• In U.S.A., the taxes are related to the Jurisdiction code which is a combination of pin code & region.
• The Jurisdiction code is stored in the customer master.
• The Jurisdictions (State, County, Town or lower) are several levels
• The Taxes are:-

•          Domestic Taxes

•          Export Taxes

Tax in UK

• In U.K., the output taxes are called as VAT(Value Added Taxes)
• The taxes are subdivided into Domestic and Exports.

                 For U.K., the tax condition type is MWST in SAP.

• Domestic – Within U.K. e.g. sale is from UK to UK 17.5 % VAT
• Exports – It is further subdivided into:-

•          Exports to European Countries

▪       i.e. from Great Britain to France which is 0%

•          Exports to Non-European Countries

▪       i.e. from Great Britian to U.S. which is 0%

Tax in India

• In India, in SAP, there are 2 types of output Taxes:-

•           Domestic Taxes

•           Export Taxes (Zero Taxes)

•  Under Domestic Taxes, the state may be relevant for

   VAT or not    relevant for VAT.

•  If the state is relevant for VAT, then it will be either

•           VAT e.g. Maharashtra

•           CST under VAT.  e.g. Maharashtra to Karnataka

•  If the state is not relevant for VAT,then it will be

  either

•           LST(Local Sales Tax) e.g. sales from within the same state i.e. within Tamilnadu

 CST(Central Sales Tax) e.g. sale from one state to another i.e. Tamilnadu to Karnataka

SAP SD Tax configuration -Output Taxes

The configuration/master data settings relating to taxes are as follows:-

Configurations for Output Taxes in SAP

• Check Calculation Procedure

•          Create a Tax Procedure

• Assign Country to Calculation Procedure

•          Assign Tax Procedure to the Country

• Taxable indicator for Customer & Material

•          Create Taxable indicators for Customers &  Materials like Full Tax, Zero Tax, Concessional Tax

• Define Tax Determination Rules

•          Create Rules for determining the Taxes

• Tax Codes

•          Create Tax codes for various types of Tax % or Amounts

• SD Pricing Procedure

•          Create Sales Pricing procedure which contains the Tax Condition Types

• Account keys for Taxes and G/L account codes

•          Assign Account Keys to the Tax Condition Types

•          Assign GL Accounts to Account Keys

Master Data for Output Taxes in SAP

The Master Data pertaining to taxes are as follows:-

• Customer and Material Master should have a taxable indicator

•          Customer indicator is “Taxable” or “Exempt”.

Configurations steps as below 

1.Check Calculation Procedure

IMG>>Financial Accountin>> Financial Accounting Global Settings>>Tax on Sales/Purchases>>Basic Settings>> Check Calculation Procedure

TAXIN is the tax procedure in India

2.Assign Country to Calculation Procedure

IMG à Financial Accountingà Financial Accounting Global SettingsàTax on Sales/Purchasesà Basic Settingsà Check Calculation Procedure

Assign tax procedure as below

3.Taxable indicator for Customer & Material

IMG à Sales and Distributionà Basic Functionsà TaxesàDefine Tax Relevancy Of Master Records

Here we define taxable indicator for customer & material

Define tax relevancy indicator for Customer such as 0 value can be configured for Tax Exempt and 1 value for Liable for Tax

Same as material ,Define tax relevancy indicator for Material

4 Define Tax Determination Rules

IMGà Sales and Distributionà Basic Functionsà Taxesà Define Tax Determination Rules 

Tcode:OVK1

Define tax determination rule 

5.Tax Codes

IMGà Financial Accountingà Financial Accounting Global Settingsà Tax on Sales/Purchasesà Calculationà Define Tax Codes for Sales and Purchases 

Tcode:FTXP

Define tax code for Sales & Purchased 

6.SD Pricing Procedure

IMGà Sales and Distributionà Basic Functionsà Pricingà Pricing Controlà Define And Assign Pricing Procedures 

Tcode:V/08

Define & Assign priceing procedure

The MWS account key for the MWST condition type indicates that the tax will hit a particular G/L account code 

7.Account keys for Taxes and G/L account codes

In FTXP transaction code on entering the country and tax code,keep the cursor on output tax MWS and click on Tax accounts tab,enter the chart of accounts as shown in the below snapshot:-

8.Master Data Maintenance 

Customer and Material Master should have a taxable indicator

VAT registration number for European customers.

