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Purpose

This wiki page will discuss how to do rebate processing in Sales and Distribution.

Introduction

It’s a special discount that is accumulated based on sales volume over the period and paid retroactively to the desired customer.

It can be based on :

  • Material
  • Customer
  • Customer Hierarchy
  • Group of Materials

Example

Say, you have agreement with your customer. That if they go for a business worth of Rs.10 Million in 1 year. Then you would provide a discount of 3% on total sales in the year, which will be paid to them retroactively at the end of decided period. Accordingly you create/updates a rebate agreement. Now, if at the end of the year the customer DOES achieve the target. Then you offer them whatever is decided. The rebates are passed on to the customer in the form of Credit Notes. Therefore, rebates are more or less discounts which are offered to customers. The rebates are based on the volume of the business the customer does with you within a specified time.

Components of Rebate Process

Rebates process in SAP is divided into three components

  1. Configuring Rebates.
  2. Setting Up Rebates.
  3. Managing rebate agreements and payments.

Pre-requisites

Following are the pre-requisites for processing rebate.

1.

Payer Customer Master

The payer partner needs toi have the rebate field checked in
the customer master on the sales area-billing doc tab.

2.

Billing Document Type

The billing type must be marked as relevant for rebates.

3.

Sales Organisation

The sales organisation must be marked as relevant for rebates.

Rebate & Condition Technique

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

Condition Table

Rebates have their own field catalog and their own condition table naming convention. So you could have two condition table "001" one for pricing and one for rebates, which could have different key fields.

Additional Information

You need to use the technical names A001 for pricing and KOTE001 for rebates when you use the query type using transaction SE16 or SE16N.

Access Sequence

Create access sequence (ASeq.). Enter 1 in field category for rebate specific. ASeq. after going through the right path of maintaining ASeq for rebates.
The big difference between the rebate and the pricing access sequence is that there is no exclusion flag available for rebate related ASeq. This means multiple tables for an access sequence can be applied at the same time.

Condition Type

Rebate related condition types are identified by condition class - C.
After defining and creating condition types for rebated include them in the pricing procedure. The requirement should be 24 here which imply that the accruals are calculated on the basis of invoice/bill.
The other fields Alctyp and Altcbv does not allow you to manipulate how a rebate is calculated. Also, remove the requirement 24, if you want to see rebates at order time. That means with this requirement rebate accrued value will reflect once billing document is created.

Payment of Rebates

Payments can be done

  • manually
  • in full settlement
    on the accrued amount.

When you do manual payments, it defines how much can be paid out during a partial settlement. You use partial settlement only when rebate agreement is defined for a full year but the payouts are supposed to happen on a specified period, such as, monthly, quarterly or any other.
These accruals are based on sales volume and when they are posted billing is created in the following manner:

Account Entries

Debit (Dr)

Credit(Cr)

Provision for accruals

100

 

        to Sales Revenue

 

100

When rebate credit memo is created

Account Entries

Debit (Dr)

Credit(Cr)

Customer account

100

 

        to Accrual provision account

 

100

The rebate can be given to the customer at one time or in installments also.

This is broadly the outline of the rebate process.

Note : I recomend you to study the theory part of why rebate and why not a discount.
This will help you understand better.

May be I can help you with rebate process.(IN -IMG)
1. define a rebate agreement type
2. define a condition type group
3. define a condition type and place this condition
Type in the pricing procedure.(REQUIREMENT=24)
ALSO IN THE PROCEDURE- ACCRUAL KEY = ERU
YOU ALSO HAVE TO DO THE ACCOUNT DETERMINATION FOR REBATES.

Once you have defined all the 3 and assignment starts.

Assign the agreement type to the condition type group
Assign the cond type group to the condition type.

Condition technique is also used in rebates.
REBATE ACTIVATION- IN CUSTOMER MASTER, SALES ORGANISATION AND FOR THE BILLING DOCUMENT.

After having done this please proceed to maintain the condition record for the rebates (transaction code-vbo1)

Note: if you maintain the requirement coloumn with the requirement as 24 - the rebate will be affected in the billing document and if you dont give the requirement as 24 your rebate will be affected in the sales order.

The rebate process is completed when you have created a credit memo to the customer.

The document type for the partial settlement is R3.

Please make sure you open two screens SO THAT YOU CAN COMPARE THE NEW ENTRIES WHAT EVER YOU'RE DEFINING WITH THAT OF THE STANDARDS or first you try with the standard condition type boo1, boo2
boo3 boo4.

AFTER YOU HAVE FINISHED A COMPLETE SALES CYCLE OF CREATION ORDER , DELIVERY AND BILLING.
GO TO THE CONDITION RECORD IN CHANGE MODE (VB02) AND SETTLE THE ACCOUNT PARTIALLY.

In a simple way,

1. First you need to create a Rebate agreement.
2. Create condition record for rebate giving the rebate rate and accrual rate.
3. when the rebate relevent billing doc is generated, the rebate and accruals are determined and posted in a seperate GL account as a noted item - amount to be settled. Also it gets copied in the rebate agreement.
4. create settlement run using credit memo request and then credit memo to settle this amount with the customer.