Standard Order to Cash: Sales Order, Delivery, Goods Issue (601) and Billing

Business scenario

Demo Retail Pvt. Ltd. orders 50 EA of FG-2000 (bracket assembly) from Demo Manufacturing. Sales confirms the order, the shipping point picks and loads the goods, goods issue is posted when the truck leaves, and billing invoices the customer.

All companies, numbers and documents are fictional demo data.

Step-by-step flow

1. 01

   Customer orders 50 EA open in twin

   Sales creates standard order 10000123 for Demo Retail Pvt. Ltd. — 50 EA of FG-2000.

   It is the commercial agreement and the reference document for everything that follows — delivery, goods issue and billing all point back to it.

2. 02

   Availability check confirms the date open in twin

   200 EA are in stock, so all 50 EA are confirmed for the requested delivery date.

   A confirmed schedule line is what makes the order deliverable. Without it, no delivery can be created for that date.

3. 03

   Shipping creates the outbound delivery open in twin

   Outbound delivery 80000456 is created for the order at shipping point 1000 (VL01N).

   It separates the commercial agreement (order) from the physical execution (picking, loading, goods issue), so one order can become several deliveries and vice versa.

4. 04

   Picking and loading open in twin

   50 EA are picked from SLoc 0001 and loaded onto the truck at the shipping point.

   Picking confirms what will actually ship. Until goods issue, the stock is still yours and still in SAP as unrestricted stock.

5. 05

   The truck is loaded open in twin

   The goods are on the truck and ready to leave. Decide what reduces the stock.

   Stock and value leave inventory at goods issue, not at billing. Keeping the two apart is the single most important idea in order to cash.

6. 06

   Billing does not touch stock open in twin

   A billing document posts revenue and a receivable. Inventory is untouched — the stock is still 200 EA.

   Stock and revenue are deliberately separate events. The goods issue (601) handles quantity and cost of goods sold; billing handles revenue and the receivable.

7. 07

   Post goods issue (601) open in twin

   FG-2000 at 1000/0001: 200 → 150 EA. Cost of goods sold is charged.

   This is the moment the goods stop being your asset. The delivery's goods-issue status is also what makes it due for billing.

8. 08

   Truck delivers to the customer open in twin

   The goods travel to Demo Retail Pvt. Ltd. They are already out of your stock.

   In this standard flow nothing is posted while the goods are travelling. Who carries the risk in transit is an Incoterms question, not a stock-posting one.

9. 09

   Create the billing document (VF01) open in twin

   Invoice 90000789 bills 50 EA at ₹2,000 — revenue ₹1,00,000 and a receivable from the customer.

   Revenue is recognised here, against the cost of goods sold already posted at goods issue — that pairing is what makes the margin visible in CO-PA and profitability reporting.

10. 10

    Order to cash complete open in twin

    Sales order → delivery → goods issue (601) → invoice. Stock down 50 EA, revenue ₹1,00,000, margin ₹40,000.

    That chain (visible in the order's document flow) is how you audit any sale: what was promised, what shipped, what left stock and what was billed.

SAP documents

Stock impact

Accounting impact

Movement type

• 601GI for delivery (sales order)Reversal: 602
• 602Reversal of GI for delivery (VL09)

Sells stock to a customer and collects the money: records the agreement, ships the goods, takes them out of inventory at cost, and invoices the customer at the sales price.

Transactions & Fiori apps

Configuration

• Sales document type (VOV8)

  Configuration dependent

  Order type OR drives screens, delivery type, billing type and whether billing is order- or delivery-related.

• Item category and schedule line category

  Configuration dependent

  Determine whether an item is deliverable, billing-relevant and stock-relevant. This is what makes third-party or free-of-charge items behave differently.

• Copy control (order → delivery → billing)

  Configuration dependent

  Controls what may be copied into the follow-on document and when, including the requirement that goods issue is posted before a delivery-related invoice.

• Revenue account determination (VKOA)

  Configuration dependent

  Maps condition account keys (ERL, ERS, MWS) to G/L accounts. Actual accounts are always system specific.

• Partial delivery and over-delivery tolerance

  Configuration dependent

  Set on the customer master sales area data and the item category; controls whether shortfalls may split into several deliveries.

Prerequisites

• Customer master (business partner) created for the sales area, with shipping and billing data
• Material extended to the sales area with a sales view and a valuation price
• Pricing condition records so the order can determine a price
• Revenue account determination (VKOA) and cost-of-goods-sold account determination (GBB/VAX) configured
• Shipping point determination for the plant, shipping condition and loading group

Master data

Customer / business partner

Sold-to, ship-to, bill-to and payer roles; sales area data drives pricing, shipping, partial deliveries and billing.

Material master (sales views)

Sales organization data, delivering plant, loading group and tax classification.

