Generating Rebate Accruals

This chapter provides an overview of the Rebate Accrual process and discusses how to generate rebate accruals.

Understanding the Rebate Accrual Process

The Rebate Accrual Application Engine process (PO_VRBTACCR) calculates earned rebates for transactions that are related to purchase orders, such as receipts, vouchers, and return to vendors (RTVs).

The Rebate Accrual process identifies all purchase order lines that have vendor rebate agreements defined. Then the system finds all associated receipts, vouchers, and RTVs to calculate the rebate and generate accrual records for those source transactions based on the rebate agreement terms and rules. During the processing of the different transactions, the system converts amounts and quantities to the currency and rule unit of measure on the vendor rebate agreement. The sum of these amounts and quantities becomes the basis for calculating the vendor rebate. The basis is referred to as the rebateable amount and rebateable quantity.

The rebate accrual records provide visibility to the rebate manager on the estimated earned rebates for analysis purposes, but also serve as the basis for the claim generation. The final rebate should be calculated based on the actual amount that you pay to the supplier for the goods that you order and receive. But with the analysis objective in mind, the accruals process will generate accruals records spontaneously as soon as the receipt transactions are available in the system. That is, the rebate amount is calculated based on the purchase-order estimated price and the received quantity. Later, when the voucher is entered and available, the accruals process will recalculate the final rebate based on the information on the voucher and update the accrual records. Of course, if the voucher is already entered and available at the time when the receipt transaction is being processed, the accruals process calculates the rebate amount based directly on the voucher information to avoid an unnecessary step.

The accruals process also supports purchase orders without receipts, such as direct shipments or purchase orders for which the receipt is optional. In these cases, the voucher serves as the source transaction to generate accruals records.

Finally, for return to vendor shipment transactions, the Rebate Accrual process will or will not calculate and generate rebate adjustments depending on the rebate agreement terms.

For analysis purposes, the rebate accrual records that are generated will have two levels of details:

• Header level, which corresponds to the total rebate that is calculated for the source transaction.

• Details level, which corresponds to the rebate that is calculated for each of the rebate agreement rules.

The Rebate Accrual process can be run on demand for one or multiple rebate agreements, or run automatically at the time of claim generation for the rebate agreement that is being processed.

The Rebate Accrual process can be initiated from these pages:

• Rebate Accrual.

• Generate Claims.

Note. The accuracy of the rebate information that is available for vendor rebate analysis depends on the Rebate Accrual process and how often you perform that process. The volume of information to be processed by the Rebate Accrual process can be very large and the processing time could take awhile. You should determine an appropriate frequency for the run of the process so that business requirements are met and the process is able to finish in a reasonable amount of time.

Restricted and Unrestricted Access

Rebate managers can initiate the Rebate Accrual process using the Rebate Accrual page. Rebate managers select the vendor rebate agreements that they want to process and then run the process.

The vendor rebate agreements that are available for selection on the Rebate Accrual page are determined by the rebate manager's access rights. When you set up PeopleSoft Purchasing, you can specify which rebate managers have unrestricted access rights. You give the rebate manager unrestricted access by selecting the Unrestricted Rebate Manager check box on the User Preferences: Procurement - Rebate Authorizations page.

If you are a rebate manager who does not have unrestricted access, then you can initiate the Rebate Accrual process only for your rebates.

If you are a rebate manager and have unrestricted access, then you can initiate the Rebate Accrual process for any vendor rebate agreements that are associated with any rebate manager.

See Defining Vendor Rebate Agreement Authorizations.

Common Processing for Rebate Transactions

For each of the eligible source transactions that are related to purchase order lines that have vendor rebate agreements defined, such as receipt, voucher, or RTV shipment transactions, the Rebate Accrual process first looks at the related transactions that are available for the source transactions to determine the applicable scenario to be processed. Then the process performs the rebate calculation and generation for each of the rules that are defined on the rebate agreement.

