Describing Discounts and Charges

The image outlines rules for calculating and distributing discounts in contracts tied to a master agreement, including defining validity, assigning to different levels, and varying billing cycles. An example is given of a 10% discount on CPU usage if yearly revenue exceeds 1 million Euros.

Discount agreement:

Dependent on business partners, products, and further selections, it can be decided what kind of discounts will be applied to the billable items.

For a more convenient maintenance of the agreements' area of validity, it's possible to define business partner and product groups. By those groups, the single records are bundled together and can be assigned to an agreement more easily (instead of entering each entry separately, which can become quite cumbersome).

The agreements are built up out of a rules part and an area of validity part. The rules part is specific for each type of agreement. It tells what has to be done when a billable qualifies for an agreement, for example, the rules part of an invoice agreement tells who the invoice recipient is. The area of validity specifies the conditions under which the rules are applied. The conditions can be set up based on business partners, products, and further selections, based on filters and function modules.

Alternative Business Partner:

The Alternative Business Partner for posting of discounts is the business partner, to which the credit memo for the discount from the current agreement is posted.

If no Alternative Business Partner is given, then the system credits the discount according to where it originated. The system distributes the discount mathematically to the items where it originated and proportionately to the business partners and contract accounts belonging to the items.

This diagram illustrates the discount calculation process in SAP S/4HANA FI-CA, showing the flow from billing items (BITs) through discount calculation to invoicing and contract accounting, with two options for generating billing and discount documents.

Process Steps of Discounting and Charging of Billable Items:

Configuration of a discount key and assignment to the master agreement or provider contract
In the standard billing process, determination of base information and creation of base BITs
Calculation of discounts and charges in a discount billing process
Create discount / charges calculation documents
Invoicing of discount billing documents either with usage billing documents (Option1) or separate

Flexibility of new Discount and Charge functionality:

Discount determination using discount agreement when usage BITs are billed. Time-independent processes are possible, for example, quarterly sums for discount base amount.
Discount calculation on specified calculation level, such as provider contract Item, provider contract, contract partner, or agreement level.
Discount distribution: the assignment to source of discount or assignment to, for example, headquarter.

The benefit of this solution is that the same architecture is used in B2C and B2B. The reuse of discount key and discount definition, or calculation modules on provider contract and master agreement level.

From standard billing and invoicing processes, document linkage and traceability is used.

The image illustrates the characteristics and definition of a discount key for RAM usage, detailing the basic, calculation, and condition components. Screenshots show the configuration settings for each component in a software interface.

Discounts and Charges on Billed Items

Configuration

You configure discount/charge keys in three steps on the following three tabs:

Characteristics: On the upper part of the tab, you make general settings about the use, the discount or charge currency, the calculation cycle, and the processing level. In the lower part of the tab, the derived settings for the base items show you directly the currently valid derived values for the discount/charge key from posting areas 8117 and 8118, as long as you have maintained the posting areas.
Calculation: On the upper part of the tab, you define the basis for the calculation, meaning which billed items form the basis for the discount or charge calculation. On the lower part of the tab, you define the calculation rule. That means that you specify here how the discount or charge is calculated for the billed items defined in the basis.
Condition (optional): On the upper part of the tab, you define the basis for the condition. That means that you specify for which billed items the system applies a condition. On the lower part of the tab, you define the condition rule. That means that you specify which prerequisites have to be met in order for a discount to be granted or a charge levied.