Rebates Configuration in SAP SD

Contents

• Introduction  3
• What are Rebates?  3
• Steps in Configuring Rebates. 4 
• Prerequisites. 4
• Define Agreement Type. 5
• Define and Assign Condition Type Group. 8
• Define Number Ranges for the Rebate Agreement Type. 10
• Condition Technique For Rebate Processing. 11
• Assigning Condition Types to Condition Type Groups. 13
• Section 2. 14
• Setting up Rebate Agreements. 15
• 4.1.1Creating a rebate Agreement 15
• Testing the Rebate functionality. 19
• Settling Rebates: 21    
  

 Introduction

This BOK provides an insight into the very basic steps involved in configuring and setting up Rebate Agreements. The document is divided into 2 sections:

Section 1 deals with Configuring Rebates

Section 2 looks at Setting up Rebate Agreements

What are Rebates?

A rebate is a special discount which is paid retroactively to a customer which is based on the customer's sales volume over a specified time period.

In its details, a rebate agreement specifies:

who receives the rebate payment  
on what criteria the rebate is based (customer, customer and material, and so on)how long the rebate agreement is valid

Within the rebate agreement you create separate condition records for each product the customer buys. These records specify the rebate amount or percentage for each product. You can also specify a pricing scale so that the customer can earn a better rebate by ordering more. Because rebates are always paid retroactively, the system keeps track of all billing documents (invoices, credit and debit memos) that are relevant for rebate processing. The system can, if you wish, automatically post accruals so that the accumulated value of a rebate is recorded for accounting purposes.

A rebate agreement is finally settled when you issue a credit memo to the customer for the accumulated rebate total.

You can set up rebates at any level just like pricing. The following rebates have been set up in the standard version of the SAP R/3 system:

>Rebate based on a material

>Rebate based on a customer

> Rebate based on a customer hierarchy

> Rebate based on a group of materials

Steps in Configuring Rebates

Prerequisites

Before configuring rebates, three settings have to be made in order for rebates to work:

·         Rebate Processing Active for the customer.

The Payer partner needs to have the “Rebate” field checked in the Customer master on the Sales Area - Billing Document tab.

·         Rebate Processing Active for the Billing Type

The billing type must be marked as relevant for rebates.

IMG Sales and Distribution – Billing - Rebate processing - Activate Rebate Processing - Select billing documents for rebate processing

·         Rebate Processing Active for the Sales Organization

The sales organization must be marked as relevant for rebates

IMG Sales and Distribution - Billing - Rebate processing - Activate Rebate Processing - Activate rebate processing for sales organizations

The system will issue respective messages when you are trying to process any rebate-related transactions with any of these settings missing.

Define Agreement Type.

SPRO – IMG - SALES AND DISTRIBUTION-BILLING - REBATE PROCESSING - REBATE AGREEMENTS - DEFINE AGREEMENT TYPES

You can create your own agreement type or can copy a standard one.

Here, you can define various data like

·         Validity Period

·         Payment Method

·         Condition Type Group. (Defined for your agreement type. You will have to create it in the subsequent steps and later on add it in the agreement type)

·         Payment procedure

·         Document Types for Partial Settlement/Final Settlement. (Can use standard or your own Credit Memo Request)

Note – Assign your Credit Memo Request & Credit Memo in Billing -  Copy Control Requirements ( Sales Document to Billing Document) and add your item category in the item data level.

Rebate Agreement Types

When you first create a rebate agreement, the system prompts you to specify a rebate agreement type. The rebate agreement type you specify determines which data the system automatically proposes for the corresponding rebate agreement.

The standard version of the SAP R/3 System includes the following rebate agreement types (the table shows the corresponding condition types):

Agreement type	Basis of rebate	condition type
0001	Customer/material (% rebate)	BO01
	Customer/rebate group (% rebate)	BO01
0002	Customer/material (quantity dependent)	BO02
0003	Customer (% rebate)	BO03
0004	Customer hierarchy (% rebate)	BO04
	Cust. hierarchy/material (% rebate)	BO05
0005	Sales volume independent	BO06

Rebate based on a customer

Base a rebate on a customer. Certain customers get a 2% rebate on all materials that they buy. When you create a condition record, you must enter a settlement material.

Rebate Based on a Material

Base a rebate on a material that the customer buys. 

Rebate Based on a Customer Hierarchy

Base a rebate on a customer hierarchy. Certain customers get a 2% rebate on all materials that they or their subsidiaries buy. The subsidiaries must be linked to the rebate recipient within a customer hierarchy.

