Using Supplier Ship and Debit

The Supplier Ship and Debit Process

Supplier Ship and Debit is the process by which a distributor ships goods at a lower price to the customer and either debits the supplier for the difference in the acquisition and selling price or absorbs this. The customer can request this new price or the distributor can decide on this price to make a bulk sale, retain a customer, or interest a new customer. In order to debit the supplier for the difference, the distributor raises a supplier ship and debit request for the new price and sends it for supplier approval.

If the supplier approves, an accrual offer is created and sales made against the offer. After accruals are calculated, the distributor creates a supplier ship and debit batch, obtains supplier approval on the claim amount, and debits the supplier for this amount. If the supplier declines the distributor’s request, the distributor raises an internal ship and debit request. The accrual or claim amount from sales against offers for internal ship and debit requests are accounted for on the distributor’s side.

The key steps in the supplier ship and debit process are described below.

• Supplier Ship and Debit Request

  A distributor creates this request to obtain supplier approval for the new prices or discounts on one or more product and customer combinations. The supplier can approve of some of these prices in a request and reject others. All rejected lines are removed from the request and a new request created for them. An accrual offer can then be created for the approved request and sales made for this offer. You then consolidate accruals against ship and debit offers in a batch that you intend to claim or debit the supplier for, if approved.

• Internal Ship and Debit Request

  A distributor creates this request for prices that the supplier rejects on a supplier ship and debit request. Ship and Debit allows you to copy the original request and modify it to create a new one. Because an internal ship and debit request requires no internal or supplier approval, an offer is directly created based on the request. When the sale is processed and accruals calculated, you can directly create accounting on the cost center specified on the request. This cost center absorbs the costs of the offer.

• Ship and Debit Batch

  A distributor generates a ship and debit batch to obtain supplier approval on amounts from accruals against sales for offers on approved supplier ship and debit requests. The supplier can approve some amounts and reject others. Rejected lines and lines with no response from the supplier are retained in the batch with a batch status of Work in Progress (WIP) and a new batch is created for all approved lines. You can review and correct information in the WIP batch and resubmit the corrected lines for supplier approval. A supplier claim is automatically created for the approved ship and debit batch and this, in turn, generates a debit memo for the supplier in Oracle Payables.

The process described above is illustrated in the following diagram.

Related Topics

Implementing Supplier Ship and Debit, Oracle Supplier Ship and Debit Implementation Guide

Integration Points

The Supplier Ship and Debit process has within it several points of integration internally with other products of Channel Revenue Management and externally with other products of Oracle E-Business Suite.

Internal Integration

The diagram below illustrates the products of the Oracle Channel Revenue Management product family with which Supplier Ship and Debit integrates.

These points of integration are described below.

• Channel Revenue Management for setting up of supplier trade profiles and system parameters.

• Channel Rebate and Point of Sales Management for the budget to fund the offer, the offer, and accrual calculation

• Accounts Receivable Deductions and Settlement for claim processing

External Integration

Oracle Supplier Ship and Debit integrates with the following Oracle applications in the E-Business Suite.

• Oracle Advanced Pricing – to store the modifiers on the accrual offer that is created when the supplier approves a ship and debit pricing request

• Order Management – to create the sales orders against the offers on an approved ship and debit request

• Oracle Web ADI – to communicate between supplier and distributor when seeking approval on a ship and debit request and batch

• Oracle XML Gateway - to communicate between supplier and distributor when seeking approval on a ship and debit request and batch

• Oracle Payables – to create the debit memo for the supplier on approved supplier ship and debit batch lines

• Oracle Subledger Accounting – to create accounting for the distributor on an internal ship and debit request

The diagram below illustrates these external integration points.