I am trying to understand the financials logic behind the accruals taken when using the rebate management module.
My expectation would have been that the accruals create an amount "to be paid" on the balance sheet, but instead the standard configuration books the accrual to the PnL. So basically, it creates a in and a out in the same PnL GL which bottom line creates no impact at all. I couldn't find any configurations to change that behaviour.
My Invoice, I see the accrual, amounts are also available in reporting which is great
Here is the journal entry ... the accrual amount creates a in and a out in the same GL, no PL impact, not too sure to understand the point, if somebody can explain it would be great.
and here is the credit memo, the accrual creates a in and a out in the PnL GL. And now that it's time to recognize to real discount, the main Sales GL (400000) is being debited instead of the Sales Discounts GL.
My expectations would have been (let's forget the sales tax):
AR DT 37,50 $
Sales Discount DT 4.88$
@ Sales CT 37,50$
Accrual on rebate CT 4,88$
2. Credit Memo
Accrual on Rebate DT 4,88$
@ AR CT 4,88$
Am I getting this all process wrong ? Have I missed a configuration point ?
We have proposed the customer to go with a development that would have create automated journal entries to reclass the amounts into the right GL, but they refused. So we just decided not to use the feature and go manually. Basically, they analyse reports and book the relevant JEs.
The rebate management allows to create rebate agreement and schedule different settlement of rebates. It depends on the set up of the rebate agreement which specifies the account, product, accrual rate and rebate settlement rate. Following is the rebate management documentation for further clarity.