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Understanding Vendor Rebate Agreements in Dynamics 365 for Supply Chain Management
Vendor rebates help companies better manage their supplier rebate programs by automating tasks that are required in order to administer, track, and claim rebates that are earned. This blog is intended for business decision makers in enterprise companies who are in charge of negotiating vendor price, discount, and rebate agreements; managing staff that processes rebate claims and collects payments; ordering inventory at the best possible prices. Read on to learn about details surrounding vendor rebate agreements in Dynamics 365 for Supply Chain Management.
Details of a Vendor Rebate Agreement
A vendor rebate agreement is a record of a contract with a vendor that specifies the negotiated terms and conditions under which the company qualifies for a monetary reward in return for achieving preset purchase targets. Vendor rebate agreements are recorded on the Rebate agreements page.
To open the Vendor rebate agreements page, select Procurement and sourcing > Vendor rebates > Rebate agreements.
On the Vendor rebate agreements page, you can view details about the negotiated conditions of a vendor agreement.
The agreement’s header specifies the general conditions that qualify a company for rebates. In effect, the header information specifies that a vendor grants a rebate when a specific product is bought in a specific quantity. On the header, you also specify the unit of measure rebate option and the calculation date type.
- On the Overview tab, if you have lines with Item code set to table to specify the item, then the agreement is for that specific item. If you have lines with Item code set to Group or All to specify the items, then the vendor rebate agreement will be individually processed per item qualifying for the item code, not across all items qualifying for the item code.
- On the General tab, in the Unit of measure rebate option field, you can define whether a unit of measure should be a condition for the purchase order line to qualify for a rebate claim.
- Convert – A purchase order line qualifies for a vendor rebate per the rebate agreement. You will receive a rebate regardless of the unit of measure that is applied on the line.
- Exact match – To qualify for a rebate, a purchase line must have the same unit of measure that is specified on the agreement.
- On the General tab, in the Calculation date type field, select the date that is used to determine whether the purchase occurs in the validity period of the rebate agreement.
- Created – Use the creation date of the purchase order.
- Requested delivery – Use the requested delivery date.
On the agreement lines, you can specify the vendor rebate agreement in more detail.
- In the Cumulate purchase by field, you can set the calculation of the rebate claim. The amount can be set to depend on a period (of week, month, year, lifetime or a customized period). The Invoice value indicates that a rebate claim will be determined every time that a purchase order line is invoiced.
- In the Taken from field, you can specify the basis for the rebate calculation.
- 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 (that is, the price after other discounts have been applied).
- The Rebate program accrual account and Rebate program expense account fields specify account numbers that will receive accrued rebate amounts during the intermediate stage between approval and processing.
- When the Approval required option is set to Yes, the rebate claim must be approved before it can be accrued or paid out.
- The Rebate line break type field specifies the basis for the rebates.
- Quantity – The rebates are volume-based.
- Amount – The rebates are amount-based.
- On the Lines FastTab, you can see how different quantity tiers can be set up to grant different rebates. For example, in the previous illustration, the From value and To value fields indicate that a product quantity between 10 and 19 units will qualify for a rebate of USD 15 per unit.
- In the Workflow approval status field, the Approved value indicates that the agreement can be applied to purchase orders that meet the agreement’s conditions.
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