   

Jurisdiction code for U.S. customers.

Tax condition records

Maintain Condition records  

Tcode -VK11

U.S.A.:- 

In case of U.S., the taxes are derived from the tax code. 

e.g. In a sales order ,if we consider the condition types at item level, we will observe JR1 condition type having tax rate as 4%.

Tips for Configuration 

If Tax is not getting determined, then we can check the following points :-

• The country and region should be maintained for the Customer 
• Customer Master for taxable indicator
• Material Master for taxable indicator
• Check if tax procedure has been defined
• Check if tax procedure has been assigned to the country
• Check if the account key exists in pricing procedure for the respective tax condition type
• Check if the G/L account exists for Tax account key

Following are some of the tables that can be referred to:-

• Customer Master – KNA1,KNVV 
• Material Master – MVKE 
• Pricing Conditions – KONV 
• Tax Codes - T007S , T007V for percentage of tax code.

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Sales and Distribution Quiz-Answer

Sales and Distribution Quiz

1.     Organizational elements are defined in the IMG.

2.     The highest organizational element defined in Sales and Distribution is the Sales Organization.

3.     Once defined the distribution channel is assigned to a Sales Organization.

4.     Once defined a division is assigned to a Sales Organization.

5.     Once defined a sales organization is assigned to a Company Code.

6.     Once the organizational elements of Sales Organization, Distribution Channel and Division have been defined and assigned.  A sales area can be formulated.

7.     A plant once defined is assigned to a Company Code and the combination of sales organization and distribution channel..

8.     A sales office once defined is assigned to a sales area.

9.     A sales group once defined is assigned to a sales office.

10.  A shipping point once defined is assigned to a plant.

11.  If Lean Warehouse Management or Warehouse Management is being utilized the warehouse is assigned to a plant and storage location.

12.  True or False.  A plant once defined can be assigned to as many company codes as your implementation may require.

13.  True or False. A sales organization can only be assigned to one company code.

14.  True or False. If a sales office has been defined you must create a sales group to link to the sales office.

15.  True or False. A shipping point can only be assigned to a single plant.

16.  True or False.  Sales goods can only be sold from a plant assigned to a company code that has sales organizations which are assigned to that same company code.

17.  True or False. A warehouse can only be assigned to one plant and storage location.

18.  The template for creating the Customer Master Record is called the account group..

19.  The fore mentioned element controls things like number range, field selection, partner determination procedure, text determination procedure, and the customer pricing procedure indicator default value.

20.  There are four mandatory partner functions in the sales order.  Name them.  The Sold-To, Bill-To, Ship-To, and Payer.

21.  What determines the specific partner functions that are available in the Sold to Party master record? The partner determination procedure.

22.  The template for creating a material master record is the Material Type.

23.  The fore mentioned element controls things like Number Range, Field Selection, and the departmental views that can be created..

24.  What is the purpose of creating a customer – material information record?  It allows the customer to order goods using their product number rather than the sellers product number.

25.  Identify the phases or stages of the Customer Order Management Cycle.  Presales, Sales, Delivery Processing, Billing, Customer Payment.

26.  True or False.  All data in the sales document comes from some form of master data.

27.  What is meant by the term control table? It’s a type of table located in the IMG which proposes data in the sales document.

28.  Where are the control tables located in the system? IMG

29.  Identify some examples of data that come from a control table in the sales order.  Shipping Point, Route, Item Category, Schedule Line Category, and Pricing Procedure.

30.  The number range for the sales order is controlled by the Sales Document Type.

31.  Whether or not an item is priced in a sales document is controlled by the item category.

32.  The item category controls whether or not schedule lines are determined.

33.  Schedule lines identify the quantities and date(s) that customers require goods.

34.  The default delivery type is derived from the configuration of the Sales Document Type.

35.  The passing of requirements to MM & PP is controlled by the schedule line category.

36.  Relevance for billing is controlled by the item category.

37.  The movement type for Post Goods Issue is controlled by the schedule line category .

38.  The default billing type for order related or delivery related billing is proposed from the Sales Document Type.

39.  Identify the four main categories of condition types. Price / Discount – Surcharge / Freight / and Taxes.

40.  The first step in the condition technique is Procedure Determination.

41.  A pricing procedure could be defined as a sequential list of condition types and subtotals.

42.  What pricing element of the condition technique identifies the calculation type and scale basis? The condition type.

