Subsequent Settlement

Use
This component permits one-time or periodic settlement accounting with regard to conditions
governing cumulative, end-of-period rebates.

If you use the Agency Business component, you can use these functions in purchasing both to
settle accounts with vendors and with customers.

If, for example, you agree with your vendor or customer that certain conditions will not be paid
with the invoice but – as long as a certain volume is reached upon which you have agreed – not
until the end of the agreed time, then you can create the agreement in the system. The system
automatically updates the relevant business volumes. Settlement with regard to such conditions
takes place at predefined points in time.

Implementation Considerations
You use this component if you and your vendors or customers agree to conditions of purchase
that require subsequent (end-of-period rebate) settlement.

Integration

Required function: Required component:

Updating of cumulative business volumes at Purchase Orders

time of purchase order

Updating of cumulative business volume at Goods Receipt

time of goods receipt

Updating of cumulative business volumes at Invoice Verification

time of invoice verification

Updating of invoiced sales at the time of vendor Agency Business

billing document, settlement request and
customer settlement

Features
• You can store arrangements entered into with your vendors or customers in the system.
The arrangements involved can comprise two types of condition: those requiring one-time
settlement and those requiring periodic settlement. Both the validity period of the
arrangement and the reference magnitude (for example, quantity, value, weight, physical
volume, or number of points) can be defined by the user.

• The system automatically updates the business volume for the goods for the corporate
unit involved when you save the documents.
 • You can still enter rebate arrangements after business volumes have already been
recorded. In this case, the relevant business volumes are determined and updated
retrospectively.

• At the end of the validity period of a rebate arrangement, or at the end of the agreed
period, the system calculates the rebates payable with regard to conditions that are due
for settlement and creates a settlement list. Depending on the settlement type, the
system either automatically creates a vendor billing document or a sales invoice.

• Interim settlement is possible at any time for both rebate arrangements requiring one-
time settlement and those requiring periodic settlement.

• If the results of your cumulative business volume update differ from those of your
business partner, you can compare and reconcile the two sets of figures and carry out
settlement accounting on the basis of an agreed value.

Constraints
Conditions due for settlement immediately are settled as soon as invoices are received, or once
payment has been made. These are therefore not discussed here.

You can process business volume data from customer billing documents using the SD volume-
based rebate.

Performance
To improve performance in application components other than SAP Retail that the subsequent
settlement accesses, you can make global settings for each client in Customizing for subsequent
settlement:

• You can switch off the entire subsequent settlement.

• You can switch off individual checks for the updating of business volume and archiving.

Subsequent Settlement Procedure

Use
This process description explains the complete business cycle of Subsequent Settlement.

Process Flow
The following graphic illustrates the individual phases of Subsequent Settlement. All the functions
except Business volume comparison and Final settlement occur repeatedly during the validity
periods of the conditions.
Negotiating With the Arrangement Partner

You generally negotiate prices with your business partners at least once a year. You can set the
prices for individual articles directly, or discuss end-of-period rebates for one or more articles. You
settle end-of-period rebates with the arrangement partner (vendor or prior vendor, for example)
on the basis of the business volume, sales, points, etc. achieved.

Creating/Maintaining Rebate Arrangements

You enter rebate arrangements (together with the conditions for subsequent settlement) in the
system so that automatic settlement accounting can take place on the agreed dates.

See Rebate Arrangements in Subsequent Settlement

Updating Business Volume

Within the validity period of each rebate arrangement, the system continually updates the
business volumes (expressed as values, quantities, weights, physical volumes, and points) for
the relevant areas of application for each condition. The updated cumulative business volume
data serves as the basis for settlement accounting.

The business volume data can be updated on the basis of data from Pos, goods receipts, or
verified invoices. The conditions determined during price determination in the purchase order are
valid here. These conditions are evaluated at goods receipt or during invoice verification, and
trigger the updating of cumulative business volume.
Business volumes from vendor billing documents and settlement requests are updated when the
documents are released to Accounting.

See Business Volume Update in Subsequent Settlement

Comparing Business Volumes

If you have agreed with your business partner to compare and reconcile your respective
cumulative business volume data, you carry out this process prior to final settlement. If the values
you and your business partner determine are different, you negotiate a value acceptable to both.
This agreed business volume figure then serves as the basis for final settlement.

See Business Volume Comparison in Subsequent Settlement

Settlement Accounting

At the end of the validity period of a rebate arrangement, or at the time of partial settlement
accounting for a period-specific arrangement, the system calculates the rebates payable with
regard to conditions that are currently due for settlement and creates a settlement list. In this
process, system takes the cumulative business volume data not included in previous settlement
accounting into consideration. The amounts payable thus determined are automatically posted in
Financial Accounting according to the settlement type.

