Rebate agreement- Recalculation for previous scales

[Former Member]

I have a requirement to recalculate rebates on already accomplished scales.

Te requirement is as follows,

Say a customer has a scale for 0 to 1 million in a period for which he receives 1 %.  Now there is a second scale from 1 Million to 2 Million in the same period for which he receives 2 %.

Now since the customer has acheived both the scales, the company wants to give him 2 % on the entire 2 million instead of giving 1 % on the first million and 2 % on the second million. Some pointers on how this can be acheived would be appreciated.

Thanks,

ES.

[former_member131691 · Accepted solution]

Hi ES

In rebate processing the scales are never applied to the billing documents as they are posted. Scales are only ever taken into consideration when the agreement is being settled. The reason from this design was that it is only when the complete sales volume is known that you are truely able to apply the scale for the agreement. So this is the design and it seems to fit your requirement nicely. If your customer acheives a sales volume of 2 million the settlement will automatically apply 2%, if they fell short of the 2 million 1% would be applied.

Hope it helps
Kind regards
Brian 

[Former Member · Accepted solution]

Brian,

Correct me if I am wrong,

I thought that these rebates are accrued into an accrual account and settled during the rebate settlement only for the scales are acheived. So isn't it already accruing into the accrual account based on the scales defined?

In my case I have multiple scales, and when I think about it, when the first scale is acheived it would have accrued only the rebates for that scale, and so on for the following scales.

Please let me know if I am clear enough.

[former_member131691 · Accepted solution]

Hi

No it is not, it is accrued into the accruals account based on the accruals value you have defined in the condition record of the agreement.

Example scale :

scale value            Amount             Accruals

       0,00 EUR         5,000- %          7,000-

  100,00                   8,000-                       

1.000,00                12,000-     

If you create a real invoice for less than 100 Euro according to your current understanding the 5% rate would apply and if the invoice value was over 100 Euro the 8% rate would apply. In both cases the 7% accrual rate would apply with no consideration of the scale.               

When you create rebate condition with scales, for the individual customer billing document,the system will take the first scale level / the accruals amount. Only during the final settlement, will the detailed scales condition be taken into consideration for the real customer payment.

Check this note: 392711 - Rebate conditions with scales

Most customer's would maintain their accruals amount as an average based on the business reality when using rebate scales.

Hope it helps
Kind regards
Brian

[Former Member · Accepted solution]

Hello Brian,

Thanks for the response. It was very informative.I also went through the note you mentioned and its very much in line with what you have explained.

In the example you mentioned above- irrespective of which scale it falls under the accrual happens for 7%. Now for example, if I acheive the third scale, what would happen during settlement?

Since I have accrued only 7 % and the customer has hit sales targets eligible for 12 % what would happen while doing the settlement?

I hope I am clear with my question.

Thanks and Regards,

ES

[former_member131691 · Accepted solution]

Hi ES

In the final settlement the value paid to the customer wiould be calculated using the high scale and

the reversal of the accruals would be in line with the 7% posted on the billing documents already.
You will see 2 conditions (Bo03 for example) in the final settlement one for the customer posting and the other for the accruals

So in the end the customer will receive the amount form the scale based on the real sales volume achieved over the year and the accruals will be fully cleared by the final settlement.

Kind regards
Brian

[Former Member · Accepted solution]

Thanks Brian. I tested it with various scales but giving the accrual for the highest scale. I did partial settlements for what ever was accrued. ( which was higher that what the customer should have got coz' he had still not hit the highest scale) then I did a final settlement and the system recalculated according to the scale and created the adjustment. ( in my case a negative amout in the credit note which was the same as what we had over paid the customer) 🙂