Vendor Rebate Maintenance

This area is used to specify rebates that you receive from the vendor you are currently viewing in Vendor Maintenance. Each rebate is comprised of at least two records: the rebate header and any rebate detail(s).

The Rebate Header

The rebate header allows you to specify a name for the rebate, a description for the rebate, the customer that is involved with the rebate, the general ledger account to which rebate based transactions are recorded, and the dates within which the rebate is active.

The customer may either be set to a specific customer account or may be left blank. When a specific customer account is set, only sales to that customer qualify for this rebate. When the customer field is left blank, sales to any customer will qualify.

The 'Active From' and 'Active To' fields are not required but can be populated (either one or both) to specify a date range that the rebate is being offered.

The Rebate Detail

At the detail level, you will specify which groups or items qualify for the rebate, as well as all of the values that are needed by the system in order to calculate the actual rebate amount. You will begin by specifying either a product group or a specific item. You are then able to specify the basis on which the rebate is calculate, the cost basis that is used in the calculation (when applicable) and the value of the basis.

The rebate basis can be: Cost Down, Fixed Rebate Amount, or Fixed Rebate Cost.  The cost basis can be: 'Actual', 'Last', or 'Company Defined'. The cost basis is only relevant when the basis is set to 'Cost Down'. The 'Rebate Basis Value' is either a percentage (when the basis is 'Cost Down'), or a dollar amount (when the basis is not 'Cost Down').

How Rebates Are Chosen by the System

Only one rebate can be claimed per sales order line. Since an item can belong to a product group, and rebates can be setup to use product groups or items, the system has to decide which rebate to use if both the item and group are specified by one or more rebates. In addition, a rebate may be customer specific or global. To decide which rebate is awarded, the system creates a priority for each qualifying rebate detail and then chooses the first, highest priority rebate that is encountered. From most specific to least specific, the priority is:

1. An item specific and customer specific rebate
2. A group and customer specific rebate
3. An item specific, global rebate
4. A group, global rebate

Examples

A Cost Down Rebate

Assume you have an actual cost of $12, your 'Cost Basis' is set to 'Actual', and your 'Rebate Basis Value' is 10%. This rebate will be calculated as: $12 * 10% = $1.20.

A Fixed Rebate Amount Rebate

This type is very straight forward. The amount you put in the 'Rebate Basis Value' is your rebate amount. This type is the kind of rebate you encounter most commonly in the retail environment: "Purchase this item and mail proof of purchase to the manufacturer to receive a $2 rebate."

A Fixed Rebate Cost Rebate

In this case, your rebate cost is fixed, rather than your rebate amount. The vendor is telling you that, regardless of the cost that you typically pay for this item, you will instead pay this fixed amount by means of this rebate. Assume you typically pay $12 for this item from this vendor. The vendor wants to ensure that you sell their item to a specific customer. When you do sell the item to that customer, they want to help you out by selling the item to you for $10. In this case, you would set your 'Rebate Basis Value' to $10. Every time you sell this item to this customer, you can expect a $2 rebate ($12 - $10).