What distinguishes a service item characterized as item category TAD?

A service item characterized as item category TAD is primarily distinguished by the fact that it is billed based on an order reference. This characteristic is essential for understanding how billing processes are managed in SAP S/4HANA. In this context, the order reference indicates that the invoicing process is directly tied to the initial sales order, reflecting the services rendered or to be rendered as part of that order.

The implication of this is that any services categorized under TAD will generate invoices linked to specific sales orders, ensuring that financial records align with service deliverables. This aligns with the broader goal of maintaining accuracy and traceability in financial transactions within the system.

This item category does not imply that the item cannot be part of a quotation; in fact, service items like TAD can be included in quotations as part of the sales process. Additionally, while the item may indeed lack direct delivery relevance, the most defining feature of TAD is its billing process linked to order references rather than delivery or automatic invoicing rules.