Don’t Overlook Standard POD Functionality to Confirm Deliveries

  • by Ajay Pande, Senior SAP Consultant, Infosys Technologies Ltd.
  • December 15, 2007
Configure standard R/3 proof of delivery functionality to streamline your delivery process with these step-by-step instructions.
Key Concept
Proof of delivery (POD) is the stage in the delivery process in which the customer confirms the quantity of the goods received. Based on the confirmation of goods received, an invoice is issued to the customer to avoid generating unnecessary credit memos. The quantity ordered by the customer can vary from the quantity that is actually shipped by the vendor for several reasons. POD is standard functionality in R/3 Release 4.6B and higher.
Proof of delivery (POD) is important for business scenarios in which goods are supplied by the vendor directly to the customer and the exact delivery quantity is unknown. For example, POD is especially critical in the case of third- party processes, in which goods are not received at your plant and you must bill your customer based solely on the invoice from the vendor.

From the revenue recognition point of view, it is a best practice to create an invoice only when the customer has confirmed the arrival of the goods. The revenue recognition perspective asserts that revenues should not be recognized by a company until they are realized and earned by the company. This means that customers should be billed only when the delivery occurs or services are rendered properly.

Based on my experience, I’ve witnessed several companies implement complex custom workarounds for delivery receipt confirmations. Many users are unaware of the standard R/3 POD functionality that can replace your elaborate customization work with a simple solution for delivery confirmations. In this article, I’ll explain a few key advantages of POD and show you how to configure POD in your system.

Ajay Pande

Ajay Pande is a senior consultant with the Enterprise Solutions Group of Infosys Technologies Ltd. He has experience in SAP implementation, configuration, and project management at Fortune 500 companies. He has also worked on integrating finance and logistics modules. Ajay holds a bachelor’s degree in mechanical engineering and a master’s degree in industrial engineering.

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