
Partial Settlement refers to the process of making a partial payment or credit settlement against a rebate agreement. This typically occurs when a customer or business partner earns a rebate, but the full amount due under the agreement isn't paid in one go. Instead, a portion of the rebate is settled, leaving the remainder for future settlement. As an example, an annual rebate agreement with partial settlement every quarter.
Let us under how the partial settlement of rebate condition contract works in S4 with an example:
There is an agreement with the customer stipulating that they will receive a 5% rebate on their business volume, provided they make purchases totaling $100,000.
| Quarterly Sales | Rebate amount |
Q1 | $50,000 | 0 |
Q2 | $75,000 | $6,250 |
Q3 | $100,000 | $5,000 |
Q4 | $75,000 | $3,750 |
Let’s walk through how the rebate amount is calculated each quarter. In Q1, the total sales amount is $50,000, which does not meet the required business volume of $100,000. Therefore, the rebate for Q1 is zero. By the end of Q2, the cumulative business volume reaches $125,000 (Q1: $50,000 + Q2: $75,000). The rebate is calculated on the total of $125,000, resulting in a rebate of $6,250. By the end of Q3, the total business volume increases to $225,000. A 5% rebate on this amount equals $11,250. However, since $6,250 has already been settled in Q2, this amount is deducted from the $11,250, leaving a Q3 settlement amount of $5,000.
This process follows the standard functionality in the CCM rebate agreements.
Let's examine how individual partial settlements operate. Business volumes are not cumulative; instead, each quarter's business volume is assessed independently. According to the annual agreement, the customer must purchase products worth $100,000 within a quarter to qualify for the rebate for that specific quarter
| Quarterly Sales | Rebate amount |
Q1 | $50,000 | 0 |
Q2 | $75,000 | 0 |
Q3 | $100,000 | $5,000 |
Q4 | $75,000 | 0 |
Configuration required:
Menu path: WLFA -> Condition Contract Management -> Condition Contract Settlement -> Specify Settlement Settings for Condition Contract Types
In the “Settlement Dates” section, for Partial settlement type select 2-Separate.
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