SAP Condition Contracts: Solution Details

SAP Condition Contrat: Solution Diagram

The condition contract settlement can be used everywhere where subsequent chargebacks based on business volume or quantity are to be settled with a business partner or with a group of business partners. The settlement does not usually take place at document item level (although possible through chargeback document oriented settlement) but, due to the high volume of documents, it is made based on cumulative key figures (business volume). These key figures are determined from the transactional document data.

The condition contract settlement can be used for purchase-based and for sales-based compensation. Different data sources can be used to determine the business volume, for example purchase orders, deliveries, billing documents, point-of-sale data, or agreed fixed budgets. You can use the following key figures that are determined by the system from the transactional document data as the basis for the settlement: quantity, monetary sales, weight, volume, or points. The key figure used for the settlement is also usually uniformly known as the "business volume base".

You can define contracts for one or more business partners (supplier, customer, or plants as internal customers). This means that, for example, you can also define business-partner specific contracts as contracts for a group of suppliers or customers that are to be settled in the same way. As a rule, these group contracts are then always used if these settlement processes are identical for all involved partners. This is the case, for example, for the settlement of charges or the distribution of general rebate payments (all customers receive a 3% rebate).

Conditions requiring subsequent settlement are generally settled at different times according to the agreement with the business partners. You can define the settlement dates in the contract in a settlement calendar. In addition to the settlement date, you also specify which settlement type is to be used.

The following settlement types are available:

• Partial settlement
• Final settlement
• Delta settlement
• Delta accruals

You can also use detailed statements in the settlement to document which exact transactional documents have gone into the settlement. Settlement can be made on the basis of account receivable or account payable for any rebate. For example you can settle a purchase rebate with a settlement request to the customer (account receivable) attached to the vendor master or creating a vendor invoice request for a Sales Rebates settlement.

SAP Condition Contracts: Special Features Highlights

SAP Condition Contract master special features

• Default values per field are customizable per contract type.
• Extended checks per field with custom class/methods for special validation are available.
• Document flow with accruals and settlement documents is directly linked to each contract.
• System statuses for document lock, request for approval, approved / reject, locked for settlement are available and can be linked to special transaction event initiating workflows.
• User defined statuses at contract level can be assigned and are customized per contract type.
• Field statuses per contract type are supported for all fields.
• Changes to customized “sensitive” fields can be assigned to system status change and workflow initiation.
• Authorization per contract type and organizational data is supported as well as to any transaction and event related to contract maintenance and settlement.
• Copying a contract as subsequent contract for contract hierarchy reporting and comparison is available.
• Contract validity extension with mass maintenance is available.
• Special Header text, attachments and notes at contact level is supported.
• All changes are logged for auditing purposes.

Extremely Dynamic Base of Settlement

In SAP condition contact, the base volume is dynamically defined in customizing and can be:

• SAP database Table.
• SAP Database view.
• SAP HANA CDS view.
• External Data stored in custom tables.
• SAP BW DSO modeled as view. 

Multiple Data Sources: It is often necessary to combine different data sources that define the total business volume relevant for settlement. For example, by combining multiple business volume tables, you can settle settlement management documents, SD documents, or goods receipts together using the corresponding original documents. More specifically, you can also use external data sources as additional sources.

Some other special features of Business Volume definition at contract level are:

• Criteria and filter are defined in customizing and can be freely assigned as filter during contract business volume definition. Any field accessible and defined in the relevant in the base volume views can be chosen during contract definition.
• Business Volume can be time depended.
• Inclusion and exclusion are freely defined for each criteria during volume base definition.
• Fields for date reference, quantity, units and so on are mapped in customizing for each contract category.
• Volume base can be value, quantity, volume, weight, points or value and any combination of the above.
• Dynamic value bases can also be defined in customizing and proposed as drop down selection to the user during contract maintenance.  For example gross invoice value or net net value could be chosen as the rebate basis for the same contract type.
• List of customers, vendors and plant with validity period and approval status can be centrally predefined for user in eligible partners and business volume definitions.
• Organization data of contract header can differ from filters in business table, for example in multi company scale achievement, the business volume could be related to many entities but settled centrally.
• Snapshot of business volume can be activated for each settlement date.

Condition Records Maintenance special Features

• Standard SAP MM or SD Conditions type are used.
• Same access sequence for SD/MM condition types is supported.
• Condition groups at contract level or split criteria available.
• Different condition for accrual and settlement can be defined.
• Fixed amounts with allocation to characteristics of business volumes at settlement are supported.
• Accrual reversal is linked to special condition type per contract type / condition type and is automatically field by settlement program.
• All base values are linked to special condition types per contract type and automatically field by the settlement program.
• Special condition types for accumulated values before splitting are maintained in customizing.
• Special condition types for previous settlement value per split criteria (in case of cumulated settlement) are defined in customizing per contract type.
• Link of condition types to MAP calculation possible.
• Statistics conditions are supported.
• Separate condition levels combination are customizable per condition type / contract type.
• Exclusive inclusive condition are supported.
• Multiple validity periods at condition level are supported.
• Different colors per condition group / maintenance level are customizable.
• ALV view of entered conditions available.
• All condition type propertied can be defined during condition record maintenance such as calculation type, scale base type, scale type.
• MM or SD pricing procedure is linked to each settlement billing type.

