Rebate Processing in SAP

:
How to Efficiently Set Up and Manage Your Rebate Programs
By Matthias Liebich, MLI Solutions, LLC Editor’s Note: Even a casual stroll through the Sunday paper reminds us that we can no longer ignore the proliferation of rebates in our lives. Taking the “if we can’t beat ’em, join ’em” attitude, SD master Matthias Liebich decides it’s time to show SAPtips readers the inner workings of rebate functionality in SAP®. Matthias points out that even the most flexible and robust ERP systems have to be stretched and tweaked to support “the crazy deals that salespeople sometime concoct to incent their customers”. This 30-page white paper presents a sweeping review of what the SAP rebate function can and cannot do. Matthias introduces rebate planning, setup, and configuration in SAP. He then brings the focus to the detail level, using screen shots to illustrate the procedures for managing the rebates, primarily relating to accrual, paying, and tracking.

Introduction
When I opened the Sunday paper a while ago, I was overwhelmed with all the President’s Day offers of “free” things. Of course, after reading the small print, I realized that it was only free “after rebates”. Every time I see these ads that promise me “free” DVDs or food, I get excited; but my wife never fails to remind me that there is no such thing as a free lunch. It is common for companies to pay rebates to their customers in return for fulfilling certain requirements. The classic example is the car manufacturers. They give their car dealerships a rebate at the end of the year, depending on how many vehicles they sold. This way, the dealers make money, even if they sell you your dream Beamer at “invoice” price (all right, maybe not a BMW). How do SAP customers manage these rebates? This is the subject of this issue’s pricing related white paper. SAP provides a basic set of rebate functionality to manage the most common rebate scenarios. However, no standard system can handle the crazy deals that salespeople sometime concoct to incent their customers. This white paper will show you what SAP rebates are capable of (and what not). It will guide you through standard configuration, how to plan and set up rebates in SAP, and most importantly, how to track and pay out rebate payments. Rebate functionality first was available in rudimentary form back in R/3 version 2.1. With R/3 Release 3.0, that functionality received a significant overhaul. Since most SAPtips readers are running on 4.6 (as in this white paper) or 4.7 versions of R/3, you can be confident that the rebate tips provided in this article will be applicable to your installation.

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Rebate Processing in SAP:
How to Efficiently Set Up and Manage Your Rebate Programs
Overview of Functionality If you know how to set up your pricing configuration, you will not have any issues configuring rebates. It uses the same condition technique (but with rebate specific features), about which I will go into detail when I walk you through the rebate setup. But before I go into the configuration of rebates, it is helpful to understand how rebates work in SAP. For example, in this white paper, we assume that we want to give a customer a 3% discount on everything he or she buys (condition type ZB03). In addition, we will give away another 1% discount if the customer reaches a certain amount of gross sales for the year, for a specific group of products (ZB01). We will also have a promotion that will give the customer $1.00 back if he or she buys certain products (ZB02). After all these rebates are set up, the rebate conditions will apply on applicable invoices as accruals instead of off-invoice discounts. The rebate agreement tracks the applied amounts, which can be reviewed at anytime in the rebate agreement. Once we decide to pay out any rebate amount to the customer, we will create a rebate settlement, which is represented by a credit memo request. This reverses accrued amounts and pays the actual monies to the customer either in form of a check or a credit memo. I would like to divide the rebate process in SAP into three separate components: 1) Configuring Rebates 2) Setting Up Rebate Agreements 3) Managing Rebate Agreements and Payments

1) Configuring Rebates
The configuration section for rebates can be found in the IMG under Sales and Distribution>Billing>Rebate processing. Some of the configuration transactions are shared with regular pricing, but it is easier to remember this central configuration path to access your entire rebate related configuration. Prerequisites Before you even start configuring rebates, three settings have to be made in order for rebates to work: 1. The Payer partner needs to have the “Rebate” field checked in the Customer master on the Sales Area>Billing Document tab. 2. The billing type must be marked as relevant for rebates (IMG Sales and Distribution>Billing>Rebate processing>Activate Rebate Processing>Select billing documents for rebate processing). 3. The sales organization must be marked as relevant for rebates (IMG Sales and Distribution>Billing>Rebate processing>Activate Rebate Processing>Activate rebate processing for sales organizations). The system will issue respective messages when you are trying to process any rebate-related transactions with any of these settings missing.

