Set up vendor rebate agreements

Applies To: Microsoft Dynamics AX 2012 R3

A business can set up an agreement with one of its vendors to specify that the vendor provides a rebate for purchases. This topic describes how to create a vendor rebate agreement to store details of the rebate offer.

After you create a rebate agreement, you can create purchase orders that are eligible for the rebate, generate rebate claims, and process the claims. For more information, see Work with vendor rebates.

1. Set vendor rebate parameters

Set the relevant parameters for vendor rebates in the Procurement and sourcing parameters form.

To set vendor rebate parameters, follow these steps.

1. Click Procurement and sourcing > Setup > Procurement and sourcing parameters.

2. In the left pane, click Rebate program, and then fill in the following fields.

   Field	Description
   Accrual account	Specify the main account to which the rebate accrual is posted.
   Interim expense account	Specify the main account to which the rebate expense is posted. This account is used for interim postings that are made when a rebate is manually approved, if manual approval is required.
   Starting day of week	Specify the starting day of the week to use when the Cumulate by week option is selected.
   At invoicing	Select this check box to create a rebate claim when the purchase order is invoiced. If this check box is cleared, no rebate claims are created.
   Procurement category	Specify the procurement category to use in the lines of a vendor invoice that is created for a processed rebate. The system automatically creates a vendor invoice to debit the vendor liability after the rebate is processed.
   Accrual journal name	Specify the journal to use for rebate accrual. This journal is used for interim postings that are made when a rebate is manually approved, if manual approval is required.

2. Create a rebate program type, vendor group, and item group

You must define a type of rebate program to represent vendor rebates. You can also optionally create a vendor group, if you want a rebate agreement to apply to a group of vendors, or an item group, if you want a rebate agreement to apply to a group of products.

To create a rebate program type, follow these steps.

1. Click Procurement and sourcing > Setup > Rebate program > Rebate program types.

2. Click New, and enter an ID and description for the program type.

3. Select a default accrual account and expense account.

Optional: To create a vendor rebate group, follow these steps.

1. Click Procurement and sourcing > Setup > Rebate program > Vendor rebate groups.

2. Click New, and enter a name and description for the vendor rebate group.

3. Close the Vendor rebate groups form.

4. Click Procurement and sourcing > Common > Vendors > All vendors.

5. For each vendor that is part of the vendor rebate group, open the vendor record, and then, on the Action Pane, click Edit. On the Miscellaneous details FastTab, in the Vendor rebate group field, select the vendor rebate group that you created earlier.

Optional: To create an item rebate group, follow these steps.

1. Click Procurement and sourcing > Setup > Rebate program > Item rebate groups.

2. Click New, and enter a name and description for the item rebate group.

3. Close the Item rebate groups form.

4. Click Product information management > Common > Released products.

5. For each product that is part of the item rebate group, open the product record, and then, on the Action Pane, click Edit. On the Purchase FastTab, in the Vendor rebate item group field, select the item rebate group that you created earlier.

3. Create a rebate agreement

The rebate agreement defines which products are included in the rebate offer, which vendors offer the rebate, and how the rebate is calculated. Rebates can be based on the quantity (number of products) or the amount (monetary amount) that is purchased.

The rebate agreement also specifies how purchases are cumulated. For cumulation, the purchases from a particular vendor over a specified period of time are added together, and then the rebate amount or quantity criteria are applied to the sum. This method makes it easier to meet the minimum purchase requirements for each line of the rebate agreement.

To create a rebate agreement, follow these steps.

1. Click Procurement and sourcing > Common > Rebates > Rebate agreements.

2. Click New, and then, on the Overview tab, fill in the following fields.

   Field	Description
   Rebate program ID	Specify the ID of the type of rebate program.
   Vendor code	Specify the vendor selection method. Select from the following options: Table – Select an individual vendor in a list. Group – Select a vendor rebate group in a list. All – The rebate is valid for all vendors.
   Vendor selection	Specify the ID of the vendor account or vendor rebate group that is offering the rebate.
   Item code	Specify the product selection method. Select from the following options: Table – Select an individual item in a list. Group – Select an item rebate group in a list. All – The rebate is valid for all items. Selection – Use a tab on the agreement header to select multiple items that are not part of a predefined group. For example, you can select items by category.
   Item selection	Specify the ID of an item or item rebate group that is eligible for the rebate.
   Unit	Specify the unit of measure that is used for item quantities.
   Minimum quantity	Specify the minimum quantity of items that you must purchase to qualify for the rebate.
   Minimum amount	Specify the minimum amount that you must spend on items to qualify for the rebate.

