The Supplier Ship and Debit process allows distributors to sell products to specific customers at a price that is below the distributor acquisition costs or the expected margin on the product. Such a sale can help meet competitor bids, gain a foothold into new account, or move excess or unsold inventory. As a result, an accrual offer is created between the supplier and the distributor with the customer as the qualifier. A sales order is recorded against this offer.
If the supplier approves the new price, the distributor can claim the difference from the supplier. If the supplier declines the distributor’s request for the lower price, the distributor may still decide to go ahead and absorb this loss. In either case, the distributor raises a supplier ship and debit claim for which accounting is done as part of claims processing
Related Topics
The Supplier Ship and Debit Process
Creating a Supplier Ship and Debit Request
Generating a Supplier Ship and Debit Batch
Supplier Ship and Debit includes the following key features.
Supplier Trade Profile
Accrual Offer
Sales Order
Supplier Ship and Debit Dashboard
Debit Claims
For supplier ship and debit, you submit a request to the supplier for approval on discounted prices at which you want to sell products to your customers. After you make the sale, you submit a batch for supplier approval before you can debit the supplier for the difference in your acquisition and selling prices.
You define a trade profile for your supplier to capture supplier preferences and attributes for the approval and claim settlement processes. For example, if your supplier does not require you to submit a batch and seek approval for the claimed amount, you can select the auto debit function on the supplier trade profile. Auto debit enables you to directly go to claims processing after you create a batch. On the supplier trade profile, you can define the frequency of batch creation, the quantity and amount limits on an offer, and claim computation and approval communication methods.
After the supplier approves price changes on a supplier ship and debit request, an accrual offer is created on the request. Similarly, accrual offers are created on internal ship and debit requests. Except for the distributor being the qualifier or beneficiary on such an offer, offer approval and creation follows the existing trade management functionality.
An accrual offer is created on a request and sales orders booked for this offer. Goods are then shipped to the retailer or end customer against these sales orders. After the sale is made, the claim can be created and settled.
The supplier ship and debit dashboard enables distributors to do the following.
Create requests and obtain supplier approval on requested prices
Generate batches and obtain supplier approval on claim amounts
View all the supplier ship and debit requests initiated for each supplier
Search for a specific request
View approval or rejection of accrual lines in a batch and make adjustments if required
Export request and batch information for approval and import supplier approval or rejection
Distributors create requests for supplier approval of the new prices and upon approval, create batches for supplier approval of claim amounts. A batch contains all the accrual lines for which the supplier is expected to make payment. Approval transactions between distributors and suppliers use the XML gateway or Web ADI.
A supplier debit claim is created for accrual lines in a batch that the supplier approves. For rejected accrual lines, an internal ship and debit claim is created. The supplier claim is closed out on posting of a debit memo in Oracle Payables for the supplier for the total of all approved lines. Internal ship and debit requests have no supplier debits; accruals are settled by relieving liability and booking the expense to the appropriate distributor GL account.