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Rebate Processing in SAP:
How to Efficiently Set Up and Manage Your Rebate Programs
Condition Technique for Rebates Rebates use the condition technique, but distinguish themselves from pricing in applying to transactions over time, versus on a transaction basis. In this white paper, I will not get into the creation of rebate condition tables (since the settings work the same ways as in pricing). The only thing you have to be aware of is that rebates have their own field catalog and their own condition table naming convention. So you could potentially end up with two condition tables “001”; one for pricing and one for rebates, which could have different key fields. If you want to query the tables with transaction SE16, you need to use the technical names: A001 for pricing, and KOTE001 for rebates. To create rebate-related access sequences (AS), use IMG path Sales and Distribution>BillingRebate processing>Condition technique for rebate processing>Maintain access sequences. You will recognize the screen (see Figure 1) since it is the same one as for pricing. In order to distinguish pricing and rebate specific access sequences, enter “1” in field “Cat” (Category) for rebate specific AS. Select AS “BO01” and double-click on the “Accesses” tab.

Figure 1: Access Sequence for Rebates The big difference between the rebate and the pricing access sequence is that there is no “Exclusion” flag available for rebate-related AS (as you can see in Figure 2). This means multiple tables for an access sequence could apply at the same time. However, OSS note 105681 explains how to turn on the Exclusion flag, but there are several other impacts in doing this change, which I will address in the last part of this white paper.

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SAPtips. which would reverse the accrual and pay the amount to the customer. a value of “A” will not reverse it. If the “Rebate proc. These rebates would be paid out as a lump sum and would require the creation of a manual accrual. www. Inc.com Page 4 . but on the specific performance of the customer (such as a display in a store or an advertisement in the paper). For example. you can create a lump sum payment in that amount. you determine if you want to reverse your accruals at time of partial payment (we will cover payments later in that paper). You then would create a one-time manual accrual of $5000. you want to give the customer a $5000 rebate if he displays your product at the entrance of his store. For example. you get a configuration section exclusively available for rebate condition types (see Figure 3). The latter would make sense if you don’t base your rebate payment on actual sales. you will not be able to use Condition Updates or Group Conditions. Instead. you will realize that several fields you can usually use in a regular pricing condition will disappear or become unavailable. When you create a new rebate condition type (IMG path Sales and Distribution>Billing>Rebate processing>Condition technique for rebate processing>Define condition types) and you change the class to “C”. Leaving this field blank will reverse the accrual. With the “Provision con.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Figure 2: Condition Tables in a Rebate Access Sequence Rebate-related condition types are identified by condition class “C” (Expense Reimbursement). Copyright © 2005 by Klee Associates. accruals will be posted on each applicable invoice. Once you have proof of compliance by the customer. Entering an “A” will prevent the automatic generation of accruals on invoices.” Field.” field is blank.

at invoice time. which reverse the accrued amounts and credits the customer. The settlement document (in form of a credit memo) uses the accounts assigned to the account key in column ‘ActKy’ (Account key). As I mentioned in the introduction. Also. Copyright © 2005 by Klee Associates. The posting of this accrual is done by accounts assigned to the account key in column ‘Accrls’ (Accruals).com Page 5 .. It is also imperative that any sub-total line a rebate condition refers to needs to be stored in one of the seven available sub-total fields (KZWI1-KZWI6 and BONBA in column “SubTo”). The requirement “24” in column “Reqt” prevents the rebate condition from displaying on any document type but the invoice. Alternate condition type “AltCTy” and Alternate condition base value “AltCBV” will not let you do any manipulations on how the rebate is calculated. accruals are being created that post to accounting.SAPtips. Simply take this requirement off if you want to have visibility of rebates at order entry time as well. to give you visibility on how much you owe your customers. Please note in Figure 4 that not all configuration fields are available for the rebate conditions in the standard system. you will not be able to do any manual changes to rebate conditions. 2 for net price). we can add them to our regular pricing procedure (IMG path Sales and Distribution>Billing-Rebate processing>Condition technique for rebate processing>Maintain Pricing Procedures).Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Figure 3: Rebate Condition Type Definition Now that we defined our rebate conditions. Inc. If you are using multiple pricing procedures. 1 for gross price. www. you want to keep the sub-total designations common (i.e. A very important setting for the rebate conditions in the pricing procedure is the account keys. usually a sales deduction and an accrual account.

