Title ABC/123 Version X 1 Leadership Development Journal LDR/535 Version 3 6 University of Phoenix MaterialLeadership Development JournalJournal Entry 1 Journal Entry 2Journal Entry 3Journal Entry 5Journal Entry 6Final Journal Summary Copyright © XXXX by University of Phoenix. All rights reserved. Copyright © 2016 by University of Phoenix. All rights reserved. Lecture 6 Order to Cash (OTC) FIN419 Learning Objectives Understand the elements involved on the Order to Cash (OTC) process Understand the goal of Sales and Distribution (SD) and Inventory Management (IM) Understand the SD elements involved on the OTC process Understand the IM elements involved on the OTC process Understand the FI elements involved on the OTC process Understand the integration points between SD, IMWM and FICO 2 Order to Cash (OTC) Process Customer order Receive order from the customer (demand) Order fulfillment (financial impact) Manufacturing of goods or Shipping (financial impact) Delivery of finished goods Billing (financial impact) Billing to customer Cash collection (financial impact) 3 Shipping Billing Cash collection Customer order Order Fulfillment Order to Cash (OTC) Organizational Structure Client An independent environment in the system Company Code Represents an independent legal accounting unit Balanced set of books, as required by law, are prepared at this level A client may have more than one company code Credit Control Area An organizational entity which grants and monitors a credit limit for customers Credit limits Monitors credit Extend credit It can include one or more company codes It can managed credit Centralized Decentralized Represents the legal and/or organizational views of an enterprise and it forms a framework that supports the activities of a business in the manner desired by management Procurement to Pay (PTP) Organizational Structure (Cont) Plant The plant represents a production unit and is the central organizational unit in Materials Management and Production Planning. Under the OTC represents the place where goods will be deliver to customer. Shipping point Is a location in a plant from which outbound deliveries are shipped They associated to one or more plants and a plant may have more than one. Sales Area A unique combination of sales organization, distribution channel and division Sales organization is the organization unit responsible for the sale and distribution of goods and services in a geographical area Distribution channel is the means by which a company code delivers goods and services (e.g. wholesale, retail, online, etc) Division is a way to consolidate goods and services with similar characteristics Procurement to Pay (PTP) Organizational Structure (Cont) Sales Office A physical location that has the responsibility to sales goods or services within a geographical area Order to Cash (OTC) Global Bike Material Management Structure Two company codes Four s ...

1. Title
ABC/123 Version X
1
Leadership Development Journal
LDR/535 Version 3
6
University of Phoenix MaterialLeadership Development
JournalJournal Entry 1 Journal Entry 2Journal Entry 3Journal
Entry 5Journal Entry 6Final Journal Summary
Copyright © XXXX by University of Phoenix. All rights
reserved.
Copyright © 2016 by University of Phoenix. All rights reserved.
Lecture 6
Order to Cash (OTC)
FIN419
Learning Objectives
Understand the elements involved on the Order to Cash (OTC)
process
Understand the goal of Sales and Distribution (SD) and
Inventory Management (IM)
Understand the SD elements involved on the OTC process
Understand the IM elements involved on the OTC process
Understand the FI elements involved on the OTC process
Understand the integration points between SD, IMWM and
FICO

2. 2
Order to Cash (OTC) Process
Customer order
Receive order from the customer (demand)
Order fulfillment (financial impact)
Manufacturing of goods or
Shipping (financial impact)
Delivery of finished goods
Billing (financial impact)
Billing to customer
Cash collection (financial impact)
3
Shipping
Billing
Cash collection
Customer order

3. Order Fulfillment
Order to Cash (OTC)
Organizational Structure
Client
An independent environment in the system
Company Code
Represents an independent legal accounting unit
Balanced set of books, as required by law, are prepared at this
level
A client may have more than one company code
Credit Control Area
An organizational entity which grants and monitors a credit
limit for customers
Credit limits
Monitors credit
Extend credit

4. It can include one or more company codes
It can managed credit
Centralized
Decentralized
Represents the legal and/or organizational views of an
enterprise and it forms a framework that supports the activities
of a business in the manner desired by management
Procurement to Pay (PTP)
Organizational Structure (Cont)
Plant
The plant represents a production unit and is the central
organizational unit in Materials Management and Production
Planning.
Under the OTC represents the place where goods will be deliver
to customer.
Shipping point
Is a location in a plant from which outbound deliveries are
shipped
They associated to one or more plants and a plant may have
more than one.
Sales Area
A unique combination of sales organization, distribution
channel and division
Sales organization is the organization unit responsible for the
sale and distribution of goods and services in a geographical
area
Distribution channel is the means by which a company code
delivers goods and services (e.g. wholesale, retail, online, etc)
Division is a way to consolidate goods and services with
similar characteristics

