Exercise - Generate and process customer rebates

  • 25 minutes

In this exercise, you will review a customer agreement, and then generate and process rebate claims.

  1. In company USMF, go to the Accounts receivable parameters page, expand the Prices tab and then the Price details tab, and check the Enable price details option is set to Yes.

  2. Go to the Sales and marketing > Customer rebates > Rebate agreements page and select the Customer rebate agreement: USMF-000001.

  3. If the Workflow approval status field is not set to Approved, you need to select Validation on the Action Pane to approve it.

Review a customer rebate agreement

Now let's review the agreement for a customer, which in this example is customer US-009.

  • Rebates are given to the customer when they purchase a specific product. In this case, the product has item number T0020.
  • The customer's sales performance, against which the rebate amounts are estimated, is to be accumulated on a weekly basis.
  • The setting for Price taken from is Gross, which means that line's sales amount, on which basis the claim is estimated, is not reduced by the line discount.
  • The Rebate line break type field shows the method for calculating rebates. In this case, the sales target against which the rebates are to be estimated is set to Quantity.
  • The agreement's lines specify the rebate amount type, the actual rebate value, and the thresholds. In this example, the customer will qualify for a rebate of USD 20.00 for each unit sold, if their weekly purchases of the product fall within 1 to 50 units and a rebate of USD 40.00 for each unit sold, if they purchase above 50 units.

Generate rebate claims

  1. Go to Sales and marketing > Sales orders > All sales orders.
  2. Select New.
  3. In the Customer account field, enter or select US-009.
  4. Select OK.
  5. In the Item number field, enter or select T0020.
  6. Set Quantity to 40.
  7. Select Sales order line.
  8. Select Price details.
  9. Expand the Rebates section. The Rebates tab lists all the rebate agreements that are applicable to the current order line and shows the estimated rebate amount.

    Note

    The displayed amounts are only indications of what future rebate claims might be. The actual rebate amounts might be different depending on: the total sales volume that is achieved by the customer under a periodic rebate agreement, whether the customer had returned all or partial quantities, and whether the applicable sales order was invoiced.

  10. Close the page.
  11. Select Save.
  12. On the Action Pane, select Invoice.
  13. Select Invoice.
  14. Expand the Parameters section.
  15. In the Quantity field, select All.
  16. Select OK.
  17. Select OK.
  18. Close all pages

Process rebate claims

The Rebates page acts as a workbench in which you can review, approve, and process rebate claims. You'll now process the claims that were created because a sales order was invoiced for customer US-009, who is the subject of the rebate agreement USMF-000001.

The line represents a rebate claim for USD 800.00, which is based on the sales of 40 units of product T0020, calculated at USD 20.00 per unit. This matches the conditions of the first quantity break in the rebate agreement.

The claim is in the To be calculated state. This means that they are associated with an agreement that tracks the customer's sales performance on a periodic basis and that they must be re-calculated to account for the total sales volume within the respective period.

  1. Go to Sales and marketing > Customer rebates > Rebates.
  2. Select Cumulate.
  3. In the Customer account field, enter or select US - 009.
  4. In the Start date field, select today's date.
  5. Select OK.
  6. Select Approve.
  7. Select Process.
  8. In the Customer field, enter or select US-009.
  9. Select OK.

If you get a message that Supply Chain Management cannot create a record in Ledger journal table, it is because the demo data is out of sync and you need to perform the following steps:

  1. Select Close.
  2. Reset the number sequence by going to General Ledger > Ledger setup > General ledger parameters.
  3. Select the Number sequences tab.
  4. Select the hyperlink for Number sequence code field for Journal batch number.
  5. In the General FastTab, change the Next number to a higher number.
  6. Set Continuous to No.
  7. Select Yes
  8. Go to Sales and marketing > Customer rebates > Rebates.
  9. Resume with step 7 of Process rebate claims steps: "In the Customer field, enter or select US-009."

A message shows that the rebate was processed successfully, and the status of the claims has been changed to Mark. As a result of a Rebate accrual journal being posted, the following occurs:

  • The claims have now been transferred to the temporary customer balance as deductions.
  • The Rebate accrual account has been credited to represent the future liability toward the customer.
  • The Rebate expense account has been debited in recognition of the cost incurred in connection with the sales.

Process rebates for payment

The Rebates page lists the rebate claims that you have processed in the customer rebate workbench and that are in the Mark status. When you create a credit note, a message appears to inform you that a journal has been posted.

  1. Go to Accounts receivables > Customers > All customers.
  2. In the list, find and select US-009.
  3. On the Action Pane, select Collect.
  4. Select Settle transactions.
  5. Select Functions.
  6. Select Rebate program.
  7. Select Edit. Set check marks in the Mark field for the claims that you want to include into the credit note.
  8. Select Functions.
  9. Select Create credit note.
  10. Close the page.
  11. Select Cancel. This refreshes the page so that you can see the updates.
  12. On the Action Pane, select Collect.
  13. Select Settle transactions. Note that a transaction for a negative amount, representing the total rebate amount, without an invoice reference has been added to the customer balance.
  14. Select Cancel.
  15. Close all pages.