It is a concept by which we add extra code to the standard sap software without modifying it is called enhancement.
Each enhancement point is called as exit point. 

Types of enhancements 
User exits
Customer exits

User exits :
These are subroutines where we can write our custom code to enhance the application.
Technically, these are called as modifications. 
We need sap access key for user exits, that is why these are called as modifications.
These are available only in sd module.
Each user exit will start with userexit_xxxx. 
Ex  :- perform userexit_xxxx. 
         Form userexit_xxxx        
         End form.

Customer exit:-
These are zinclude programs which are available inside a fuction module.
Each function module is called as customer exit.
Technically these  are called as enhancement, we don’t  require any access key.
Customer exits are available in all modules.
There are four types of customer exits.
 Function module exit
Menu exit
Screen exit
Field exit (absolete now).

Function module exit:- 
This exit is used when we want to write custom coding to enhance the standard sap application.
Each function module exit will have a predefined signature
i.e importing and exporting parameters.
Based upon the importing  and exporting parameters write the custom code.
Each function module exit will have a zinclude.
Double click and create the zinclude and write your abap code.
Each function module exit will start with Exit_xxxx_001
Menu exit:-
This exit is use to add  custom menus to the standard menu bar.
Each menu exit is identified by ‘+’ symbol.
Double click on the ‘+’ symbol and create the custom menu.
Every menu exit should have a function module exit to add the abap coding for the custom menu options.
A menu exit is use to add custom menu and function module exit is use to add the abap logic for the corresponding menu exit.

Screen exit:-
This exit is use to add custom sap screen to the standard sap screen is called screen exit.
All the screen exits will be of type subscreen.
Each subscreen is identified by screen no
Double click on the screen no and create a screen of type subscreen.
Each screen exit will  have a function module exit to write the abap code for the custom screen.

Field exit:-
This is exit is use to change the standard field labels of input fields on sap screen. This are absolete in sap.
Sap does not support this. 

The project is a group of enhancements.
Each enhancement is group of  exits i.e.function module exit, screen exit, menu exit.
A project must be created  so that the enhancements which are available under a project will move into active state and then our coding will be executed .

A project is group of enhancements but each enhancement cannot be linked to more than one project.
CMOD is the transaction to create a project.
SMOD is the transaction for searching the enhancement exits.

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