You can carry out interim settlement accounting at any time for rebate arrangement conditions for
which settlement accounting has not yet been effected. Rebate income that is settled as a result
is then offset against the amounts calculated as being due at the time of partial or final settlement
accounting.

See Settlement Accounting in Subsequent Settlement

Archiving Rebate Arrangements

Rebate arrangements and all associated documents can be archived. You can store all the
relevant data in an archive, and access this again as and when needed. To ensure data
consistency and traceability, all index files are archived together. A deletion program is also
available.

For further informatio, see Archiving of Rebate Arrangements.

Rebate Arrangement Processing (Vendor)

Purpose
This process allows you to create rebate arrangements by grouping together conditions requiring
end-of-period settlement agreed with a "condition granter" that are valid within the same overall
timeframe and which are due for settlement at the same points in time.

Vendors may agree to refund a certain portion of the purchase price to purchasers in the
wholesale/retail industry on condition that a certain quantity or value of goods is bought (incentive
rebates), that payment is effected promptly, or that promotional activities are carried out, for
example. End-of-period refunds of (retrospective discounts allowed on) part of the total spend
with a certain vendor may also be payable as the vendor’s contribution towards disposal costs
incurred by retailers and wholesalers (in connection with packaging, waste materials returned
such as spent batteries, etc.). If a vendor agrees to enter into an such an arrangement with you,
he is regarded in the SAP System as "granting conditions".

Conditions can be divided into two groups: those having immediate effect based on individual
invoice dates, and those requiring "subsequent" settlement (retrospective settlement at the end of
a certain period).

Conditions having immediate effect are taken into account immediately in the vendor invoices
or at the time of payment of the latter (and therefore do not form part of this module).

Conditions having subsequent effect have to be taken into account at a later date: that is,
some time after the submission of an invoice relating to an individual purchase transaction. In this
case, settlement is based not on individual transactions but on the total volume of purchases -
expressed in money or quantity terms - over a period. This is what is meant by "subsequent
settlement."

You can enter rebate arrangements negotiated with the "condition granter" (comprising the
agreed conditions involving subsequent settlement) in the system. Later, settlement with regard to
such arrangements can be effected automatically, when payment becomes due. (Process:
settlement accounting for conditions requiring subsequent settlement.)

Rebate arrangement processing in the SAP System provides the following options:

• Conditions apply on the one hand to goods/merchandise and on the other to

organizational units of an enterprise (area of application).
• If a condition applies to several articles that do not belong to the same vendor sub-range,
you can assign these articles to a "settlement group" for joint processing.
• Conditions relating to a group of articles (a vendor sub-range or a settlement group, for
example) are created with a "settlement article." The latter serves to facilitate any
necessary conversions between different units of measure.
• A volume rebate arrangement can contain scaled or non-scaled conditions/main
conditions and period conditions.
• Furthermore, you can extend the validity of such an arrangement to cover a longer time-
span or "until further notice". For example, an arrangement created for one calendar year
can be automatically replaced by a new, identical one that is valid for the following
calendar year.

Process Flow
1. You first choose an arrangement type. This determines the payment method, default
values for validity periods, the permissible condition types, and key combinations, for
example. It is also used to assign the settlement and arrangement calendars.
2. You then enter the condition granter and define the validity period of the rebate
arrangement.
3. You enter the conditions that make up the arrangement. In the case of arrangements
requiring periodic settlement, you also enter the period-specific condition records
(covering the individual periods within the overall timeframe of the arrangement).
4. If required, you define rebate scales for the conditions, together with the relevant validity
periods.
5. You specify whether a business volume comparison and agreement process is to take
place (in order to identify and reconcile any discrepancies between your company’s and
 the vendor’s figures) prior to final settlement accounting with regard to the rebate
arrangement.

Notes and Remarks

• Before you set up a volume rebate arrangement in the system, the Subsequent
settlement indicator must have been set for the condition granter in the vendor master
record at the desired purchasing organization level.
• For conditions relating to a group of articles, you must make sure that a "settlement
article" has been maintained in the system. This is used to carry out any necessary
conversions between different units of measure and may also be used for billing rebate
income due. The settlement article is entered in the arrangement.
• The ongoing business volume update process is based upon certain important
information from the conditions, such as the area of application (condition relates to
goods/merchandise or to organizational units of an enterprise), and settlement frequency.
This information cannot be changed once the arrangement has been created in the
system.
• In the case of broker processing, ensure that an access sequence for broker processing
has been assigned to the condition type (in Customizing).That is to say, the condition
type must include accessing of the prior vendor (original, or supplier’s, supplier).
• You will find details on the volume of business done with a vendor in the lists Detailed
statement (e.g. of purchase orders or invoices received) and Statement of statistical data
as well as in the Standard analysis for subsequent settlement accounting. You will find
these lists in the Subsequent settlement menu.

You create arrangements for a promotion via the Promotion menu.

