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SAP S/4HANA Rebate processing being replaced by condition contract management

Rebate processing being replaced by condition contract management

With the introduction of SAP S/4HANA, we see the end of classical rebate processing in sales and purchasing, now replaced by condition contract management, itself part of settlement management. Condition contract management has been available in the Global Trade component for some time, but in practice sometimes tended to occur more in sectors like trade, consumer goods or pharmaceuticals, where very complex payment models often prevail.

What's different in condition contract management?

Classical rebate processing in SAP is characterized by a very limited functional scope and only a few extension options. Malfunctions are difficult to identify, and their corrections can require a lot of effort.

Condition contract management is the exact opposite in this regard. Settlement management is altogether very complex and offers a plethora of functions. There exist numerous entry points for additional developments, too. The condition contract consolidates all agreements for both the customer and the supplier, combining all information required for settlement at a central point. For example, you can specify the so-called sales base through simple customization.

Document settlement occurs periodically through the condition contracts in separate documents, independently of customer invoices. The use of provision conditions in individual invoices is still possible. Usually however, you would process them through separate provision documents from the condition contract.

How do I proceed when introducing S/4HANA?

If you choose the Greenfield approach ("new implementation"), the roadmap for rebate processing becomes clear. When introducing the new system, you will have to implement the condition contract management immediately as well. You can no longer use the previous rebate processing.

If, on the other hand, you choose the Brownfield approach of "system conversion" to S/4HANA, you'll have to take a few things into consideration beforehand: after system conversion is completed you can no longer create any new rebate agreements. You can only use the previous rebate agreements through the end of the validity period. Hence you could in principle schedule implementation of the condition contract management to follow the system conversion, and, during the first period with the converted system, still work with classic rebate processing in a limited way.

Darstellung der Software Wartung der Scheer GmbH

As part of the system conversion you can also migrate existing condition tables to condition contracts, for which the SAP migration programs are available. Many of the previous rules & regulations can be significantly simplified in condition contract management. In many cases, a purely technical migration will not sufficiently consider this simplification potential. We therefore recommend analyzing and revising these rules & regulations.

As already mentioned, condition contract management has been available for some time as a component of Global Trade. This innovation can therefore be introduced even before system conversion. You'll find a detailed overview of the necessary system requirements and business functions to be activated in OSS note 2497386 – Required business functions for settlement management.

Which approach is preferable?

This cannot be determined in a general way, since the approach must be decided for each system and each project individually. In any case, condition contract management allows you to put these processes on a new foundation and actively arrange them.

We'll gladly support you in your decision with our experience and expertise.

Darstellung des Process Mining der Scheer GmbH

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