Note. Purchase orders require matching, receipts require processing, vouchers require posting, and RTVs must be in Shipped status to be considered for rebate accrual.

For example, assume that a receipt is the source transaction. Then the system verifies whether the related voucher exists and is eligible, matched, and posted. If the voucher covers the receipt totally or partially, based on the information that is available, the Rebate Accrual process processes the receipt as a receipt without a voucher, as a receipt partially vouchered, or as a receipt fully vouchered.

Note. To view an explanation of the different scenarios that can occur, see the subsequent section Accruals Generation Upon Transactions.

The rebate calculation and generation for each of the rules defined on the rebate agreement includes a series of functions, such as currency conversion, unit of measure conversion, rebate calculation based on the rule configuration for the rebate agreement, and rebate recalculation based on changes to the source transactions or other factors such as rebate agreement changes or modification of the rebate accruals balance on the rebate agreement.

The Rebate Accrual process performs these functions for each transaction that is associated with a vendor rebate agreement:

• Currency conversion:

  The Rebate Accrual process converts the amounts for the different transactions that it processes to the vendor rebate agreement currency.

• Unit of measure (UOM) conversion:

  The Rebate Accrual process converts the transaction UOMs for the different transactions that it processes to the vendor rebate agreement rule UOMs.

• Vendor rebate recalculation:

  Accrual records are generated from the source transactions that are related to the purchase orders and to the terms and rules of the rebate agreement. Changes to the source transactions or to the rebate agreements might affect the earned rebates. Therefore, the Rebate Accrual process includes a function to detect changes that are made after the generation of the original rebate accrual to automatically recalculate the accruals as appropriate. Changes include rebate agreement change, source transaction change (receipt quantity change), and purchase orders that are dissociated from the rebate agreement or newly associated with the rebate agreement (using the Backdate Vendor Rebates page). Due to the nature of the retrospective and growth bonus rules types, rebate recalculation might also be necessary when new source transactions are entered into the system even if none of the changes that have been discussed occur. This function takes care of such situations.

  When the Rebate Accrual process performs the recalculation function, the accrual records might have already been included in a claim, and are therefore no longer available for update. To not lose the history in such a situation, the Rebate Accrual process recalculates the rebate for the source transaction, but instead of updating the existing accrual records, it generates child accrual records with the difference between the new rebate and the old rebate. This mechanism is referred to as the rebate accruals split.

  To view examples of rebate accruals split, see the subsequent section Accruals Generation Upon Transactions.

• Vendor rebate calculation for each vendor rebate agreement rule type:

  The Rebate Accrual process calculates the vendor rebate for each vendor rebate agreement rule type. The rule types that it can calculate for are stepped/standard, retrospective, flat amount, growth bonus, and marketing contribution.

  Stepped/Standard Rule Type:

  Assume that:

  Purchases between 0 USD and 100,000 USD receive 1 percent rebate.

  Purchases between 100,001 USD and 500,000 USD receive 2 percent rebate.

  As of date purchase amount is 100,000 USD.

  Total rebate amount is 1,000 USD.

  If the receipt transaction amount for the purchase order is 20,000 USD, then the rebate amount for this purchase order receipt transaction is 400 USD (2 percent of 20,000 USD). So the new total rebate amount is 1,400 USD (1,000 USD + 400 USD).

  Retrospective Rule Type:

  Assume that:

  Purchases between 0 USD and 100,000 USD receive 1 percent rebate.

  Purchases between 100,001 USD and 500,000 USD receive 2 percent rebate.

  As of date purchase amount is 100,000 USD.

  Total rebate amount is 1,000 USD.

  If the receipt transaction amount for the purchase order is 20,000 USD, then the rebate amount for this purchase order receipt transaction is 400 USD (2 percent of 20,000 USD). And because the accumulative purchase amount reaches the next threshold level, the rebate is also recalculated for the existing accrued rebate transactions of 2,000 USD (2 percent of 100,000 USD), so the new total rebate amount is 2,400 USD (2,000 USD + 400 USD).

