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Customer Hierarchy

Hello Guys,

Please explain Customer Hierarchy like definition, use, config.. etc.


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  • author's profile photo Former Member
    Former Member
    Posted on May 29, 2008 at 09:18 AM

    Hi David,

    Please go through this link it will help you about customer hierarchies

    I hope it will help you,



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  • author's profile photo Former Member
    Former Member
    Posted on May 29, 2008 at 09:24 AM

    Hi Devid,

    1) Define hierarchy type: just put and ID and a name to the new hierarchy.

    2) Set partner determination: if you want to user the hierarchy in price determination, then, in the orders, at the header level, you have to have a Partner Procedure with a partner function for each level. In the partner procedure, in each partner function you must indicate the source partner function. With this informacition, in the order, you obtain the bussiness partner for each partner function.

    3) Assign acount groups: you indicate which accounts groups are allowed for being part or your hierarchy.

    4) Assign sales areas: symple you indicate wich sales areas are allowed in your hierarchy. (Here you can customize common sales areas, just for not having to build de hierarchy in all the different sales areas).

    5) Assigning hierarchy type for pricing: you indicate which classes of documentos uses hierarchy in pricing determination.

    It is possible to maintain so called customer hierarchies. This might be useful when for example you create a condition discount for a customer that is part of such a hierarchy structure. All subnodes in the hierarchy below that customer, will thus receive the same discount.

    Customer hierarchy setup, firstly decide the hierarchy type to be used.

    The standard is type A.

    You can also assign a partner function to the customer so that the higher level customer in the hierarchy is copied into a sales order as a partner function - but you don't need that right?

    Next assign your customer account group to the hierarchy type. And enter the combinations that will be allowed for creating the hierarchy.

    You want to assign a ship-to to a payer. So enter the ship to account group and enter the payer account group as the higher level.

    You must also make an entry for permitted sales area assignments. So if you want to a hierarchy for customers in the same sales area then enter the sales area and enter the same one as the higher level sales area.

    All these settings can be found in the IMG. Under SD - master data - business partners - customers - customer hierarchy

    You use for example customer hierarchy when you have an company like Unilever and you agree both on a discount. Unilever does have different locations / businesses and you have to maintain the discount for all customers. If you use a customer hierarchy you can maintain the discount for the partner in the top of the hierarchy and in this way it will be valid for all customers in the hierarchy.

    Reward if it helpful.



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  • author's profile photo Former Member
    Former Member
    Posted on May 29, 2008 at 09:36 AM

    1. Definition

    Customer hierarchy is nothing but a multilevel customers grouped together for eg Mc Donalds chain starting with MC Donalds Corp at the top. Within that one can have MC Donald Asia Pacific as 2nd node and further dividing it into MC Donalds India, Mc Donalds Singapore at level 3.

    2. Purpose

    Customer hierachies are used to assign pricing conditions and rebates agreements.

    3. Configuration settings in SAP

    a. Define hierarchy type

    b. Set partner function for hierarchy categories - as an what partner functions are applicable eg sold to party, bill to party

    c. Assign account groups - assigning account group of higher level node with a subordinate node

    d. Assign Sales Area

    4. SAP Easy access

    a. Create Hierarchy Node

    Logistics> Sales n Distribution > Master Data > Hierarchy Node > Create

    b. Assign higher level hierarchy node to lower level node Tcode VDH1N

    Edited by: Kirti Bhatia on May 29, 2008 11:37 AM

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