Hi Divya,
Please find below a detailed explanation on Rebate Processing -
<b>Rebate Agreements –</b>
A rebate is a price reduction which is granted to a customer in the form of a credit memo depending on the sales of a period. The basis for a rebate can be defined in various ways (for example, customer, and customer/material pricing group). You can define a rebate on the basis of an agreement, the so-called rebate agreement, with your customer. Rebate processing in the R/3 System can currently meet the following requirements:
1. Creating rebate agreements
2. Creating accruals in the billing document
3. Settling rebate agreements
4. Deleting accruals
1. A rebate agreement is an agreement between the business and a customer. This agreement takes the form of a special discount paid retroactively to the customer. This discount is based on the sales volume for the customer over a specific time period. The rebate is only relevant if the customer purchases the required sales volume.
2. Menu path: IMG – sales and distribution – billing – rebate processing. The rebate agreement has separate condition records for each product the customer buys. These condition records specify the rebate amount or percentage due to the customer for each product. One can also specify a pricing scale so that the customer can earn a better rebate by ordering more products.
3. Because rebates are always paid retroactively, the system keeps track of all billing documents that are relevant for rebate processing. This includes standard invoices as well as credit and debit memos related to the rebate.
4. The system can also post accruals automatically so that the accumulated value of a rebate is recorded for accounting purposes. A rebate agreement is finally settled when a credit memo is issued to the customer for the accumulated rebate total.
Configuration of a Rebate Agreement
5. The rebate agreement type determines which data the system is to automatically propose for the rebate agreement.
Agreement type – basis of rebate – condition type
0001 – customer/material % - BO01 (Group Rebate)
0001 – customer/rebate group % - BO01 (Group Rebate)
0002 – customer/material quantity dependent – BO02 (Material Rebate
0003 – customer – BO03 (customer rebate)
0004 – customer hierarchy % - BO04 (hierarchy rebate)
0004 – customer hierarchy/material % - BO04 (hierarchy rebate)
0005 – Sales volume dependent – BO05 (indep. Sales vol. rebate)
6. The following is the description of a rebate agreement configuration taking the sample rebate agreement 0002 i.e. customer/material quantity dependent – BO02.
Default Values: The rebate agreement has a validity period i.e. a valid “From and To” date rule, a payment method which determines how payments are to be made (which is define in financial accounting for customers in their master records).
Control data: it includes condition type group assigned to the rebate type. The condition type group is not to be confused with condition type used in pricing. The condition type group has generally one condition type assigned to it, but it is possible to assign more than one condition type to the condition type group.
The verification level is a key indicator that determines the level of detail one sees when displaying totals for a rebate agreement.
Here you specify the sales document type which you want the system to use when you perform manual posting of accruals for a rebate agreement. The manual accruals order type is actually a sales document type that is assigned to the rebate agreement and is used in the manual accruals in a rebate agreement. The sales document assigned here should have an order-relevant billing type assigned to it. The SAP standard uses the billing type B4 for the sales document type R4.
For example - You agreed to make a lump sum payment of 10,000 USD to your customer if your product is used in a front-of-store display. You have now established that your product was used in a display at the customer location and you want to post accruals for the lump sum payment. You specify the amount of accruals to be posted on the manual accruals screen in the rebate agreement. The system automatically creates a credit memo request using the document type specified here. This request must then be forwarded to Financial Accounting where the accruals are posted. Please make sure that the definition for the specified sales document type includes a default billing type, which is appropriate for manual posting of accruals.
The arrangement calendar defines the end of the validity period of rebate arrangements and controls their extension. The validity period end date is simultaneously the date for final settlement (for rebate arrangements with a settlement calendar ) or the date for settlement (for rebate arrangements without a settlement calendar). Rebate arrangements with an arrangement calendar represent longer-term rebate arrangements that may be valid for several calendar years or indefinitely.
Manual payment: should you want to make manual payments of the rebate to the recipient, you can indicate this in the payment procedure. When a manual payment is carried out, the system automatically creates a credit memo request of the type specified in the partial settlement field for the specified amount. Thus when the system carries out the final settlement, all partial payments are taken into account, and the remaining balance is paid.
Again make sure that there is an order relevant billing type (B3) assigned to the partial settlement sales document type (R3).
Reverse accruals: Mark this field if you want accruals to be reversed when a manual payment is made for a rebate agreement of this type. The system reverses accruals for the amount of the manual payment. If the cumulative accruals are not sufficient, the system reverses the accruals amount which exists. Be sure to indicate that the system must reverse the accruals. This will ensure the system will reverse the accruals up to the amount specified in the manual payment. Should the accruals not be as high as the payment to be made, the system will reverse whatever accruals it has.
Final settlement: you must ensure that the credit memo request for the final settlement is assigned to the final settlement field. Again make sure that this credit memo request has the associated order-relevant billing type (B1) assigned to it in the sales document type (B1).
Minimum status: Specifies the minimum status that a rebate agreement must have before the settlement can be calculated. During the processing of a final settlement, the system checks whether the rebate agreement is assigned the minimum status. You want to make sure that a rebate agreement is only calculated by explicit request. In this case, you enter the following status as the minimum: B - Agreement released for settlement. Please note that you cannot enter the following statuses as minimum status for final settlement – C: credit memo request already created for settlement. 😧 final settlement of agreement already carried out.
Correction: Specifies the sales document type that the system automatically uses to correct the values (for example, the sales volume) on which the rebate payment is based. When you want to pay out a settlement for a rebate agreement, the system sometimes has to correct the values on which the rebate is based. For example, if you created a rebate condition record with a starting date in the past, the system may need to adjust the sales revenue of the customer. In this case, the system has to take into account invoices that were processed between the retroactive starting date of the condition record and the actual date on which you entered the starting date.
<b>REWARD POINTS IF HELPFUL</b>
Regards
Sai
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