Settlement Management in SAP S/4HANA—Condition Contract Settlement

2.1 Condition contract for customer-side settlement

At the core of every settlement is the condition contract. This is where you define the rules for determining the rebate base, settlement dates, the amount to be rebated and the rebate recipient.

Using the following Fiori tile, you can create, view or modify contracts:

A condition contract has already been created for our sample customer 10100004 – Fahrradhandel Rad&Tat GmbH, which we will go into more detail below (see Figure 2.1).

Figure 2.1: Condition contract—initial screen

The contract’s header information, shown in Figure 2.2, contains the contract number, the validity period and the contract owner (our sample customer), who is to receive a sales bonus for 2020. As a rule, contracts are created for contract settlement for one fiscal year.

Figure 2.2: Header information

Further detailed information on the contract can be called up or maintained via the tab structure below the header data (Figure 2.3). In the following, we will show you what is behind the individual tabs.

Figure 2.3: Tab structure in condition contract

The Basic Data tab takes you to the Contract Type (see Figure 2.4). This controls things such as the contract number range, the assigned tables for determining business volume, and which condition types can be stored in the contract. You can also define the Contract Currency and Payment terms for the settlement documents. There are also several fields available for reference specifications. For example, these can be used to store an external contract number. Our example contract has a Sales Rebate in EUR. In our example, the Contract Category of 0S Sales Rebate is another grouping criterion for contracts and can be used in report selections or included when determining account/price. It is stored in the system settings of the contract type and cannot be changed within contract maintenance. Different process variants can be assigned to the contract types so that various rebate types can be distinguished within a contract type. For more information on process variants see Section 5.3.

Figure 2.4: Basic Data tab

Allocation to SAP organizational units is done via the Sales tab (see Figure 2.5). For a customer contract, this is the sales area (consisting of a combination of a Sales Organization, Distribution Channel and Division).

Figure 2.5: Sales tab

The Administration tab (see Figure 2.6) shows who created or changed the contract and when.

Figure 2.6: Administration tab

Figure 2.7 shows a partial screenshot of the Header Texts tab, where you can enter editing notes or texts to be output in forms.

Figure 2.7: Header Texts tab

Texts stored here can be printed on the settlement form, for example.

The Status tab tells you whether the contract is new, released, locked or logically deleted (see Figure 2.8). A contract with the status “new” cannot yet be settled. It must first be released. If a contract has been locked or deleted, settlement is also no longer possible. Our sample contract has already been released and is therefore ready for settlement.

Figure 2.8: Status tab

On the Business Volume Selection Criteria tab, you define which business volume is to be used as the base for rebates. Various functions are available on the icon bar for this purpose:

In addition to the usual SAP functions for filtering, sorting, layout design, etc., you will work a lot with the icons for inserting a single or multiple rows, deleting or copying rows.

In the example, all of the customer’s business volume in sales organization 1010 is to be selected (see Figure 2.9). On this tab you can also make restrictions (see column Incl Excl for inclusive/exclusive) to certain product groups and/or items.

Figure 2.9: Business Volume Selection Criteria tab

The Settlement Data tab is used to determine which material is used for contract settlement if this cannot or should not be determined from the business volume data (see Figure 2.10). Settlement Type Customer controls how settlement is carried out; for example, Accounts Receivable or pro forma only without posting in Financial Accounting. The settlement calendar stored here (Contract Extension Calendar field) controls the period for which a contract is newly created in the event of a contract being extended.

Figure 2.10: Settlement Data tab

If a Prior Supplier is entered and Customizing for purchase price determination is adapted accordingly, contract items can also be transferred to the purchase order data of the selected prior supplier. The Amount Fields Group controls which amount is to be used as the basis for the rebate. For example, within a contract type, it is possible to have one rebate type calculate the rebate based on the net amount, and another to calculate it based on the gross amount in the sales document. If you enter a Settlement Unit of Measure in the contract, the quantities are converted to this unit during settlement (e.g., from kilograms to grams).

In addition to the business volume selection data, the Settlement Calendar is a very important part of the contract (see Figure 2.11). This allows you to see the dates on which final settlements or partial settlements are to take place during the year and the date on which the contract is finally settled. In the Status column, you can see whether the scheduled dates have already been successfully settled. These are marked with a green traffic light symbol. Our example contract has not yet been settled. How the display changes during the contract’s life cycle is shown in the following chapters.

Figure 2.11: Settlement Calendar tab

In the Reference Date column, you can enter a date that is to be used for determining the amount of a settlement. This is particularly important for delta settlements (see Tip Box “Settlement date types”), as these refer to a final settlement that has already taken place. The reference date here would be the final settlement date (see Section 5.8). In the Execution Date column, you can specify a date for executing the settlement. An example of where this can be useful is automated contract settlement by job run, because the job can then process all contracts with a specific settlement execution date (e.g., today’s date). In the columns BusV From (Business Volume Date From) and BusVol To (Business Volume Date To) you define the time interval used to determine business volume data for settlement. This information is only required if you do not want the interval to be determined from the contract start date (= from date) and the settlement date (= to date) by default. In practice, when settling fixed amounts if these are to be distributed on the basis of the previous year’s business volume on an item-by-item basis. In the other columns, you can see the number of documents created (manually or by settlement run) and the number of open documents (e.g., when settlement documents have been created, but not yet posted completely, due to it not being released or because the collective document has not yet been created in the two-step settlement procedure, see Section 8.3).

Finally, let’s take a look at the Conditions area (see Figure 2.12), which you will find at the very bottom of the initial screen (see Figure 2.1). This is where you can find the valid settlement conditions for the contract type. In addition to the percentage calculation based on business volume selected for our example (condition type RES1), fixed amounts can also be stored. Quantities, weights, volumes or numbers of units sold can also be used as the basis for business volume. In addition, various scales (from scales, to scales, interval scales) as well as minimum and maximum amounts can be defined so that a certain maximum rebate amount is not exceeded even with higher business volumes. In addition, accrual conditions—condition REA1 in our example—are stored in the contract. These form the basis on which accruals can be posted during invoicing and/or contract settlement (see Section 2.3).

Figure 2.12: Conditions tab

Various functions are available for maintaining the conditions in the contract, which you can call up via the icon bar:

The most-used icons include inserting a single condition line or multiple condition lines , and deleting or copying lines. To update scale conditions, use the icon. The scale levels can be shown and hidden again for a more compact view of the stored conditions.

The following tile provides an overview of all contracts stored in the system:

You can search for contracts using flexible criteria and then select the contract to be processed from the list of contracts found. For example, we will select the contract type 0S01 for our “sales bonus” (see Figure 2.13).

Figure 2.13: Partial screenshot of selection options for a list of condition contracts

If you call the result list via the button, all contracts that match the selection criteria are listed, including our sample contract 1000000000 (Figure 2.14).

Figure 2.14: Output list of condition contracts

Various editing options are available within the output list at the bottom right of the screen:

• Select a line in the list and click the button to jump to the contract display.
• To release a contract, select the corresponding line and press the button.
• Press to deactivate the selected contract.
• If you want to cancel all previous settlements for a contract, use the Button.
• Use the button to logically delete a contract. This means that it can no longer be changed and is also no longer available for settlement.
• The button is used to archive the contract.