Understanding the Rebate Accrual ProcessThis chapter provides an overview of the Rebate Accrual process and discusses how to generate rebate accruals.
Understanding the Rebate Accrual ProcessThe Rebate Accrual Application Engine process (PO_VRBTACCR) calculates earned rebates for transactions related to purchase orders such as, receipts, vouchers, and return to vendors (RTVs).
The Rebate Accrual process identifies all purchase order lines that have vendor rebate agreements defined. Then the system finds all associated receipts, vouchers, and RTVs to calculate the rebate and generate accrual records for those source transactions based on the rebate agreement terms and rules. During the processing of the different transactions the system will convert amounts and quantities to the vendor rebate agreement currency and vendor rebate agreement rule unit of measure. The sum of these amounts and quantities becomes the basis for calculating the vendor rebate. The basis is referred to as the rebateable amount and rebateable quantity.
The rebate accrual records provide visibility to the rebate manager on the estimated earned rebates for analysis purposes but also serve as the basis for the claim generation. The final rebate should be calculated based on the actual amount that you pay to the supplier for the goods that you order and receive, but with the analysis objective in mind, the accruals process will generate accruals records on the fly, as soon as the receipt transactions are available in the system. That is, the rebate amount is calculated based on the purchase order estimated price and the received quantity. Later, when the voucher is entered and available, the accruals process will recalculate the final rebate based on the information on the voucher and update the accrual records. Of course, if the voucher is already entered and available at the time when the receipt transaction is being processed, the accruals process calculates the rebate amount based directly on the voucher information to avoid an unnecessary step.
The accruals process also supports purchase orders without receipts such as, direct shipments or where the receipt is optional. In these cases, the voucher serves as the source transaction to generate accruals records.
Finally, for return to vendor shipment transactions, the Rebate Accrual process will or will not calculate and generate rebate adjustments depending on the rebate agreement terms.
For analysis purposes, the rebate accrual records generated will have two levels of details:
Header level which corresponds to the total rebate calculated for the source transaction.
Details level which corresponds to the rebate calculated for each of the rebate agreement rules.
The Rebate Accrual process can be run on demand for one or multiple rebate agreements, or, run automatically at the time of claim generation for the rebate agreement being processed.
The Rebate Accrual process can be initiated from these pages:
Rebate Accrual.
Generate Claims.
Note. The accuracy of the rebate information available for vendor rebate analysis is dependent on the Rebate Accrual process and how often you perform that process. The volume of information to be processed by the Rebate Accrual process can be very large and the processing time could take awhile. PeopleSoft recommends you determine an appropriate frequency for the run of the process so that business requirements are met and the process is able to complete in a reasonable amount of time.
Restricted and Unrestricted Access
Rebate managers can initiate the Rebate Accrual process using the Rebate Accrual page. Using the Rebate Accrual page the rebate manager selects the vendor rebate agreements they want to process and then runs the process.
The rebate vendor agreements available for selection on the Rebate Accrual page is determined by the rebate manager's access rights. When you set up PeopleSoft Purchasing you can specify which rebate managers have unrestricted access rights. You give the rebate manager unrestricted access by selecting the Unrestricted Rebate Manager check box on the User Preferences: Procurement - Rebate Authorizations page.
If you are a rebate manager that does not have unrestricted access then you can only initiate the Rebate Accrual process for your rebates.
If you are a rebate manager and have unrestricted access then you can initiate the Rebate Accrual process for any vendor rebate agreements associated with any rebate manager.
See Defining Vendor Rebate Agreement Authorization.
Common Processing for Rebate Transactions
For each of the eligible source transactions related to purchase order lines that have vendor rebate agreements defined such as, receipt, voucher, or RTV shipment transactions, the Rebate Accrual process will first look at the related transactions available for the source transactions to determine the applicable scenario to be processed. Then the process will perform the rebate calculation and generation for each of the rules defined on the rebate agreement.
Note. Purchase orders require matching, receipts require processing, vouchers require posting, and RTVs must be in Shipped status to be considered for rebate accrual.
For example, assume that a receipt is the source transaction, then the system will verify if the related voucher exists and is eligible—matched and posted. If the voucher covers the receipt totally or partially, based on the information available, the Rebate Accrual process will process the receipt as a receipt without a voucher, as a receipt partially vouchered, or as a receipt fully vouchered.
Note. To view an explanation of the different scenarios that can occur see the section below—Accruals Generation Upon Transactions.
The rebate calculation and generation for each of the rules defined on the rebate agreement includes a series of functions such as, currency conversion, unit of measure conversion, rebate calculation based on the rebate agreement rule configuration, and rebate recalculation based on changes to the source transactions or other factors like rebate agreement changes or modification of the rebate accruals balance on the rebate agreement.
