Unit 18: Free Goods

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Lesson:
614

Free Goods
Lesson Duration: 75 Minutes

Lesson Overview
This lesson deals with automatic free goods determination.

Lesson Objectives
After completing this lesson, you will be able to: Set up automatic free goods determination.

Demo: Set up automatic free goods for material M-18. You can find quantity details for the master record and document in the notes under the Free goods - Calculation Rule diagram.

Business Example
Free goods play a large role in price negotiations with your customers. As a result, you want to be able to determine free goods and place them in sales documents automatically. You are responsible for automating determination of free goods, bearing in mind that certain information related to the free goods has to be supplied to Controlling.

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Lesson: Free Goods

Figure 223: Exclusive and Inclusive Bonus Quantities (1)

Figure 224: Exclusive and Inclusive Bonus Quantities (2)

In industry sectors such as retail, the chemicals industry or consumer goods industry, it is common to provide discounts in the form of free goods.

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Free goods can be part of the order quantity not included in the invoice. This is called an inclusive bonus quantity. The ordered goods and the free goods both involve the same material. The quantity units of the free goods and ordered goods must be the same. Free goods can also take the form of extra goods that are free of charge. These are called exclusive bonus quantities. In exclusive bonus quantities, the extra goods are delivered free of charge and are not included in the invoice. This can either be an additional quantity of the goods ordered or it can be another article. The exclusive free goods appear in the sales document as a separate, free-of-charge item.

Figure 225: Free Goods in the Sales Order

Both forms of free goods are handled in the same way in the sales order. The material that has been ordered is entered as a main item and the free goods material is automatically displayed as a sub-item. The item category determines how the item is controlled later in the business process (for example, for delivery or pricing). Item categories TAN and TANN are used in the standard SAP system. The system determines the free goods automatically by accessing the relevant condition records. The system then accesses the free goods master record with the pricing date. As in earlier releases, you can also enter free goods manually by entering data in the higher-level item and item category fields (TANN). In this case however, the system does not refer to the free goods master record, and settings such as automatic reduction of the main item quantity for inclusive quantities or certain controls for the delivery are not available.

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Lesson: Free Goods

The system re-reads the free goods master record in the sales order if the quantities in the main item change or if the pricing date changes. The system then deletes the sub-items and re-creates them. Any manual changes to the free goods quantity are lost. If pricing is re-run in the sales order, it does not affect the free goods determination.

Figure 226: Free Goods - Master Data

The condition technique is used for free goods. Free goods are generally regarded as a supplement to the pricing agreement for a material. You maintain the free goods in the master records for sales by: Using a different menu entry Going to Prices and Discounts/surcharges when maintaining the master records

You can define master records for free goods at any level - for example, material, customer / material, price list category / currency / material or customer hierarchy / material. You can restrict master records for one level in many different ways: Validity period: The condition is only valid within this period. Minimum quantity: The condition comes into affect when this quantity has been exceeded Calculation rule: see next slide Scales

You can process different master data with the same key for inclusive and exclusive bonus quantities at the same time. You only need to press a button to switch between the two types of discount.

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Unit 18: Free Goods

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When you enter an exclusive bonus quantity, an extra entry line appears where you can enter the goods item if it is not the same as the ordered material.

Figure 227: Free Goods - Calculation Rule

When you specify a calculation rule, you decide how the system determines the free goods quantity from the additional and document quantities. The free goods quantity is the quantity from which the discount is calculated (not the minimum quantity). The additional quantity is the quantity delivered free-of-charge. The document quantity is the quantity entered by the person creating the sales order.

Three calculation rules are provided in the standard system. The following example describes how they work: You offer supply 20 units of free goods for a free goods quantity of 100 units. The customer orders 162 units (document quantity). Rule 1 Prorated: 32 units of free goods [ 162*(20/100) = rounded down ] Rule 2 Related to units: 20 units of free goods [ 100*(20/100) = rounded down ] Rule 3 Whole units: 0 units free goods [ 162 is not a complete unit of 100]

Calculation rules are stored in the system in the form of ABAP/4 code. You can also define your own rules (transaction VOFM, under menu entry, formulas).

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Lesson: Free Goods

Figure 228: Free Goods - Analyses and Accounting

You can see detailed information about free goods in Accounting or analyses. Revenues, sales deductions and costs of free goods can be transferred to Accounting in different ways, shown in the examples below. (MIt = main item, SIt = sub-item) Scenario 1 (SAP standard system) MIt: Not influenced by free goods Slt: Pricing de-activated, calculation price (VPRS) configured as costs Scenario 2 MIt: Not influenced by free goods SIt: Pricing activated for item category TANN with characteristic B (in pricing procedure, condition type R100 - 100% discount - is activated by condition 55 at level 819), discount is transferred as sales deduction and the calculation price (VPRS) as costs. Scenario 3 MIt: Cumulation of calculation price for lower-level item configured at main item level (in copying control Delivery Billing document), cumulated calculation price transferred as costs SIt: Pricing deactivated

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Figure 229: Free Goods - Condition Technique

The condition technique provides greater flexibility for using the free goods functions. The system uses the information about the sales areas, document determination procedure (from the sales document type) and customer determination procedure (from the customer master) to determine the free goods procedure. The procedure contains a list of the condition types for free goods. One access sequence (search strategy) is assigned to each condition type. Each access sequence consists of one or more accesses. Each access contains exactly one condition table. This represents the search key that the system uses to search for a valid master record. If the search is successful, the system generates a sub-item for the free goods in the document. The item category is assigned with the item category usage FREE. Pricing for both items is controlled with the item category as normal. You can activate an analysis of the free goods determination in the sales document. The system then displays detailed information on how the free goods were determined.

