Example of Final Settlement for Period-Specific Conditions
Vendor 4711:
Main condition
Valid from 1 January - 31 December
From $100 000 |
2% |
From $200 000 |
2% |
From $300 000 |
3% |
From $400 000 |
4% |
Period-Specific Conditions
Quarterly settlement:
1. January – 31. March
1. April – 30. June
1. July – 30. September
1. Oct. – 31. Dec., 2% each
Volume of business done with vendor 4711:
January |
$25 000 |
|
February |
$20 000 |
|
March |
$29 000 |
2% = $1 480 (Partial settlement) |
April |
$50 000 |
|
May |
$45 000 |
|
June |
$34 000 |
2% = $2 580 (Partial settlement) |
July |
$23 000 |
|
August |
$20 000 |
|
September |
$38 000 |
2% = $1 620 (Partial settlement) |
October |
$35 000 |
|
November |
$19 000 |
|
December |
$32 000 |
2% = $1 720 |
Jan. - Dec. |
$370 000 |
3% = $11 100 (final settlement for this year) |
The results of the partial settlements are set out above. Final settlement takes into account the total volume of business done with (volume of purchases made from) the vendor over the period as a whole. Since a total business volume of $370 000 was achieved, the third scale level (3%) is reached. The total rebate earned thus amounts to $11 100 (3% of $370 000).
However, since partial settlements have already been effected during the year (in March, June, and September), the sum due in final settlement amounts to $5,420 ($11 100 – $1 480 – $2 580 – $1 620 ).