Rebate Types - How Do Each Work In SAP?

[Former Member]

Hello,

Im hoping you'll be able to help me with my questions! I'm working on a project to implement our customer rebates into the SAP system but have limited knowledge of how the SAP reabtes system works.t

Currently we have the following types of rebates:

1) Fixed Value Rebates - WE pay a customer a fixed amount of £36,000 annually just for purchasing from up. This isn't based on any spend/volume values. The amount is agreed upfront prior to the agreement start date.

Is it possible to accrue for this rebate e.g. accruals of £3000 each month? I have been told that it is not possible to accrue for a fixed value rebate which accrues for the amount evenly throughout the year. He says we can only accrue on a quarterly/annually basis

2) Fixed Percentage Rebates - Customer gets 5% on everything they spend/

I am aware that this can be done. Has anyone got any procedure notes on the method?

3)Variable Percentage Rebates - Customer has the following agreement:
Customer hits £10,000 sales - gets 2% rebate on everything
Customer hits £15,000 sales - gets 2.5% rebate on everything
Customer hits £20,000 sales - gets 3% rebate on everything.

If a customer spent £10,000 last year, then we predict they will do the same this year so we will set the accrual rate at 2% on all sales. If however they are looking to hit the £15,000 target before the agreement is over, thus is owed 2.5% on the full £15,000. Is there a way that SAP can automatically change the rebate amount and backtrack the previous sales at the addition 0.5% rate?
Our current method, we have a spreadsheet that looks at the customers ytd spend to predict the total yearly spend which highlights whether the rebate value will need to be changed. e.g. P8 YTD Spend = £12,000, predicted spend FY £18,000 (12k/8*12)

4) Tiered Percentage Rebate -  Set up similar to the UK tax System
First £100,000 = 0%
Between £100,0001 and £150,000 = 2%
Between £150,001 and £200,000 = 5%
E.g. Customer Spends £175,000.
Should Received:
£25k @ 4% = £1250
£50k @ 2% = £1000
£100k @ 0% = £0

Are these possible to create in SAP?

If anybody could help with advise as to whether SAP can deal with these types of rebates then could you help. And if anybody has any procedure/process notes on how they are set up then I will be extremely grateful!

Thankyou in Advance!

[Former Member · Accepted solution]

Hi Emma,

If you haven't already, please review the book linked below:

Learn SAP tips: Rebate Agreements in SAP

I also highly recommend The Ultimate SAP Pricing Guide by Matthias Liebich, which has over 60 pages dedicated to configuring rebates.

Quick answers to your questions:

Is it possible to accrue for this rebate e.g. accruals of £3000 each month? I have been told that it is not possible to accrue for a fixed value rebate which accrues for the amount evenly throughout the year. He says we can only accrue on a quarterly/annually basis

I don't know how common this is, but to me, this isn't a rebate if it's not tied to sales in any way. You may want to have accounting set it up as just an annual liability to pay to the customer and set up a monthly GL entry to accrue for the annual payment.

2) Fixed Percentage Rebates - Customer gets 5% on everything they spend/
I am aware that this can be done. Has anyone got any procedure notes on the method?

Check the first book linked above. Scale type "Base Scale". Easy peasy 🙂

Is there a way that SAP can automatically change the rebate amount and backtrack the previous sales at the addition 0.5% rate?

I would just accrue at the highest expected rate for the customer. If you end up settling at the lower rate, accounting can flush the extra accrual back into an appropriate sales income GL account. Configure the condition type for this one with a scale type of "To Scale".

4) Tiered Percentage Rebate -  Set up similar to the UK tax System
First £100,000 = 0%
Between £100,0001 and £150,000 = 2% 
Between £150,001 and £200,000 = 5%
E.g. Customer Spends £175,000.
Should Received:
£25k @ 4% = £1250
£50k @ 2% = £1000
£100k @ 0% = £0

Are these possible to create in SAP?

Yes, you'll just create your condition type with scale type "Graduated Scale".

I hope this helps.

Glenn

[Former Member · Accepted solution]

Thanks Glenn, youve been extremely helpful

Will have a look into them links

[former_member182378]

Emma,

This is a late reply. But I feel these scenarios and this implementation will benefit the entire community. And this thread is "Not Answered".

1.

Is it possible to accrue for this rebate e.g. accruals of £3000 each month?...
He says we can only accrue on a quarterly/annually basis

I am not sure how you can automate the periodic creation of accrued amount 3000 pounds per month. Manually this is possible.

Did you implement this and how?

2.  Standard rebate agreement type 0003 Customer rebate

TW

[former_member182378]

Emma,

For 3. I would set the accrual rate as the one that is most likely (2%). If your sales are more, then you can "top-up" the accrual with manual accruals, and make the payments to customer. Or else no change required to accrued value, just do the settlement.

I don't think dynamic changing of accrual percentage is possible in standard rebate functionality.

TW

[Former Member]

Thanks for the advice TW. I'll pass the information onto my team

[Former Member]

Hi TW,

Just another quick question. We a customer who receives £1000 for every new delivery point they open and then receives a 10% additional rebate on the on the new delivery points first order with us.

How would you advise to deal with this in SAP?

Thanks,

Emma

[former_member182378]

Emma,

Not sure what delivery point exactly means. How will SAP or your rebate agreement number know that this is a new delivery point. These things (lump sum payment 1000 pounds) need to be done manually.

If this is still open, then please explain the business and this need.

TW