Creating a Rebate Arrangement

Procedure
1. On the Create Agreement screen, enter the desired arrangement type and choose Goto →
Organizational data.

The Organizational data screen appears.

2. Enter the desired organizational data and press ENTER .

The Arrangement overview screen appears.

3. Enter descriptive and control data relating to the arrangement, such as:

− Description of the arrangement

− Condition granter, currency

− Validity period
 o Control data

You can, for example, define that business volume has to be compared with the
vendor before partial or final settlement is made. The system suggests a value
from the vendor master.

4. Choose Goto → Arrangement partner to enter the name of a person who is

responsible for the rebate arrangement, for example. Partner roles may have been
defined as mandatory roles in the partner schema for the arrangement type
(Customizing). Return to the previous screen.

5. Choose Goto → Conditions to enter the conditions belonging to this rebate arrangement.

If the settlement type is debit-side settlement at purchasing organization

level, the Debit-side settlement level screen appears, with the appropriate
mandatory entry fields (for example, the sales organization). Otherwise, the
system goes directly to the next screen.

If the settlement type is debit-side settlement at site level, the necessary data
can be determined automatically from the master data if the latter has been
maintained.

6. If several condition types or key combinations exist, a box showing the valid condition
types and key combinations now appears. Choose the entry for which you wish to create
conditions. Click Choose to call up the entry screen for conditions.

If there is only one valid condition type, the entry screen for conditions appears
immediately.

7. Enter one or more main condition(s).

If a settlement calendar has been defined for the rebate arrangement, period
conditions are created automatically. If the calculation rule for the period
conditions is the same as that for the main condition, the Amount and Unit are
adopted. Otherwise, these fields are set to zero and must be remaintained
manually. The Provision field in the main condition is simply a suggested value
for period conditions that have not yet been created. When provision is later
created when purchase orders are created, the provision of the valid period
condition is used.

8. The following options are available for processing a main condition:

 − You can process the details. To do so, select the main condition and then choose Goto
→ Details. On the detail screen for the main condition, you can then enter a settlement
article, for example.

− You can specify scale levels. To do so, select the main condition and choose Goto →
Scales. If desired, you can enter a currency unit that differs from the arrangement
currency.

− If a settlement calendar has been assigned to the rebate arrangement, you can define
the period-specific conditions. To do this, select the main condition and choose Goto
→ Period conditions. See Processing Period-Specific Conditions.

9. Save your rebate arrangement.

Creating a Rebate Arrangement Using the

Referencing Technique
Use

If you wish to adopt data from an existing arrangement, you can reference the latter when you
create a new arrangement.

Prerequisites

The arrangement type in both cases must be identical.

You cannot use this function to extend an arrangement (for example, to cover the
following year). A separate transaction (Manually extending a rebate
arrangement) is available for this purpose.

Procedure

To create a rebate arrangement by referencing an existing one, proceed as follows:

1. On the Create Rebate Arrangement screen, enter the desired arrangement type and
choose Arrangement → Create with reference.

The box for entering the reference arrangement appears.

2. Enter the ID of the rebate arrangement you wish to reference, specify the new validity
period, and copy.

The arrangement overview screen appears. The data from the reference arrangement is
preset in the new arrangement.

3. Make any necessary changes to the data. If you have used an arrangement requiring
periodic settlement as a reference, you must enter a new, unique, external description.
 4. Choose Goto → Conditions to change the conditions of the arrangement. If necessary,
change the detail data, the scale levels, and the period-specific conditions. See also
Processing Period-Specific Conditions.

Extending a Rebate Arrangement Using a

Report
Use

You can use this procedure to extend a rebate arrangement. In this procedure, you create a new
rebate arrangement referencing the old arrangement.

Prerequisites

A prerequisite for extending a rebate arrangement is that an arrangement calendar has been
assigned to the relevant arrangement type in Customizing.

Note that a rebate arrangement must be extended in good time (before the
creation of the first purchase order for the new arrangement period), so that the
business volume data can be recorded correctly.

If an arrangement is not to be extended any further, delete the arrangement

calendar from the last valid arrangement by choosing the function Remove
arrangement calendar from the Extras menu during rebate arrangement
maintenance. If the rebate arrangement is later to be extended after all, you can
restore the arrangement calendar to the arrangement in the same way.

Procedure

To extend the validity of an arrangement, proceed as follows:

1. On the Extension of Rebate Arrangements (Purchasing) screen, enter the desired

selection criteria and specify which details you wish to see in which order in the list
output.

2. Run the program. You can decide whether or not the program is to be run in the
background and whether you wish to have the list of results printed out.

If the extension has been successful, the list will contain the appropriate messages.

You can display the extensions of a rebate arrangement in maintenance or

display modes via Goto → Extended arrangements. This function is also
available on the Business volume comparison screen.
 5. Save your rebate arrangement.