The Rebate Accrual process performs these functions for each transaction that is associated with a vendor rebate agreement:
Currency conversion:
The Rebate Accrual process converts the amounts for the different transactions it processes to the vendor rebate agreement currency.
Unit of measure (UOM) conversion:
The Rebate Accrual process converts the transaction UOMs for the different transactions it processes to the vendor rebate agreement rule UOMs.
Vendor rebate recalculation:
Accrual records are generated from the source transactions related to the purchase orders and the rebate agreement's terms and rules. Changes to the source transactions or to the rebate agreements might affect the earned rebates. Therefore, the Rebate Accrual process includes a function to detect changes made after the generation of the original rebate accrual to automatically recalculate the accruals as appropriate. Changes include rebate agreement change, source transaction change (receipt quantity change), purchase orders disassociated from the rebate agreement or newly associated with the rebate agreement (using the Backdate Vendor Rebates page). Due to the nature of the retrospective and growth bonus rules types, rebate recalculation might also be necessary when new source transactions are entered into the system even if none of the changes discussed occur. This function takes care of such situations.
When the Rebate Accrual process performs the recalculation function, the accrual records might have already be included in a claim, and are therefore no longer available for update. To not lose the history, in such a situation, the Rebate Accrual process recalculates the rebate for the source transaction but instead of updating the existing accrual records, it will generate child accrual records with the difference between the new rebate and the old rebate. This mechanism is referred to as the rebate accruals split.
To view examples of rebate accruals split see the section below—Accruals Generation Upon Transactions.
Vendor rebate calculation for each vendor rebate agreement rule type:
The Rebate Accrual process calculates the vendor rebate for each vendor rebate agreement rule type. The rule types it can calculate for are stepped/standard, retrospective, flat amount, growth bonus, and marketing contribution.
Stepped/Standard Rule Type:
Assume:
Purchases between 0 USD and 100,000 USD receive 1 percent rebate
Purchases between 100,001 USD and 500,000 USD receive 2 percent rebate
As of date purchase amount is 100,000 USD
Total rebate amount is 1,000 USD
Purchase order receipt transaction amount is 20,000 USD, then the rebate amount for this purchase order receipt transaction is 400 USD (2 percent of 20,000 USD), so the new total rebate amount is 1,400 USD (1,000 USD + 400 USD).
Retrospective Rule Type:
Assume:
Purchases between 0 USD and 100,000 USD receive 1 percent rebate
Purchases between 100,001 USD and 500,000 USD receive 2 percent rebate
As of date purchase amount is 100,000 USD
Total rebate amount is 1,000 USD
Purchase order receipt transaction amount is 20,000 USD, then the rebate amount for this purchase order receipt transaction is 400 USD (2 percent of 20,000 USD) and since the accumulative purchase amount reaches the next threshold level, the rebate is also recalculated for the existing accrued rebate transactions 2,000 USD (2 percent of 100,000 USD), so the new total rebate amount is 2,400 USD (2,000 USD + 400 USD).
Flat Amount Rule Type:
Assume:
Purchases between 0 USD and 100,000 USD receive 1,000 USD rebate
Purchases between 100,001 USD and 200,000 USD receive 2,000 USD rebate
As of date purchase amount is 90,000 USD
Total rebate amount is 1,000 USD
Purchase order receipt transaction amount is 20,000 USD, then the rebate amount for this purchase order receipt transaction is:
With the prorated option: 200 USD (10 percent of 2,000 USD) so the new total rebate amount is 1,200 USD (1,000 USD + 200 USD).
Note. The system calculates the 10 percent prorate factor. The prorate factor calculation is: ((new purchase amount – lower level of the applicable tier) / (upper level applicable tier – lower level applicable tier)).
Without the prorated option: 2,000 USD so the new total rebate amount is 3,000 USD (1,000 USD + 2,000 USD).
Growth Bonus Rule Type:
Assume:
2 percent growth bonus on a particular category of products under the condition that the purchasing turnover has increased by 10 percent
As of date purchase amount is 90,000 USD for this category
Growth Basis is 100,000 USD
Purchase order receipt transaction amount is 20,000 USD for this category, the growth bonus rebate amount is: 200 USD (2 percent of 10,000 USD)
Marketing Contribution Rule Type:
Accrued once for a vendor rebate agreement
Example 500 USD for Marketing Contribution
Rebate accruals update with vendor rebate agreement updates:
Once the Rebate Accrual process completes the rebate accrual calculation and generation for a rebate agreement, it will calculate the total accrued rebate amount and update the rebate agreement header. It also updates the total rebateable amount and rebateable quantity at the rebate agreement rule level.
Accruals Generation Upon Transactions
For each of the eligible source transactions related to purchase order lines that have vendor rebate agreements defined, the Rebate Accrual process will look at the related transactions available for the source transactions to determine the processing. One of these scenarios can occur:
Receipt source transaction:
New receipt and related voucher is not available (voucher not entered or voucher entered but not matched and not posted).
