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Settlements Management in S/4 HANA

February 17, 2017 | 4,765 Views  |

 Abhinav Jain
more by this author 

SAP S/4HAN
SAP S/4HAN A

Condition
Condition contract
contract | rebate agreement
agreement | Set
Settlements
tlements Management
Management

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Objective

 As we move from the world of ERP Business suit to the world of S/4 HANA,
there are many things which are changing in various modules like FI, SD, PP
PP,,

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Output management etc. and the question always arises how is my business
going to be impacted, what is the way forward and am I getting into a totally
unknown territory? The first thing which anybody would do is to search for 
topics on SCN blogs, Google, JAM pages which actually a good starting point.
However sometimes ( or most of the times ) one finds it a bit difficult to run a
hands-on end to end scenario for the new features which is going to be part of 
S/4 HANA. I faced similar problems while trying to understand “Condition
Contract Management” within Settlements Management which is the
replacement for traditional “Rebates Management” and hence I thought it
would be nice to share my experiences.

Description

The blog will cover the following topics

1. Pre-requisites
2. Introduction
3. Traditional Rebate Processing
4. Comparison : Old Vs New
5. General Process
6. Step to create condition contract
7. Sales Flow
8. Actual Settlement
9. Credit Memo Display
10. Business Volume Display
11. Important Transactions
12. Useful Tips & Links

Pre-requisites

Knowledge of SD Rebate Processing ( to be able to understand the

advantages of the new solution )

Introduction

Moving into S/4 1610, New Rebate Agreements are no longer available for 
creation. Yes,
Yes, you heard it right!
rig ht! You
You can’t create a new Rebate Agreement

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neither can you extend existing ones. Subsequent logical question which any
sane person would ask now is “How do I provide rebates to my customers
then?”

The answer is via Settlements Management.

Next logical question which would be asked is “Alright, but why Rebates
Management has been done away with in S/4?”

The answer lies in the difference between the architectures of S/4HANA and
traditional ERP business suite. So, before we move into Settlements
Management, let’s touch upon how the traditional Rebate processing works to
be able to appreciate the advantage Settlements Management offers.

Traditional Rebate Processing

 As a reference from help.sap.com

 A rebate is a special discount which is paid retroactively to a customer. This

discount is based on the customer’s sales volume over a specified time
period. You define the details of the rebate in a rebate agreement. In the
agreement you specify, for example

who receives the rebate payment

on what criteria the rebate is based (customer, customer and material,
and so on).how long the rebate agreement is valid

Within the rebate agreement you create separate condition records for 
each product the customer buys. These records specify the rebate
amount or percentage for each product. You can also specify a pricing
scale so that the customer can earn a better rebate by ordering more.
Because rebates are always paid retroactively, the system keeps
track of all billing documents (invoices, credit and debit memos)
that are relevant for rebate processing. The system can, if you wish,
automatically post accruals so that the accumulated value of a rebate is
recorded for accounting purposes.
 A rebate agreement is finally settled when you issue a credit memo to
the customer for the accumulated rebate total.

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Comparison : Old Vs New

Let’s focus on the line in bold in the above section.

Question. How does the system keep track of the invoices which relevant for 
rebate processing?

Answer . Table VBOX stores all rebate relevant invoices. The customer runs
transaction VBOF to apply the rebate conditions in the invoices.

Problems:

1. Size: This Rebate index table could contain hundreds of thousands to

millions to billions of entries in the system In fact for one of the
customers we noticed 1 TB of data being occupied in total DB size of 5
TB. It won’t not take long for our BASIS, DB & ABAP colleagues to
understand the repercussions of such a situation.
2. Locks: If changes in one customers’ conditions occur the table needs
to rebuild; while this rebuild is going on, all rebate data is locked
throughout the organization

The solution to these issues lie in the Settlements Management

1. The table VBOX itself has been done away with in S/4 HANA because
the rebate conditions are applied instantly due to power of HANA.
Hence Rebate Index need not be rebuild when new customers become
eligible for rebates and previous business can be retroactively
considered.
2. This significantly reduces data footprint and memory.
3. Sales document no longer reduce operations impairment in sales
processes

Have a look at a side by side architecture of Rebate Management in

Traditional ERP Vs Settlements Management in S/4.

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General Process

The general process in the CCM differs from the standard Rebate processing
in the sense that there are no rebate Agreements at the first step. There are
Condition contracts which need to be created and released. The steps for the
same are explained in Step 8.

