You do not need to use distribution channels if you do not use them to structure your enterprise. However, for technical reasons, you have to set up one distribution channel. Choose the distribution channel 00 as a neutral distribution channel.

You may need to define several distribution channels for the following reasons:

• Processes are carried out differently, for example order entry
• Differences in master data
• Prices / conditions (discounts, bonus, incentives)
• Material master data
• Customer master data (sales area)
• Authorizations
• Reporting requirements

Reporting requirements alone do not justify setting up distribution channels. Other grouping terms may also be used, for example, customer hierarchy.

It often makes sense to set up your own distribution channel called "Inter Company" in order to facilitate reporting, for example when assigning revenue in CO-PA.