use IMG path Sales and Distribution>Billing>Rebate processing>Rebate agreements>Define Agreement types. however. all invoices from that moment on are eligible for the rebate and will apply on the invoice itself.com Page 6 . but way more powerful in how you can configure it. it will carry this flag forward to FI. The other default in this section allows you to set a payment method. to later let you cut a check. The rebate agreement is based on the same principal. www. For example. Copyright © 2005 by Klee Associates. However.SAPtips. if you set the start date of a rebate agreement to today’s date. Inc.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Figure 4: Rebate Conditions in a Pricing Procedure Configuring the Rebate Agreement You might be familiar with sales deals in SD. if your default is the beginning of the current year. All field references in this section are made in regards to Figure 5. Of course. all of these defaults can be overwritten during creation of the actual rebate agreement. Every rebate settlement will create a credit memo request in SAP. The default start date is important in regards to whether or not you want to allow retroactive rebates. if you set your default to “C” for check. You can define the default start and end date of the agreement. Default values The first section (Default values) serves to define the defaults that apply for every rebate agreement of that type. even if they did not apply on the invoice. the system will calculate rebates for all invoices in the past. To maintain rebate agreement types. These rebates are called retroactive. which is freely definable to suit your individual situation. from that date on. Select “New Entries” to create a new agreement type.

if you choose so. In a separate step. The “Different val. This will become more clear when we cover the actual settlement of a rebate agreement later in this paper. period” option lets you define whether or not the rebate condition records you create out of the rebate agreement can have validity dates outside of the ones of the agreement. schedule job RV15C005. quarterly.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Control data The “Condition type group” is linked to the rebate agreement type in a different configuration transaction. Inc. which we will get into a little bit later. Copyright © 2005 by Klee Associates. you can do so for the partial settlement by checking the “Reverse accruals” box. Use program RV15C001 (accessible through transaction “VB(7”) to schedule your payment runs. No matter what the payment amount is going to be. Settlement The “Settlement” section defines the final settlement order type (“B1” in standard SAP) and the minimum status that needs to be set in the agreement before it can finally be settled. You can change this default while reviewing the verification level in the rebate agreement. To turn on this feature. but the customer did not reach their sales goal. but the payouts are supposed to happen on a monthly. if you accrued $10. to automatically extend your agreements. or any custom defined schedule. Manual payment The “Manual payment” section of the rebate agreement defines how much can be paid out during a partial settlement. The reversal of the accruals is independent from the payment amount of the final settlement. Just as with agreements. You can choose whether you want to allow partial settlements only in the amount of what you accrued so far. The “Verification levels” field is also a default that defines the level of detail you see when you review the applied invoices within a rebate agreement. that’s the left parenthesis in the transaction code). the rebate agreement is defined for a full year. You can add a standard SAP calendar. This condition type group defines which rebate condition types are allowed for the rebate agreement type. For example. which is “B3” in the standard SAP system. to schedule the automatic creation of rebate agreements. you might want to pay only half that amount or nothing at all. If you don’t want to wait to reverse your accruals until the final settlement. which can also be accessed via transaction “VB(D” (yes.000 over a given period.SAPtips. However. the total remaining accrued amount for the agreement is reversed. you need to define the partial settlement order type. You would use partial settlements if. If you want to allow manual accruals (we will get into what these are for). You are able to create the same rebate agreement automatically in regular intervals with the same data (but different validity dates). for example. you can also allow any payment amount. As with manual accruals. or your own defined one. I suggest you leave this field unchecked. “B4” is the standard SAP order type for manual rebate accruals.com Page 7 . This will create automatic payments according to the defined schedule. utilize the “Arrangement calendar” field to do that. www. This is a good idea if you don’t want to pay out more than what the customer is entitled to. you can also schedule regular payments by entering the appropriate calendar in the “Settlement periods” field. you need to indicate this and define the respective order type.

Sales deals share this configuration transaction and would be identified with a category of “A”.SAPtips. Copyright © 2005 by Klee Associates. Text determination You can assign text types through standard SAP text determination to the agreement type as well. This is mostly the case for retroactive rebates. This defines the Condition Type Group as relevant for rebates.” (Category) field blank. which will enable you to add comments. www. you can freely define your rebate condition type group (see Figure 6).com Page 8 . Make sure that you leave the “Cat. With IMG menu path Sales and Distribution>Billing>Rebate processing>Rebate agreements>Condition type groups>Define condition type groups. These comments will show on a printed rebate agreement Figure 5: Definition of a Rebate Agreement Condition Type Groups I mentioned the assigned condition type group in the definition of the rebate agreement. Inc.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs The standard correction order type “B2” is needed if the statistical and actual accrual amounts are getting out of sync.