  Flat Amount Rule Type:

  Assume that:

  Purchases between 0 USD and 100,000 USD receive 1,000 USD rebate.

  Purchases between 100,001 USD and 200,000 USD receive 2,000 USD rebate.

  As of date purchase amount is 90,000 USD.

  Total rebate amount is 1,000 USD.

  If the receipt transaction amount for the purchase order is 20,000 USD, then the rebate amount for this purchase order receipt transaction is:

  With the prorated option, 200 USD (10 percent of 2,000 USD), so the new total rebate amount is 1,200 USD (1,000 USD + 200 USD).

  Note. The system calculates the 10 percent prorate factor. The prorate factor calculation is ((new purchase amount – lower level of the applicable tier) / (upper level applicable tier – lower level applicable tier)).

  Without the prorated option, 2,000 USD, so the new total rebate amount is 3,000 USD (1,000 USD + 2,000 USD).

  Growth Bonus Rule Type:

  Assume that:

  A 2 percent growth bonus is on a particular category of products under the condition that the purchasing turnover has increased by 10 percent.

  As of date purchase amount is 90,000 USD for this category.

  Growth Basis is 100,000 USD.

  If the receipt transaction amount for the purchase order is 20,000 USD for this category, then the growth bonus rebate amount is 200 USD (2 percent of 10,000 USD).

  Marketing Contribution Rule Type:

  This rule type is accrued once for a vendor rebate agreement.

  Example: 500 USD for Marketing Contribution.

• Rebate accruals update with updates to the vendor rebate agreement:

  When the Rebate Accrual process completes the rebate accrual calculation and generation for a rebate agreement, it calculates the total accrued rebate amount and updates the rebate agreement header. It also updates the total rebateable amount and rebateable quantity at the rule level of the rebate agreement.

Accruals Generation Upon Transactions

For each of the eligible source transactions that is related to purchase order lines that have vendor rebate agreements defined, the Rebate Accrual process looks at the related transactions that are available for the source transactions to determine the processing. One of these scenarios can occur:

• Receipt source transaction:

  • New receipt and related voucher is not available (voucher is not entered or voucher is entered but not matched and not posted).

    The Rebate Accrual process generates the accrual records based on the receipt information, such as received quantity, the purchase order information, such as the unit price, and the rebate agreement information. The accrual records have the transaction status set as Received.

    Example:

    Before Rebate Accrual:

    Receipt

    Receipt ID	Purchase Order ID	Quantity	Unit Price	Rebate
    RCV01	PO001	10	10	2 percent

    Voucher

    Voucher ID	Purchase Order ID	Quantity	Unit Price
    N/A	N/A	N/A	N/A

    Accrued Rebate

    Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
    N/A	N/A	N/A	N/A	N/A

    After Rebate Accrual:

    Accrued Rebate

    Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RCV01	PO001	1	2 (2 percent of 100)	Received

  • New receipt, related voucher is available (voucher is entered, matched, and posted) and covers the receipt fully.

    The Rebate Accrual process generates the accrual records based on the receipt information, such as received quantity, the voucher information, such as the unit price, and the rebate agreement information. The accrual records have the transaction status set as Vouchered.

    Example:

    Before Rebate Accrual:

    Receipt

    Receipt ID	Purchase Order ID	Quantity	Unit Price	Rebate
    RCV01	PO001	10	10	2 percent

    Voucher

    Voucher ID	Purchase Order ID	Quantity	Unit Price
    VCHR01	PO001	10	11

    Accrued Rebate

    Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
    N/A	N/A	N/A	N/A	N/A

    After Rebate Accrual:

    Accrued Rebate

    Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RCV01	PO001	1	2.2 (2 percent of 110)	Vouchered

  • New receipt, related voucher is available (voucher is entered, matched, and posted) and covers the receipt partially.