5. Procurement to Pay (PTP)
Organizational Structure (Cont)
Sales Office
A physical location that has the responsibility to sales goods or
services within a geographical area
Order to Cash (OTC)
Global Bike Material Management Structure
Two company codes
Four sales organization
2 under GBI
2 under Global Bike Germany
3 Distribution channels
1 for GBI
2 for Global Bike Germany
Sales office
3 under GBI
2 under Global Bike Germany
Procurement to Pay (PTP)
Reflection
What similitude do you find between plant and sales office?
How would you describe the concept of sales area?
Order to Cash (OTC)
Master Data Summary

6. The order to cash (OTC) involved elements of the sales and
distribution (SD), materials management (IMWM) and finance.
This includes the following master data
Material Master controls the material (Raw, WIP, finished
goods)
Customer master. Customer sales area data and AR ledger
Pricing conditions. Use to determine the selling prices of
products
Inventory Management (IM)
Introduction
Inventory and Warehouse management deals with placing and
handling stock that will be shipped to customers in the correct
place within the company’s premises and plays a relevant
element in the order to cash (OTC) process.
Inventory control
Stock
Demand
GL

7. Inventory Management (IM)
Inventory Management
Part of Logistics/Production/ Repetitive Manufacturing/Data
entry
Backflush
Material document
Inventory Management (IM)
Backflush
Backflush is a goods movement in which we accept the
manufactured finished goods after the transformation from
components.
Material is placed on stock (finished goods) ready for shipment
Sales order
Customer notification
Customer Demand
Manufacturing finished goods

8. Procure raw material
Inventory Management (IM)
Material Movements Types
It is a three digit key that represents a movement of goods
Examples of movement types
101, goods receipt into warehouse
103, good receipt into blocked stock
122, return goods to vendor
231, consumption for a sales order
Inventory Management (IM)
Backflush
Event series during a backflush
Material document

9. Stock quantities and values are updated
Accounting document
Raw material inventory updates from price on material master
from components
Finished foods inventory updates from price on material from
finished foods and BOM
Any variance goes Backflush variance
Material document
Raw material Inventory valuation
Accounting document
Finished goods Inventory valuation
Controlling document

10. Inventory Management (IM)
Backflush (MFBF)
Repetitive Manufacturing
Confirmation type
Confirmation qty
Posting date
Material
Plant
Production strategy
Make to stock
Make to order
Batch
Inventory Management (IM)
Display Material Document (MB03)
Material document or
Material document list
Material
Plant
Movement type
Order to Cash (OTC)
Reflection
Where do you connect the PTP with the OTC processes?
What do you think is the financial impact of backflush?

11. What could the reason of any backflush variance?
Would you say GBI has a repetitive manufacturing process,
why?
What production strategy do you think GBI might use and why?
Sales and Distribution (SD)
Sub-modules
Part of Logistics/Material Management/Sales and Distributions
Master Data
Sales
Shipping and Transportation
Billing
Credit Management
Sales and Distribution (SD)
Introduction
Sales and Distribution contains the most relevant elements of
the order to cash process gathering the data from the customer
order to the delivery of goods.
Sales
Demand
Fulfillment

12. Quote
Sales and Distribution (SD)
Transactions
XD01 Create Customer Master (Master Data)
VK31 Create conditions (Master Data)
VA21 Create customer quote (Sales)
VA01 Create sales order (Sales)
Shipping
Sales and Distribution (SD)
Customer master (XD01)
Customer Master Account is data needed to conduct business
with customers and execute transactions related with fulfillment
process.
General (Client)

13. Sales area
Account
Name
Address
Bank information
Currency
Delivering plant
Delivery priorities
Shipping conditions
Partner functions

14. Sales and Distribution(SD)
Material Master Views
Basic
Sales (SD)
Purchasing
Plant
Forecast
Storage
Quality
Accounting
Controlling
Sales and Distribution (SD)
Material Master
Contains all of the key information a company needs to manage
a material within its organization.
The material master defines, among other things, how a product
is sold, manufactured, purchased, inventoried and costed.
Information is grouped into views that are organized by
business function.
The majority of views of master data are stored at the plant
level.
Basic Data
Material