Steps to create Condition Contract

1. Execute transaction WCOCO ( W ko-ko ) and click on ‘Create’.

2. Select the type of contract you would want to create

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3. Enter the customer and period for whi ch you want to create the
condition contract.

4. Enter the Sales data on the 2 nd tab

5. Enter the business volume selection criteria. Thi s steps defines which
invoices are relevant for application of this condition contract.

6. Enter the settlement Material

7. Enter the Settlement Calendar. This step defines when you would like
to carry out partial/final settlements.

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8. Create Rebate Accrual condition

9. Change condition Table

10. Create Rebate condition

11. Save the Condition Contract

12. One thing is of utmost import is to release the contract. Hence release
the contract in WCOCO

13. Once done the light will become ‘Green’. Save it.

Sales Flow

I won’t be explaining how to create a Sales document, Delivery, PGI, Invoice

etc but what needs to be mentioned is that either these documents can be
created before the condition contract creation or after the condition contract
creation. In case Sales document is created after the contract creation, REBA

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accrual condition would be available in the conditions tab.

Don’t worry about the 7 % as opposed to 10 % I created earlier as this is from

a different example.

In case the Sales document is already created before the contract creation,
the rebate would be provided as part of the settlement process and rebate
condition would be visible in Credit memo which will book the correct accrual
amount to the respective accounts. So there is no need to adopt the Sales
order anymore.

Actual Settlement

Run transaction WB2R_SC and enter relevant values. Please note that Run
Type ‘Check Run’ does not post any data. For actual settlement use ‘Li ve
Run’.

Once executed, you will get a message like shown below

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Credit Memo

In WCOCO, you can see a credit memo created with relavent values

In the Header conditions, you will find the Rebate condition we had created as
part of the condition contract.

Business Volume

Run transaction WB2R_BUSVOL,

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 As you can see below, business volume 1.5 is updated against the condition
contract

Important Transactions

There is a whole list of important transactions for the new Settlement

management solution.

Useful tips and Links

1. Condition contract settlement is also available in the SAP Business

Suite. Therefore you use condition contract settlement if you are

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planning to create new rebate agreements before you upgrade to SAP

S/4 HANA.
2. SAP Business Suite customers can move from various rele ases to SAP
S/4 HANA, on-premise edition and still process the existing rebate
agreements. It is not possible to create or extend the existing type
rebate agreements.
3. Help SAP – Condition Contract LINK
4. Help SAP – Condition Contract Based Settlement LINK
5. S/4HANA OP1610 simplification list LINK
6. Settlements management is also available on FIORI apart from SAP
GUI.

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24 Comments
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Sahil Jain

February 21, 2017 at 10:55 am

Thanks a lot Abhinav…Its nicely consolidated. I was searching for document on

Settlement Management and this looks perfect

 Abhinav Jain Post author 

February 23, 2017 at 7:44 pm

Thanks Sahil !

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Jasjeet Singh Sachdeva

February 23, 2017 at 3:02 am

Very well compiled and written Abhinav!! Great job.

 Abhinav Jain Post author 

February 23, 2017 at 7:44 pm

Thanks Sir !

 Andre Drabbe

March 1, 2017 at 5:18 am

Thanks so much for this Abhinav. Will you be able to share the configuration for this? I
am now having an error ” No calculation schema assigned in Customizing. Check
Customizing” when executing the settlement in WB2R_SC.
Hope you can help me on this. Thanks so much.

Twinergy OSS HORSA

March 7, 2017 at 2:57 pm

Thanks for explanation.

Which is the standard configuration of MM pricing procedure and conditions REBA,
REBT and BUVO. I’m working in a system where all of them are missing.
Thanks a lot

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Saurabh Sawant

March 8, 2017 at 1:35 pm

Thank You so much for this ! Helped a lot. !

Huyen Tran

March 13, 2017 at 9:00 am

Thanks for sharing. Very clear and well structured!

Zahid Anwar 

March 15, 2017 at 9:19 am

HI ,

can you please share how Retroactive rebates will work in S4H. can you please explain
the process in detail.

 Ana Fleisch

March 16, 2017 at 4:05 pm

Thank you Abhinav. Finally I have some answers

I have some others questions, do you know how the extended rebate settlement for 
indirect sales will work in S4H?
How can we update Indirect sales to the system and use this conditions contracts?
The structure S469 can still be used?
Thanks, BR

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Francesca Milardo

March 29, 2017 at 2:06 pm

Hi,

Thanks a lot for your amazing explanation!