    The Rebate Accrual process generates the accrual records based on the receipt information, such as received quantity, the voucher information, such as the unit price, quantity vouchered, and the rebate agreement information. The rebate accruals split occurs. The vouchered portion is calculated based on the unit price from the voucher and has accrual records with the transaction status set as Vouchered. The portion that has not been vouchered yet is calculated based on the unit price from the purchase order and has accrual records with the transaction status as Received.

    Example:

    Before Rebate Accrual:

    Receipt

    Receipt ID	Purchase Order ID	Quantity	Unit Price	Rebate
    RCV01	PO001	10	10	2 percent

    Voucher

    Voucher ID	Purchase Order ID	Quantity	Unit Price
    VCHR01	PO001	6	11

    Accrued Rebate

    Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
    N/A	N/A	N/A	N/A	N/A

    After Rebate Accrual:

    Accrued Rebate

    Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RCV01	PO001	1	0.8 (2 percent of 40)	Received
    RCV01	PO001	2	1.32 (2 percent of 66)	Vouchered

  • Receipt with accruals already generated with a transaction status of Received, and the related voucher is newly available and covers the receipt fully.

    The Rebate Accrual process recalculates and updates the accrual records with the voucher information. The accrual records now have the transaction status set as Vouchered.

    Example:

    Before Rebate Accrual:

    Receipt

    Receipt ID	Purchase Order ID	Quantity	Unit Price	Rebate
    RCV01	PO001	10	10	2 percent

    Voucher

    Voucher ID	Purchase Order ID	Quantity	Unit Price
    VCHR01	PO001	10	11

    Accrued Rebate

    Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RCV01	PO001	1	2 (2 percent of 100)	Received

    After Rebate Accrual:

    Accrued Rebate

    Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RCV01	PO001	1	2.2 (2 percent of 110)	Vouchered

  • Receipt with accruals already generated with a transaction status of Received, and the related voucher is newly available and covers the receipt partially.

    The Rebate Accrual process recalculates and updates the accrual records with the voucher information. The rebate accruals split occurs. The vouchered portion now has accrual records with the transaction status set as Vouchered. The portion that has not been vouchered yet is calculated based on the unit price from the purchase order and has accruals records with the transaction status as Received.

    Example:

    Before Rebate Accrual:

    Receipt

    Receipt ID	Purchase Order ID	Quantity	Unit Price	Rebate
    RCV01	PO001	10	10	2 percent

    Voucher

    Voucher ID	Purchase Order ID	Quantity	Unit Price
    VCHR01	PO001	6	11

    Accrued Rebate

    Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RCV01	PO001	1	2 (2 percent of 100)	Received

    After Rebate Accrual:

    Accrued Rebate

    Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RCV01	PO001	1	1.32 (2 percent of 66)	Vouchered
    RCV01	PO001	2	0.8 (2 percent of 40)	Received

• Voucher source transaction:

  New voucher, and the receipt is not available.

  The Rebate Accrual process generates the accrual records based on the voucher information, such as unit price, quantity vouchered, and the rebate agreement information. The accrual records have the transaction status set as Vouchered.

  Example:

  Before Rebate Accrual:

  Receipt

  Receipt ID	Purchase Order ID	Quantity	Unit Price	Rebate
  N/A	N/A	N/A	N/A	N/A

  Voucher

  Voucher ID	Purchase Order ID	Quantity	Unit Price
  VCHR01	PO001	6	11

  Accrued Rebate

  Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
  N/A	N/A	N/A	N/A	N/A

  After Rebate Accrual:

  Accrued Rebate

  Receipt ID	Purchase Order ID	Sequence	Rebate Amount	Status
  RCV01	PO001	1	1.32 (2 percent of 66)	Vouchered

• RTV shipment source transaction:

  Note. The RTV must be in a Shipped status to be considered for accrual.

  • New RTV shipment and related adjustment voucher is not available (voucher is not generated or generated but not posted).