The Rebate Accrual process will generate the accrual records based on the receipt information such as, received quantity, the purchase order information such as, the unit price, and the rebate agreement information. The accrual records will have the transaction status set as Received.
Example:
Before Rebate Accrual:
Receipt
|
Receipt ID |
Purchase Order ID |
Quantity |
Unit Price |
Rebate |
|
RCV01 |
PO001 |
10 |
10 |
2 percent |
Voucher
|
Voucher ID |
Purchase Order ID |
Quantity |
Unit Price |
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
After Rebate Accrual:
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RCV01 |
PO001 |
1 |
2 (2 percent of 100) |
Received |
New receipt, related voucher is available (voucher is entered, matched and posted) and covers the receipt fully.
The Rebate Accrual process will generate the accrual records based on the receipt information such as, received quantity, the voucher information such as, the unit price, and the rebate agreement information. The accrual records will have the transaction status set as Vouchered.
Example:
Before Rebate Accrual:
Receipt
|
Receipt ID |
Purchase Order ID |
Quantity |
Unit Price |
Rebate |
|
RCV01 |
PO001 |
10 |
10 |
2 percent |
Voucher
|
Voucher ID |
Purchase Order ID |
Quantity |
Unit Price |
|
VCHR01 |
PO001 |
10 |
11 |
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
After Rebate Accrual:
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RCV01 |
PO001 |
1 |
2.2 (2 percent of 110) |
Vouchered |
New receipt, related voucher is available (voucher is entered, matched and posted) and covers the receipt partially.
The Rebate Accrual process will generate the accrual records based on the receipt information such as, received quantity, the voucher information such as, the unit price, quantity vouchered, and the rebate agreement information. The rebate accruals split occurs. The vouchered portion will be calculated based on the unit price from the voucher and will have accrual records with the transaction status set as Vouchered. The portion that has not been vouchered yet will be calculated based on the unit price from the purchase order and will have accrual records with the transaction status as Received.
Example:
Before Rebate Accrual:
Receipt
|
Receipt ID |
Purchase Order ID |
Quantity |
Unit Price |
Rebate |
|
RCV01 |
PO001 |
10 |
10 |
2 percent |
Voucher
|
Voucher ID |
Purchase Order ID |
Quantity |
Unit Price |
|
VCHR01 |
PO001 |
6 |
11 |
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
After Rebate Accrual:
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RCV01 |
PO001 |
1 |
0.8 (2 percent of 40) |
Received |
|
RCV01 |
PO001 |
2 |
1.32 (2 percent of 66) |
Vouchered |
Receipt with accruals already generated with a transaction status of Received and the related voucher is newly available and covers the receipt fully.
The Rebate Accrual process will recalculate and update the accrual records with the voucher information. The accrual records will now have the transaction status set as Vouchered.
Example:
Before Rebate Accrual:
Receipt
|
Receipt ID |
Purchase Order ID |
Quantity |
Unit Price |
Rebate |
|
RCV01 |
PO001 |
10 |
10 |
2 percent |
Voucher
|
Voucher ID |
Purchase Order ID |
Quantity |
Unit Price |
|
VCHR01 |
PO001 |
10 |
11 |
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RCV01 |
PO001 |
1 |
2 (2 percent of 100) |
Received |
After Rebate Accrual:
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RCV01 |
PO001 |
1 |
2.2 (2 percent of 110) |
Vouchered |
Receipt with accruals already generated with a transaction status of Received and the related voucher is newly available and covers the receipt partially.
The Rebate Accrual process will recalculate and update the accrual records with the voucher information. The rebate accruals split occurs. The vouchered portion will now have accrual records with the transaction status set as Vouchered. The portion that has not been vouchered yet will be calculated based on the unit price from the purchase order and will have accruals records with the transaction status as Received.
Example:
Before Rebate Accrual:
Receipt
|
Receipt ID |
Purchase Order ID |
Quantity |
Unit Price |
Rebate |
|
RCV01 |
PO001 |
10 |
10 |
2 percent |
Voucher
|
Voucher ID |
Purchase Order ID |
Quantity |
Unit Price |
|
VCHR01 |
PO001 |
6 |
11 |
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RCV01 |
PO001 |
1 |
2 (2 percent of 100) |
Received |
After Rebate Accrual:
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RCV01 |
PO001 |
1 |
1.32 (2 percent of 66) |
Vouchered |
|
RCV01 |
PO001 |
2 |
0.8 (2 percent of 40) |
Received |
Voucher source transaction:
New voucher and the receipt is not available.
The Rebate Accrual process will generate the accrual records based on the voucher information such as, unit price, quantity vouchered, and the rebate agreement information. The accrual records will have the transaction status set as Vouchered.
