How to define Commission in Pricing Procedure

[vijay_srivasttava]

Hi All,

I have a scenario, where I have to pay commission to dealers on sales confirmation. There are slabs for commission paid to dealers based on number of items sold. For example- upto 5 vehicles Rs 10000, for 6 and above Rs 15000 etc.

The complete process followed in SAP is as follows.

1. Advance Billing: Normal Sales Cycle--> VA01--> VL01N--> VF01 (for example: 20 Items)

Dealer A/C----- Dr (20 Items)

Sales A/C-------Cr (20 Items)

2. Sales Report received from Dealers on Sales confirmation- (for example 15 Items)

3. Based on confirmed sales quantities- 20-15 = 5 Items needs to be returned

4. Commission calculated on 15 Items by marketing department

5. Finance Department verifies the commission calculated

6. Created JV for Commission to Dealers

Entry:

Commission on Sales-----Dr (for 15 Items)

Dealer------Cr

TDS on Commission------Cr

I dont want to post JV manually, instead I want  the commission to be charged during the billing point as shown in point 1. Next when there is a return of 5 items, I want the commission to be reversed for the returned number of items.

As per few suggestions in the forum, I need to create Commission as condition type & select scaling as factor to calculate incentive value in condition properties. Assign condition in pricing procedure. Maintain the incentive slabs in VK11.

Now, since there are both sales and sales return and in both scenarios the commission account has to be posted and reversed, please explain how to define this in Pricing Procedure.

Please suggest.

[jignesh_mehta3 · Accepted solution]

Hello Vijay,

Whenever you execute Sales Returns Process all the entires of the Invoice in proportion to the returned quantities are reversed.

Thus the division commission will also be automatically reversed.

Now coming to your requirement for commission kindly refer this link - http://scn.sap.com/docs/DOC-25769.

Thanks,

Jignesh Mehta

[vijay_srivasttava · Accepted solution]

Hi,

Thanks for your valuable input. I have also some queries on Debit and Credit note. How Debit Note/Credit Note process can be mapped for the above scenario?

[vijay_srivasttava]

Hi All,

I have got few more doubts here, now in the above mentioned scenario, I have mentioned about the commission slabs.

Commission details:

There are 3 slabs:

1. T1- Sell 2 Tractors- Get commission @ Rs 5000/= per tractor

2. T2- Sell 3 to 5 Tractors- Get commission @ Rs 10000/= per tractor

3. T3- Sell 6 & Above Tractors- Get commission @ Rs 15000/= per tractor

Now, suppose initially we booked sales for 10 Tractors, so that the dealer falls under slab 3, and he gets a commission of Rs 15000 x 10= Rs 150000.

Now, once the confirmed sales list comes, for example only 4 vehicles are sold, we have to return 6 vehicles as sales return. Thus the dealer is falling under Slab 2 i.e. Rs 10000 x 4= Rs 40000.

Hence in Return Billing the Commission will be reversed by Rs 15000 x 6 = Rs 90000.

So commission payable account balance is Rs (150000 - 90000) = Rs 60000

But in the current situation, since the dealer is falling in slab 2, the actual commission for the dealer is Rs 40000.

There is excess amount of Rs 60000 - 40000 = Rs 20000 showing as commission payable to dealer.

This scenario seems very very complicated, hence I would request you to give me a solution so that  I can map them in SAP. Or please suggest a work around.

[jignesh_mehta3]

Hello,

I do not know how the above requirement can be done in standard process.

But just a workaround, I would like to suggest not to give commission at the time of initiall booking of Sales Order. Or give only minimum commission i.e. 5,000 per tractor.

Ideally in this scenario the Commission calculation process should start after Return cycle is completed & final Quantity picked up by dealer is avvailable.

You may think of developing a Z-Report which will pick commission figures from a Z-Table by calculating Final Quantity (Initial Order - Returns order).

Based on outcome of the above Z-Report, you can issue Credit Notes to Dealers.

Thanks,

Jignesh Mehta

[vijay_srivasttava]

The option to create a Z Report gives great relief.

Hence, can you suggest from where our discussion started, what all steps I can keep in SAP and from where the Z Report should start its work. Also, kindly suggest, what Functionality, the Z Report needs to be produced in order to achieve the  maximum result.

Also, I want to keep the manual process away. Is that possible? If not then, let me know what all activities needs to be done manually for completing the process.

[jignesh_mehta3]

Hello Vijay,

Firstly, while creating initial Sales Order, Delivery & Invoice do not give any discount. 

Now Execute the Returns process if any (i.e. Returns order, Delivery & Credit Memo).

Now, above Returns Order will obviously be created with reference to Original Invoice.

Z-Development:

Develop a Z-Table with following columns & maintain the commission scheme there

1. Material Code
2. Quantity
3. Commission Amount.

Z-Report:

The Report will execute for a particular month & calculate final Quantity the Customer has picked (Initial Invoice – Returns Order). Based on this net Quantity Z-Report will look in above Z-Table & calculate correct applicable commission amount.

From the output of the report you can provide the option of creating Credit Memo to the Dealer & system will proposed a automatic Billing Block, which a Authorized person can check & approve.

A another Z-Table will record the Dealer number, Month & Amount of Commission paid for future reference.

The above are just my ideas on limited available information. You can sit with the client & explore further options / Control Points. 

Thanks,

Jignesh Mehta

[vijay_srivasttava]

Thanks a lot Jignesh. I will come back to you for any more suggestions on this matter.

[jpfriends079]

Just imagine your Dealer to be customer(payer), to whom you have to pay discount on confirmed sales. In standard this discount can be mapped as Rebate. And rebate can provide you all what to need for your requirement, like

- Sales Report received from Dealers on Sales confirmation

- Commission calculation

- scales on sales confirmation

- settlement block, till it is reviewed by relevant authority, say, Finance Department

- No JV, it will have billing doc & account doc for payment settlement

- You will be able to view accrued amount for commission in billing level.

- Automatically accrual will be adjusted for return sales

This all can happen, provide you configure your system well based on standard Rebate functionality.

Cheers, JP