accounting entries of rebate settlement credit memo

Accounting entries of rebate settlement credit memo update#

Rebate solution with condition contract was introduced initially in 1511 release of S/4HANA. Same is applicable also for vendor rebates (not shown in picture). Settlements are carried as per the settlement calendar and settlement (Delta accrual, Partial settlement, Final settlement ) as set in the condition contract.Īpart from sales rebate condition contracts (0S01), S/4HANA 1909 release has provided several kinds of sales scenarios with sales bonus, commission etc as shown in below image. The process and system solution for rebates in Sales (Order to cash) and procurement (Procure to pay) is same as shown in below image.īusiness benefits with new Rebate solution with Condition Contract have captured / summarized as below.īelow images show a sales condition contract (1), Delta accrual (2) and Partial settlement (3) in S/4HANA 1909 release. If the gross value of billing item is more appropriate for a particular business scenario, then that can be achieved with standard configuration.Īnother big advantage of rebate solution with condition contract is that it can be applied to vendor rebates as well (and many other scenarios like bonus, commissions etc). Below image shows the standard configurations for business volume determination for Sales rebate 0S01 which considers the fields BONBA (Rebate basis 1) and NETWR (Net value of billing item). The parameters for determination of business volume is also very much configurable (i.e not fixed ) in S/4HANA. Business volume is determined based on the parameters in condition contract and the relevant data is read directly from the corresponding business documents like billing documents for sales rebate. Simplified sales rebate flow with condition contract in S/4HANA is depicted in below image. Settlement document directly creates credit memo along with corresponding financial accounting documents. Also, note that no credit memo request is created which is a futher simplificatios. HANA database now directly accesses the relevant (billing) documents and calculates the accrual values based on the accrual conditions of business volume for Condition contracts.

Accounting entries of rebate settlement credit memo update#

System now neither requires to update the billing document in rebate agreement (condition contract) nor separate tables (like VBOX as in case of ECC).

Harminization of rebate processing for 'Order to cash' and 'Procure to pay' scenariosĪ Condition contract is created in S/4HANA instead of a rebate agreement as shown in below image.

In-memory HANA database with the capability to access and process the primary / billing documents directly.

S/4HANA has simplified the rebate processing with the

Only rebate relevant customer sales documents can be processed.

Re-indexing of table VBOX is required in case of new customers or change in rebate conditions.

Size of Index table VBOX can be very high (in the range of 2-5 TB), specially for Consumer goods company.

Major limitations of the above rebate process in ECC are

Finally, the rebate agreement is released for settlement and subsequentl settlement creates debit memo request and debit memo to the customer. An Index table VBOX is used to link the rebate invoices to reduce the processing time. Rebate is generally processed at regular intervals or at the end of the year. After the creation of rebate agreement and billing document/s, Transaction VBOF (or program SDBONT06) needs to be run to update the corresponding sales volume in rebate agreement. The process flow diagram for Sales rebate in SAP ECC has been depicted in below image.

Total rebate for the year has been calculated as 3040. At the end of fourth month, the rebate has been calculated on 2000(52000-50000) i.e 80 and considered as an accrual for that month. Below image shows a typical rebate scenario in which the rebate discount is applicable when the cumulative value of sales is above 50000. Accruals also also generally calculated at regular intervals (monthly) for the amount that needs to be paid back to the customer.

Generally, this discount is based on the customer's sales volume over a predefined time period and settled by credit notes at the end of the year. Rebate is a kind of discount paid to a customer retroactively.