15. Sales
Unit of measure
Material group
Description
Sales org data 1
Sales org data 2
Delivery plant
Tax data
Conditions
Sales general
Availability
Transportation
Sales and Distribution (SD)
Conditions (VK31)
Contains the selling prices of finished goods.
You can define the condition master to be dependent on various
data:
Material specific
Customer specific
Conditions can be dependent on any document field
Pricing elements

16. Gross price
Freight cost
Sales taxes
Surcharges and discounts
Sales and Distribution (SD)
Quote
The quotation presents the customer with a legally binding offer
to deliver specific products or a selection of a certain amount of
products in a specified timeframe at a pre-defined price.
Sales and Distribution (SD)
Quote(VK21)
Quote data and sales org
Header
Sold to and Ship to
Line items
Validity
Required date
Material
Quantity
Price

17. Sales and Distribution (SD)
Sales Order
Sales order processing can originate from a variety of
documents and activities
Customer contacts us for order: phone, internet, email
Existing Contract
Quotations
Elements of a sales order
Customer Information
Material/service and quantity
Pricing (conditions)
Specific delivery dates and quantities
Shipping and billing information
The sales order contains all of the information needed to
process your customers request, the following information is
determined for each sales order:
Delivering Schedule
Shipping point and route determination
Availability Check
Transfer of requirements to MRP
Pricing
Credit limit check
Sales and Distribution (SD)
Sales Order Delivery Scheduling
When an order is created you must enter a requested delivery
date for the order or each line item.
The system will then determine a delivery timeline, this will be
used when determining our material availability, or ATP

18. (Availability to Promise) date.
The system will determine this date using forward and backward
scheduling rules you have defined.
Types of scheduling
Backward
Forward
Sales and Distribution (SD)
Backward Delivery
The time needed to complete all the necessary steps from order
to delivery beginning with the required delivery and then works
in reverse order.
Sales and Distribution (SD)
Forward Delivery
The time needed to complete all the necessary steps from order
to delivery from the customer beginning with order, make sure
material will be available and the delivery date
Sales and Distribution (SD)
Create Sales Order (VA01)
Header data
Sold To
Ship To
Item details
Delivery date
Picking date
Payment terms

19. Incoterms
Material
Delivery plant
Net price
Sales and Distribution (SD)
Introduction to Shipping
The shipping process begins when you create the delivery
document for the sales order. This document controls, supports,
and monitors numerous sub-processes for shipping processing:
Picking
Packing
Loading
Posting Goods Issue
Integrated with the Material Management (MM) and Finance
(FI) modules
Delivery
Picking
Packaging
Post Goods issue

20. Sales and Distribution (SD)
Shipping (Transactions)
VL01N Outbound Delivery
Delivery
Picking
Packaging
VL35 Picking
VL02N Packaging
VL02N Post goods issue
Sales and Distribution (SD)
Delivery
Checks order and materials to determine if a delivery is possible
— delivery block (hold), completeness
Confirms availability
Confirms export/foreign trade requirements
Determines total weight & volume
Generates packing proposal
Calculates weight and volume
Checks scheduling
Considers partial deliveries
Updates route assignment
Assigns picking location
Updates sales order
Determines batches

21. Quality check (if needed)
Updates sales order
Sales and Distribution (SD)
Create Delivery (VL01N)
Header
Shipping point
Date
Order number
Ship to party
Item
Planned goods issue
Total weight
Material
Quantity
Sales and Distribution (SD)
Delivery: Picking
Quantities based on delivery note
Assigned date when picking should begin
Automated storage location assignment
Supports serial number/lot number tracking and batch
management
Integrated with Warehouse Management (WM)
Sales and Distribution (SD)
Delivery: Loading and Packaging
Identifies which packaging is to be used for specified products
Identifies and updates accounts associated with returnable
packaging

22. Tracks the packed product by container
Insures weight/volume restrictions are enforced
All packed items are assigned to the required means of
transportation
Sales and Distribution (SD)
Post Goods Issue
Post Goods Issue triggers the official change of ownership of
finished goods
Stock overview
Post Goods issue
Finish goods
Delivery

23. Sales and Distribution (SD)
Post Goods Issue
Event series during a goods issue
Material document
Stock quantities and values are updated
Accounting and Controlling document
Inventory updates from price on material master (finished
goods)
COGS updates from price on material master (finished goods)
Billing due list is updated
Output generated
Material document
COGS
Accounting document
Billing due list
Transaction output
Controlling document

24. Sales and Distribution (SD)
Post Goods Issue (VL02N)
Outbound delivery
Document date
Post Goods Issue
Sales and Distribution (SD)
Billing
VF04 Billing Due List
Sales and Distribution (SD)
Billing
The billing document is created by coping data from the sales
order and/or delivery document.