3. Beneath the list, fill in the following fields.

   Field	Description
   Cumulate purchases by	Specify the method by which purchases will be cumulated. Select from the following options: Invoice – The rebate amount is calculated for individual invoices when those invoices are posted. Purchases are not cumulated. Week, Month, Year, Lifetime, or Customized period – The rebate amount is first calculated for individual invoices. Then purchases are cumulated over the specified period, and the rebate is recalculated for the purchase total. If you select the Customized period option, you must specify the period in the Period type field.
   Taken from	Specify the basis for the rebate calculation. Select from the following options: Gross – The rebate is calculated based on the gross price of the item. Net – The rebate is calculated based on the net price of the item (the price after other discounts have been applied).
   Rebate program accrual account	Specify the account to which the rebate accrual is posted.
   Rebate program expense account	Specify the account to which the rebate expense is posted.
   Currency	Specify the code for the current currency.
   Approval required	Select this check box to require that the rebate claim be approved before it can be accrued or paid out.
   Rebate line break type	Specify the purchase criteria to use to determine rebate amounts. Select from the following options: Quantity – The rebate amount is determined by the number of items that you purchase. Amount – The rebate amount is determined by the monetary amount that you purchase (the unit price of items multiplied by the quantity).

4. On the General tab, under Unit, select one of the following options for the Unit of measure rebate option field:

   • Exact match – The unit of measure for the rebate line must exactly match the unit of measure that is specified in the purchase order. Otherwise, the rebate does not qualify.

   • Convert –The unit of measure for the rebate line is converted to the purchase order unit of measure, or to the catch weight unit of measure if catch weight is applicable.

5. On the General tab, under Date, select one of the following options for the Calculation date type field:

   • Created – Use the creation date of the purchase order to determine whether the purchase falls in the validity period of the rebate agreement.

   • Requested delivery – Use the requested delivery date on the purchase order line to determine whether the purchase falls in the validity period of the rebate agreement.

6. On the Lines FastTab, click Add line.

7. Optional: To add other dimensions to the Lines list, so that you can further define rebate lines, click Inventory, and then click Dimensions display. Select the check box next to each dimension to include in the Lines list, and then click OK.

8. In the From value and To value fields, enter the range of values that qualify for the rebate amount for that line.

   Note

   The From value is inclusive, and the To value is exclusive. For example, if the Rebate line break type field is set to Quantity, and you enter 1 in the From value field and 3 in the To value field, the rebate amount applies when you purchase one or two items, but not when you purchase three items.

9. In the Value field, enter the amount of the rebate for that line.

10. In the Amount type field, select one of the following options:

    • Amount per unit – The rebate amount in the Value field is applied per unit that is purchased.

    • Fixed amount – The rebate amount in the Value field is a fixed amount.

    • Percentage – The rebate amount in the Value field is a percentage off amount.

    Note

    If there is a value in the To value field, and the total purchase quantity or amount exceeds that value, some combinations of Rebate line break type and Amount type values can cause incorrect calculation of rebate amounts. Therefore, the following combinations are not allowed, and you receive a message if you try to enter them into the agreement:

    • The Rebate line break type field is set to Quantity, and the Amount type field is set to Percentage.

    • The Rebate line break type field is set to Amount, and the Amount type field is set to Amount per unit.

11. Repeat steps 6 through 10 to add a line for each range of values that you want to include in the rebate calculation.

    For example, after you create a rebate line that applies when you purchase one or two items, you can add a second line that applies a different rebate amount when you purchase three to 10 items.

12. Validate the agreement: On the Action Pane, click Validation, enter the name of the user who validated the agreement, and then click OK. Review any messages that describe errors in the agreement data, and fix the errors as required.

You can optionally set up a workflow to create and approve vendor rebate agreements.

Next step

After you create a rebate agreement, you can create purchase orders that are eligible for the rebate, generate rebate claims, and process vendor rebate claims. For more information, see Work with vendor rebates.

Technical information for system administrators

If you don't have access to the pages that are used to complete this task, contact your system administrator and provide the information that is shown in the following table.