Material valuation

Supplies the value posted to cost of goods sold at goods issue — independent of the sales price.

Pricing condition records

Determine the net value of the order and the invoice.

Organizational structure

• Company code 1000
• Sales organization 1000, distribution channel 10, division 00
• Delivering plant 1000, storage location 0001
• Shipping point 1000

Tables

Integration

• FIBilling posts the receivable and revenue; goods issue posts cost of goods sold.
• CORevenue and cost of goods sold flow to profitability analysis, giving the margin per order, customer or product.
• MMThe delivery consumes inventory managed by MM; stock availability drives the availability check.

Common errors

• “No delivery can be created for the sales order”

  Likely causes: No confirmed quantity on the schedule line; Delivery block on the order or the customer; Shipping point could not be determined; Requested delivery date in the past

  Where to look: Sales order schedule lines · Customer master shipping data · Shipping point determination configuration

• “Goods issue cannot be posted”

  Likely causes: Picking quantity not confirmed; Insufficient unrestricted stock at the delivering plant/storage location; Posting period closed; Cost-of-goods-sold account missing in account determination

  Where to look: Delivery picking status · Stock overview (MMBE) · Posting period settings · Account determination analysis

• “Delivery does not appear in the billing due list”

  Likely causes: Goods issue not yet posted; Billing block on the order or the item; Item category not billing relevant; Copy control between delivery and billing type missing

  Where to look: Delivery goods-issue status · Order and item billing block · Item category configuration · Copy control for the billing type

• “Invoice posts no revenue or hits the wrong account”

  Likely causes: Revenue account determination (VKOA) incomplete; Condition has no account key; Account key assigned to the wrong G/L account

  Where to look: Billing document account determination analysis · VKOA condition records · Pricing procedure account keys

Troubleshooting

Something went wrong? Work through these checks in order. They are diagnostic questions, not configuration instructions — confirm changes with your system owner.

1. CHECK 1

   Order cannot be saved

   • Is the material extended to this sales area?
   • Does the customer exist for this sales area?
   • Can pricing find a condition record?
   • Is the pricing procedure complete for this document type?

2. CHECK 2

   Nothing to deliver

   • Is there a confirmed schedule line?
   • Is there a delivery block on the order, item or customer?
   • Is enough unrestricted stock available at the delivering plant?

3. CHECK 3

   Cannot invoice

   • Has goods issue been posted?
   • Is there a billing block?
   • Is the item category billing relevant?
   • Is copy control maintained from the delivery type to the billing type?

4. CHECK 4

   Wrong accounts posted

   • Run the account determination analysis in the billing document
   • Check VKOA condition records for the account keys used
   • Check GBB/VAX for the cost-of-goods-sold account

Interview questions

• At which point does stock actually leave the company in a standard sales process, and what else happens at that moment?

  At goods issue on the outbound delivery, posted with movement type 601. It reduces unrestricted stock at the delivering plant and storage location, posts the inventory value to cost of goods sold, creates a material document and an accounting document, and sets the delivery's goods-issue status so it becomes due for billing. Neither the sales order nor the billing document moves stock.

• Why is the value posted at goods issue different from the value on the invoice?

  Goods issue posts the material's inventory value (standard price or moving average) to cost of goods sold. The invoice posts the sales price determined by pricing to revenue. The difference is the gross margin — which is exactly why both postings exist separately.

• What is the difference between order-related and delivery-related billing?

  Delivery-related billing invoices what was actually shipped, so the billing document copies from the delivery and requires goods issue to be posted — the normal case for physical goods. Order-related billing invoices from the sales order without a delivery, used for services, credit and debit memo requests, and some third-party configurations. The item category controls which applies.

• A customer orders 100 EA but only 60 are available. What does SAP do?

  The availability check confirms what it can. Depending on the customer master's partial-delivery settings and the item category, it either confirms 60 now with the remaining 40 on a later schedule line, confirms the full 100 for a later date when everything is available, or refuses to split at all if the customer requires complete delivery.

• How would you reverse a goods issue that was posted by mistake?

  Use VL09 to reverse the goods movement for the delivery, which posts movement type 602 and puts the stock back. If the delivery has already been invoiced, the billing document must be cancelled first (VF11), because the document flow has to be unwound in reverse order.

Quiz

Related processes

• 101101 Goods Receipt
• 651 · 453 · 653Customer Returns
• 631 · 633 · 632Customer Consignment

References

• SAP SE — SAP Help Portal: Sales and Distribution (SD) (source)
• SAP SE — SAP Help Portal: Sales Order Processing (source)
• SAP SE — SAP Help Portal: Billing (source)
• SAP SE — SAP Help Portal: Revenue Account Determination (source)

Explanations are original. They summarize standard behaviour; always validate against your system's release and configuration.

Version history