SAPtips. You can assign multiple condition types that can have different access sequences.com Page 9 . the order of condition tables can be freely defined here. you allow for a specific Condition Type Group. of which rebate condition types. Since the standard SAP rebate functionality does not allow exclusions in the access sequence. Copyright © 2005 by Klee Associates. you define which condition tables. and in which order they appear in the rebate agreement (see Figure 7). Inc.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Figure 6: Definition of Condition Type Groups Assigning Condition Types to Condition Type Groups In this configuration step (IMG Sales and Distribution>Billing>Rebate processing>Rebate agreements>Condition type groups>Assign Condition Types/Tables To Condition Type Groups). www.

www. we are able to link the Condition Type Group to the Rebate Agreement Type through the IMG menu path Sales and Distributions>Billing>Rebate Processing>Rebate Agreements>Condition Type Groups>Assign Condition Type Groups to Rebate Agreement Types (see Figure 8).com Page 10 . Copyright © 2005 by Klee Associates. Inc.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Figure 7: Assigning Rebate Conditions to Condition Type Groups Assignment of Condition Type Groups to Rebate Agreement Types Finally.SAPtips.

www. Here are the main tasks that can be done out of this transaction: • • Define the payment method and validity of the rebate agreement.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Figure 8: Assignment of Condition Type Groups to Rebate Agreement Types 2) Setting Up Rebate Agreements The rebate agreement is the central point for processing rebates. • • • Copyright © 2005 by Klee Associates. as well as manual accruals. Inc. See which payments were already made and how much you accrued.com Page 11 . Define the condition records with rates and scales for which rebates should apply.) Review all applied invoices to a specific rebate agreement. In order to track all payments within the rebate agreement. NOTE: If you attempt to create any rebate credit memo manually with VA01. The reason for this is the same as the one for the condition types. (This is due to the condition class of “C” as indicated in the section above about condition types.SAPtips. Generate partial and final settlements. you will get an error. NOTE: You cannot create rebate condition records with the regular pricing transaction VK11 or VK31. they have to originate from that rebate agreement.

Here are some comments to the individual fields: The rebate recipient has to be a payer partner. As we can see later.01. Click on the “Copy” button.SAPtips. enter the description of the rebate. not a 0) or use menu path Logistics>Sales and Distribution>Master Data>Agreements>Rebate Agreement>Create. the rebate recipient.etc. Once all this data is entered. It is important to understand that this sales area will be used to create the rebate settlements. but if you want to do it by fiscal year. we need to back-date the start date to the first of the year. just adjust the dates to your liking.02. The condition records that are created within this rebate agreement can be for the same or for different sales areas.01. the rebate recipient becomes the soldto in the rebate settlement credit memos. You also need to make sure that the payer partner type that you are using (“RG” in standard SAP) is linked to the account group you are using for the sold-to (“0001” in standard SAP).5% for 1000. 1. and the validity period of the agreement. you set up different condition records for different rates in different sales areas (1% for 1000. Enter the sales area in which the rebate should be paid.01. The payment method defaults from the rebate agreement type configuration setting and can be overwritten here. However. your rebate payments are going to be made in sales area 1000. We assume that the rebate agreement is valid for the whole calendar year.01. Since our sales department was (as usual) late to give us the agreement information. either execute transaction VBO1 (with the letter O.). click on the button to create rebate condition records. Copyright © 2005 by Klee Associates. Figure 9: Entering a Rebate Agreement On the next screen (Figure 10). The same applies to the validity period. In the screen shown in Figure 9. www. Originally the valid from date is defaulted to today’s date (as set in the agreement type).Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs To create a rebate agreement. For example. enter the rebate agreement type and click on the “Organizational Data” button.com Page 12 .02. the payment method. the currency in which the rebate payments are going to be made. Inc.

com Page 13 .SAPtips. Inc.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Figure 10: Rebate Agreement Overview Screen Copyright © 2005 by Klee Associates. www.

based on your accounting guidelines. The accrual rate applies on each invoice. 2. Figure 11: Available Condition Types in a Rebate Agreement You can see that the validity period for the condition record defaults from the validity period of the rebate agreement. the same amount applies in the “Accruals” column. you can change the validity period to one within the range of the agreement period. Although you are able to maintain different rates based on different scale levels of sales achievements. For this rebate agreement. However. As we defined in the agreement type. It is important to remember. an attempt to change the validity period (to one outside the agreement validity period) would result in an error.or under-accrue. www. that the rate represents what you are going to pay to the customer. you also might either over. This becomes very clear when you are using scales. if you are trying to create partial settlements and configured the agreement to not allow higher payments than what you accrued. these are the settings of our condition type group (see Figure 7). if you have scale rates of 1. Copyright © 2005 by Klee Associates. For example. you will have to create manual accruals in order to do so. and 3%. if you set up the agreement for the whole year and you pay out on a monthly basis with different amounts. You might want to maintain an average accrual rate (for example. Inc. you can only maintain one accrual rate. You also have the choice not to accrue at all (for example. If you enter a rate in Figure 12 and hit Enter. your accrual rate might be the median of 2%). However. for a lump sum payment) and can take out the accrual rate entry. we choose condition type BO03 with the customer key combination. However. Double click on the key combination for which you would like to create a record.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Do the available condition types and tables in Figure 11 look familiar? You are correct.com Page 14 .SAPtips. at which time you don’t know if a customer will reach the next scale level over the time of the agreement. it makes sense to create multiple condition records with monthly validity dates. and the accrual is what you accrue over time on invoices.