    The Rebate Accrual process generates the accrual records based on the RTV shipment information, such as shipped quantity, the purchase order information, such as the unit price, and the rebate agreement information. The accrual records have the transaction status set as Returned.

    Example:

    Before Rebate Accrual:

    RTV

    RTV ID	Purchase Order ID	Quantity	Unit Price	Rebate
    RTV01	PO001	10	10	2 percent

    Voucher

    Voucher ID	Purchase Order ID	Quantity	Unit Price
    N/A	N/A	N/A	N/A

    Accrued Rebate

    RTV ID	Purchase Order ID	Sequence	Rebate Amount	Status
    N/A	N/A	N/A	N/A	N/A

    After Rebate Accrual:

    Accrued Rebate

    RTV ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RTV01	PO001	1	– 2 (2 percent of –100)	Returned

  • New RTV shipment and related adjustment voucher will not be generated (RTV adjustment voucher option not used).

    The Rebate Accrual process generates the accrual records based on the RTV shipment information, such as shipped quantity, the purchase order information, such as the unit price, and the rebate agreement information. The accrual records have the transaction status set as Vouchered.

    Example:

    Before Rebate Accrual:

    RTV

    RTV ID	Purchase Order ID	Quantity	Unit Price	Rebate
    RTV01	PO001	10	10	2 percent

    Voucher

    Voucher ID	Purchase Order ID	Quantity	Unit Price
    N/A	N/A	N/A	N/A

    Accrued Rebate

    RTV ID	Purchase Order ID	Sequence	Rebate Amount	Status
    N/A	N/A	N/A	N/A	N/A

    After Rebate Accrual:

    Accrued Rebate

    RTV ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RTV01	PO001	1	– 2 (2 percent of –100)	Vouchered

  • New RTV shipment and related adjustment voucher is available (voucher is generated, matched, and posted).

    The Rebate Accrual process generates the accrual records based on the RTV shipment information, such as shipped quantity, the adjustment voucher information, such as the unit price, and the rebate agreement information. The accrual records have the transaction status set as Vouchered.

    Note. The adjustment voucher cannot be partially generated for RTVs, and therefore the partial adjustment voucher scenario is not applicable for rebate accruals.

    Example:

    Before Rebate Accrual:

    RTV

    RTV ID	Purchase Order ID	Quantity	Unit Price	Rebate
    RTV01	PO001	10	10	2 percent

    Voucher

    Voucher ID	Purchase Order ID	Quantity	Unit Price
    VCHR01	PO001	10	11

    Accrued Rebate

    RTV ID	Purchase Order ID	Sequence	Rebate Amount	Status
    N/A	N/A	N/A	N/A	N/A

    After Rebate Accrual:

    Accrued Rebate

    RTV ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RTV01	PO001	1	– 2.2 (2 percent of –110)	Vouchered

  • New RTV shipment, accruals already generated with a transaction status of Returned, and the related adjustment voucher is newly available.

    The Rebate Accrual process recalculates and updates the accrual records with the voucher information. The accrual records now have the transaction status set as Vouchered.

    Example:

    Before Rebate Accrual:

    RTV

    RTV ID	Purchase Order ID	Quantity	Unit Price	Rebate
    RTV01	PO001	10	10	2 percent

    Voucher

    Voucher ID	Purchase Order ID	Quantity	Unit Price
    VCHR01	PO001	10	11

    Accrued Rebate

    RTV ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RTV01	PO001	1	–2 (2 percent of 100)	Returned

    After Rebate Accrual:

    Accrued Rebate

    RTV ID	Purchase Order ID	Sequence	Rebate Amount	Status
    RTV01	PO001	1	– 2.2 (2 percent of –110)	Vouchered

Generating Rebate Accruals

This section discusses how to generate rebate accruals.

Page Used to Generate Rebate Accruals

Generating Rebate Accruals

Access the Rebate Accrual page.