A Retail Organisation needs the basic organisational units - Purchasing, Sales, Finance, Shipping considering the operations involved in basic retailing. Since this post assumes that  you are aware of / experienced in any core SAP module, we fastly pass through the organisational units definition without delving much in detail into them. We are defining and adding the following Organisational units for configuring our basic Retailing process.

1. Company Code

2. Purchasing Organisation

3. Sales Organisation

4. Shipping Point


The Organisational Units defined and assigned are as follows:-

 Company Code: PS01

Purchasing Organisation: WW01

Purchasing Group: E01

Sales Organisation: WW01

Distribution Channel: W1, W2, W3

Division: W1

Shipping Point: WW01

Company Code (PS01)


A company code (PS01) is an independent accounting unit that represents an independent company in the legal sense. It is the central organizational element in Financial Accounting.


In the retail sector, company codes can be used at distribution chain level or even at the level of individual stores. For this reason, goods movements (such as stock transfers) between different company codes are common in SAP Retail.


Various assignments between a company code and other organizational units are possible:

A purchasing organization (WW01) can be assigned to a company code. In this case, the purchasing organization can only order for sites within this company code.

A valuation area is the organizational unit subject to inventory management on a value basis in the SAP system. In SAP Retail, the valuation area must always correspond to a site.

You assign a company code as an attribute to the valuation area that is already allocated to a site either in the site maintenance or in Customizing.

Each sales organization (WW01) must be assigned to a company code in Customizing. This assignment forms the link between Sales and Distribution and Accounts Receivable Accounting.


Sales Organization (WW01)


A sales organization (WW01) is an organizational unit in Logistics that structures the company according to its sales requirements.


Each sales organization (WW01) represents a "selling unit" in the legal sense. Its responsibilities include product liability and any claims to recourse that customers may make. It is also responsible for the sale and distribution of merchandise and negotiates sales price conditions. Sales organizations can be used to reflect regional subdivisions of the market, for example by states. A sales transaction is always processed entirely within one sales organization.


Each sales organization (WW01) is assigned one company code (PS01). This company code tracks the business transactions of the sales organization from a mainly financial accounting point of view.


Distribution Channel (W1, W2, W3)


The distribution channel is the channel through which saleable materials or services reach the customer. Distribution channels include selling to consumers through various types of retail outlet or via mail order.

W1 - Distribution Center Channel

W2 - Stores Channel

W3 - Wholesale Channel


Each distribution channel (W1, W2, W3) is assigned to a sales organization (WW01), and these two units together form a distribution chain. Multiple assignments are possible.


Data is not retained at distribution channel level. A distribution channel level is not a data retention level until it has been combined with a sales organization or (later) a division as well.


Division (W1)


A division (W1) is an organizational unit based on responsibility for sales or profits from saleable materials or services.


Divisions have two main applications: They are organizational units for Sales and Distribution, and they are necessary for business area account assignment for logistics transactions in Financial Accounting. Divisions can be used to describe specific product groups and can form the basis for sales statistics, for example.

Divisions are not used for any functions developed specifically for SAP Retail. However, a single dummy division is provided where necessary.


Articles are assigned uniquely (client-wide) to one division.

Divisions (W1) are assigned to sales organizations (WW01).

For each combination of sales organization and division there is a reference division for customer and article master data, and also for condition data and sales document types. This allows the data in the reference division to be used in the original division too.


Sales Area


The sales area is the combination of a distribution chain (a sales organization and a distribution channel) and a division . Since divisions are not actively used in SAP Retail, however, sales areas are of little significance here and can largely be seen as synonymous with distribution chains.





Just as the purchasing organization plays an important role in calculation schema determination in Purchasing, the sales area (together with the document schema and the customer schema) is used to determine the sales price calculation schema in Sales Pricing.


Each site is assigned one sales area, and therefore one distribution chain as well, permanently ("statically") in site maintenance. The sales organization does not necessarily have to belong to the same company code as the site.

If a site is to be supplied by other sources, you can define (in site maintenance) the sales areas, and therefore distribution chains, via which the site is allowed to procure merchandise.

The "static" sales area determines the sales prices and assortments of a site, and frequently the internal and external presentation, too.

Sales areas appear in all the main sales and distribution documents, including customer inquiries, customer quotations, sales orders, customer outline agreements, deliveries and billing documents.

Sales areas are used for updates in the Sales Information System

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