you can now save the rebate agreement. Inc. However. use the green back-arrow to go to the “Valid Condition Types and Key Combinations” screen (see Figure 11). the material number defaults as the settlement material. Copyright © 2005 by Klee Associates. f. if you are done with all your rebate pricing maintenance. Since a rebate settlement in SAP is reflected as a credit memo request. This means that not only will invoice line items apply from this day forward. you can see that the condition record was created retroactively. At the bottom of the “Control Data” section of the details screen (see Figure 13). The material for this credit memo is stored in field “Matl. If you like to create more condition records. settl. You will always have to choose a material if the material number is not part of your condition table. At this point. since the materials that are actually being accrued on cannot be easily tied to the material of the settlement. we need to define a material of our choosing. a material number is needed to generate the credit. For most of my clients. I would like to give some insight on the number of condition records you create per rebate agreement. For our example we will create three separate rebate agreements: One for all the items a customer purchases throughout the duration of the rebate. this always causes an issue with reporting. a second can be created for the performance based (scale). it does not mean that we have to maintain it in one and the same agreement. www. In the latter case. but also the ones that were created from the valid from-date of the condition record. Although we allowed three different condition types to be maintained within agreement type “ZSRB”. until today’s date. and a third agreement for the material promotion.com Page 15 .SAPtips. Since the key combination we choose is by customer.” (Material for settlement). It makes sense to distinguish multiple rebate agreements based on the type of rebate you want to give.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Figure 12: Rebate Pricing Record Rates Select the condition record and click on the “Details” button.

Also. If the threshold is not met. B and C are not in some kind of grouping. if you want to see the status of one of your rebate programs.com Page 16 . Another common mistake I often see is that instead of creating new rebate agreements (for example. When you come back.000 worth of item A. Copyright © 2005 by Klee Associates. yearly renewals). clients just extend the validity end date of the agreement. You can also use the automated rebate agreement renewal transaction “VB(D”. You can’t comply with a request like: “If you buy $100.5x. NOTE: The scale levels are always only applicable to the condition record they were created for. Once we create the final settlement. Get your mocha latte while the program is running. Figure 13: Rebate Condition Record Detail Figure 14 shows you our condition record for condition type BO01 for which we wanted to set a sales goal. the system has to look back at two or more years worth of data. www. all applicable sales will be accumulated and compared with the scale value. you can look at it without having to dissect other rebate conditions.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs This way. nothing will be paid out.SAPtips. Inc. since SAP Release 4. It also improves performance since the system does not have to read every invoice line item every time. B and C …. The customer needs to buy $100. you will realize that you timed out of the transaction. you are able to use interval scales.” if A. The problem with that scenario is that when you want to look online to see which invoice line items applied to the rebate. We will always accrue 1% on all applicable invoices since we don’t know at that time if the customer will reach that goal. but all accrued values will be reversed. just like in pricing. Instead of increasing the validity period.000 worth of Health Foods (represented by Volume rebate group “01” of the material master) in order to get an additional 1% rebate. it takes the same amount of time to create a new rebate agreement with reference by clicking the button (see Figure 9).

Inc.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Figure 14: Scale View of Rebate Condition Record After we have created our rebate agreement.com Page 17 . www. Copyright © 2005 by Klee Associates. so go to the “Conditions” tab of one of your invoice line items.SAPtips. we can check an invoice that has rebate conditions applied. The service rendered date (not the pricing date!) of the invoice line item is used to determine the validity of a rebate condition record. All rebate conditions are line item conditions.

a new store promotion). www. You would see both BO03 records. In addition you have a rebate agreement that pays an additional 1% for a specific sold-to customer (for example. select one of the rebate condition types and click on the “Details” button.SAPtips. Inc. Figure 15: Applied Rebate Conditions on an Invoice Next. It is possible that the same rebate condition type applies several times. unlike regular pricing conditions. BO02 for our material promotion with a $1.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs You see in Figure 15 that two rebate conditions applied. one with 3% and one with 1%.com Page 18 . This is also set up as a BO03 condition record. Copyright © 2005 by Klee Associates. You could for example have a Headquarter rebate that pays 3% of all sales of a payer (BO03).00/EA allowance and the 3% of condition type BO03 for everything the customer buys.

