Sales - A/R

1. Sales - A/R Contents: • Sales Process • Handling Issues in Sales – A/R

2. Sales - A/R:Purpose In this unit, you will: • Master the basic steps of the sales process • Understand the consequences of each step on inventory and accounting • Handle issues that arise within delivery and billing

3. Sales - A/R:Business Example • The company has set customer satisfaction as its top priority and wants to streamline its processes in sales to make sure that its customer’s demands can be met as quickly as possible. • When problems arise for the customer, you can quickly solve the issues by using documents such as Returns and Credit Memos.

4. Sales Process: Unit Overview Diagram Sales - A/R Topic 1: Sales Process Topic 2: Handling Issues in Sales

5. Sales Process System Configuration Master data Service Marketing & Sales Outbound logistics Warehouse management Purchasing Inbound logistics Production Financial controlling Sales Order Delivery A/R Invoice Incoming Payment

6. Key Data in the Sales Process: Business Partners • Common structure for all business partners used in sales and purchasing • Business partners used in the sales process: • Leads • Customers • Defaults are set at the company level for business partner details such as: • Currency • Payment terms • Credit Limit • Price list

7. Leads and Customers Leads • Use on pre-sales documents or sales orders • Not on deliveries or invoices Customers • Use on any sales document • Convert leads to customers when they buy

8. Key Data in the Sales Process: Items • Items represent products to be sold • Item information is stored in the item master record • You can type item codes directly into a sales document rows or search for items by description or other item attributes

9. Using Price Lists in the Sales Process Price List Customer Master Record Price List Basics: • 10 default price lists are provided. • Items are linked to every price list. • Assign a price list to each customer. • The assigned price list defaults into a sales document automatically. Sales Documents

10. Sales Order • Our customer orders 5 laptops • We enter customer, items, and quantities in the sales order • The system determines the price automatically • A manual discount for 1% is entered in the order • The customer is also eligible for an early payment discount of 2%

11. Item Availability Check in Sales Orders 2.) 1.) Sales Order Administration  System Initialization  Document Settings Item No. Description Quantity WH Document Settings A00001 … 50 01 Per Document Sales Order Document Activate Automatic Availability Check If Order Quantity>Quantity Available Item Availability Check Item No. A1000 Warehouse 3.) 01 Quantity Ordered 50 Pair = 100 pcs Requested Due Date 05.06.2010 Available Quantity 28 pieces Earliest Available 10.06.2010 Select Action: • Continue • Change To Available Quantity • Display Available-to-Promise Report • Display Quantities in Other Warehouses • Display Alternative Items • Delete Row

12. Delivery • We ship 5 laptops to the customer • The quantity of 5 laptops is removed from inventory • The inventory account is credited for item cost • The cost of goods sold account is debited

13. A/R Invoice • We bill our customer for the 5 laptops • The total includes the 1% manual discount • The due date is based on the customer’s payment terms • A journal entry is created to record: • a credit to revenue • a debit to the customer account

14. Incoming Payment • The customer pays the invoice on time for the 5 laptops • The total includes the 1% manual discount and the early payment discount of 2% • A journal entry is created to record: • debits to our house bank account and discount accounts • a credit to the customer account

15. Sales to One-Time Customers (A/R Invoice + Payment) Setup  Financials G/L Account Determination Menu Administration Sales Default Customer for A/R Invoice + Payment C9999 One-Time Customer A/R Invoice + Payment PaymentMeans Customer C9999 Check Bank Transfer Credit Card Cash Name Michael Kramer Ship To Main 9855Chicago TX 65095 USD 1000.00 Item No. Item Description A00001 Twin Seater USD 303.84 Three Seater A00002 ... USD 1303.84 Balance Due Add Balance Due USD 1303.84

16. Postings in Sales Process for Inventory Items Inventory Item Sales Item Purchased Item Fixed Assets Sales Order Delivery A/R Invoice Revenues AccountSales Revenues – EUForeign Revenues Acc. Cost Acc. Stock Acc. Customer 100 100 100 100