Do have any idea how to manage the lump sum at fixed value with condition contract
management?
I saw that still exist the condition BO06, can be useful?

thanks,
Francesca

Robert Forster 

May 16, 2017 at 1:53 pm

Hi,
in my EHP7 system no WB2R* transactions are available.
Is this S4 only function?

BR

Robert Forster 

May 17, 2017 at 5:10 am

Hi,
i just found that my EA-GLTRADE is on 600 not 617 maybe that’s the
reason.

BR

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 Abdullah Attia

May 17, 2017 at 7:48 pm

Hi,

could you add link for configuration or just steps here?

 Aruna kumar Biswal

May 19, 2017 at 1:44 pm

Hi Abhinav,
During creation of invoice you accumulated REBA amount as provision and
 As per my accounting knowledge it should reverse during settlement would tell me how
to do it.

Regards
 Arun

Pranav Dave

June 14, 2017 at 10:10 am

@ Andre Drabbe –
Did you manage to solve the error related to calculation schema, I am also getting the
same error “No calculation schema assigned in Customising. Check Customising” This
error is appearing while executing T Code WB2R_SC.
@ Abhinav –
Can you please throw some light onto this one please.

Thanks
 Abhijit Aswalikar 

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M CRM

June 26, 2017 at 8:42 am

This looks GREAT, I was looking for something similar last year as I was unsure of which
document types to use.

Thanks so much .

Raghu Sharma

July 13, 2017 at 4:28 am

Hi Abhinav,

Thank you so much for the detailed document. I have one question.. In you demo you
used SBBI Contract type. In S/4 Hana 1610 these is a contract type 0S12 – Sales
Rebate which I have used for Sales Rebate. I have done end to end testing and till now
this looks fine. Do you see any difference in using SBBI and 0S12. This is just to ensure
that I am not doing anything wrong here.

 Also i wanted to know if I want to add a field combination for business volume. For 
example I only wanted to offer rebates on sales document number. How can i add that in
Field Combination for Business Volume.
Can i assign the existing output types to Credit Memo created for Settlement
documents?

Thanks
Raghu

Guillaume Villain

July 27, 2017 at 1:26 pm

Hi Raghu,

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To add a field combination for business volume, got to SPRO Logistics –

General -> Settlement Management -> Condition Contract Management -
> Condition Contract Settlement ->
Define and Configure Field Combinations for Business Volume Selection
You can create your own field combination.
If you need other field for assignment, then you can extend table
WB2_S_BVB_FIELDCAT
You can check note 2481934 – Extending the field catalog for bus.vol.sel.
field combinations
Once you have created your field combination, then you should set it to the
condition contract settlement settings:
Settlement Management -> Condition Contract Management -> Condition
Contract Settlement -> Specify Settlement Settings for Condition Contract
Types

Nguyen Cong Tan

July 27, 2017 at 8:51 am

Dear Experts,

When i run tcode WB2R_SC – Customer Contract Settlement , there is an error with ”

Bill-to party 10100007 is not intended for 

Settlement Management
Message no. WS538″
I don’t know how to check this issue
Please help me check this issue

Thanks,
Binh

 Aniket Mohod

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July 27, 2017 at 11:08 am

Hi Nguyen Cong Tan,

Go to BP, in sales & dist tab, there is check box for relevant for settlement management .

Thanks
 Aniket AM

Nguyen Cong Tan

July 28, 2017 at 7:27 am

Hi Aniket Mohod and Experts,

Thanks for your support. I fixed this issue as you show
 After fixing this issue, there is issue “A balance of EUR 1,270,748.64- exists
in document 0000000001”

Pleas help me check this issue

Thanks,
Binh

Nguyen Cong Tan

July 28, 2017 at 8:45 am

Dear Experts,
I create settlement document by tcode WB2R_SC – Customer Contract Settlement .
 A Credit Memo has been created but the settlement qty = 0.

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Please help me check this issue

Thanks,
Binh

 Aniket Mohod

July 28, 2017 at 11:35 am

Hi Guys,
Can anyone please tell me what settings need to be done in pricing procedure or in
schema as I am facing these issues
1. Condition type REBA is reflecting twice, in one attempt it is pulling condition value and
in other it is pulling PR00 value.
2. PR00 is not appearing in condition tab of credit memo whereas it is there in invoice.
3. Net value is still showing ‘0’

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Thanks
 Aniket

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