If you grant free goods to a customer, you can implement automatic free goods determination. The system automatically create a free goods item in the sales order. The item is free of charge. For inclusive free goods, the main item is automatically reduced by the free goods quantity. For exclusive free goods, the quantity of the main item remains the same.

Free goods determination requires that the free goods be maintained in the master data.

The free goods records have a validity period. They are accessed using the pricing date.

The free goods item is determined automatically by the system, according to the data in the free goods record. In the standard system, item category TANN is set for free goods items.

The system informs you if an order does not reach the minimum quantity specified for free goods. In Customizing you have the option of suppressing this message or setting it as an error (In Customizing choose: Sales and distribution - Sales - Sales documents - Define variable messages This case concerns message V4 160).

You can change the free goods quantity. The system issues an error message if the free goods quantity exceeds the quantity of the material ordered.

Other than the quantity, no other data is available for entry in the free goods item.

The free goods items are displayed as items free of charge.

Free goods in Controlling (CO-PA)

You have different options for transferring costs in Controlling (CO-PA). This is best explained using the following three examples:

1. Example:

• Free goods is granted to promote the free material.

• The free goods material is treated independently of the material ordered.

• The cost value is taken as the cost of the free goods material.

This example corresponds with the standard version.

Pricing is not activated for the free goods item category (TANN).

1. Example:

• Free goods is granted to promote the free material.

• The free goods material is treated independently of the material ordered.

• The cost value and the sales deduction is taken as the cost of the free goods material.

To implement this example, you must make the following settings in Customizing (for further information, see the IMG under: Sales and distribution – Basic functions - Free goods):

• You activate pricing for the free goods item category (TANN) using special setting ‘B’.

• You defined a new condition type, which you set in the corresponding pricing procedure as a 100% discount.

• You assign requirement 55 (free goods) to this condition type - which checks for indicator ‘B’ in pricing.

1. Example:

• Free goods is granted to promote the material ordered.

• The costs of the free goods are assigned to the material ordered.

• Neither costs nor sales deductions are taken into account for the free goods.

You need to make the following settings in Customizing:

Deactivate pricing for item category TANN. This is the standard version setting.

At main item level in copy control for delivery to billing document, you activate transfer of the cost price from the sub-items to the main item (see the information in the IMG under: Sales and Distribution -Basic functions - Free goods).

The three examples given in the previous section for CO-PA, are equally valid for the Sales Information System.