17. Document Flow in Sales Sales Order Delivery A/R Invoice Warehouse(Quantity) 1 2 3 General Ledger(Value)

18. Sales Documents and Their Properties A/R Invoice Quotation Order Delivery Sales Document must be Created in the System 1) 2) Change/Reverse Returns A/R Credit Memo Sales Documentfor Correction 3) Delivery OrderQuotation Quotation OrderQuotationA/R Reserve Invoice 4) Reference WhenAdded Quantities Postedin InventoryManagement 5) (Goods Issue) (If No Reference to Delivery) Posts committed quantity 6) Values Postedin GeneralLedger

19. Stock Changes in Sales Model Report: Inventory Status In Stock - Committed + Ordered = Available Transaction Quotation + - Order - - Delivery for order Separate delivery (w/oreference to order) - - Sales / AR Pick List A/R Invoice for delivery Separate A/R Invoice (w/o reference to delivery) - - A/R Reserve Invoice for Order A/R Reserve Invoice (w/o reference to order) + - Delivery for A/R Reserve Invoice - - + + Returns + + A/R Credit memo + Indicates increase in quantity - Indicates decrease in quantity

20. Functions in Sales – A/R Quotation Order Delivery A/R Invoice 1.) Credit Limit Check Gross Profit andLast Prices Report 2.) 3.) Link to TransactionJournal Serial Number andBatch Management 4.) 5.) Activities Create DocumentDrafts 6.)

21. Document Generation Wizard Invoices need to be produced Deliveries to a customer Summarized A/R Invoice

22. Sales Analyses in SAP Business One Sales analyses provide information on sales by: • Customers • Items • Sales employees • A combination of the above Examples • What are the sales figures per customer?Which customer is the most profitable? • Which product is most successful?Which is the most profitable?How are the sales figures distributed among the quarters? • Which products does a certain customer prefer? • How successful is our sales staff?How well does a particular sales employee sell one item in comparison to another one?How are the sales figures per employee and item distributed over the entire year?

23. Open Items List Open Items List: • Open Sales Quotations • Open Sales Orders • Open Deliveries • Open …

24. Sales Process: Topic Summary • Key points from the Sales Process topic: • The four main steps in the sales process are: • Sales Order • Delivery • A/R Invoice • Incoming Payment • Each sales document has a different effect on inventory and/or accounting. • Key master data used in sales: business partner and items • Key reports in sales process: open items list and sales analysis

25. Exercises for the Sales Process

26. Handling Issues in Sales: Unit Overview Diagram Sales – A/R Topic 1: Sales Process Topic 2: Handling Issues in Sales

27. Returns Delivery Cost Account Stock Account 50 50 Returns Cost Account Sales Returns 50 50 Warehouse(Quantity) General Ledger(Value)

28. Customer 100 Cost Acc. 50 Credit Memo SalesRevenues Cost Acc. Stock Acc. Customer 50 50 100 100 Revenues Acc. 100 Stock Acc. 50 Warehouse(Quantity) General Ledger(Value)

29. Negative rows on marketing documents • Make corrections directly in a marketing document without a credit memo • Negative rows can be added to: • Delivery • A/R Invoice • Returns • A/R Credit Memo • Example: customers can get a credit for returning packaging while ordering more items.

30. Troubleshooting Issues in Sales: Topic Summary • Key points from this topic: • If no A/R invoice has been created, use a Return document to receive items from a customer. • When correcting a problem after the A/R invoice has been created, use an A/R credit memo. • Negative rows can be added to marketing documents.

31. Exercises for Troubleshooting Issues in Sales

32. Sales – A/R: Unit Summary • You should now be able to: • Complete the basic steps of the sales process • Understand the consequences of each step on inventory and accounting • Handle issues that arise with in delivery and billing