How To Configure New Division/Sales Area/Sales Office in SAP SD

Introduction to SAP SD Organizational Structure

Setting up your company’s sales configuration in SAP SD is essential to ensuring streamlined operations, logical process flows, and scalable structure. Whether you're rolling out SAP for a new entity or optimizing existing setups, configuring divisions, sales areas, and sales offices plays a key role. 

Understanding Key Organizational Units in SAP SD

What is a Company Code?

A Company Code is the smallest organizational unit in SAP that represents a legal entity. Each company code maintains its own balance sheet and profit and loss statement. It’s the backbone of financial reporting in SAP.

What is a Sales Organization?

The Sales Organization is responsible for the sale and distribution of goods and services. It oversees transactions, manages customer rights, and drives the order-to-cash cycle.

What is a Sales Area?

A Sales Area is a combination of Sales Organization, Distribution Channel, and Division. It determines the sales data applicable to transactions and pricing.

What is a Division in SAP SD?

The Division represents a product line or range in a company. Each division can be assigned specific pricing, discounts, and reporting structures.

What is a Sales Office and Shipping Point?

  • Sales Office: Represents a physical office location involved in the sales process.
  • Shipping Point: It’s responsible for processing and dispatching deliveries to customers.

Step-by-Step Guide: How To Configure New Division in SAP SD

SM30 – Create Division via V_TSPA

Navigate to Transaction SM30 and maintain table V_TSPA to define a new division.

OVXA – Assign Division to Sales Organization

Use OVXA to link newly created divisions with the appropriate Sales Organizations.

VOR2 – Define Common Divisions

Enable data sharing across divisions by defining common divisions using transaction VOR2.

OVAN – Combine Divisions for Centralized Document Types

Centralize document type data using reference divisions. For example:
 
Sales Org Division Reference Division
ALL 01 01
ALL 02 01
ALL 03 01

How To Set Up a Sales Area in SAP SD

OVXG – Create and Configure Sales Area

Access OVXG to define combinations of Sales Organization, Distribution Channel, and Division.

Understanding the Relationship: Sales Org + Dist. Channel + Division

This combination forms a Sales Area, which is the cornerstone for pricing, reporting, and document types.

Configuring Sales Office in SAP SD

OVXM – Assign Sales Office to Sales Area

Link Sales Offices to Sales Areas using transaction OVXM to complete the regional sales setup.

Best Practices for Sales Office Mapping

  • Align offices with geography
  • Use intuitive naming
  • Avoid redundancy across areas

Setting Pricing Procedures by Sales Area

OVKK – Define Pricing Procedure Determination

Configure pricing procedures using OVKK with the following structure:
 
Sales Org Dist Channel Division Doc Proc Pricing Proc
ALL 01 01 A 1

Advanced Configuration with SM30 Transaction Codes

Table/View Description
V_T134G_WS Assign Business Area to Plant
V_TVTA_GRE Define Rules by Sales Area
V_TVTA_KFV Assign Business Area to Sales Area
V_TVAKZ Sales Order Types for Sales Area

Practical Example: Mapping SAP Sales Structure for a Business

Imagine "Essar Group" with multiple business units:
  • Essar Infotech (Company Code: INF)
  • Essar Oil (Company Code: OIL)
Essar Oil could have multiple Sales Orgs:
  • Essar South
  • Essar North
Each is uniquely assigned to Essar Oil—not to Essar Infotech. The mapping supports regional specialization and legal compliance.

Common SAP SD FAQs Answered

What is the difference between Sales Organization and Sales Area?

Sales Organization is a standalone unit, while Sales Area is a combo of Sales Org, Dist Channel, and Division.

Should structure be based on product group or location?

It depends on business strategy. Product groups align well with Divisions; locations work better with Sales Offices and Orgs.

How do Divisions and Plants interact in SAP?

Divisions handle product grouping; Plants manage physical inventory and delivery.

What are the key considerations when assigning Company Codes?

Legal reporting requirements, balance sheet separation, and geographical control.

What are Delivering Plants and Shipping Points?

A Plant tied to a Sales Org and Dist Channel delivers goods. A Shipping Point handles logistics execution.

How does SAP structure support strategic alignment?

“Structure follows strategy” — SAP allows mapping strategies into configurable hierarchies for seamless operations.

Conclusion: Building a Strong, Scalable SAP SD Configuration

Configuring new divisions, sales areas, and sales offices in SAP SD isn’t just a technical task—it’s a strategic step. By aligning your organizational structure with business goals, you enable faster transactions, accurate reporting, and greater flexibility.

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