Manually Extending a Rebate Arrangement

Use
You can use this procedure to manually extend a rebate arrangement. In this procedure, a new
rebate arrangement is created and linked to the old arrangement. In contrast to extending an
arrangement using a report, in the manual procedure you are able to make changes to the rebate
arrangement before saving it.

Prerequisites
A prerequisite for extending a rebate arrangement is that an arrangement calendar has been
assigned to the relevant arrangement type in Customizing.

Note that a rebate arrangement must be extended in good time - before the
creation of the first purchase order for the new arrangement period, so that the
business volume data can be recorded correctly.

If an arrangement is not to be extended any further, delete the arrangement

calendar from the last valid arrangement by choosing the function Remove
arrangement calendar from the Extras menu during rebate arrangement
maintenance. If the rebate arrangement is later to be extended after all, you can
restore the arrangement calendar to the arrangement in the same way.

Procedure
To extend the validity of an arrangement, proceed as follows:

1. On the Extend Agreement screen, enter the rebate arrangement to be extended and press
ENTER .

A dialog box containing error messages and warnings may appear. The overview screen
for the new rebate agreement is then displayed.

2. Make the necessary changes.

3. Save the new rebate arrangement.

You can display the extensions of a rebate arrangement in maintenance or

display modes via Goto → Extended arrangements. This function is also
available on the Business volume comparison screen.
Retrospective Creation of Rebate Arrangements
Use
In the normal course of the process chain, arrangements are created before the documents
relevant to business volume. During price determination for a document item, the system
determines the condition records and includes these in the document conditions. On the basis of
the settings in the document conditions, the relevant cumulative business volumes are then
updated in the information structures of the LIS.

In some cases, however, it is not possible to create the rebate arrangement in good time. This
may be due to one of the following reasons:

• Annual negotiations with the vendor do not take place until April. However, the agreed
conditions requiring subsequent (end-of-period) settlement apply retrospectively (i.e. from
the start of the year).

• The programs for Subsequent Settlement are activated during current business
operations.

In both cases, documents already exist in the system, and a rebate arrangement whose condition
records are not included in the document conditions will thus be entered subsequent to the
creation of these documents.(If the rebate arrangement had been created at the right time, the
arrangement conditions would have been included in the purchasing document conditions.)

You can ascertain whether a rebate arrangement was created retrospectively by looking at its
creation date (see Rebate arrangement maintenance. → Extras → Status information). For
condition records - especially for period-specific condition records - there is a corresponding
indicator in the detailed view, which you can also change if necessary.

A rebate arrangement is regarded as having been created retrospectively if its validity period
begins prior to or on the same day as its creation. If this is the case, relevant documents may
already exist in the system.

Likewise, a condition record is regarded as having been created retrospectively if its validity
period begins prior to or on the same day as its creation. Only a retrospectively created rebate
arrangement can contain retrospectively created condition records.

Rebate arrangement 1 Valid from 01.01. – 31.12.,

Entered on 03.01, 10:00
Monthly period-specific conditions (periodic partial settlement)
Business volume. updating as per invoice receipt

Purchase order 4500000010, entered on 10.02.

Invoice no. 5000000100, document date 10.03.
Invoice no. 5000000140, document date 02.04.

Purchase order 4500000020, entered on 01.03., 09:00

Invoice no. 5000000120,
 Purchase order 4500000030, entered on 03.06.
Invoice no. 5000000130

In the above example, rebate arrangement no.1 was created at 10:00 on 03.01. Since its validity
period start date is 01.01, it is a retrospectively-entered arrangement. The Retrospective entry
indicator is set for the period-specific condition records for the months of January, February, and
March.

The cumulative business volume update for purchasing document no. 4500000030 is carried out
in the normal way (in this case, following invoice receipt). This is not possible for documents
4500000010 and 4500000020, because their document conditions do not include a condition
record for rebate arrangement no. 1. The business volume update process cannot therefore be
triggered in these cases.

Activities
Business volumes are updated in the normal way if they were entered after the arrangement was
created. However, retrospective determination and updating of the relevant business volumes is
necessary for those documents that were entered prior to the creation of the rebate arrangement.

For information on how to determine the missing vendor business volumes for retrospective
rebate arrangements and condition records, please see Business Volume Updating in
Subsequent Settlement.

Conditions in Subsequent Settlement

Use
A condition is an individual stipulation within a rebate arrangement. Conditions apply on the one
hand to goods or merchandise (for example, vendor assortment, vendor sub-range, merchandise
category, article), and on the other to the organizational units of a corporate enterprise (such as
sites or distribution centers), referred to in the following as the "areas of application". If a condition
applies to several articles that do not form part of the same vendor sub-range, these articles can
be assigned to a single "settlement group".