43.  The condition type is the template for creating the condition record.

44.  The condition table identifies the keys for the condition record.

45.  The condition table is linked to the access sequence which defines the search strategy for a condition record.

46.  The condition technique is really a search engine.

47.  Identify the processes involved in delivery processing as it pertains to sales and distribution processing.  Delivery Creation which identifies an intent to deliver product to the customer, picking, packing and post goods issue.

48.  Whether or not delivery scheduling is used is determined by the sales document type.

49.  Up to four times stored in two places can be used to formulate the delivery schedule.  Identify the four times that can be used and where they are stored.  Pick / Pack and Loading times stored in the shipping point and the In-transit time and Transportation Planning time stored in the route.

50.  What type of scheduling logic is always applied first? Backward Scheduling.

51.  What date in the order does the system use as a basis for developing the schedule?  Customer requested delivery date.

52.  What date is dynamically determined at the schedule line level of the order based on the results of the scheduling logic? The Material Availability date.

53.  What date does the system use to perform an ATP check? The Material Availability date.

54.  In order to perform ATP processing two factors are required.  What are they?  The material and the transaction require a check.

55.  The Scope of Check will define what will be counted in relation to supply and demand.

56.  True or False.  Incompletion procedures can only be created for the header of the sales document.

57.  True or False.  In an incompletion procedure each field can be given a status.  This status can impact if the sales document can be copied from one sales document to another or if the document could be delivered or billed.

58. Identify how the system defaults in the delivering plant at the line item level of your order.  Be specific.   Customer – Material Information Record, Customer Master, and the Material master.

58.  What is a shipping point?  What is it used for? Create and Monitor delivery documents.

59.  Provide a definition for the term route.  The pathway that the goods take to reach the customer.

60.  How does the system automatically determine a shipping point in the order?  Be specific. It uses the shipping condition, the loading group and the plant.

61.  What is a stage or a leg? A segment of a route.

62.  What functionality in the system can be used to collective create deliveries for multiple  sales orders?  The delivery due list

63.   It is possible to have different delivery agreements with a customer.  Name at least three types.  Partial Deliveries, Fill or Kill, and Complete Deliveries.  Where can this information be stored?  The Customer – Material Information record, or the Customer Master Record.   Is it possible to change these values if they have been defaulted into the sales order? Yes

64.  True or False.  In a delivery in order to post goods issue to the delivery the delivery quantity and the pick quantity must be equal.

65.  What type of document is used to pick goods from a warehouse if the system is using warehouse management or lean warehouse management?  A transfer order.

66.  True or False. In the R/3 system the system is able to carry out an availability check for multiple plants simultaneously and then propose the plant that would provide the best means of supplying the product.

67. True or False.  The type of delivery agreement a customer has is not a factor in determining the availability of the product for the customer.

68. What document type is used to organize deliveries for transportation processing? The shipment document.

69. What type of document is used to calculate cost in transportation planning? The shipment cost document.

70. What determines if an item is considered "fully referenced" in a sales document? The completion rule stored in the configuration of the item category.

71.  What determines if an item in a sales document is considered "fully referenced" in a sales document?  Duplicate Question

72. What table in the IMG determines if a sales document can be copied to another sales document type? The copy control tables.

73. What field in the material master is used as a key in a control table in the IMG to

Determine an item category in a sales document? The item category group.

74. Identify the other three keys which are used in the "Assign" item category control table to

Determine the default item category.  The order type, the item category group, usage and higher level line item.

75. Identify the document flow in the business transaction of a return document.  Best business practice is to create with reference to the originating order or billing document.  The RE order is the reference document that is used to create the LR delivery type. The delivery item category REN does not require picking so the Posts Goods issue can be performed immediately using Goods Movement type 651.  The credit memo is created using the RE document number as a reference once the billing block has been removed.

76. What control element (part of the sales document) determines if a billing block should default automatically in the credit, debit, return or invoice correction request document. The sales document type.

77. True or False.  A billing document cannot be canceled once it has been created.

78. What type of document requires a mandatory reference to a previous billing document?  The SDF subsequent delivery free of charge document and the RK invoice correction request documents.

79. Account determination uses what technique to determine an account in the accounting document at billing.  The Condition Technique.