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Rebate Management


 Rebate is business function we encounter many times in our normal lives. The ERP technologies like SAP deals very successfully with such functionality. This is used in CPG industry very commonly.

As I am working on this functionality for a CPG (Consumer Packaged Goods) company so this is a try to share the knowledge.

The reader will be benefited by this as this is not a bare configuration guide but I have attempted to make it as business process & its implementation guide.

Rebate in Our Practical Life

Rebate is a part of our life. Suppose you are out to purchase something you will notice many advertisements mentioning rebates on particular kind of purchases. Rebate may depend on material you purchase, material group of purchase, Customer you are, customer category. The percentage of rebate may change with quantum or time of purchase. The method of rebate payment well changes case to case.

It is common for companies to pay rebates to their customers in return for fulfilling certain requirements. The classic example is the car manufacturers. They give their car dealerships a rebate at the end of the year, depending on how many vehicles they sold. This way, the dealers make money, even if they sell you your dream car at “invoice” price.

 Use of Rebate in Consumaer Packaged Goods Industry

 All leading CPG companies use this functionality as per policies & strategies. The following types of rebates used in CPG industry:-

1)      Cash Rebates:- Discount paid for early payment track record.

2)      Promotional Rebates: -Discounts applied to introduce new product.

3)      Quantity Rebates: – Paid for the particular quantity

4)      Method Rebates: – Paid for Efficient Daily transactions Methods, Efficient Payment  methods, Visibility of events.

5)      Logistics efficiency Rebates: – This discount paid to promote buyers to order in such a way that the transportation cost should be minimum.

The Standard SAP has following rebates types:

The std. SAP rebate process applied  irrespective of Industry and Markets.

 1) Group rebate

2) Material Rebate

3) Customer rebate

4) Hierarchy rebate

5) Hierarchy rebate/material

6) Sales independent rebate


Std. SAP provides rebate solution at high level. I have listed some rebate scenerio’s at root level. CPG industry rebate is complicated and needs lot of development in Std. sap. People who need information about this information can use this. I am plnning to explain the CPG rebates in detail in next webposts.

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