Settlement Management - Condition Contracts

[former_member562929]

Introduction:

Calculating Rebates - Traditional vs S/4HANA way

In ECC system, it was necessary to set up accruals while setting up rebates as they are retroactive discounts. Conventional rebate system does not provide the flexibility to use same configuration and T-Codes for both the supplier and the customer side. It was essential for the system to keep track of all relevant documents including invoices, cancellations, credit, and debit memos, etc. In the ERP system, table VBOX stored all the relevant invoices. This table contained a huge number of rebate entries and any change in a customer’s scenario required the entire table to be rebuilt. During which, all rebate data would get locked throughout the organization, resulting in major blockages and preventing critical tasks.

SAP S/4HANA has an innovative functionality called ‘Settlement Management’, which offers an intelligent solution for the above scenario irrespective of volumes. It handles the settlement of customer and supplier rebates seamlessly and provides a centralized and standard solution for managing supplier and customer conditions. Settlement Management in S/4HANA has various key advantages over traditional ERP rebate solution. It provides a real-time insight into the data related to actual business volume and accruals from sales order and sales invoice’s header and item tables. It comes with the feature of defining supplier and customer contracts by a single T-code and entry screen. This entry screen also provides options for inclusion/exclusion of conditions based on various organisational and master data aspects like customer, material, sales organization, material group, customer hierarchy and so on.

Condition Contract

This is a very important part of Settlement Management. Condition Contract allows to store all information related to an agreement, such as parent customer, eligible partner and contract conditions. It also contains important information, such as prices and the validity of the agreement. There is an exhaustive list of Condition Contract types that can be selected from various options to suit your business needs. Condition Contract consists of four main sections, mainly Condition Contract header, customer/vendor data, relevant conditions and settlement information. Multiple standard reports are available around Condition Contract for business use.

Key Process Flow:

 

 

Prerequisite:

Basic understanding of Rebate Management Process is required.

Understanding of SD pricing condition technique that includes Condition table, Access sequence, Condition Type, Pricing procedure etc.

Understanding of Rebate Settlement.

Activation of Scope-Dependent Application Job Catalog Entries (S/4HANA)

Check the following entries:

 

Getting Started

Customizing – Sales & Distribution:

The configuration of Condition Contract Management comprises of three main steps:

1. Configure Pricing including Condition Contract Conditions

In this step, you define pricing conditions that are relevant for the calculation of the settlement amount during the condition contract settlement. In particular, you make specific settings for the so-called condition contract conditions which you enter in the condition contract maintenance in the Conditions screen area. Contract conditions usually comprise the rebate and accrual conditions.

 

 

2. Configure Condition Contract Maintenance

In this step, you first define and configure parameters for condition contract types and then the condition contract types themselves.

 

 

3. Configure Condition Contract Settlement

In this step, you first define and configure parameters for condition contract settlement. Then you enhance existing condition contract types with these parameters

 

 

Other Configuration Settings:

 

Business Process:

• Create Condition Contract – Business Volume Selection Criteria

• Create Condition Contract - Conditions

• Condition Contract - Settlement

 

Conclusion and Key Takeaways:

• Condition contract management provides central, standardised solution for the administration of supplier and customer conditions.


• Condition contracts support single or multiple customers/suppliers.


• Condition contract supports different types of settlement defined o the settlement calendar.


• Settlement and Accrual conditions are created independently on the condition contract.


• Accruals can be posted during invoicing or as a single document on delta accrual.

 

References and Further Reading:

2497386 - Required business functions for Settlement management

2481672 - Condition Contract Management - Useful Documents

2815535 - FAQ: Condition Contract Management by Settlement Management in SAP S/4HANA

[venu_ch8]

Nice.

[former_member757177]

Nice Blog.

Do you have any useful link for setting up PPF actions for condition contracts?

[former_member765021]

This looks great! This is really insightful! The way you explained about condition contract is really good. I was thinking of implementing a contract management software for the same. I was doubtful of things like this. But this is really good. Looking forward to more content like these. Keep up the good work!

[former_member562929]

Hi,

Sorry, i do not have that with me saved somewhere. But i am sure you might some other blog for the same. Good Luck..!!

[diana_kong]

Thank you very much for this overview.

Would you mind to tell me if the accrual condition type is added to the SD pricing procedure if I would like to perform accrual posting during invoicing?

 

[verena_120819]

If you use SAP ECC and want to implement SAP CCS there (and replace MM Bonus there), do you also need the Business Partner ready in the ECC or is this still possible with the "old" vendor concept from ECC?

[imran_mukaddam2]

Hello I have a question on the condition records tab in WCOCO. The Standard shows rebate condition table based on Condition Contract, and Condition contract with Material. I had a requirement being explored where the rebate condition records need to have additional fields from the sales order item. But we are unable to find way how to apply that to the aggregate business volume via enhancements. Normally we do this on the individual sales order or billing user exits where the condition record belongs to order or billing pricing procedure . But how to do the same in Condition Contracts pricing procedure. Alternatively we came to conclusion that instead of extending the condition records, we should instead extend the business volume selection criteria. Please advise what is your finding, can condition contract condition records have custom fields from sales order then how to get them during settlement run within contract pricing procedure determination..

[former_member869938]

Hi,

Let's say I've 3 invoices this year:

• First invoice 2 UO / Gross price 2 x 10€ / Discount on the bill 1%


• Second invoice 2 UO / Gross price 2 x 10€ / Discount on the bill 2%


• Third invoice 5 UO / Gross price 5 x 10€ / Discount on the bill 3%

During the year I get 1% x 20€ + 2% x 20€ + 3% x 50€ of discount, so 0.20 + 0.40 + 1.50 = 2.10€ of discount

I would like to get a rebate of 3% on the year because I've sold more than 5 UO. So condition contract from 5 UO, apply 3%

But 3% must be applied on Total Gross amount of the year, so 90€. And I don't want to excldue the discount from rebate calculation.

So 3% x 90€ - 2.10€ = Rebate of 0.60€ only

For total gross amount I think I can use Sub-Total 1 field of the view into Profiles for Business Volume Determination

But regarding Discount to exclude, how to perform? If I change my Pricing procedure, can I provide a Condition type been the sum of all the discounts? How to do?

 

Thanks

[srimantabanerjee]

Hi all,

while create Settlement in WB2R_SC getting error -

Weights without units are not allowed. Check input data

Message no. WS592

Volumes without units are not permitted. Check entries

Message no. WS593

Please suggest how to resolve this issue.