Features
Conditions can be described as follows:

• Each condition specifies a certain rebate. This consists of the amount (for example, fixed
amount or percentage) and the unit of rebate of the amount (for example, $, %).

• Each condition is assigned to a condition type. The condition type is defined in

Customizing and determines the basic characteristics of a condition, such as the
reference magnitude and the calculation rule. Via the condition type, you can also specify
whether or not a provision for accrued income is to be set up.
 In the case of scaled conditions, the reference magnitude defines how the scale
is to be interpreted. The scale can relate to a quantity, a value, a weight, a
physical volume, or a number of points.

The calculation rule specifies how the rebate payable with respect to a
condition is to be calculated. The rebate can be a fixed amount or a percentage.
The amount can relate to a quantity, a value, a physical volume, a weight, or a
number of points.

Via provisions for accrued income you determine whether anticipated rebate
income is to be taken into account in the current valuation of an article (that is to
say, whether the moving average price in the article master record is adjusted at
the time a goods receipt is posted for a purchase order whose price
determination process takes account of a provision-relevant condition).

You can flag condition types as independent of business volume. An example of this may
be condition types that are used to settle promotional deals. Only a fixed amount is
allowed as a calculation rule for these types of conditions. You cannot work with
provisions for accrued income, as business volume is not updated. Conditions that are
independent of business volume should not be entered in calculation schemas for
purchase orders, vendor billing documents or single settlement requests.

• Each condition can be specified in a different currency - even within the same rebate
arrangement. The currency in which settlement is to be carried out (the settlement
currency) is entered in the rebate arrangement.

• A condition can be scaled or non-scaled. The rebate payable under non-scaled

conditions remains constant (that is, it is independent of the quantity or value purchased
etc).

For information on scaled conditions, please see Scaled Condition in Subsequent

Settlement.

• Settlement for condition can be carried out periodically. In the case of conditions subject
to periodic settlement, the planned settlement dates for each period are determined via
the settlement calendar. The dates defined in the calendar determine the validity periods
and thus the due dates of the conditions. Similarly, the date for effecting a final settlement
(last settlement within the validity period of an arrangement) can be predefined if desired.

For information on conditions requiring periodic settlement, please see Period-Specific

Conditions in Subsequent Settlement. Each condition can apply to certain goods or
merchandise on the one hand, and to certain organizational units of a corporate
enterprise on the other. You determine which of the two a certain condition applies to via
the key combination of the associated condition table (condition tables are defined in
Customizing):

o Goods-related

The condition applies to an article, a vendor sub-range, a merchandise category,

a settlement group or to the entire vendor assortment.

o Corporate-unit-related
 The condition applies to a site or a purchasing organization.

A settlement group is a grouping of certain articles to which the same rebate

arrangements or conditions apply. The settlement groups are stored in the info
record of the vendor for the article.

For conditions that relate to a group of articles (for example, to a vendor sub-
range or a settlement group) you must ensure that a settlement article is
maintained in the system (on the detail screen of the conditions). This is needed
by the system to perform conversions between units of measure and, in some
cases, to create a billing document in the course of settlement accounting.

Main Conditions in Subsequent Settlement

Definition
The main condition is the condition agreed with the settlement partner for the purposes of final
settlement in the case of periodic arrangements.

Use
When you create a rebate arrangement, you define the main conditions at the highest level. All
main conditions can have the same validity period. You enter the rebate payable for each main
condition.

The buyer has negotiated an end-of-period rebate of $1 for each item of a

particular article purchased.

Integration
Final settlement for a rebate arrangement is always carried out using the main condition. A main
condition can be scaled and/or subject to periodic settlement. Periodic settlement is only possible
if a settlement calendar has been assigned to the arrangement.

Scaled Conditions in Subsequent Settlement

Definition
Scaled conditions specify a series of rebates that vary according to different total volumes of
purchases made over a period (expressed as a quantity, value, or number of points). Scaled
conditions consist of one or more scale levels.

Use
Each scale level consists of a scale value and a rebate that depends on this value:

• The scale values of a condition can be defined via the business volume (expressed as a
quantity or dollar value). The unit of the scale value (for example, quantity, weight,
physical volume, points) is defined in Customizing for the condition type in the Reference
magnitude field. The value in combination with the reference magnitude is also referred
to as the scale basis.

• The rebate consists of the scale amount (for example, fixed amount, percentage) and the
unit of rebate of the amount (for example, $ or %). The amount is calculated for a
quantity, a weight, a physical volume or a number of points, for example. This unit is
termed the condition basis and corresponds to the reference magnitude.

Scale level Scale basis Condition basis

First scale level From 1,000 (Scale value) 1 (Scale amount) dollar (Unit
pieces (Reference magnitude) of rebate) per piece

Second scale level From 2,000 (Scale value) 2 (Scale amount) dollar (Unit
pieces (Reference magnitude) of rebate) per piece

The following scaled conditions are possible:

• From-scales

From 100,000 pieces 2%

From 200,000 pieces 3%

With business volume of 500,000 pieces, at $1,000,000, income is 30,000.

