Direct volume or external reference data can be used for accrual calculation depending on the promotional scenario (direct versus indirect). Usually volume from various sources is associated with the promotion and used in calculating variable pay for performance trade spends. Sources might be direct invoice sales, scan data, indirect data (spin report), and so on.
Variable pay-for-performance rebates need sales volume for the accrual calculation:
- Shipment volume.
- Scan data (POS sales).
- Indirect sales (Spin report).
Using the lump sum amounts, specified and agreed with the customer in the approved trade promotion, as a source for accrual amounts are calculated and allocated to the appropriate period. Based on the accrual method, the lump sum is either spread across the promotional period or posted as a one time amount using one of the specific dates from the promotion (typically in-store or buy-date).
The credit memo will be used to generate a check for payment.
Fixed pay-for-performance does NOT need sales volume for the accrual calculation. The most common accrual calculation methods are:
- Whole amount on a fixed date.
- Spread equally across the promotional period.
- Spread accrual amount using planned volume.