What is sales order processing in SAP S/4HANA SD, and why is it critical?

Sales order processing in SAP S/4HANA SD refers to managing a sales order from generation to completion. It starts with taking a customer order, then checks product availability, pricing, and credit limits before moving on to delivery, shipping, and invoicing. This process is crucial because it serves as the foundation of the order-to-cash cycle, ensuring that customer needs are met on time and accurately. SAP S/4HANA streamlines the process with real-time data and improved interaction across modules such as Materials Management (MM) and Finance (FI). This real-time view into inventory levels, credit risks, and customer master data enables businesses to reduce errors, boost customer satisfaction, and optimise revenue recognition.