• To-scales

To 100,000 pieces 2%

To 200,000 pieces 3%

With business volume of 500,000 pieces, at $1,000,000, income is $0.

• Interval scales

To 100,000 pieces 2%

To 200,000 pieces 3%

With business volume of 500,000 pieces at $1,000,000, income of 2% of $200,000=

$4,000 is granted for the first 100,000 pieces, and an income of 3% of $200,000= $6,000
 is granted for the next 100,000 pieces. There is no income for the remaining 300,000
pieces.

Integration
Prior to settlement accounting, the system determines the scale level that has been achieved by
referring to the scale values, and then calculates the rebate payable.

Rebates payable as fixed amounts can be determined directly.

Sums payable as percentages or per unit (for example, quantity, weight, physical volume, points),
are calculated on the basis of the business volume (expressed as a quantity etc. or dollar value)
done with the business partner in the relevant area of application in accordance with the desired
calculation rule.

Period-Specific Conditions in Subsequent

Settlement
Definition
Period-specific conditions are used for partial settlement in the case of periodic arrangements.

Use
If conditions are settled periodically, the main condition defines the overall validity period. The
validity periods for the individual period-specific conditions must fall within the validity period of
the main condition. When determining prices in the documents, the system uses only the period-
specific conditions.

Different conditions can be entered for each period. The unit of rebate of the period-specific
conditions can differ from that of the main condition. For example, settlement with regard to the
main condition can be effected as a percentage, whereas settlement for the period-specific
conditions can be effected as a fixed amount in dollars. This is configured via the calculation rule
in Customizing for the condition type. When maintaining conditions, you can assign a different
calculation rule to the period-specific conditions.

Settlement Calendar

The periods in the period-specific conditions correspond to those in the settlement calendar that
is valid for the rebate arrangement. For example, only monthly period-specific conditions are
created in the case of monthly settlement. These periods cannot be changed once the rebate
arrangement has been set up.

Assumed Values

In the case of scaled conditions, the use of period-specific conditions allows settlement to be
effected using assumed values if desired. These assumed values can represent empirical figures
or estimates. Thus the assumed value can be used for the purposes of partial settlement in the
course of the fiscal year, it is not necessary to take into account which scale level has actually
been reached on the basis of the business volume achieved to date. This approach permits a
non-fluctuating rebate income to be generated as early as possible within the validity period of a
condition.

Scaled Condition

From $100 000 1%

From $200 000 2%

From $300 000 3%

From $400 000 4%

From $500 000 5%

Period-Specific Conditions

1. – 31. January: 3%

1. – 28. February: 3%

1. – 31. March: 3% etc.

Setting the period-specific conditions at 3% reflects the empirical value for the
last few years. To date, purchases worth at least $300,000 have always been
made from this vendor each year. The advantage of this setting is that settlement
is already effected on the basis of 3% over the first few months of the year, even
though the business volume does not reach the 3% scale level during this time.

Final Settlement with Respect to Period-Specific Conditions

In contrast to partial settlement within the validity period, final settlement with respect to period-
specific conditions takes into account the total business volume achieved over the period, even if
partial settlement has already been effected with respect to the conditions in some cases. By
taking total figures into consideration, a higher scale level can be reached in the case of scaled
conditions (and hence a larger rebate attained). The final sum payable is arrived at after
deduction of the rebates already paid in the course of the partial settlements.

In Customizing, you can specify whether final settlement should be effected.

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 ).

Business Volume Updating in Subsequent

Settlement
Use
During settlement accounting, the system uses the volume of business done with your business
partner to determine the scale level, for example. In this process, the system updates the
business volumes (expressed as a money value in the rebate arrangement currency), and the
purchased quantities, weights, physical volumes, or points for each condition, depending on
which data is required for settlement purposes. The money value of the business volume is
updated in all cases.

Prerequisites
If the cumulative business volume figures are updated at the time of the purchase order or the
goods receipt, the tax code of the PO item must be known. You maintain this in the info record or
use the condition technique to set it.

Features
If different currencies or units of measure are used in a rebate arrangement (e.g. arrangement
currency differs from scale currency and scale unit differs from condition unit) the system records
the business volumes in all currencies and units that occur. As a result, problems caused by
exchange rate fluctuations or missing conversion factors are avoided.

The following methods of updating are possible:

• Updating at time of purchase order

Updating is carried out as at the delivery date. When you order an article from a vendor,
the vendor’s conditions that are valid on the purchase order date are used to determine
 the price of the article. The relevant condition type must be specified in the calculation
schema for this purpose.

