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A special discount paid retroactively to a customer once he reaches sales volume in a given period of time.


You can define the following data in a rebate agreement:

  • Validity period
  • Status (whether the agreement is released for settlement)
  • Rebate recipient (the party who receives the credit memo)
  • Currency
  • Method of payment (cheque, bank transfer etc)

Data Defined In Condition Records:

  • Basis for rebate (customer, customer/ material, rebate group, etc)
  • Validity period (the validity must lie with in the validity of rebate agreement)
  • Cond rate
  • Material for settlement
  • Accrual rate
  • Other control data, such as pricing scale type

Prerequisites for Rebate Processing:

  • Sales orgn: must be relevant for rebate processing
  • Payer: must be relevant for rebate processing
  • Billing type: (invoice, credit memo etc) must be relevant for rebate processing

Material for Settlement:

You may have to create rebates that do not depend on a material, but instead, e.g. on:

  • A Customer
  • A Customer Hierarchy
  • A Group of Materials

You will then need to refer to a material for settlement. The system uses this material when you pay out the rebate. It does not matter which material type & mat application type you use.
When you create the cond record with in the rebate agreement, the system automatically asks you to enter the no of material for settlement.
Rebate based on Group of Materials:

A rebate group consists of materials to which you want to apply the same rebate. You system administrator can define rebate group in Customizing for Sales according to the need o f the orgn.

You can assign a material to a rebate group in the MMR: view- Sales, field- Rebate Grp. When you create a cond record, you must enter a settlement material.
  Rebate Agreement Types:

Agreement Type

Basis for Rebate


Cond Type


Customer / Material

% Rebate



Customer / Rebate Group

% Rebate



Customer / Material

Quantity Dependent




Percent rebate



Customer hierarchy

Percent rebate



Customer hierarchy / Material

Percent rebate



Sales Volume Independent



-          Define rebate agreements
-          Condition type groups
o        Define cond type groups
o        Assign cond types to cond type groups
§         Maintain access sequence
§         Define condition types
§         Assign conditon types to conditon type groups
§         Maintain pricing procedure
o        Assign condition type groups to rebate agreement types
-          Activate rebate processing
o        Select billing documents for rebate processing3
o        Activate rebate processing for sales organisations
o        Activate at customer level.
Step-1. Define Agreement Types:
Copy & rename: 0002 & go to Details
-          From
-          To
-          Reverse accruals: flag it on
-          Manual Accrual Doc Type:                  Doc Type (R4) & Billing Doc Type: B4
-          Verification level: payer, material
-          Partial payment:                                  Doc Type (R3) & Billing Doc Type: B3
-          Rebate credit memo:                          Doc Type (R1) & Billing Doc Type: B1
Step - 2. Define Condition Type Groups:
Copy & rename: 0002. Give the same code as given to agreement type.
Step -3. Assign Condition Type to Condition Type Group:
In this activity one needs to assign the cond type from the pricing procedure to the cond type group found on the rebate agreement type. The sequence no column represents the fields in the cond table that determines what the system is to use as the basis for rebate. In this e.g., 1 determines that the cond type should use the fields customer & material. The cond type group 0002 will use pricing cond type Bo02. Before assigning cond type to cond type group, you have to create a cond type.
Cond Technique for rebate processing:
-          Create cond table
-          Maintain access sequence
-          Define cond type: BO02 is the cond type used in pricing, copy & rename.
-          Assign cond type to cond type group: BO02 to 0002
-          Maintain pricing procedure: assign cond type BO02 to pricing proc, after total discount & before freight. Assign Subtotal: 7, Account Key: ERB, Accruals: ERU (keeping reserve money from customer money), & Requirement: 24 (rebate will get affected in billing doc & not in sales doc)
-          The cond type BO02 must use cond class 'C'- expense reimbursement.
-          The rebate procedure in BO02: indicates if the cond is dependent or independent of sales volume
-          The accruals correction proc indicates if accruals must be corrected when this cond type is accessed.
Step - 4. Assigning Cond Type Groups to Agreement Type:
Here you are presented with a list of agreement types as created in the system & you can assign the relevant cond type group
Step - 5. Activate Rebate Processing: at
-          Sales orgn level: activate rebate processing for sales organisations
-          Billing Document: select billing doc for rebate processing
-          Customer: active rebate in CMD Sales Area Data, Billing Tab Page.

Billing Document Types


Standard Invoice


Order Relate invoice


Cash Sale

B1, B2, B3, B4

Rebate invoices


Credit Memo


Debit Memo


Invoice Cancellation


Cancel Credit Memo


Inter Company Sales



Create Rebate Agreements: VBO1
Easy Access- Logistics- SD- Master Data- Agreements- Rebate Agreements- Create
Agreement type: 0002 & press enter. In the over view screen fill the following details:
-          Rebate recipient: payer no
-          Currency
-          Validity Period
-          Agreement Status: open
-          Then Go To Conditions Icon & Fill
-          Material, Rebate Amount, Accruals & save
-          Then create sales order, delivery, picking, goods issue & invoice
-          After this in order to see rebate in sales order cycle Go to: VF01*®* Go to Conditions (item). You can check rebate in VF01 before saving or else you can also see in VF02.
  Rebate Settlement: VBO2
Change the agreement status to 'B' (released for settlement), while we are creating rebate agreement it is open, hence change from open to 'B'.
Then, from main menu bar go to ® Rebate Payments ® Rebate
Rebate credit memo no will be generated (Doc Type: G2)
Go to VA02, give the rebate credit memo request no & remove billing block & save the document. Go to VF01 & create credit memo request (enter & save).

Retroactive Rebate Processing:
You can create rebate agreement for which the validity period start date lies in the past. The system takes in to account all the rebate relevant billing documents that were created between the validity start date & the date you created the rebate agreement. In addition to the credit memo request, the system creates a correction sales doc (type B2) automatically for this amount.
Create the rebate agreement in the usual way. The system recognizes that the rebate agreement is retroactive.
Deleting Rebate Agreements:
-          In the change rebate agreement (VBO2) screen, enter the no of the rebate agreement that you want to settle. And press enter
-          Select 'Agreement ® Delete', the system prompts you to confirm the deletion.
-          Press enter to delete the rebate agreement.
-          Result: the rebate agreement receives status 'C' (settlement created)
Automatically Renewing Rebate Agreements:
Your system administrator is responsible for defining in Customizing for agreement type a calendar for extending rebate agreements. You can set for each rebate agreement whether it is to be renewed automatically or not. Select Extras*®* Rebate Calendar ® Reactivate or Remove in the change rebate mode.
Renewing Rebate Agreements:
-          Enter the screen rebate agreements: renewing: Logistics- SD- Master Data- Agreements- Rebate Agreement- Extend & Choose Enter
-          The system issues a list of all rebate agreements which were renewed and which the system could not renew are listed in the log.


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