SD Commission Management Case Study V1.0
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Transcript of SD Commission Management Case Study V1.0
8/2/2019 SD Commission Management Case Study V1.0
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Rebate and Commission Management
October 21,2011
8/2/2019 SD Commission Management Case Study V1.0
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Requirement
The company sells its products through sales agents who are rewarded a
commission based on the sales volume.
The commission rates are not based just on the total volume but depends on the
rates at which the products are sold.
E.g. Commission rate = 1%, if the unit price is Rs. 1000 – 1200
Commission rate = 2%, if the unit price is Rs. 1201 – 1400
Commission rate = 3%, if the unit price is > Rs. 1400 (This is an incentive to the sales agent to negotiate a better price.)
The commission is to be paid at the end of every quarter.
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Solution Exploration
Solution 1: Update a z-table with the commission amount after saving the
invoice. Create a z-program to create a debit memo at the end of a quarter based
on the table data.
Solution 2: Use an accrual condition to calculate the commission & post to a GL
account. Create a report to show the accrued commission & a z-program to
create the debit memo at the end of a quarter based on the accrual posting.
Solution 3: Use the functionality of rebate management with some
enhancements.
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Solution using Rebate Functionality
Benefits:
No need of creating any additional reports to show accumulated values to date Avoids duplicate payments for the same period
Possibility of posting provisional entries (accruals)
Difficulties:
Standard Rebate processing works with a payer; not with sales agent.
Rate of rebate is based on the total sales volume; is independent of the unit
price of the individual transaction.
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Standard Rebate Processing
RebateAgreement
CreationVBO1
Sales Order1
Delivery, PGI1
InvoiceAmt: 2000
Sales Order2
Delivery, PGI2
InvoiceAmt: 5000
RebateaccrualRs. 40
RebateaccrualRs. 100
Rebate rate = 2% if volume > 4000= 3% if volume > 6000
Accrual rate = 2% (cannot be based on scale)
RebateSettlement
VB(7
Rebate payable : Rs.210 (Rs. 7000 * 3%)+Rebate accrualreversal
Credit MemoRequest
Credit Memo
(Auto-generated)
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Solution Approach & Steps
Approach:
Use new rebate processing which allows pricing routines to be attached to the
rebate conditions. (These fields are disabled in the old procedure.)
Calculate the rebate rate & accrual amount correctly based on the unit rate in
the transaction.
Allow final settlement (quarterly) only to the extent of accrued amount.
Step 1: Creation of a partner function for sales agent
Step 2: Extending price determination based on the sales agent
Step 3: Rebate Customizing
Step 4: Customizing the Pricing procedure and development of routines
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Price Determination Based on Sales Agent
Append structure to KOMK (or KOMKAZ) with a field representing the sales agent
Add the field to the pricing catalog
Write the userexits to move the partner from the sales document to the pricing
communication structure
MV45AFZZ-PRICING_PREPARE_TKOMK (for sales document)
RV60AFZZ-PRICING_PREPARE_TKOMK (for billing – rebate conditions)
Create the condition table using the new field added to the pricing catalog
Create an access sequence based on the new table
Assign the access sequence to the condition type
Note: Rebate pricing determination uses similar concept as sales pricinghowever s maintained in a separate IMG node; the application (E) is different
from sales (A).
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New Rebate Processing
Need to activate synchronous update of LIS info-structure S136
Possible to specify condition value & base value routines for rebate conditions
Possible to use exclusion indicator in rebate access sequence
Very useful in addressing non-standard requirements
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Pricing Procedure for the Invoice
Two condition types are used in the pricing procedure of the invoice.
A “normal” condition (not a rebate condition) to determine rebate rate based on
the scale of the unit price
A rebate condition which is used to accrue the rebate volume. A pricing routine is
attached to the rebate condition to copies the rate from the normal pricingcondition to the rebate condition.
(Otherwise in standard rebate processing accrual rate is independent of any
scale.)
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Pricing Procedure for the Rebate Credit Memo
Only the rebate condition type is used in the pricing procedure.
The rebate credit memo contains two lines with the same condition type.
The first line contains the rebate amount calculated based on the final sales
volume. This triggers the credit posting.
The second line is statistical & contains the accrual value to be reversed. This ine
triggers the accrual reversal posting.
Note: Partial settlement of rebate has an option to pay the rebate to the extent
of only upto accrued values; however this is not available for final settlement.
In standard system final settlement amount is calculated with rebate rate based
on the scale ; it is independent of the accrued amount.
In this solution, a pricing routine attached to the condition type sets the final
settlement value = the value accrued so far.
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Rebate Accounting
Accrual posting is used when the agreement period is comparatively long.
In invoice pricing procedure assign an accrual accounting key (ERU in standard) to
the rebate condition type.
At the time of invoicing
Dr Rebate Expense Account (a P&L account) (assign in the left column in VKOA)
Cr Rebate Accrual Account (a BS account) (assign in the right column in VKOA)
Therefore customer receivable is not affected. At the time of settlement (partial / full):
Following two entries with the actual rebate amount to be paid:
Dr Rebate Expense Account (a P&L account) (assign in the left column in VKOA)
Cr Customer Receivable
Following two entries with the accrual amount (remaining to be reversed):Cr Rebate Expense Account (a P&L account) (assign in the left column in VKOA)
Dr Rebate Accrual Account (a BS account) (assign in the right column in VKOA)
• Note: In this solution, amount to be paid is always equal to the accrued amount.
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Useful Sources of Information
White Paper on Rebate Processing in SAP:
http://www.erpgenie.com/publications/saptips/052005.pdf
OSS Notes:
Note 75778 – Consulting / Troubleshooting for rebate processing
Note 105681 – To use the new rebate procedure