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Author's profile photo Prasad Bollineni

Vendor Rebate FICO Configuration


Rebate Arrangement is contract that is made between the Vendor & Supplier for giving certain percentage/value of discounts by vendor on purchase over a particular value/quantity of material.

I tried to cover only FICO configuration, there are many blogs for MM configuration.




  1. Define Rebate Arrangement Types for Subsequent Settlement
  2. Document Splitting for Document Type RA
  3. OBYC Configuration
  4. Accounting Entries




  1. Define Rebate Arrangement Types for Subsequent Settlement

Path: SPRO-Materials Management-Purchasing-Subsequent (End-of-Period Rebate) Settlement-Agreements-Define Rebate Arrangement Types for Subsequent Settlement.

Click on Agreement Type, Example 1000

Go to Settlement Tab

Settlement Type should be: Credit side settlement accounting at plant level.

Go to Credit side Settlement

Partial settlement: BM30 – Part.Set.Rebate,Plant

Final Settlement: BM10 – Fin.Set.Rebater, Plant


Partial settlement: BM31 – Part.Set.Rebate,Purchasing org

Final Settlement: BM11 – Fin.Set.Rebater, Purchasing org


Above setting can be chosen based on client requirement. Recommended is BM30 and BM10.


2. Document splitting for Document type RA

Path: SPRO-Financial Accounting (New)-General Ledger Accounting (New)-Business Transactions-Document Splitting-Classify Document Types for Document Splitting.

This configuration is mandatory derive the profit center.


Profit center derivation:  If agreement type is 1000-Rebate (Vendor based Agreement) than settlement material has to assign at agreement level while creating the agreement.

System derives the profit center from settlement material master while running settlement MEB4.

The settlement Material extend to multiple plants and assign appropriate profit center in material master.

While Running settlement the the system derives the profit enter from settlement material not from you GR based profit center.


3. OBYC Configuration

Create a Balance Sheet GL Account for Rebate Accruals with reference of GR/IR Account.

Assign Rebate Accruals GL account to Transaction Key BO1.

Create a P/ L GL Account for Other Revenues.

Assign to Other revenue GL account to transaction key BO2 or  Any P/L account can be assigned to transaction Key BO2.

If assigned GL Account in BO2 is cost element with category 1 than cost object is optional only in rebate settlement, It post to REO object type.

OKB9 settings does not work for BO2 transaction key.

OKC9 can work but i don’t recommend for this scenario due to OKC9 always substitute cost object.


4. Accounting Entries.

Purchase order 10Qty price 10 total value 100

Agreement if reach total order value 100 than 10% Accrual, 12% Actual.

Goods Receipt

Material Account Dr 90

Accrual Rebate account Dr 10

GR/IR Account Cr 100



GR/IR Dr 100

Vendor Cr 100


Rebate Settlement as per 12% actual (one accounting entry below 6 lines) 

Rebate Accruals Cr 10

Other Revenue Dr 10


Other Revenue Dr 12

Other Revenue Cr 12


Other Revenue Cr 12

Vendor Dr 12


The inventory value is reduced and also posted rebated accruals at the of GR based rebate accrual 10% mentioned in rebate agreement. Rebate accruals knock off at the finance settlement. Other revenue account has net impact of 2 after final settlement of rebate agreement. Vendor has open item with 12 which can be adjusted with vendor payable amount or through new credit note.



Best Regards,

Prasad Bollineni.

SAP FICO Consultant.

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      Author's profile photo Jarlei Nascimento Gonçalves
      Jarlei Nascimento Gonçalves

      Hi, great article. Do you know where I can find the MM part? Than k you

      Author's profile photo Daniel Araújo Santos
      Daniel Araújo Santos

      Excellent article.

      I would like to see the MM part, do you have some material or link to this information?



      Author's profile photo VIJAYSHREE PINGALE

      Excellent article

      Author's profile photo 007 Reddy
      007 Reddy

      Good article:)

      Author's profile photo RTN P
      RTN P

      is there any way to avoid hitting inventory GL during making Goods Receipt?

      Author's profile photo Ashish Shah
      Ashish Shah

      Hi Prasad,

      Is this blog for S4 HANA or for ECC?


      Ashish Shah