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Mar 15, 2015 at 12:10 PM

Rebate Agreement (Accounting Entries Confusion)


Dear Gurus,

Please clear my understanding regarding rebate agreement processing.

1. the system books accruals at the time of invoice. (this step is clear to me).

Lets assume system books the provision/accruals $1000 against an invoice.

2. partial settlement, system create credit memo request and than credit memo, to pay the accrual amount to the customer. (this step is clear to me).

lets say system create $1000 credit memo as its already accrued for the customer, system make the accounting entries accordingly.

3. what is the difference in the condition record column of rebate agreement column1 "Rate" and column 2 "Accrual".

But when I go for final settlement I get confuse: !!!!

a. why final settlement is there.

b. why this process reverse all the financial entries created in above scenario 2.

c. when accruals are booked and paid through credit memo tan why we use final settlement, and I confuse till we create final settlement before that

rebate agreement will remain open.

Looking for the gurus feedback in this regard.


Imran khan