Example:
Before Rebate Accrual:
Receipt
|
Receipt ID |
Purchase Order ID |
Quantity |
Unit Price |
Rebate |
Voucher
|
Voucher ID |
Purchase Order ID |
Quantity |
Unit Price |
|
VCHR01 |
PO001 |
6 |
11 |
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
After Rebate Accrual:
Accrued Rebate
|
Receipt ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RCV01 |
PO001 |
1 |
1.32 (2 percent of 66) |
Vouchered |
RTV shipment source transaction:
Note. The RTV must be in a Shipped status to be considered for accrual.
New RTV shipment and related adjustment voucher is not available (voucher is not generated or generated but not posted)
The Rebate Accrual process will generate the accrual records based on the RTV shipment information such as, shipped quantity, the purchase order information such as, the unit price, and the rebate agreement information. The accrual records will have the transaction status set as Returned.
Example:
Before Rebate Accrual:
RTV
|
RTV ID |
Purchase Order ID |
Quantity |
Unit Price |
Rebate |
|
RTV01 |
PO001 |
10 |
10 |
2 percent |
Voucher
|
Voucher ID |
Purchase Order ID |
Quantity |
Unit Price |
Accrued Rebate
|
RTV ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
After Rebate Accrual:
Accrued Rebate
|
RTV ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RTV01 |
PO001 |
1 |
– 2 (2 percent of –100) |
Returned |
New RTV shipment and related adjustment voucher will not be generated (RTV adjustment voucher option not used).
The Rebate Accrual process will generate the accrual records based on the RTV shipment information such as, shipped quantity, the purchase order information such as, the unit price, and the rebate agreement information. The accrual records will have the transaction status set as Vouchered.
Example:
Before Rebate Accrual:
RTV
|
RTV ID |
Purchase Order ID |
Quantity |
Unit Price |
Rebate |
|
RTV01 |
PO001 |
10 |
10 |
2 percent |
Voucher
|
Voucher ID |
Purchase Order ID |
Quantity |
Unit Price |
Accrued Rebate
|
RTV ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
After Rebate Accrual:
Accrued Rebate
|
RTV ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RTV01 |
PO001 |
1 |
– 2 (2 percent of –100) |
Vouchered |
New RTV shipment and related adjustment voucher is available (voucher is generated, matched, and posted).
The Rebate Accrual process will generate the accrual records based on the RTV shipment information such as, shipped quantity, the adjustment voucher information such as, the unit price, and the rebate agreement information. The accrual records will have the transaction status set as Vouchered.
Note. The adjustment voucher cannot be partially generated for RTVs and therefore the partial adjustment voucher scenario is not applicable for rebate accruals.
Example:
Before Rebate Accrual:
RTV
|
RTV ID |
Purchase Order ID |
Quantity |
Unit Price |
Rebate |
|
RTV01 |
PO001 |
10 |
10 |
2 percent |
Voucher
|
Voucher ID |
Purchase Order ID |
Quantity |
Unit Price |
|
VCHR01 |
PO001 |
10 |
11 |
Accrued Rebate
|
RTV ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
After Rebate Accrual:
Accrued Rebate
|
RTV ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RTV01 |
PO001 |
1 |
– 2.2 (2 percent of –110) |
Vouchered |
New RTV shipment, accruals already generated with a transaction status of Returned, and the related adjustment voucher is newly available.
The Rebate Accrual process will recalculate and update the accrual records with the voucher information. The accrual records will now have the transaction status set as Vouchered.
Example:
Before Rebate Accrual:
RTV
|
RTV ID |
Purchase Order ID |
Quantity |
Unit Price |
Rebate |
|
RTV01 |
PO001 |
10 |
10 |
2 percent |
Voucher
|
Voucher ID |
Purchase Order ID |
Quantity |
Unit Price |
|
VCHR01 |
PO001 |
10 |
11 |
Accrued Rebate
|
RTV ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RTV01 |
PO001 |
1 |
–2 (2 percent of 100) |
Returned |
After Rebate Accrual:
Accrued Rebate
|
RTV ID |
Purchase Order ID |
Sequence |
Rebate Amount |
Status |
|
RTV01 |
PO001 |
1 |
– 2.2 (2 percent of –110) |
Vouchered |
Generating Rebate AccrualsThis section discusses how to generate rebate accruals.
Page Used to Generate Rebate Accruals
|
Page Name |
Object Name |
Navigation |
Usage |
|
RUN_PO_VRBTACCR |
Purchasing, Vendor Rebates, Rebate Accrual, Rebate Accrual |
Initiate the Rebate Accrual process. |
Generating Rebate AccrualsAccess the Rebate Accrual page.
|
Rebate ID |
Select one or more vendor rebate agreements you want to have processed by the Rebate Accrual process. Note. If you do not select any vendor rebate agreements the Rebate Accrual process will process all eligible vendor rebate agreements. |