• Updating at time of goods receipt

Updating is carried out as at the document date. The time-independent conditions of the
PO or the results of a new price determination process (in the case of prices for precious
metals, for example) can be used as the basis for this. A new price determination process
is always carried out at the time of goods receipt if the GR date is specified as the pricing
date category.

• Updating at time of invoice receipt

Updating is carried out as at the invoice date. With regard to the value, you can elect to
update using either the verified final invoice value or the PO data. In this case, the scale
and condition basis to be updated can be any level of the calculation (the net/net
purchase price, for example).

In the case of subsequent debit, business volume is updated on a value basis only.

Business volumes from vendor billing documents and settlement requests are updated when the
documents are released to Accounting.

Business volumes can also be updated for service items, but only on the basis of the associated
PO items. This is not integrated with price determination for the individual services. You can
therefore only work with money values of business volumes. You can also use blanket purchase
orders and invoicing plans. Business is always updated from the invoice.

Business volumes that result from credit memos and invoices without reference to purchase
orders in Invoice Verification cannot be taken into account in Subsequent Settlement. The
documents do not support price determination. Instead, you can use vendor billing documents.

Business volumes from consignment processes cannot be taken into account in Subsequent
Settlement either, as, in these cases, invoices without reference to purchase orders are created.

The general rule in the case of scheduling agreements with time-dependent conditions is that the
price determination process is not carried out as the basis for updating until the time of goods
receipt. Under certain circumstances updating that is planned for the time of the purchase order
may take place at the time of goods receipt. Updating that is planned for the time of invoice
verification may be brought forward to the time of goods receipt.

Updating takes place for each valid condition. In the process, the business volumes (expressed
as dollar values and quantities) are cumulated separately for the area of application (goods-
related or corporate-unit-related conditions) of each condition, and for each site and each tax
rate. If settlement is effected monthly or more frequently, updating is carried out simultaneously
for each settlement period. If settlement is carried out less frequently than monthly, the business
volumes are nevertheless updated on a monthly basis. This ensures that it is subsequently
possible to generate monthly statistics.

The updating of business volumes is based on certain important information from the conditions,
such as area of application and settlement frequency. For this reason, you cannot change such
information once a rebate arrangement has been created.
 Purchase Orders and Price Determination in
Subsequent Settlement
Use
The purchase order is a prerequisite for the cumulative updating of business volume figures. This
section explains the price determination process for a purchase order and the how these
functions interact with Subsequent Settlement.

Price determination for Agency Business documents is carried out in the same way.

Features
When a purchase order is created, the system carries out price determination. This process is
based on the price calculation carried out for the article. The calculation also defines which value
is relevant to subsequent (end-of-period rebate) settlement accounting with respect to a condition
(in the above example, this is the net net purchase price, NNPP).

Within the framework of price determination, the system checks whether any conditions have
been agreed with the relevant vendor for the article in question (in the example: 5% discount and
1% surcharge) at the time of the purchase order. In this case, the valid conditions (4711) are
taken into account in the purchase order and displayed.

If a condition belongs to a condition type for which a provision for accrued income is to be set
up (that is, the condition involves subsequent settlement), the value of the provision (here: 1 % of
191.90 = 1.92) is displayed in the purchase order. In the case of condition types without
provisions for accrued income, the value "0" is shown against the condition.
For weight- and volume-dependent condition records, the gross or net weight or the physical
volume must be maintained in the article master record, purchasing info record, and/or the
purchase order item, so that the system can access the condition record and update the business
volume. In the case of points-dependent conditions, the points conversion factor must be
maintained in the purchasing info record or in the purchase order.

Updating Business Volume from Customer

Settlement Documents
Use

The document type customer settlement document used in Agency Business supports item-
oriented price determination. Subsequent settlement takes these customer settlement documents
into account when updating the business volume.

A customer settlement document is used for the separate posting of debit side postings from a
single settlement request. That means that debit side postings no longer come from the single
settlement request but are grouped together from the customer settlement document.

Customer settlement documents are created by copying the items from all single settlement
requests which have not yet been transferred to customer settlement documents. All single
settlement request items for one customer are grouped together. The single settlement request
has to be created within a single settlement request list. They cannot be created individually.

Integration
Unlike posting lists, which also enable grouped separate debit-side posting, customer settlement
documents contain item data. The document supports item-oriented price determination in
particular. Business volume and provisions for rebate income updates for use in subsequent
settlement can no longer be made in the single settlement request (no postings in Financial
Accounting from this document), but instead have to be carried out from the customer settlement
request.

The expense settlement document which is also used in Agency Business does not take
subsequent settlement into account when updating the business volume.

