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Product 
A market-oriented entity derived from a product category for business operations between business partners. It forms the basis for every contract. Depending on how it is designed, the product governs the level of autonomy for setting up contracts.
In the broader sense, products form the basis for all business operations. Each contract is based on a product to which particular characteristics and functions are ascribed in general business transactions.
Contracts regulate specific characteristic values of product characteristics. Furthermore, general characteristics expected by a product can be excluded in the contract, provided a higher authority such as the legislator permits this.
The system works in the same way.
You can structure products freely on the basis of the specified product categories. Depending on whether you structure mass products or individual products, for example, you can either restrict or extend the level of autonomy permitted when creating contracts.
Products consist of the used attributes from a product category. You can make different settings for each attribute, depending on the attribute category:
· Default values for entry fields.
· Definition of the field modification for the contract.
· Feature of the product with specific functions that provides contract elements.
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1. SAP supplies product categories. These have attributes that SAP defines and assigns in the Customizing for Account Management (FS-AM) under Product Management ® Product Definition ® Product Categories.
2. Create your market-oriented products using the specified product categories in the Customizing for Account Management under Product Management ® Product Definition.
3. As long as the products have an active product version status, you can create contracts for the product.
4. You can create different versions of products. You can only create contracts for active product versions.