Settlement Process Special Features

Some highlights of Condition contract settlement documents are mentioned below:

• A distinction is made here between a normal partial settlement and a cumulative partial settlement. In a cumulative partial settlement, the sales and revenue from previous time periods that have already been settled are "rolled up".
• Moving average price is updated during goods receipt.
• Assignment to SD or MM pricing procedure is customizable. Except from condition maintained in condition contact or filled by settlement program, other MM & SD condition types are fully accessible for special pricing (e.g. alcohol tax)
• Settlement dates for each settlement type are automatically generated based on logistics calendars that can be defaulted to each contract type.
• Accruals can be reversed based on date or accrual invoice status by the settlement program.
• Condition contract without owner with automatic splitting to the relevant parties is supported.
• Settlement header and item split criteria are customizable per contract type. For example header split criteria could be the invoice party (for common central rebate) and item split criteria the material or article code.
• Different document type can be customized for each settlement type on account payable or receivable side in each contract type, providing a very flexible customizing.
• Additionally, splitting based on settlement date is also possible. With this feature, a retroactive change to the percentage of a rebate can be assigned to the relevant settlement period although posted on a different period providing a more accurate view for the profitability reports.
• Settlement after the end and the final settlement of a contract due to retroactive change is supported.
• Settlement split per posting year is customizable.
• In case of document splitting, special condition types containing the total value before splitting are assigned in customizing in order to determine the right scale level.
• Test execution with full results in ALV at header / item level is available.
• Simulation mode for settlement execution is also supported.
• Retroactive accrual creation is supported.
• You can distribute the income from end-of-period rebates to the eligible partners according to the service contribution. For this purpose, you can define plants or customers as eligible partners. This is relevant, for example, for contracts that are transferred from SAP Promotion Management for Retail to the condition contract settlement. You can use the corresponding share of business volume or order volume as the assessment basis. The granularity defined in Customizing depends on the business volume level in the relevant business volume table. If business volume has been determined at plant, cost center, or material level, for example, and has been stored and updated in the corresponding business volume table, then a balanced distribution of income is possible up to this level. This means that a posting is automatically made at account assignment object level at the time of settlement in accordance with the share at the time the service was provided.
• Integration with profitability analysis and financials is very flexible.
• Output message and smart forms are configurable for both single settlement request and remuneration lists.
• Fully customizable field status at billing type level exists.
• Integration with Intrastat is customizable at agency billing document type.
• Integration with credit management and payment program is also customizable per agency billing document type.
• Link to plant and info record available for extra field determination.
• Negative values allowed (via customizing) per agency billing document type,.
• Link to complain management is also possible.

Integration with Financials

• Alternative debtor / creditor can be automatically defined.
• Alternative reconciliation account and link with special G/L indicators is customizable.
• Credit and debit special rules can be defined for each agency billing type.
• Class based accounting is supported.
• Summarization levels are supported.
• Multicurrency is fully supported.
• Posting block and payment block at billing type level are supported.
• Different accounting document type can be defined for each contract type / settlement type.
• Input and output taxes can be based on FI or SD/MM condition technique.
• Special Document Statuses can be defined for each billing type.
• Income account with SD procedure is fully customizable.
• Accruals accounts are customizable.
• Accruals posting via pricing are supported.
• PA customizing as for SD billings.
• Item texts to FI are supported.
• Posting in closed MM periods possible.
• Recalculation of payment Currency amount after aggregation can be done.

Clearing Workbench Tool

With the use of Agency Business clearing workbench tool it is possible to post settlement document into intermediate provision account and enter the incoming invoice from FI, SD, MM modules at a different tine and possibly by a different department.

By defining special rules in customizing those document can be reconciled and cleared.

Posting of differences depends on the reason for the difference in each case.

• Reduce invoice: The invoice reduction is remarked and is debited back to the vendor.
• Create provisions: If invoice amounts turn out to be smaller than expected, you must create provisions for the expected amount. The vendor can then send a further invoice which is cleared against the provision.
• Accept differences: You can accept possible currency differences and post them to a corresponding account.

Tools and Reporting

A wide range of tools are provided as part of the condition contract settlement for reporting and mass processing:

• Available idocs and Bapis for condition contracts and historical data migration.
• More than 50 BADIs are available to meet your specific business needs.
• Tool for mass copying of condition contract is provided.
• Mass release of settlement document to FI with special tool is available.
• Mass tool for settlement recalculation with automatic cancelation and recreation of settlement documents is provided.
• Mass re-pricing of settlement documents can be initiated through special transaction.
• Mass creation of extended remuneration list is provided.
• Mass cancelation and deletion of condition contract and relevant documents can be done.
• Report for mass condition contract overview in ALV with user actions available exist.
• Report for Condition contract condition records overview linked with contract header in form of ALV showing all condition records data as well as scales data exists.
• Business volume report per condition contract and or different criteria is available for reconciliation purposes. Output is dynamic and can present data aggregated at contract level, header split criteria, header and item split criteria, or even at document level.
• Settlement analysis with drill down with linked to snapshot of business volume and derivation of each base document to the settlement.
• Transaction WB2R_AB_DOCS provides a number of options for finding settlement documents. You can search for settlement documents for specific contracts and you can also restrict your search to a settlement period and document status. The reporting functions of Settlement Management are also provided for further analyses.
• The mass release, locking, and cancellation of contracts (including the recalculation of contracts that have already been partially settled) can be performed interactively. The follow-on documents required for these processes are generated automatically. To increase the degree of automation, reports can be run as background jobs. Errors and other messages are stored in the application log and are available for evaluation.
• Special Data source for Agency business documents for BW integration is available.
• Ready interface with SAP Retail PMR is provided.