Features
If a single settlement request is transferred to customer settlement documents, business volume
update and posting of provisions for rebate income does not take place for customer rebate-
relevant document conditions (no customer posting altogether). When single settlement requests
are transferred to customer settlement documents, business volume update and posting of
provisions for rebate income takes place using document conditions from the customer
settlement document. These can be identical to the document conditions of the settlement
request or can be totally or partially redetermined. Note the copy control when doing this. The
system always redetermines condition records for subsequent settlement, however, to ensure
consistency in the document data and document conditions.

Subsequent settlement manages customer settlement documents under the new document
category 60. Subsequent business volume update is also supported. Report RMEBEINA,
transaction MEIA enables the document index S111 to be recreated for use in subsequent
business volume update.

You cannot choose whether the system performs business volume update from the customer
document conditions of the single settlement request or the customer settlement document.

Activities
In price determination for the customer settlement document you can only use purchasing data
(invoicing party, purchasing organization etc.), if you set the Additional Item Data indicator in the
billing type, because otherwise the system removes the condition records relating to purchasing
fields when transferring the single settlement request to customer settlement. Otherwise the
document conditions for the fields in the document would be inconsistent.

The customer settlement document item does not have any fields such as invoicing party,
purchasing organization etc. If necessary, the system looks these up from the single settlement
request. For performance reasons, you should only set this indicator if really necessary.

Item 1 in settlement request 1 is transferred to customer settlement document 2, item 2. The

customer settlement document does not have any fields such as purchasing organization and
vendor at item level. This information is only saved in the header of the settlement request. If you
set the Additional Item Data indicator, the header of document 1 is read in the price determination
for customer settlement document 2, item 2. The communication structure KOMK for price
determination of customer settlement document 2, item 2 is extended with the following fields.

• MOVE KOMLFK-LIFRE TO KOMK-LIFRE

• MOVE KOMLFK-EKORG TO KOMK-EKORG
• MOVE KOMLFK-LIFRE TO KOMK-LIFNR

If you do not set this indicator, these three fields remain blank. Condition records that relate to
these fields are removed when the customer settlement document is removed.

If you need to copy extra fields, you can do this in user exit LWZRE001, component
EXIT_SAPLWLF0_001 or in the BAdI WLF_ADDITIONAL_DATA2, method
change_pricing_header.

Maintain the residence time for archiving for document category customer settlement.

If you want to use subsequent business volume update (generally for customer rebate
arrangements) and documents for the customer could be affected, flag the Document Index
Active indicator in the customer master. Note, however, that setting this indicator increases the
volume of data.

If necessary, an entry is created in document index table S111 each time an existing rebate-
relevant access sequence that is used by at least one condition type is accessed. The volume of
data can become very large. Do not under any circumstances delete all the rebate relevant
access sequences that are not being used, for example, the access sequences delivered by SAP.

The indicator in the customer master is maintained at sales area level (Sales screen). For
documents without a sales area, entries are always created (no control function exits).
Note that this indicator is only valid for customer settlement documents. For single settlement
requests (customer price determination) you need to specify explicitly that the indicator needs to
be taken into account in the central control table (report RWMBON21, transaction WMN9).

The Document index indicator in the customer master also controls the creation of entries for
customer price determination for single settlement requests. The indicator for the vendor is only
relevant for vendor price determination.

Business Volume Updating in Subsequent

Settlement (Process)
Purpose
When business volumes are updated, the total volume of business done with a business partner
in a specified period is recorded. This value is needed in settlement accounting.

Process Flow
1. During price determination for a purchase order is created, the system establishes which
conditions apply to the purchase order in question.
2. When the vendor’s invoice is received, it is checked against the purchase order and the
goods receipt.
3. If the incoming invoice is correct, the cumulative business volume data (values, quantities
purchased, and so on) is updated by the addition of the data from the invoice.
4. Credit memos received from vendors have a retrospective and reversing effect on the
updated data in comparison with the corresponding invoices. The areas of application
and the validity periods of the conditions are taken into account. If, according to the
condition type, a provision for accrued income is to be set up, the appropriate posting is
 made at the time of goods receipt and the moving average price in the article master
record is changed accordingly.

In the case of articles with standard price, the articles stock data is not reduced. An
offsetting entry is posted in the price difference account.

Example of Business Volume Update for a

Condition

A rebate arrangement has been entered into with vendor 12345 with regard to the vendor sub-
range XY. This is valid for the entire calendar year. When a purchase order is created for article
22222 on Feb. 10, the system recognizes that article 22222 belongs to vendor sub-range XY, and
that the rebate arrangement 5 is valid at this point in time. When the vendor’s invoice created on
the basis of this PO is subsequently released for payment, the cumulative business volume data
is updated as outlined above.

Updating is carried out for each condition at the level of vendor, site, and tax rate in the rebate
arrangement currency and the unit of measure of the condition. At the same time, the figures are
cumulated separately for each settlement period. However, if settlement is effected less
frequently than monthly, the update data is still cumulated on a monthly basis. This ensures the
availability of monthly statistical information.