Since the rebate agreement did not exist when they were created.SAPtips. Copyright © 2005 by Klee Associates. In this case. Inc. www. Items that show accruals of 0 are invoice line items that applied retroactively. which lets you run a verification report in background. Remember that we set the verification level in customizing the agreement type to “Open”. It is also indicated if the condition is retroactive or not. It might make sense (if you have thousands of invoice line items and you would like to just see totals by customer) to select verification level “D”. select the button on the “Verification Level” screen shown in Figure 17. although not specified explicitly in the rebate condition type configuration. but the answer was that the system works as designed and that there are no plans for an enhancement. use transaction “VB(8”. One annoying thing to note is that the month displayed is always the calendar month. select the “Verification level” button shown in Figure 10. meaning every line item shows. This can lead to misinterpretation of the data. no accrual could be made.com Page 19 . it can happen that the system times out if you are trying to review the verification level online (due to the large number of applicable invoice line items). If you would like to change the level of detail shown. To see which invoice line items applied. Figure 16: Condition Detail of a Rebate Condition on an Invoice 3) Managing Rebate Agreements and Payments Verification levels After several invoices are created. This issue was addressed with SAP. As mentioned above.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs You can see that. You can drill down to an individual invoice by clicking the invoice number once. The rebate agreement number to which the condition record belongs to is also shown in the rebates section of this screen (see Figure 16). even if you set up your condition records by your fiscal month. the rebate condition is automatically an accrual. we can access the rebate agreement either in change (Transaction VBO2) or display mode (VBO3).

I will explain how to create manual settlements. For example. if this option makes sense. Copyright © 2005 by Klee Associates. based on the number of rebate agreements you have.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Figure 17: Verification Level of a Rebate Agreement Creating Partial Settlements As mentioned before. In this paper. it makes sense to schedule regular payments for rebates where the customer gets a certain percentage for everything he buys. However. you can automate periodic creation of rebate payments.SAPtips. and their complexity. www. Inc. rebates that check scales or need manual calculations or adjustments should be handled manually.com Page 20 . You need to decide.

The reason for that is the actual payments are updated in the rebate agreement only at accounting time. www. which. to determine what is left to pay. Clicking the the partial settlement screen as seen in Figure 18. Note that the amount you enter always defaults as a negative amount.com Page 21 . Enter the amount you want to pay in the “Amt. All condition records of this agreement are displayed (in our example just one). Copyright © 2005 by Klee Associates. by our configuration setting.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs In order to create any kind of settlement. Save your changes. you need to be in change mode (Transaction VBO2) of “Create Manual Rebate Payment” button will open the rebate agreement. to be paid” field. Figure 18: Partial Settlement Amount Screen An information message is displayed that a partial rebate settlement was created. we would get an error. NOTE: You cannot create a final settlement until all open settlement requests are posted to accounting.SAPtips. is the maximum amount we are able to pay in a partial settlement. If we would enter a higher amount. In the “Max amount” field you see the accrued amount as of today. Inc.

In case you already invoiced the settlement. although the same pricing procedure as the one on the invoice is used.SAPtips. you will need to cancel the credit memo. Save the credit memo request and invoice it. Since you then cannot delete the credit memo request. If you realize you made a mistake before you invoice the credit memo request. you can delete the credit memo request with transaction VA02. One is to actually credit the customer with the specified amount. you see that only the rebate condition type appears. www. You need to release the credit memo billing block before the request can be invoiced. the other one to reverse the accrual. Looking at the line item pricing screen (see Figure 19). which will increase the available accrual amount in the rebate agreement again.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs You can process the settlement request with transaction VA02. the amounts are always the same in a partial settlement. Since we configured the partial settlement in the agreement type to always reverse the accrual (See Figure 5).com Page 22 . There are two entries. Inc. Figure 19: Pricing Screen of Partial Settlement Credit Memo Copyright © 2005 by Klee Associates. you have to reject all the line items.

Click the check mark and you will see all (in our case just one) partial settlements that were created for this rebate agreement.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Going back to the rebate agreement itself. If you would like to see the actual credit memo. This helps if you try to determine if you have any “open” settlement documents for this rebate agreement. this is the only option that is available. you can see which settlements were already created for this agreement. click on the invoice number (to select it) and the “Display” button. www. Figure 20 shows the settlement amount (what was credited to the customer) and the reversed accrual amount. you will see the credit memo request number here. Figure 20: Rebate Documents of a Rebate Agreement Copyright © 2005 by Klee Associates. Inc. If you have a credit memo request that is not invoiced yet.SAPtips. Select Rebate Payments>Rebate Documents and select the type of document you would like to see. Since we only created a partial settlement so far. Partial and full settlements can be accessed separately.com Page 23 .

