The SAP SD Master data forms the basis of the SD processing. Master data is the responsibility of all SAP modules, as each module has an element of it. However, many other modules other than SAP SD, such as PP, FI, AND CO, will access the SAP SD master data. The structure of this master data represents how the system is to perform in the future. It is the highest level of data and thus it has the largest effect on the standard business process. Master data in SD is divided into three main areas:

Organizational Data

This is the structure of the company, whereby each area of the business is represented by a hierarchical element. For example, a sales area is constructed of a sales organization, a distribution channel, and a division. The Finance module uses the highest form of master data, which is the “company code”. The SAP SD module

integrates with this company code via the sales organization. Thus, due to the link between the sales organization and the company code in Finance, SAP knows which company code to post a sales transaction to. This is based on the sales organization in the sales order. 

Customer and Material Master Data

As goods and services are sold by the company, for which the organizational data has been maintained, we need to represent this material and service data in our system as well as maintain and represent all our different sold-to-parties and partners.

Document Master Data

Business transactions are stored in the form of documents. These SAP SD documents are structured in such a way that all the necessary information is stored in a systematic way.

Global Settings

This area defines the country keys and currencies. This data is application independent; however, these settings are a prerequisite for handling all business transactions.

Organizational Data

You must set the organizational data in SAP before you can process SAP SD transactions. For example, without a sales organization, it is not possible to create a sales order in SAP. This data reflects the structure of your business. Every transaction occurs within this structure. The organizational data is like the steel girders in a building, so setting them up correctly is essential to a sound structure.

Also See: What are the different Types of Master data in SAP MM?