SAP Condition Contract: Overview

SAP Condition Contract: State of the art new SAP solution

SAP Condition Contract is the state of the art for condition, refund and rebate management. It is one of most dynamic, performance optimized and modern SAP solution working on both ECC and S/4 HANA.

The best part is that no additional license are needed. You can just activate it and start using it!

With Enhancement Package 6 (EHP6), SAP ceased development of MM Bonus and SD Bonus and introduced SAP Condition Contract Settlement (SAP CCS), a solution that meets current requirements and is also geared towards SAP S/4HANA Settlement Management with the future in mind. SAP Condition Contract Settlement (SAP CCS) and SAP Chargeback Management are part of SAP Global Trade Extension and are delivered with Enhancement package 6 of SAP ECC.

• In SAP ECC the solution is part of SAP compensation management of the Global Trade Management module (not to confuse with SAP Global Service Management which requires special license).
• In S/4 HANA it is part of Settlement Management.

It is important to notice that with SAP Condition Contract, all conditions related to sales or purchase processes are managed within a single application.

Condition Contract Management provides a central, standardized solution for the administration of supplier and customer conditions. You can work with conditions that accompany an invoice (such as pricing, quantity, and value conditions) and with conditions that require subsequent settlement (rebates and chargeback) scenarios. The latter differ from conditions that are valid with immediate effect in that they are agreed on during logistics processes but are settled at a later date. They are relevant during processes such as procure-to-pay or order-to-cash.

You can use Condition Contract Management to create and settle all types of conditions for the relevant contract partners (by the supplier or customer). For the first time you have a comprehensive, common view of the operational conditions in the system without having to gather them from different applications.

All on Invoice Conditions  in one single place

Conditions that accompany an invoice include all the condition types that influence the value of a purchase order item or order item, for example. More specifically, these include all prices, discounts and surcharges, handling or freight costs, and all statistical conditions, such as those that influence the effective value.
The condition contract enables you to store and edit the conditions negotiated with your business partner in one place in the system. This offers the best possible overview and maximum transparency of the conditions entered in the system and ensures that these conditions can be accessed centrally. The condition contract provides different functions that make it easier to manage conditions. In addition to a validity interval that defines the period in which conditions can be negotiated, several different release scenarios are available in order to activate the conditions for operational use. Furthermore, you can enter a wide range of information (such as texts or reference data) to facilitate communication with the involved parties.
You can use the condition contract to also enter condition records that were not negotiated with a business partner. In this way, during pricing you can determine anticipated conditions that are needed in the different business processes and in the associated valuation rules and post these conditions to FI. The condition contract therefore supports the entry of data at organizational data level or throughout an organization.

Condition with latter settlement

These conditions are not settled directly with the actual invoice but are settled at a later date. In addition to the condition data, settlement dates, data used to determine the business volume as a basis for the settlement amount, and the scope of validity are entered in the condition contract for these conditions. The condition contract settlement supports supplier and customer rebate arrangements. To enable you to map as many settlement processes as possible, you can configure a wide range of different scenarios in Customizing. The contracts can be settled automatically or manually. A distinction is made between whether settlement documents are to be sent to the business partner or whether a partner's settlement document has to be used as the basis for settlement.

Condition Contract Management supports automated processes such as those for condition contract extensions or for copying documents as well as corrections to accruals following changes to conditions. You can also enter and settle contracts with a validity date in the past. So a contract does not have to be entered before the documents relevant to business volume are posted.

Business Scenarios Example with SAP Condition Contract and SAP Chargeback management.

Below are some of the most common business scenarios that can be covered with SAP Condition Contract Solution.

• SAP Purchase Rebates with various partner schemas (MM rebates).
• SAP Sales Rebates with various partner schemas (SD rebates).
• SAP chargeback to vendor for sales to specific customers.
• SAP Sell-out refund from aggregate or POS sales.
• SAP Sell-in refund.
• SAP Scan back refund from aggregate or POS sales.
• Logistics optimization conditions and rebates.
• SAP rebates and charge back in coordination with SAP Promotion Management Solution.
• Bonus to representative partners and intermediates party.
• Sales incentive and bonus management.
• Intra Company Rebates and Settlements.
• Multi Company rebates with total volume for scale level.
• Franchise Companies Settlement
• Fuel card charges settlement