Understanding Purchase Limits
After you define the conditions for obtaining a rebate, you must enter the quantity of items or the financial amount that you must purchase before you can receive a rebate. For example, you enter either 500 widgets or 500.00 worth of widgets. Each quantity or financial amount is referred to as a threshold. When you enter multiple thresholds, you must enter threshold quantities or amounts in ascending order.
If you set up multiple thresholds, you must enter the total rebate amount that you have received from the supplier in the Amount Purchased field on the Rebate Adjustments Revision form. When you meet the next rebate threshold for the agreement, the system subtracts the received amount from the rebate that you are now due.
Next, you enter information about the type of rebate that you are to receive. The rebate type indicates whether the rebate is a specific predetermined financial amount or a percentage of the total purchase amount. For example, if you purchase 100 widgets, the supplier gives you a 50.00 rebate. However, if you purchase 500 widgets, the supplier gives you a 15 percent rebate on the total purchase amount of the widgets.
You must enter the entire financial amount or percentage that you are to receive for each threshold, regardless of other thresholds for which you might have already received a rebate. For example, you should receive 100.00 for purchasing 100 widgets, and 500.00 for purchasing 500 widgets. When you purchase 500 widgets, you are entitled to a total rebate of 500.00, regardless of the 100.00 that you might already have received.
If you are entitled to a rebate regardless of the quantity or amount that you purchase, you can enter a threshold quantity of zero.
The system stores information about the thresholds and rebates that are applicable to a rebate agreement in the F4341 table.