Rebate Calculations
Read the following topics for more information about rebate calculation:
Real-Time Rebate Calculation
The SuiteApp lets you calculate rebates in real time as you enter transactions line by line or after you complete and save an order entry.
To calculate rebates in real time, go to Setup > Company > General Preferences. On the Custom Preferences subtab, go to General field group. Then, check the Calculate Rebates at Real-time box. This preference is checked by default
The Calculate Rebates at Real-time box is also available on a sales transaction page. If there are existing line items on a transaction page before you check the box, the rebates are shown only for the newly added line. You must edit the previous line items to display their calculated rebates.
If you clear the box only on the sales transaction page, the box remains checked on the General Preferences page. And because this preference inherits the setting on the General Preference, the box remains checked on a View Mode of a sales transaction.
Negative Rebate Amount
The calculated rebate amount may be a negative value depending on the calculation method, calculation basis, rebate value, and rebate stackability.
The Allow Negative Rebate Calculation preference enables the system to show a negative rebate value on the transaction and calculates rebates on returns.
If the preference is not enabled, the negative amount for receiving rebates and positive amount for paying rebates are shown as zero.
A negative price pass-through amount is added to the item's rate, which increases the amount due of an invoice or other similar transactions.
A positive price pass-through amount is deducted from the item's rate.
To edit this preference, go to Setup > Company > General Preferences. On the Custom Preferences subtab, go to General field group, then check or clear the Allow Negative Rebate Calculation box as required. Changes to this preference apply to future transactions only.
If the settlement value is negative, NetSuite generates an alternative settlement transaction. For more information, see Settlement Methods.
Calculation Basis Value
The rebate calculation references the item record for the calculation basis value. These values are either user defined costs or calculated by the system. The unit cost of an item is multiplied by item quantity to populate the Est. Extended Cost value. See Cost Estimate Types in NetSuite OneWorld.
Unit costs are on the item records, not on the agreement details. But if you select Rebate Cost as the calculation basis, the system uses the value on the agreement details. If the selected calculation basis on the agreement details does not have a corresponding value on the item record, the corresponding calculation basis amount of the item is considered as zero.
Some for receiving rebates use the estimated extended cost value and divide it by the item quantity to get the unit cost or the calculation basis value.
To review the calculation methods and calculation basis descriptions, read the accounting information section of Adding Agreement Details.
To review the custom rebate fields and columns on the sales transactions, read Custom Rebate Fields and Columns on Transactions.
UOM in Rebate Calculation
Units of measure or UOMs are used to quantify inventory items.
With the Multiple Units of Measure feature, you set up a Units Type and define each unit for that type. You can set up a Units Type called Quantity. Then, set up Quantity units of Each, Case, and Pallet. You assign a base unit and define each unit in terms of the base. A base unit is the minimum quantity for which you can buy an item. See Multiple Units of Measure.
In the UOM Inclusion field of an agreement details record, you can specify which units of measure for item inclusions are eligible for rebate. If you select multiple Unit Types for UOM inclusion, you should select a unit for each Unit Type in the Calculation UOM field.
The Calculation UOM field lets you specify a unit to determine the conversion factor for calculating rebates.
A Conversion Rate is a number used to convert one unit into a different unit. If you do not select a value in the Calculation UOM field, the system uses the Primary Sale Unit of an inventory item as a conversion factor.
Using the following UOM table, transaction, and agreement details, see how the rebate is calculated for an item on a transaction line:
Units of Measure (UOM):
|
Units Type |
Units |
Conversion Rate |
Base Unit |
|---|---|---|---|
|
Pallet |
Each |
1 |
Yes |
|
Box |
10 |
— |
|
|
Pallet |
1000 |
— |
Agreement Details:
|
Calculation Amount: 8 Calculation Basis: Not Applicable |
Price Pass-through Type: Flat Amount Price Pass-through Value: 2 |
UOM Inclusion: Each, Box, Pallet Calculation UOM: Box |
After you enter an item on a transaction, the system compares agreement details, calculates applicable rebates, and applies the best rebate deal.
Transaction Details:
|
Item: Item A Quantity: 100 Unit: Box |
In this example, an invoice with Box in the Units column matches the selected conversion factor in the agreement details.
Example Calculation #1:
|
Calculation Method: Flat Amount Calc = (calc amount * conversion factor) * (item quantity) Calc = (8*1) * 100 Rebate Amount: 800 |
If an invoice has Pallet in the Units column, the system multiplies the calculation amount with the conversion rate Pallet. Then, divides it with the selected conversion factor which is 10 for the unit Box.
Example Calculation #2:
|
Calculation Method: Flat Amount Calc = (calc amount * unit conversion rate)/conversion factor * (item quantity) Calc = (8*1000)/10 * 100 Rebate Amount: 80,000 |
Similarly, if the unit has a smaller conversation rate than the selected conversion factor, the system divides the conversation rate with the conversion factor. In this example, the unit Each is used.
Example Calculation #3:
|
Calculation Method: Flat Amount Calc = (calc amount * unit conversion rate)/conversion factor * (item quantity) Calc = (8*1)/10 * 100 Rebate Amount: 80 |
Rebate Calculation on Item Types
You can use any of the supported item types when entering a sales transaction. The system calculates the rebates for every item type specified on the item inclusion of a Rebate Agreement record. See Supported Item Types.
For kits and assemblies, rebates are calculated similar to an inventory item. Kits do not support units, so the conversion rate is always considered as 1. Retailers can set a price for the entire kit which does not have to be the total price of the individual components.
For example, the kit is composed of the parent Home Theater and its components cost $1,274. The kit sells for $1,200. If a rebate agreement with a 10% rebate contains Home Theater in its Item Inclusion, the kit item gets a $120 rebate.
Example Rebate Calculation for Kits and Assemblies:
|
Home Theater |
$1,200 |
|---|---|
|
Receiver |
$198 |
|
Blu-ray player |
$88 |
|
Speakers |
$359 |
|
55" Television |
$629 |
The Derived from Member Items is a cost estimate type that only applies to kits and sums the estimated costs of each item in the kit, based on each of their individual Cost Estimate Types.
You must disable the Advanced Bill of Materials feature to use this calculation basis for assemblies.
For Item Groups, rebates are calculated for each item within that group. If you update a component of an item group by changing the UOM, Rate, or Quantity, the system recalculates rebates immediately.
For example, the item group Luggage Travel Set is composed of four individual items priced separately. Two out of four items, the 26" Spinner suitcase and 20" Carry-on spinner luggage are part of item inclusions for a rebate agreement with a 10% rebate.
Example Rebate Calculation for Item Groups:
|
Luggage Travel Set |
- |
|---|---|
|
26" Spinner suitcase |
$90 |
|
0" Carry-on spinner luggage |
$60 |
|
Boarding tote |
$25 |
|
Travel kit toiletry bag case |
$10 |
On the transaction line, only the 26" Spinner suitcase and 20" Carry-on spinner luggage get a $9 and a $6 rebates respectively. The rest of the items from the item group will show 0 in the Estimated Rebate Amount or Rebate Amount column.
All calculation methods applicable to an inventory item are applicable to kits and assemblies. For calculation basis on kits, you can only use Item Defined Cost, Rebate Cost, Derived from Member Items, and Transaction Price.