What is the purpose of sales document type?

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Answer:

A sales document type fulfills a requirement of a specific business transaction.. for example in a cash sale you would require the delivery to be happening immediately after the order and you would require a invoice slip to be handed
Over to the customer immediately after his purchase.

These things are customized in your Cash sales(CS) document type.

Also, It can determine whether the sales docs of that type are blocked or not.

No ranges for the documents whether a reference doc is mandatory or not whether it should read customer material info record whether the system should run credit checks and how it should respond etc.