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Contracts and Chargebacks with SAP Compensation Management

Did you know there’s an SAP standard module for contract pricing and chargeback management?  It provides the same functionality as the popular Vistex add-on but there are no license fees.  It’s called SAP Compensation Management and it’s part of the standard Logistics / Global Trade modules.   Take a look at this comparison:

Function Vistex SAP
Contract pricing image image
Chargeback processing image image
Chargeback reconciliation image image
Rebates image image
Extra license cost Yes Free

If you didn’t know about Compensation Management, don’t feel bad – it’s one of SAP’s best-kept secrets.  You won’t find it in SAP marketing materials or the training curriculum.  Even the online documentation is limited to just two pages, and there’s a lot of confusion with the HR module of the same name.  And yet it offers critical functionality for SAP wholesale distribution.

It’s time to drag this shy module into the spotlight and give it the attention it deserves.  Take a look at the Key Features, then read on to learn more about the Compensation Management module in detail.  And of course, contact me with your questions, suggestions and comments.

Read the rest of this series:
  1. Contracts and Chargebacks with SAP Compensation Management
  2. SAP Compensation Management Key Features
  3. Business Process
  4. SAP Process
  5. Screenshots
  6. Conclusion

Sep 04, 2009 | Compensation Management, Pricing, SAP Chargebacks, SAP Contract Pricing, Vistex, Vistex Documentation | 18 Comments »

SAP Compensation Management Key Features

SAP Compensation Management is an ECC module that offers the following functionality:

  • Contract pricing
  • Contract membership management
  • Chargeback processing (chargeback submission and tracking)
  • Chargeback reconciliation
  • Online processing and support for EDI (844/845/849)

Compensation Management is intended for wholesalers.  For example, it provides outbound chargeback processing (chargeback submission).  If you are a manufacturer you may want to consider SAP CRM instead, since it provides contract pricing and inbound chargeback processing (I’ll post a future series on that topic).

Even if you already have Vistex or another add-on package, SAP Compensation Management is worth a look.  The provided functionality is superb and it’s even possible to combine the two: for example you can use contract pricing from Compensation Management module along with chargebacks from Vistex, or vice-versa.

Contract Pricing Functions
Contract Loading and Prioritization
image Inbound EDI 845 support
image Multiple overlapping pricing contracts for a customer/product
image Customizable contract prioritization (best-price, contract type, etc.)
Contract Header
image Multiple contract validity dates at header, customer and product level
image Track internal contract reference number and vendor’s contract number
image Set "assignment" number that will appear on all contract-related FI documents
image Special payment terms or additional value days at contract header and product level
image Create contracts in "pending" status
image Configurable contract status management and workflow
image Instantly find SD documents and chargebacks related to a contract
image Configurable texts for notes about contract
image Attach source documents (spreadsheets, emails, faxes, etc.)
image Configurable contract output including EDI, ALE, print, fax, Excel, email, etc.
Contract Customers
image Add and search for customers by DEA number, HIN number, vendor reference number or identifiers
image Load customers in "pending" status until released
image GPO roster management
image Class-of-trade and other customer lists
image Add GPO rosters and customer lists to contract
image Filter (exclude) customers or lists of customers from contract
image Export contract customer list to Excel, print, email, etc.
image Manage contract customers that are not loaded in the wholesaler’s SAP system
image Configurable texts for notes about customer
Contract Products and Pricing
image Add products by NDC number
image Search for products by name, number, NDC number, vendor part number, etc.
image Contract pricing, discounts and surcharges by contract, customer, product, etc.
image Contract rebate conditions
image Contract prices by customer, GPO, product or other criteria
image "Tiered" (scaled) contract pricing based on sales quantity
image Validity period management (for example, price validity cannot exceed contract validity)
image Export products and pricing to Excel, print, email, etc.
image Manage contract products that are not loaded in wholesaler’s SAP system
image Search for conditions across multiple contracts
SD Integration
image Display eligible contract and contract determination directly on SD document
image Contract pricing, discounts and surcharges by contract, customer, product, etc.
image WAC pricing
image Accrue expected chargeback revenue
Other
image Standard extractors for BW
image Standard archiving functions
image Full change log and audit history
image Search for contracts by member, product, vendor, dates, etc.
image Report to submit chargebacks when a contract is loaded retroactively

 

Chargeback Functions
Chargeback Creation
image Outbound EDI 844 and inbound 849 support
image Automatic and manual creation
image Create chargebacks in batch, periodically or immediately
image Combine multiple chargeback requests into a "collective chargeback request" to reduce transaction volume
image Full chargeback workbench integration (all document display and processing can be done without leaving workbench)
image Generate chargebacks when a contract is loaded retroactively
Chargeback Document
image Chargeback pricing procedure and account determination (can be used to adjust chargeback amounts, accrue rebates, post to specific accounts, etc.)
image View contract data in chargeback
image Track vendor’s reference number
image View vendor data in chargeback
image Output and/or re-submit chargebacks using EDI 844, print, fax, email, etc.
image Document flow including chargebacks, SD documents and contracts
image Chargeback linked to all source EDI transactions
image Full change log and audit history
image Standard extractors for BW
image Standard archiving functions
Reconciliation
image All chargeback rejections, statuses and paid amounts visible on chargeback document
image Track requested and paid chargeback amounts separately
image Track rejection reasons
image Customizable rejection processing including custom fields, validations and workflow
image Reverse and reopen posted chargebacks as a result of subsequent reconciliation
image Web portal for manufacturers to enter chargeback response into your SAP system
Read the rest of this series:
  1. Contracts and Chargebacks with SAP Compensation Management
  2. SAP Compensation Management Key Features
  3. Business Process
  4. SAP Process
  5. Screenshots
  6. Conclusion

Sep 04, 2009 | Compensation Management, Pricing, SAP Chargebacks, SAP Contract Pricing, Vistex, Vistex Documentation | Leave A Comment »