We continue our free SAP SD course and go deeper to understanding of customization of the standard behavior of SAP ERP system related to Sales and Distribution business processes. In this tutorial, we are going to speak about SAP SD Item Categories. SAP SD Item Categories is an important concept is performing customizations for SAP SD module. It is difficult to describe all the properties of item categories in a single tutorial, because they control different aspects of sales processes and it makes more sense to study them in further tutorials related to specific business processes. Here we will just get started with understanding item categories and accessing their customizing.
As you already know from the previous tutorials about sales orders in SAP Sales and Distribution, these documents consist of the following elements:
- Header of a sales order containing customer’s information
- Items where the materials to be sold are maintained
- Schedule Lines confirming whether the material will be made available for sales on the required date of delivery which the customer asked for based on the settings at SAP backend
Like different sales document types, SAP SD Item Categories have their own functionality. When you enter a material to be sold, an item category for this material is populated after being identified based on certain criteria. Item Categories are a crucial part of sales orders and sales processes. They are responsible to control the behavior of items in a sales order. SAP SD Item Categories are assigned to SAP SD sales document types.
Item category is populated based on the:
- Sales document type selected for an order entry
- Item Category Group defined in the Material Master of the Finished Product to be sold
The item category group allows you to group together different materials that behave in a similar way during sales and distribution processes. Different Item Categories are determined with respect to the following sales document types:
- Value Contract
- Quantity Contract
- Scheduling Agreements
- Sales Order
- Delivery Document
SAP SD Item Categories and Their Functionality
Item Categories in Sales Orders
In SAP, standard item categories are available for line item while creating an inquiry, quotation, contract, scheduling agreement, sales order. Each item category has its own functionality and processing.
For example, in an inquiry, you are just recording the customer’s call received for inquiring about certain products. It can have pricing which you offer to your regular customers but since it is just an inquiry it does not need to and cannot be delivered and billed.
A sales order is an actual commitment with your customer to deliver the agreed product at a certain date. Hence, sales order item category is relevant for pricing, delivery and billing. If some material in the sales order is a free good or discounted material offer to a customer against purchase of certain quantity of goods, than its line item category will be relevant for 100% discount.
Examples of functionality which SAP SD item categories perform are:
- If the item is relevant for pricing
- If the item is standard or a free good given as free
- If the item is relevant for delivery. E.g., if you are selling a finished product which was either procured and then sold (in case of trading process) or produced and then sold (in case of manufacturing process), the product will be delivered physically because it is tangible.
- Sales of service is a bit different. In sales of service you do not deliver something which is tangible. However, it is the experience which you deliver but in system no delivery can be created since it is not tangible.
Examples of standard sales document types and their associated item categories are:
- AFN – IN – Inquiry
- AGN – QT – Quotation
- KMN – Quantity Contract
- TAN – OR – Standard Order
- TANN: Free Item
- TATX: Text Item in Order
- BVN – CS – Cash Sales
- REN – RE – Returns Order
- G2N – CMR – Credit Memo
- L2N – DMR – Debit Memo
Item Categories in Deliveries
The delivery item category checks how the item to be delivered will be handled during the shipping process. Whether the system should check:
- If the item is relevant for delivery
- If the minimum quantity criteria are met
- If the over delivery is prompted at the time of delivery when trying to deliver over and above the sales order quantity
- If the material is relevant for picking or not
- If the storage location is required and mandatory
Customizing SAP SD Item Categories
SAP SD item categories can be customized as per your business requirements and scenarios at hand. To do this, you should always follow and abide the best practice by first copying a standard item category which is near to your requirements, then customize it as per the business needs and rename it with your own naming convention starting from either ‘Y’ or ‘Z’ letters.
To access the customizing for item categories of sales orders at the backend in the SAP system, you can either use transaction VOV7 in the transaction bar to reach to that area directly:
or type SPRO in the transaction bar:
Then either press F5 or in the next screen:
Once you are in customizing, to access Sales Order Item Categories follow this menu path:
Sales and Distribution > Sales > Sales Documents > Sales Document Item > Define Item Categories
Below is a screenshot of a customizing screen for the standard item category TAN that by default assigned to the standard sales order type OR:
To access Delivery Item Categories, either enter 0VLP in the transaction bar:
Or follow this menu path after if you wish to access it by entering SPRO in the transaction bar:
Press F5 from keyboard or press button
Then, navigate to the following item in the SAP customizing menu: Logistics Execution > Shipping > Deliveries > Define Item Categories for Deliveries
Below is a screenshot of a customizing screen of the standard item category TAN that by default assigned to the delivery type LF.
Did you like this tutorial? Have any questions or comments? We would love to hear your feedback in the comments section below. It’d be a big help for us, and hopefully it’s something we can address for you in improvement of our free SAP SD tutorials.
Go to next lesson: SAP SD Schedule Line Categories
Go to previous lesson: SAP SD Sales Document Types
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