25. Order-based billing
Delivery-based billing
The billing process is used to generate the customer invoice.
It will update the customer’s credit status.
Sales and Distribution (SD)
Billing
Event series during a Billing
Material document
Sales order is updated
Accounting and Controlling document
Sales updates from billing document
AR updates from billing document
Material document
Sales Order History
Accounting document
Controlling document

26. Sales and Distribution (SD)
Billing (VF04)
Date
Sales organization
Sold to party
Sales and Distribution, Billing (SD)
Reflection
What is the purpose of the delivery document on SAP?
What do you think is the financial impact of the post goods
issue?
What do you think is the financial impact of processing the
billing due list?
Accounts Receivable (FI-AR)
Incoming Payment
Can be done automatically or manually
Post outgoing (F-53)
Payment program (F110)
Payments elements
Payment method
Bank from which we pay
Invoices to be paid
Payments amounts
Payment medium

27. Checks, wires, etc
Event series during a goods receipt
Accounting document
Vendor references invoice
Bank reference payment
PO is updated
Output generated
Accounts Receivable
Incoming Payments (F-28)
Company code
Posting & document date
Document type
Currency
Bank Data (debit)
Value Data (collection date)
Customer Data (credit)
Additional selections for line items identification
47
Sales and Distribution
Document Flow
The document flow and order status feature allows you to find
the status of an order at any point in time. The SAP updates the
order status every time a change is made to any document
created in the customer order management cycle (Order-to-
Cash).

28. Order to Cash(OTC)
Integration IM, SD and FI
Backflush
Dr Finished goods inventory current standard and BOM
Cr Raw material inventory current standard
Post goods issue
Dr COGS current standard finished goods
Cr Finished goods inventory current standard cost
Billing
Dr AR based on billing (invoice)
Cr Sales based on billing
Cash Collection
Dr Bank based on cash
Cr AR based on invoice
Order to Cash (OTC)
SAP Practice
Create customer
Cerate sales order from quote
Delivery
Create an inquiry
Billing

29. Cash collection
Create a quotation
Post goods issue

30. Leadership Development Journal: Entry #1 Grading Guide
LDR/535 Version 3
2
Leadership Development Journal: Entry #1 Grading Guide
LDR/535 Version 3
Leading Change
Copyright
Copyright © 2016 by University of Phoenix. All rights reserved.
University of Phoenix® is a registered trademark of Apollo
Group, Inc. in the United States and/or other countries.
Microsoft®, Windows®, and Windows NT® are registered
trademarks of Microsoft Corporation in the United States and/or
other countries. All other company and product names are
trademarks or registered trademarks of their respective
companies. Use of these marks is not intended to imply
endorsement, sponsorship, or affiliation.
Edited in accordance with University of Phoenix® editorial
standards and practices.
Individual Assignment: Leadership Development Journal: Entry
#1Purpose of Assignment
The purpose of this assignment is to provide the student with
some insights into their leadership competencies. This is
accomplished through the development of a leader journal. The
student will create the journal in Week 1 and make an entry
each week. Each entry will provide critical self-assessment on a
specific leadership topic. The student will collate this
information into a final entry in Week 6.
Resources Required

31. Leadership Journal
Leadership Trait Questionnaire Results
Leadership Skills Inventory ResultsGrading Guide
Content
Met
Partially Met
Not Met
Comments:
The student summarized leadership traits based on Leadership
Trait Questionnaire results.
The student reflected on what the Leadership Trait
Questionnaire indicates about themselves.
The student summarized leadership traits based on Leadership
Skills Inventory results.
The student reflected on what the Leadership Skills Inventory
indicates about themselves.
Total Available

32. Total Earned
2
#/2
Writing Guidelines
Met
Partially Met
Not Met
Comments:
The paper—including tables and graphs, headings, title page,
and reference page—is consistent with APA formatting
guidelines and meets course-level requirements.
Intellectual property is recognized with in-text citations and a
reference page.
Paragraph and sentence transitions are present, logical, and
maintain the flow throughout the paper.
Sentences are complete, clear, and concise.

33. Rules of grammar and usage are followed including spelling and
punctuation.
Total Available
Total Earned
1
#/1
Assignment Total
#
3
#/3
Additional comments: