sap-settlement-management

SAP Settlement Management Configuration

SAP Settlement Management/ SAP Condition Contract Management

This article explains the SAP SETTLEMENT MANAGEMENT in SAP S/4HANA.

Changes to Rebate Agreements in S/4HANA

  • In the traditional ERP system, whenever you have set up rebates, you had to keep in mind that rebates are retroactive rebates, and in addition, you needed to set up accruals.
  • Because rebates are always paid retroactively, the system had to keep track of all billing documents (invoices, credit and debit memos) that are relevant for rebate processing.
  • Therefore, the SAP ERP system did store all the invoices which are relevant for rebate processing using the index table VBOX.
  • This rebate index table could contain hundreds of thousands to millions of entries in the system, and if changes in one customer’s conditions occur, the table needed to be rebuilt. While this rebuild is going on, all rebate data is locked throughout the organization preventing critical maintenance.
  • With the use of S/4HANA, this limitation does no longer apply. The Condition Contract Management/ SAP Settlement Management applies rebate conditions instantly. It gathers real-time insight on the fly with actual business volume data and accruals in financials.

SAP S/4HANA — Subsequent Settlement Using Condition Contracts

Condition Contracts: Further Information

The condition contract combines all information relevant to the agreement, such as the condition granter or owner of the condition contract, the list of eligible partners, and special conditions such as discounts or prices.

It can be used to grant discounts for meeting quantity or value targets for sales or purchase volumes. A pricing enhancement ensures that pricing finds only special conditions for the eligible partners listed in the condition contract.

  • The conditions to be processed in the condition contract are stored in Customizing as condition tables.
  • You can assign any condition table in Customizing.
  • If you use the eligible partner or if you need to have multiple condition records in parallel, for example, in the rebate case, you need the condition contract number in the access sequence and in the condition table.
  • This number is used to ensure that the conditions are granted only to the eligible partners of the condition contract.

Supported Subsequent Settlement Scenarios

Sales-related rebates, Scan back rebates, Customer funds (Fix amounts)

Also special agreements for trade Promotion Management (TPM) which is special scenario of the retail industry.


Introductory Configuration of Condition Contract Settlement


Main Steps for Configuration of Condition Contract Management/ SAP Settlement Management

The configuration of Condition Contract Management comprises 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.

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.

  • Configure Condition Contract Maintenance:

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

  • 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.

Condition Contract Types

As variations, the standard delivery also contains settings for contracts valid for several customers (e.g. condition contract 0S02 Sales Rebate – Multiple Customers) and the collection of settlement documents before the transfer to Financial Accounting is posted.

Another variation concerns how taxes for the rebate amount are determined for which there are two options. The first option is to regard sales rebate agreements as a kind of service for the customer. Under this perspective, you apply the usual value-added tax for services.

The second option is to regard subsequent sales rebates as normal revenue reductions.

Then you must apply the tax valid for the sales of a material (goods-related taxation). In the standard delivery, there are four scenarios with taxation as service (condition contract types 0S01 to 0S04) and four scenarios with well-related taxation (condition contract types 0SG1 to 0SG4).

In addition, special settings have been made for the integration of Condition Contract Management with Trade Promotion Management (TPM).

There are four condition contract types, 0ST1 to 0ST4, which conform with the condition contact types 0S01 and 0S02 for the taxation as a service. The standard delivery does not contain settings for the TPM integration for goods-related taxation, as they can simply be derived from the settings for 0SG1 and 0SG2.

Condition Contract Management/ SAP Settlement Management Configuration Settings

The configuration settings of the different scenarios are almost identical. The following sequence of sub-topics reflects the logical sequence for maintaining the settings for Condition Contract Management and Settlement.

You find the relevant customizing settings in the SAP IMG:

IMG: Logistics – General > Settlement Management > Condition Contract Management > Condition Contract Maintenance > Define Condition Contract Types

Calculation Procedure

The condition contract settlement is designed to optimize runtimes, which means that as few condition types as possible are used in the pricing procedures for settlement. The number of accesses is also kept to a minimum. When you create a condition contract, you can select both the calculation rule and the scale base indicator at a condition record level, regardless of the settings and default values for the underlying condition types in Customizing. This also automatically reduces the number of conditions required in the pricing procedure and the access sequence.

You can use different condition types to define the amount of the accrual conditions and of the contractually agreed conditions. You can adjust the layout of the conditions to meet your company’s needs. Accrual conditions can be maintained regardless of the legally binding external requirements.

Ideally, all the accrual-relevant aspects can be mapped by a single condition or by a small number of conditions in the calculation schema. Compared to the traditional rebate settlement, the number of condition types in the calculation schema is reduced and, as a result, the computational effort required to determine and calculate conditions is minimal.

Complex data formatting is no longer necessary, and the contracts can be settled as soon as they have been released.

As a rule, aggregates are created in specific database fields when the business volume is determined, and simple calculations may be carried out.

Calculations belonging to the category “aggregation” can be delegated to the SAP HANA database to ensure optimum system performance with the maximum of flexibility.

Procedure: Configure Pricing including Condition Contract Conditions

Pricing Procedures for Condition Contract Management

The configuration of pricing in Condition Contract Management comprises two areas:

  • Configure settings for pricing used in settlement documents as part of condition contract settlement
  • Configure specific settings for condition contract conditions

IMG: Logistics – General > Settlement Management > Condition Contract Management

Within the standard delivery, SAP suggests its own pricing procedures for condition contract management/ SAP Settlement Management.

Pricing procedures A10005 Rebate (Germany), A10006 Rebate Delta Accrual (Germany), A10007 Rebate (Goods Rel.) (Germany), and A10008 Rebates Manual (Germany).

According to this goal, pricing procedures A10005, A10006, and A10007 contain both the conditions for non-TPM sales rebate scenarios and TPM-related sales rebate scenarios.

However, in a non-TPM sales rebate scenario, you can simply ignore the TPM-related condition types and vice versa. As an example, the simplified A10005 pricing procedure is shown at the end of these explanations.

Pricing setting:

IMG: Logistics – General > SAP Settlement Management > Basic Settings > Pricing > Sales (SD) > Define Pricing Procedures

You can find the pricing procedure A10005 as well in SD customizing:

Sales and Distribution > Basic Functions > Pricing > Pricing Control > Define and Assign Pricing Procedures

Condition Type RES1 and REA1/RED1

Condition type RES1 Rebate:

You use this condition type RES1 in a conditional contract to maintain rebate conditions in the sales rebate scenarios. This condition type uses the delivered access sequence RE01 Sales Rebate. It is set up as a discount, however, you are going to create a credit memo with it, so you must set the field Plus/Minus as positive.

Within the pricing procedure A10005, it contains the Base formula 214 in column Alt.Cond.Base Value controls that in case of a fix amount rebate condition the condition base value is positive (see formula documentation). The account for the FI posting is determined using account key 0S1. The calculated value is stored in subtotal 1.

Condition type REA1 Rebate Accruals:

You use this condition type REA1 in a conditional contract to maintain accruals conditions in the sales rebate scenarios. Therefore, note that the Accruals indicator is selected in the Control Data 2 group box. This condition type uses the delivered access sequence REA1. This condition type is identical to the condition type for which you maintain records in the condition contract It contains the amount of the accruals reversal. The system determines this amount in the settlement run and transfers it to the pricing procedure.

Condition type RED1:

You use this condition type RED1 in a settlement run to determine the amount of the accrual for delta accruals (pricing procedure A10006). It is not an accruals condition type itself – the Accruals indicator in the Control Data 2 group box is not selected – but it uses the accruals condition type REA1 as reference. Such a condition type is required in the pricing procedure as accruals conditions are not considered in the net amount determination. The net amount is used for the accruals update.

RES1 Rebate and REA1 Rebate Accruals are the condition types for which you maintain data records in the condition contract maintenance.

For more information on the customizing of the condition contract management, please refer to the appendix.

In addition, we recommend referring to the SAP note 2535889 — Condition Contract Management — Sales Rebate Processing. It is a description of a delivered configuration.

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