Inc. Figure 21: Payment Data for a Rebate Condition Record Copyright © 2005 by Klee Associates.SAPtips. The same check (process) for maximum accrued value occurs here. www. and how much money was paid to the customer already. just like we’ve done in Figure 18. This view (see Figure 21) shows you the total accrued dollars. Go into the “BO03” condition record for your customer specific rebate and select “Goto-Payment data”. it is indicated how much accrued money is left to pay out. how many accrual dollars were reversed. From here you can also initiate a partial settlement by entering a payment amount in field “Amount to be paid”. In the lower section of the screen.com Page 24 .Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Another view of payment data can be accessed from within the rebate condition record.

SAPtips.com Page 25 . The system will take previous invoices into consideration. but set it retroactively valid for the whole year.25) and the accrued amount ($102. Figure 22: Sales Volume Screen of a Rebate Agreement Copyright © 2005 by Klee Associates.48). sometimes manual accruals need to be made in order to increase the accrued amounts for a given condition record. We need to create an accrual for the difference of $178. In order to know how much we need to accrue in addition.77. we would not have accrued as much as we would like to pay out. So we need to increase the accrual amount by creating a manual accrual. The resulting screen (see Figure 22) shows the actual eligible rebate amount (in our example $281. but no accruals for these invoices are accounted for. If we want to make partial settlements. click the “Sales volume” button on the Agreement Overview screen. Inc. www. The most likely scenario is when you create a rebate agreement in the middle of the year.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Manual Accruals As I mentioned before.

com Page 26 . You will see that the accrual amount matches the eligible payout amount. www. we can enter the accrual amount. In the resulting screen (see Figure 23). Go back now to the rebate agreement and check the sales volume.SAPtips.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs This can be accomplished by clicking the button on the Agreement Overview screen. A negative amount will increase the total accrual amount. Save the document and you will receive the message that a manual accrual has been created. a positive amount will decrease it. Figure 23: Manual Accrual Payment Screen Copyright © 2005 by Klee Associates. Invoice the credit memo request to post it to FI. Inc.

www. Figure 24 shows that billing documents applied to the agreement in the amount of $450. Figure 24: Statistics Before the Correction Document Figure 25: Statistics After the Correction Document Copyright © 2005 by Klee Associates. but the statistics (S060) only show $300 accrued. just click on button. which will automatically create a “B2” correction document.com Page 27 . billing documents and statistical data (the accrual amount that is stored in SIS structure S060) might be out-of-sync.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Correction Documents Instead of trying to figure out the manual accrual difference. the billing document and statistic amounts are equal (see Figure 25). run report RV15B002 (IMG Sales and Distribution>Billing>Rebate processing>Compare Rebate Basis And Correct Accruals). Inc. To see these differences. When you have retroactive documents. you can also use the correction document. Instead of doing a manual accrual. After the invoicing this credit memo request. Enter the agreement number. and execute.SAPtips.

which would have created a credit memo request right away.com Page 28 . we need to manually set the “Agreement status” field on the Overview screen to “B” (Agreement release for settlement).Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs You will also realize that the accrual amount in the rebate agreement was increased to $450. This is a manual check that prevents us from accidentally closing the agreement. we finally can execute the final settlement to close the agreement. We are using our first rebate agreement. Although we only have $500 accrued. After the credit memo request is created. Nothing will stop you from doing that. Figure 26: Final Settlement Payment Screen Copyright © 2005 by Klee Associates. the final settlement shows what the customer is eligible for. As defined in the agreement type. including retroactive amounts (see Figure 26). Then select the button from the Overview screen. the agreement status is set to “C”. you could also pay out more than this amount. “Create final settlement” button from the rebate agreement You could also have used the overview screen. At this point in time. www. for which we did not create a manual accrual. Final Settlements At the end of the rebate agreement. which prevents you from creating any further settlements out of this rebate agreement. Inc. but I wonder what Sarbanes-Oxley would say to that. without giving you the opportunity to manipulate the final payment amount. Make your adjustments and save.SAPtips.