Enter a settlement material while creating a condition record.

Rebate Based on a Group of Materials

A rebate group consists of materials to which you want to apply the same rebate.

You can assign a material to a rebate group in the material master record:

·         View: Sales 2

·         Field: Rebate group

Enter a settlement material while creating a condition record.

Material for Settlement

If rebates are created that do not depend on a material, but instead, for example, on:

·         a customer

·         a customer hierarchy

·         a group of materials

Then a material for settlement needs to be referred to. The system uses this material when you pay out the rebate. In this case you need to create a special material master record for this material for settlement. It does not matter which material type and material application type you use.

Define and Assign Condition Type Group

Define Condition Type Group

SPRO – IMG - SALES AND DISTRIBUTION-BILLING - REBATE PROCESSING - REBATE AGREEMENTS – CONDTION TYPE GROUPS – DEFINE CONDITION TYPE GROUPS

Assign Condition Type Group to Rebate Agreement Type

SPRO – IMG - SALES AND DISTRIBUTION-BILLING - REBATE PROCESSING - REBATE AGREEMENTS – CONDTION TYPE GROUPS – ASSIGN CONDITION TYPE GROUPS TO REBATE AGREEMENT TYPES.

Note: After its creation, add the Condition Type Group in the Rebate Agreement Type in the previous step

 

Condition Type Group

Here, you can define condition type groups that contain condition types and condition tables for rebate processing and assign them to an agreement type.                                            

Normally a condition type group comprises a rebate condition. However the following options are available if your rebate processing require them:   

                                                             

·         You can assign more than one condition type to a group.           

·         You can enter the same condition type several times in a group and use different condition tables or key combinations for individual cases.                                                            

Number Ranges for the Rebate Agreement Type

SPRO – IMG - SALES AND DISTRIBUTION-BILLING - REBATE PROCESSING - REBATE AGREEMENTS – DEFINE NUMBER RANGES FOR SALES DEALS

Condition Technique For Rebate Processing

SPRO – IMG - SALES AND DISTRIBUTION-BILLING - REBATE PROCESSING - REBATE AGREEMENTS – CONDITION TECHNIQUE FOR REBATE PROCESSING

·         Maintain Condition Tables for Rebate.

Either Create a new one or copy an existing one.

·         Maintain Access Sequence.

Add your condition table in the access sequence. Specify requirements if ant. Example: 24 - Only in the billing document

Note: In order to distinguish pricing and rebate specific access sequences, enter “1” in field “Cat” (Category) for rebate specific AS.

·         Define Condition Types.

Define a new condition type or copy an existing one.

Note: Add your Access Sequence in the Condition Type

You can also define various data like

o    Calculation type – Quantity, Percentage, Weight, etc

o    Manual Entries

o    Scale Basis

o    Rebate procedure- Dependent / Independent of sales volume

o    Text Determination procedure

·         Maintain Pricing Procedure.

Add the Rebate Condition Type in the Control Data of your Pricing Procedure (your existing pricing procedure).

Here, specify the account keys ERB and ERU for Rebate Sales Deduction and Rebate accruals respectively.

Condition Technique

Rebates use the condition technique, but distinguish themselves from pricing in applying to transactions over time, versus on a transaction basis.

The creation of rebate condition tables work the same ways as in pricing. The only thing you have to be aware of is that rebates have their own field catalog and their own condition table naming convention. So you could potentially end up with two condition tables “001”; one for pricing and one for rebates, which could have different key fields. The condition type is stored in the Rebate Agreement itself and if you want to query the tables with transaction SE16, you need to use the technical names: A001 for pricing, and KOTE001 for rebates.

The big difference between the rebate and the pricing access sequence is that there is no “Exclusion” flag available for rebate-related AS. This means multiple tables for an access sequence could apply at the same time. Meaning, the user has the choice to select the condition type while setting up the reabate agreement.

At invoice time, accruals are being created that post to accounting, to give you visibility on how much you owe your customers. The posting of this accrual is done by accounts assigned to the account key in column ‘Accrls’ (Accruals); usually a sales deduction and an accrual account. The settlement document (in form of a credit memo) uses the accounts assigned to the account key in column ‘ActKy’ (Account key), which reverse the accrued amounts and credits the customer.

Assigning Condition Types to Condition Type Groups

SPRO – IMG - SALES AND DISTRIBUTION-BILLING - REBATE PROCESSING - REBATE AGREEMENTS – CONDTION TYPE GROUPS – ASSIGN CONDITION TYPES/TABLES TO CONDITION TYPE GROUPS

Here, you define which condition tables, of which rebate condition types, you allow for a specific Condition Type Group, and in which order they appear in the rebate agreement. You can assign multiple condition types that can have different access sequences.

