Managing Rebate Settlements for Trade Promotions 

Purpose

If payments have been made to a customer during the course of a trade promotion, it is sometimes necessary to create correction documents for the rebates honored within the trade promotion. This is particularly useful when accruals have also been made. These can be adjusted before the trade promotion is completed, so that you have a more accurate view of the outstanding payments.

The function can also be used to adjust scheduled accruals.

This function is only available for rebate agreements created in SAP ERP.

Process Flow

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       1.      Search for the required trade promotion in the Rebate Settlement application.

The rebate agreements and trade promotion conditions are displayed and the appropriate information is read from SAP ERP.

The user can only display the trade promotions for which he or she has write authorization.

       2.      Enter the amount of the payment you made to the customer and select the payment currency and payment date. If required, the payment currency is converted to the rebate agreement currency on the payment date.

       3.      It is possible to distribute the payment amount over more than one rebate agreement.To do this, select the rebate agreement and choose Distribute Amount. The weighting given to the individual condition records in the distribution depends on the amount of the partial settlement and on the open amount in the individual rebate agreements.

The amount to be settled is to be distributed over three rebate agreements. The amount is 50 Euros and the three rebate agreements are as follows:

Rebate Agreement	Correction Amount
RA 1	EUR 20
RA 2	EUR 30
RA 3	EUR 50

A weighted distribution of the settlement amount would be as follows:

Rebate Agreement	Distributed Amount
RA 1	EUR 10
RA 2	EUR 15
RA 3	EUR 25

If you are using the enhanced rebate functionality in SAP ERP, a rebate agreement may contain more than one rebate recipient. In this case, the payment cannot be distributed amongst all recipients but can only be distributed to the entries of the corresponding payment recipient.

       4.      You can adjust the payment by choosing Create Correction Document. This creates a correction document in SAP ERP, which you can then use to adjust the accruals.

Result

You have reduced the final payment amount for the rebate agreement by the amount already paid and have made the corresponding adjustments to the accruals for your trade promotion.

Example

A certain trade promotion has a rebate agreement stating that the customer receives EUR 10,000 if the new product XY is placed in a central position on the sales floor.

The manufacturer creates an accrual for EUR 10,000 in accordance with this agreement.

To avoid unnecessary transactions during the trade promotion, the customer subtracts each inbound invoice from the manufacturer from the rebate amount until EUR 10,000 has been reached. The manufacturer therefore needs a check mechanism that ensures that the sum of subtracted amounts does not exceed the total sum. The manufacturer also needs to be able to correct the accruals and reduce them by the subtracted amounts.If the manufacturer accepts the deductions made by the customer, the manufacturer can enter the corrections in the rebate agreement as described above.

At the conclusion of the trade promotion, the final settlement takes place and the customer receives any outstanding rebate payments.