Rebate Processing in SAP SD

Rebate is an agreement between the company and the customer which is valid for a specific time
period. The rebate agreement specifies the percentage of rebate offered to the customer during
the specified period. The system calculates the rebate accruals for each applicable invoice and
posts them to the corresponding G/L accounts and also updates them in the corresponding rebate
agreement. At the end of the rebate agreement validity period, the company will reimburse the
rebate amount to the customer.
The rebate process in the following 3 steps.
-Configuring rebates.
-Setting-up rebate agreements.
-Managing rebate agreements and payments.

Configuring rebates.

Setting-1: Pre-requisites.
In order to configure the rebate, we shall activate the rebate in the following 3 areas.
-In the definition of required sales organization, we shall check the field “rebate process active”.
-In the required customer master record (payer) we shall check the field “rebate”.
-In the required billing type, we shall check the field “relevant for rebate”.
Setting-2: Configuring condition technique for rebates.
Path: SPRO--->sales and distribution--->billingàrebate processing--->condition technique for
rebate processing.
Maintain condition tables for the rebate.
Create the required condition tables like the customer, material, customer/material, etc.
Maintain access sequences.
Create an access sequence and place the required condition tables in it. While creating the
access sequence for the field “type”, we shall specify the value ‘1’ (access sequence relevant for
rebate).
Define condition types.
Example:
-BO01-group rebate.
-BO02-material rebate.
-BO03-customer rebate.
Functionality of rebate condition type:
-The condition class is ‘C’ (expense reimbursement).
-Plus/minus’ field contain “negative”.
-The ‘calculation type’ is “percentage” for BO01 and BO03 whereas it is “quantity” for BO02.
-For the rebate condition types fields like ‘amount/percent’, ‘value’, ‘delete’ etc. are not available
as the rebate condition types should not be processed manually. This is controlled by the condition
class ‘C’.
-The field “rebate process” specifies how the system calculates the rebate amounts. If we leave
this field blank, the system calculates rebate on each applicable invoice value. If we specify the
value ‘1’ the system calculates the rebate independent of the sales volume. It makes sense to
specify the value ‘1’ if the company offers rebate in certain schemes such as display scheme.
-The field “provision can” specifies whether the rebate accruals are corrected or not while setting
the rebate amount to the customer.
Maintain pricing procedures.
-We shall place the rebate condition type in the main pricing procedure itself.
-In the pricing procedure just above to net value of the item, we shall specify a sub-total “rebate
basis” by specifying the value ‘7’ for the field “sub-total” which updates the rebate basis in the
table ‘KOMP’ and the field ‘BONBA’.
Rebate basis is nothing but the value based on which the rebate is calculated (net value).
-Below to the net value of the item we have to place the rebate condition types. As the rebate
amount shall be calculated on rebate basis, while placing the rebate condition types in the
procedure for the field “from” we shall specify the “step no” of rebate basis.
-For the rebate condition types, we shall maintain the “requirement” ‘24’ which specifies that the
rebate condition types must only be determined into billing document.
-For the rebate condition types, we shall assign “accrual key” as well as “account key”. The accrual
key (ERU) enables the system to post the rebate accruals from each applicable invoice to the
corresponding G/L accounts.
-The settlement document (credit memo) uses the account key (ERB) to post the rebate
deductions to the corresponding G/L accounts.
Setting-3: Defining rebate agreement types.
While creating the rebate agreement for the customer, we shall specify the rebate agreement
type. For this, we need to define the agreement type with the required functionality. For this, go
to;
Path: SPRO->sales and distribution->billing->rebate processing->rebate agreements->define
agreement types->define agreement types.
Functionality of agreement type:

Proposed valid from/proposed valid to: Specifies the default validity periods that the system
automatically proposes while creating the rebate agreement. The default valid from date is very
much important with regards to whether or not we offer retro-active rebate. If we leave this field
blank, the rebate will be valid from the current date. If we specify the value “first day of the year”
the rebate agreement will be valid from the first day of the year even though the agreement is
created on the current date which is called a retro-active rebate.
Payment method: Specifies the default method of paying the rebate amount to the customer.
For example, it can be credit memo or check, etc.
Default status: Specifies the default status of the rebate agreement. Generally, it will be “open”.
Condition type group: Specifies the corresponding condition type group of the rebate agreement
type.
Verification levels: Specifies whether the system displays all the billing documents in the rebate
agreement based on which the rebate is calculated, or it displays the totals depending on the
payer etc.
Different validity period: If we check this field, the validity period of rebate condition record may
differ from the validity period of rebate agreement.
Payment procedure: Specifies whether the rebate shall be paid up to the accrued value or there
is no limit for manual payment.
Partial settlement: Here we need to specify the document type ‘R3’ for creating partial rebate
settlement request when entering the payment in the rebate agreement.
Reverse accruals: If we check this field, in the rebate agreement the field “accruals reversed”
will be automatically with the rebate amount paid to the customer. It is always a best practice to
check this field.
Final settlement: Here we need to specify the document type ‘B1’ for creating the document
rebate credit memo request while making the final settlement to the customer.
Text determination procedure: Specify the corresponding text determination procedure for the
rebate agreement with the corresponding text ID.
Save the agreement type.
Setting-4: Condition type group.
The condition type group specifies which rebate condition types are to be used for the
rebate agreement. For configuring this, go to;
Path: SPRO--->sales and distribution--->billing--->rebate processing--->rebate agreements---
>condition type group.
Define condition type group.
Go to “new entries” and create a group.
Assign condition types and tables to condition types group.
Go to “new entries” and assign the required rebate condition types along with condition tables to
the condition type group.
Assign condition type groups to rebate agreement types.
Select the required agreement type and assign the required condition type group.
Setting up rebate agreements
Setting-1: Creating rebate agreement.
Path: logistics->sales and distribution-> master data->agreements->rebate agreement (VBO1)-
create.
-Enter the required agreement type.
-Select the icon “organization data” and enter the required sales area.
-In the overview enter the “rebate recipient” and the “currency”.
-The validity period will be automatically proposed by the system from the definition of the
agreement type which if required can be changed manually.
-Select the button “conditions” and maintain the condition record for the required rebate condition
type.
Note: If it is a customer rebate the condition record shall be maintained for the payer.
-Select the record and go to “details” where we shall enter “material for settlement”.
Note: Whatever the material that is entered for settlement, by using that only the system
automatically creates the document partial rebate settlement request while making the rebate
payment from the rebate agreement.
Note: When we save the rebate agreement the system generates a no. for that agreement. For
this, we shall maintain a no. range for the rebate agreement. For this, go to;
Path: SPRO--->sales and distribution--->billing-> rebate processing--->rebate agreements---
>define no. ranges for sales deals.
Setting-2: After creating the agreements the system calculates the rebate accruals from each
applicable invoice and updates those rebate accruals in the rebate agreement, to see this create
few invoices.

Managing rebate agreements and payments.

-To see the rebate accruals updated in the rebate agreement, select the condition record
maintained in the agreement and select the icon “payment data”.
-In the rebate agreement, the system displays all the billing documents based on which it has
calculated rebate. To see this documents select the icon “verification levels” in the rebate
agreement overview screen.
Creating partial settlements:
-In the agreement overview screen select the button “pay” and enter the required amount to be
paid. Save the agreement.
-When we save the agreement the system automatically creates the document ‘partial rebate
settlement request’ for the entered amount.
-Go to the overview screen of ‘partial rebate settlement request’ by using the transaction code
‘VA02’ where the system displays the material which is entered as “material for settlement” in the
agreement.
-Remove the billing block.
-Go to item data of that item and select the conditions tab page where the rebate condition type
is displayed twice. One is to reverse the accruals, and the other is to credit the customer with the
specified amount. Save the document.
Note:
-The sales document type ‘R3’ is same as ‘CR’ except the corresponding billing type which is ‘B3’
(rebate partial settlement).
-The item category is ‘B1N’ which is same as ‘G2N’ except the field “returns” which must not be
checked.
Create the billing document ‘rebate partial settlement’ (credit memo) with reference to ‘partial
rebate settlement request’ by using the transaction code ‘VF01’.
Note: The billing type ‘B3’ is same as ‘G2’. Apart from that for the field “rebate settlement” we
shall specify the value ‘C’ (partial settlement for a rebate agreement).
-After making the payment to the customer, the field “accruals reversed” in the rebate agreement
will be automatically updated with the amount paid to the customer and it also calculates the
“maximum payable amount” that is left to pay to the customer. To see this select the condition
record in the agreement and select the icon “payment data”.
-Like this, we can create partial settlements till the entire rebate amount is paid to the customer.