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Introduction
When I opened the Sunday paper a while ago, I was overwhelmed with all the Presidents 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 issues 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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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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Define the condition records with rates and scales for which rebates should apply. NOTE:
You cannot create rebate condition records with the regular pricing transaction VK11 or
VK31. (This is due to the condition class of C as indicated in the section above about
condition types.)
See which payments were already made and how much you accrued.
Generate partial and final settlements, as well as manual accruals. NOTE: If you attempt to
create any rebate credit memo manually with VA01, you will get an error. The reason for this
is the same as the one for the condition types. In order to track all payments within the rebate
agreement, they have to originate from that rebate agreement.
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Details button.
At the bottom of the Control Data section of the details screen (see Figure 13), you can see that
the condition record was created retroactively. This means that not only will invoice line items
apply from this day forward, but also the ones that were created from the valid from-date of the
condition record, until todays date.
Since a rebate settlement in SAP is reflected as a credit memo request, a material number is
needed to generate the credit. The material for this credit memo is stored in field Matl. f. settl.
(Material for settlement). Since the key combination we choose is by customer, we need to define
a material of our choosing. For most of my clients, this always causes an issue with reporting,
since the materials that are actually being accrued on cannot be easily tied to the material of the
settlement. You will always have to choose a material if the material number is not part of your
condition table. In the latter case, the material number defaults as the settlement material.
If you like to create more condition records, use the green back-arrow to go to the Valid
Condition Types and Key Combinations screen (see Figure 11). However, if you are done with
all your rebate pricing maintenance, you can now save the rebate agreement. At this point, I
would like to give some insight on the number of condition records you create per rebate
agreement. Although we allowed three different condition types to be maintained within
agreement type ZSRB, it does not mean that we have to maintain it in one and the same
agreement. It makes sense to distinguish multiple rebate agreements based on the type of rebate
you want to give. For our example we will create three separate rebate agreements: One for all
the items a customer purchases throughout the duration of the rebate, a second can be created
for the performance based (scale). and a third agreement for the material promotion.
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Details button.
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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). 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.
And last but not least, 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 $20.00.
Calculate a rebate for all materials in a material grouping (for example volume rebate group),
except material A and B. In this case I would over-accrue for all items within the volume
rebate group, and, before payment, run a report of sales for the two items that should be
excluded. Calculate the rebate amount for these two items and deduct it from your payment
amount.
Set up a scale for the sum of a random number of materials that are not grouped together in
a material grouping field.
Pay customer rebate amount at the beginning of the year and track throughout the year if
they met their sales goal. If not, create a debit memo; otherwise, create additional
settlements.
Conclusion
Although I did my best to cover all features of the standard SAP rebate functionality, Im sure that
you will have some scenarios that dont fit in these standard settings. Just remember that SAP is
an integrated standard software and try to utilize it as best as you can. It might also be a good
idea for you to review your more complex rebate scenarios and ask yourself if they can be
simplified. If they are complicated for you, they are, for sure, complicated for your customers.
So, now Im being treated to a free lunch by my client and have to wonder what the catch is.
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