The rebate agreement is the central point for processing rebates. Here are the main tasks that can be done out of this transaction:

§  Define the payment method and validity of the rebate agreement.

§  Define the condition records with rates and scales for which rebates should apply

§  Review all applied invoices to a specific rebate agreement.

§  See which payments were already made and how much you accrued.

§  Generate partial and final settlements, as well as manual accruals.

NOTE: If you attempt to create any rebate credit memo manually with VA01, you will get an error. The reason for this is the same as the one for the condition types. In order to track all payments within the rebate agreement, they have to originate from that rebate agreement.

Setting up Rebate Agreements

Creating a rebate Agreement

Create Rebate Agreement.

VBO1 (with the letter O, not a 0) or use menu path

Logistics - Sales and Distribution - Master Data – Agreements - Rebate Agreement - Create.

Enter the rebate agreement type and click on the “Organizational Data” button. Enter the sales area in which the rebate should be paid. It is important to understand that this sales area will be used to create the rebate settlements. The condition records that are created within this rebate agreement can be for the same or for different sales areas.

On the next screen

Enter the rebate recipient which has to be a payer partner.

The payment method defaults from the rebate agreement type configuration setting and can be overwritten here. The same applies to the validity period. Originally the valid from date is defaulted to today’s date (as set in the agreement type).

Now, click on the Conditions tab

Click on the key combination for which you would like to create a record.

If you enter a rate in the Amount Column, the same amount applies in the “Accruals” column. It is important to remember, that the rate represents what you are going to pay to the customer, and the accrual is what you accrue over time on invoices. This becomes very clear when you are using scales. Although you are able to maintain different rates based on different scale levels of sales achievements, you can only maintain one accrual rate.

The accrual rate applies on each invoice, at which time you don’t know if a customer will reach the next scale level over the time of the agreement. You might want to maintain an average accrual rate (for example, if you have scale rates of 1, 2, and 3%, your accrual rate might be the median of 2%). However, based on your accounting guidelines, you also might either over- or under-accrue.

You also have the choice not to accrue at all (for example, for a lump sum payment) and can take out the accrual rate entry. However, if you are trying to create partial settlements and configured the agreement to not allow higher payments than what you accrued, you will have to create manual accruals in order to do so.

Select the condition record and click on the “Details” button.

At the bottom of the “Control Data” section of the details screen, you can see that the condition record was created retroactively. This means that not only will invoice line items apply from this day forward, but also the ones that were created from the valid from-date of the condition record, until today’s date.

Testing the Rebate functionality

·         Create a sales order for the particular customer, sales org ( ensure that the billing type used in your sales order is relevant for rebate) .

·         Create outbound delivery, transfer order to do picking and post goods issue

 

·         Now go to Tcode VB03 and check your rebate by choosing conditions , selecting the condition line and choosing payment data. You will see that the accruals and business volume are updated when accounting doc is created for billing.

Settling Rebates:

Once your rebates have been accrued you need to settle the rebate.
For this first release the rebate for settlement by using Tcode VB02. Click on Final Rebate Settlement Tab. You will see that the rebate amount to be paid, appears automatically. Save it and note down the credit request number

Use Tcode VA02 and release the billing block for your credit request. ( use item overview tab)

Now use VF01 to create a rebate credit memo by entering the credit memo request number and save it

Now release the credit memo to accounting using vf02.

Final Settlement:

Here, the system automatically

·         calculates the rebate based on the sales volume statistics or the lump sum

·         deducts any previously paid rebates

It then creates a credit memo request, and proposes the end date of the agreement validity period as the billing date.

The system also reverses any accruals that have been posted.

Partial Settlement:

The amount to be paid can be limited in Customizing for Sales. Payments can be:

·         limited to the cumulative accruals of the condition record

·         limited to the amount that would be paid if final settlement were presently carried out

·         unlimited

The system will automatically create a credit memo request for the amounts specified.

It will also reverse the accruals with the credit memo if the rebate agreement type is configured accordingly.

The system always takes open documents into account when determining the maximum amount which you can pay.

When the system carries out final settlement for a rebate agreement, it takes all partial payments into account.

Periodic Partial Settlement

In Customizing, assign a settlement period to the rebate agreement type. Only the amount accumulated up to the settlement date is taken into account.

Depending on Customizing, when the system creates a credit memo request, the document is automatically blocked for billing.