Take Control of Customer Rebates in SD

  • by Anton Karnaukhov, Senior IT Manager, Pacific Coast Companies, Inc.
  • January 15, 2008
Learn how to make the necessary configuration changes and start using the Sales and Distribution rebate functionality in your ERP environment. This step-by-step guide explains how standard functionality supports automating your rebates accrual process to achieve higher accuracy, better visibility, and real-time updates posted to the Financial Accounting module.
Key Concept
A rebate agreement is an arrangement with a particular business partner for granting rebates in a given time period. In the context of the Sales and Distribution module, a rebate agreement is assigned to a specific customer (the rebate recipient) and is based on the volume of relevant sales that have been posted via customer billing documents.
Although customer rebates are typical in the business world, it is surprising how many companies choose to maintain them offline and avoid setting up customer rebate agreements in their SAP ERP environments. Despite the fact that such rebate agreements can be quite complex and subject to change, depending on the volume of sales that a customer has reached in a given time period, both R/3 and SAP ERP provide enough configuration flexibility and a number of rebate management tools to accommodate almost any customer rebate agreement scenario.

The core customer rebate functionality within SAP ERP Central Component (ECC) 6.0 is built around the condition technique, which is an SAP proprietary technology that allows the configuration of complex decision-making scenarios. It is used in many other areas such as pricing, output, and revenue account determination. The condition technique ensures that proper Financial Accounting (FI) accruals are posted upon the creation of a customer billing document.

SAP ERP also provides various scale types to accommodate numerous scale scenarios, which are common in customer rebate agreements because companies often provide higher rebate incentives if larger sales volumes are reached. For example, you can use a standard value base scale type to accommodate a scale scenario in which a 2% rebate is given to a customer if his or her total sales for the year equate to less than $10,000, whereas a 3% rebate is given if the sales for the year go beyond the $10,000 mark. Finally, standard SAP tools are provided to post retroactive accruals if the rebate agreement was not created on time to start capturing the accruals from the starting validity of the agreement.

I’ll walk you though the necessary IMG configuration steps to enable the creation of rebate agreements and automatic posting of FI accruals upon the creation of customer invoices. I’ll also take a close look at how SAP determines the rate at which the FI accrual needs to be posted and compare it to a different logic that SAP uses when coming up with the settlement value of the agreement. This step-by-step guide helps SD analysts make the required configuration changes and start using the SD rebate functionality effectively in their ERP environment.

Anton Karnaukhov

Anton Karnaukhov is a senior IT manager at Pacific Coast Companies, Inc., in Sacramento, California. He earned an MBA degree at Heriot-Watt University and a BS/BA degree with a specialization in computer information systems at Western Carolina University. Anton has more than eight years of SAP implementation and development experience focusing on business intelligence and logistics modules in the manufacturing and resale industries.

See more by this author


No comments have been submitted on this article. 

Please log in to post a comment.

To learn more about subscription access to premium content, click here.