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Trade Claims Management in CRM 2007 – Some words on deductions …
SAP CRM has made significant investments in developing a comprehensive integrated SAP® Trade Promotion Management (TPM) solution. With the integrated back-end processes, the TPM solution provides accurate accounting of all trade and financial results, visibility into demand planning, and allowing users to optimally manage all customer activities. With CRM2007 the SAP Trade Promotion Management Solution is the most comprehensive, integrated TPM solution in the market place.

Within this blog I would like to start discussions about new processes SAP supports with the latest release. It would be great if you share your thoughts, ideas and more or suggest topics that you would like to read about in this blog. Any feedback is very much appreciated!


Let’s start with the topic of deduction management. Deductions are a simple and straightforward way of account for and settle promotional expenses on one side, but on the other side it is very time consuming to resolve and validate deductions for any manufacturer in the CP industry. CP manufacturers need to be efficient in clearing deductions for several reasons, e.g. unless a deduction isn’t cleared and accounted for the correct trade promotion, there are still financial accruals that are directly effecting the manufacturer’s balance sheet.

If you have a look across the consumer products industry the split between documented claims and deductions vary from lower than 10% of deductions for consumer electronics compared to more than 90 % for food and beverage.

Best to deal with deductions is to avoid them where possible. One of the major reasons for deductions is not applying the trade allowances and discounts to sales orders and invoices. The good thing is that this can be resolved by a best-of-breed order-to-invoice process that SAP is recognized for. Tight integration into the back-end processes guarantees that the committed pricing and discounts are integral part of the sales order and invoicing process and the customers have no need to reduce the invoices themselves…


But deductions are still existing … even if this issue has been resolved … which is not given for many companies struggling with non-integrated systems.


Let’s discuss other reasons of deductions related to trade activities efficiently and how does CRM 2007 address these:


  • Low response time on retailer claims (yes some send nicely documented invoice claims) will lead to deductions and not only for the invoice claim you are currently working on, but also for future claims. Therefore it is key to be efficient in resolving trade claims.
    SAP CRM 2007 enables users to access all data from the trade promotion, the validation and claim history and all other documents that could be part of more complicated deduction scenario, e.g. charge backs and rejections, write-off, transfer into prepayments, corrections …
  • Rejections, charge backs and corrections of settlements are not communicated properly and timely. However it is fundamental not only to process claims efficiently, but to communicate with your customer about the status and customers also like explanations for rejections, charge backs and corrections. Sometimes this prevents deductions.
    SAP CRM 2007 supports multiple ways of communicating with the customer. I limit the list just some integral features of Trade Claims Management, if you are interested in more please visit . Based on the power and robustness of the one order framework you can leverage the post processing framework or you us the MS Office® integration.
  • Be as accurate as possible utilizing the relationship to the customer and ascertain the trade spends are consistent with the claimed and validated amounts.
    SAP CRM 2007 provides all capabilities needed to ensure a consistent process from planning to committing to executing to validating and settling. Every single step is seamlessly integrated from a process point of view but also from a system integration point of view.

As this blog focuses on trade promotion management, I skipped talking about deductions that occur because of logistical issues, product issues, etc.


There are multiple ways of validating incoming claims. You do it not at all, which is surprisingly still a common practice in the industry – but definitely not the best one. If you think the effort is worth to spend some work on managing claims then this could lead to a straightforward check of the committed spend against the claimed amounts or you choose the more sophisticated way of applying a form-based validation sheet of claims incorporating all sources of data e.g. claims history, trade promotion details, agreed and actual promotion performance gathered by the own sales force, data providers or rebate agreement statistics integrated from SAP ERP.

Which way to choose should reflect the special situation and needs in your project or company – but everything is better than just accepting deductions or payout invoice claims because of lack of ability to validate and match against the trade activities!

Released with CRM 2007, Trade Claims Management is a CRM-based application that enables you to capture and validate trade related claims and payments at the place of the right information. Trade Claims Management provides full deduction management capabilities, including charge-back and write-off processing seamlessly integrated with ERP Financials (CO-PA, FI) and ERP FSCM Dispute Management.

Using SAP Service Marketplace Quick Link /RKT-CRM or you can get more solution-related information.

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  1. Former Member
    Hi Timo,
    I believe the earlier versions of TPM i.e 6.0 didn’t had Chargeback process , so how do you think this new version of TPM has addressed this issue ?
    1. Timo Wagenblatt Post author
      Hi Venkat,

      There has been a charge back recovery process with 6.0 (CRM2007) and based on customer feedback, we improved the functionality in a SP for 6.0 to make it even more integrated with ECC.

      The functionality should be documented and available in the RKT material as well.

      Thanks for your comments,


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