select “Agreement-Delete” from the Rebate Agreement Overview screen. If a rebate agreement already has invoices applied against it and you want to cancel the agreement. Invoice the credit memo request. the agreement status changes to “D”. Run report RV15B001 Copyright © 2005 by Klee Associates.com Page 29 . no changes can be made to the rebate agreement anymore.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs The final settlement credit memo request uses the last day of the agreement validity period as the billing date. You can create it manually or via the same batch job (RV15C001) with which we can create periodic partial settlements. you see that the payment amount is higher than the accrual amount. In a case in which we wouldn’t pay out anything (for example if sales goals were not met). Inc. This can also be done if partial settlements were already processed for this rebate agreement. and it will automatically create a final settlement credit memo request that will reverse all outstanding accruals. This effectively closes the rebate agreement. Once the credit memo is posted in FI. If you mark a payer relevant for rebates (see the Prerequisites section at the beginning of this article) after the agreement was created. In this section you will find additional useful information that really didn’t fit into the previous sections. but set to a status of “C”. only the accrual amount would be reversed in a final settlement. you should update the billing index for the invoice documents that were created since the start date of the rebate agreement. A Few More Tips and Tricks By now you should have a good understanding of the standard rebate capabilities in SAP. Figure 27: Pricing Screen of Final Settlement Credit Memo After the final settlement is executed. www.SAPtips. since we can’t reverse more than what we accrued for. The agreement will not be physically deleted. Looking at the pricing screen of the credit memo (see Figure 27). It can be reviewed in display mode only.

otherwise. So.SAPtips. except material A and B. you need to recalculate these sub-totals with report RV15B003 (IMG path Sales and Distribution>Billing>Rebate processing>Recalculate Subtotals For Rebate Processing). Pay customer rebate amount at the beginning of the year and track throughout the year if they met their sales goal. and. here are some examples of rebate scenarios that cannot be handled by the standard SAP functionality: • • Apply a rebate condition only if the net price of the item is under $20. before payment. the following features will be turned on: • • Exclusion indicator in rebate access sequences Additional fields in pricing procedure (Alternate condition type and Alternate condition base value) A great OSS note to supplement this white paper is 75778 (Consulting/troubleshooting for rebate processing).00. they are.com Page 30 . If not. www. create additional settlements. create a debit memo. I’m sure that you will have some scenarios that don’t fit in these standard settings.5A). run a report of sales for the two items that should be excluded. If they are complicated for you. In case you make changes to rebate relevant sub-totals in the pricing procedure. Inc. And last but not least. Just remember that SAP is an integrated standard software and try to utilize it as best as you can. for sure. In this case I would over-accrue for all items within the volume rebate group. Calculate a rebate for all materials in a material grouping (for example volume rebate group). Calculate the rebate amount for these two items and deduct it from your payment amount. now I’m being treated to a “free lunch” by my client and have to wonder what the catch is. Set up a scale for the sum of a random number of materials that are not grouped together in a material grouping field. OSS Note 105681 explains how you can turn on SAP’s “new” rebate procedure (available since SAP Release 4. It gives you an overview of the most common problems in rebate processing and explains in more details why rebates work in SAP the way they do. complicated for your customers. Copyright © 2005 by Klee Associates. • • Conclusion Although I did my best to cover all features of the standard SAP rebate functionality.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs (accessible through IMG path Sales and Distribution>Billing>Rebate processing>Create Billing Index). You might have noticed that I mentioned “in standard SAP” several times throughout the document in regards to limited standard rebate functionality. In activating SIS structure S136 (instead of the standard S060). It might also be a good idea for you to review your more complex rebate scenarios and ask yourself if they can be simplified.

Inc. Klee Associates. Any use of this documentation is at the risk of the user. Beyond the core SD functionality. LLC.com. SAP AG software referenced on this site is furnished under license agreements between SAP AG and its customers and can be used only within the terms of such agreements. and is owned by Klee Associates. and Klee Associates. Inc. makes no warranty as to its accuracy or use. Although we make every good faith effort to ensure accuracy. He is SD certified and has extensive hands-on experience in new implementations. Inc.Liebich@SAPtips. Contracts. reserves the right to make changes without prior notice.com Page 31 . mergers. NO WARRANTY: This documentation is delivered as is. He can be reached at Matthias. Copyright © 2005 by Klee Associates. The information in our publications and on our Website is the copyrighted work of Klee Associates. Inc. All other company and product names used herein may be trademarks or registered trademarks of their respective owners. acquired during numerous full life cycle implementations in the US and Germany. he is also proficient in ABAP. www. Inc. In addition to his cross-module functional knowledge.Rebate Processing in SAP: How to Efficiently Set Up and Manage Your Rebate Programs Matthias Liebich. enabling him to play a leading role as link between functional and technical teams. and bolt-on integration. and this publication are not affiliated with or endorsed by SAP AG. Matthias is an expert in the areas of Pricing. upgrades. SAP AG and mySAP are registered trademarks of SAP AG. MLI Solutions. divestitures. and Rebates. NO AFFILIATION: Klee Associates. this document may include technical or other inaccuracies or typographical errors. Inc.SAPtips. Matthias has over 12 years of SAP SD consulting experience.

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