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Lesson: Free Goods

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Exercise 29: Free Goods

Exercise Duration: 30 Minutes

Exercise Objectives
After completing this exercise, you will be able to: Create different master records for free goods Explain how free goods affect the sales process Describe how to control free goods

Business Example
You can extend pricing by using free goods in the form of exclusive and inclusive bonus quantities. You make the relevant agreements with your customer. These will be automatically controlled by the SAP System in the document when you enter a sales order.

Task 1:
You have agreed on a price reduction for customer T-S62A## in the form of free goods. 1. Create a free goods master record (free goods type NA00) for sales organization 1000 and distribution channel 10. If the customer orders at least 20 units of material T-ATC##, 10% of the purchased quantity is to be free of charge. The free-of charge material should be a proportion of the quantity in the higher-level item. Create a trade fair order ZA## with purchase order number ##LO605-ZA##13 for customer T-S62A## and material T-ATC##. Order quantity is 10 units. What message appears? ____________________________________________________ 3. Increase the quantity to 40 units. What are the quantities in the higher-level and sub-items? Main item: _________________________ Sub-item: _________________________

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Task 2:
You make another free goods agreement with customer T-S62E## for material T-ATD##. The minimum order quantity is 20 units. You want to deliver one free-of-charge unit of material T-ATA## for each 20 units ordered. 1. 2. 3. Create the relevant master record for sales organization 1000 and distribution channel 10. In the record, indicate that the system only determines the quantity of the free-of-charge material in multiples of the free goods quantity. Create a trade fair order ZA## with purchase order number ##LO605-ZA##14 for customer T-S62E## and material T-ATD##. Order quantity is 40 units.

Task 3:
Optional The system automatically created a free goods sub-item for the order with purchase order number ##LO605-ZA##14. The system runs pricing for this sub-item even though it is free of charge. 1. Which item category did the system find for the sub-item and which key did it use? Item category: Key: 2. _______________________ ______________________

Which settings in Customizing affect pricing for the free-of-charge item? ____________________________________________________

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Lesson: Free Goods

Solution 29: Free Goods

Task 1:
You have agreed on a price reduction for customer T-S62A## in the form of free goods. 1. Create a free goods master record (free goods type NA00) for sales organization 1000 and distribution channel 10. If the customer orders at least 20 units of material T-ATC##, 10% of the purchased quantity is to be free of charge. The free-of charge material should be a proportion of the quantity in the higher-level item. a) Logistics Sales and Distribution Master Data Conditions Free Goods Create Discount type: Customer: Material: Lowest quantity: For: Unit of measure: are free goods: Unit of measure: Calculation type: Free goods delivery control (L): Save Exit 2. Create a trade fair order ZA## with purchase order number ##LO605-ZA##13 for customer T-S62A## and material T-ATC##. Order quantity is 10 units. What message appears? ____________________________________________________ a) Order Logistics Sales and Distribution Sales Order (order type ZA##) Create b) What message appears? Minimum quantity of 20 PC of free goods has not been reached. NA00 T-S62A## T-ATC## 20 10 PC 1 PC 1 blank

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3.

Increase the quantity to 40 units. What are the quantities in the higher-level and sub-items? Main item: _________________________ Sub-item: _________________________ a) Main item: 36 pieces Sub-item: 4 pieces

Task 2:
You make another free goods agreement with customer T-S62E## for material T-ATD##. The minimum order quantity is 20 units. You want to deliver one free-of-charge unit of material T-ATA## for each 20 units ordered. 1. Create the relevant master record for sales organization 1000 and distribution channel 10. a) Logistics Sales and Distribution Master Data Conditions Free Goods Create Discount type: Button: Customer: Material: Lowest quantity: For: Unit of measure: Additional quantity: Unit of measure: Additional matl: 2. NA00 Exclusive BQ T-S62E## T-ATD## 20 20 PC 1 PC T-ATA##

In the record, indicate that the system only determines the quantity of the free-of-charge material in multiples of the free goods quantity. a) Calculation type (ReR): 2 Create a trade fair order ZA## with purchase order number ##LO605-ZA##14 for customer T-S62E## and material T-ATD##. Order quantity is 40 units. a) Logistics Sales and Distribution Sales Order (order type ZA##) Create

3.

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Lesson: Free Goods

Task 3:
Optional The system automatically created a free goods sub-item for the order with purchase order number ##LO605-ZA##14. The system runs pricing for this sub-item even though it is free of charge. 1. Which item category did the system find for the sub-item and which key did it use? Item category: Key: a) _______________________ ______________________

Logistics Sales and Distribution Sales Order (order type ZA##) Create Item category: TANN

IMG Sales and Distribution Basic Functions Free Goods Item Type Determination for Free Goods Item Key: 2. ZA## / NORM / FREE / TAN

Which settings in Customizing affect pricing for the free-of-charge item? ____________________________________________________ a) IMG Sales and Distribution Basic Functions Free Goods Control Free Goods Pricing Control pricing for free goods item category Item category: Pricing: B Pricing Free goods (100% discount)

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Lesson Summary
You should now be able to: Set up automatic free goods determination.

670

2009 SAP AG. All rights reserved.

2009

TSCM60

Unit Summary

Unit Summary
You should now be able to: Set up automatic free goods determination.

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2009 SAP AG. All rights reserved.

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Unit Summary

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2009 SAP AG. All rights reserved.

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