For SAP Professionals

Contracts and Chargebacks with SAP Compensation Management

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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

This entry was posted on Friday, September 4th, 2009 at 6:15 pm and is filed under Compensation Management, Pricing, SAP Chargebacks, SAP Contract Pricing, Vistex, Vistex Documentation and tagged with , , , , , , , , , . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

18 Responses Subscribe to comments


  1. Barbara

    Trust me, SAP standard is the way to go…..

    Oct 16, 2009 @ 9:48 am


  2. Manoj Kumar

    I thank you for the article especially the screens and can you please provide more information about the reconciliationing process in your next article ??

    Oct 20, 2009 @ 8:01 am


  3. Mark Weber

    Cool stuff. Could you perhaps list out some of the available BADIs in a future post? I’m an ABAPper so I’m thinking about it from the development side. I’d like to know just how much we can customize this puppy :)

    Oct 29, 2009 @ 1:44 am


  4. Doug Altman

    We had no idea this module even existed, thanks

    Nov 01, 2009 @ 2:50 am


  5. Natalie

    Our SAP sales rep said there was no alternative to Vistex but I just looked in our system and compensation mgt is right there under Logistics. D’oh!

    Nov 02, 2009 @ 11:45 pm


  6. Diane Costain

    The Vistex license fees are enormous. A lot of companies will be looking at this…now that we know about it!

    Nov 04, 2009 @ 4:27 pm


  7. Aarnav

    Sir, This is a great article, I have worked heavily on SAP special agreements and made me understand Vistex very easily. It uses SAP determination (Sales Deal concept). It would be great if you could share a configuration document for compensation management. I read thru SAP commission and commission management and felt the documentation was not clear as other SAP documentation.

    Nov 15, 2009 @ 12:13 pm


  8. Ashok

    Hi,

    I was looking for compensation management in the standard R/3 system, but I could not find it, can you please guide me and from a pharma industry’s perspective, is it possible to implement chargebacks.
    Your reply is highly appreciated.

    Thanks,

    Ashok

    Nov 30, 2009 @ 3:06 pm


  9. admin

    Great question. Compensation Management is fully available is Enhancement Pack 4 (EHP4), although some of the code seems to have been present earlier.

    To see the menus, you’ll also need to activate some business function sets. Check the EHP1 – EHP4 release notes (the “wholesale distribution” section) for the specific sets for your implementation. I think you will need ISR_RET_COMPENSATION for the general functionality and ISR_RET_AGENCY_3 if you want to use complaints processing.

    Be sure to try this in a test system first – activating the business function sets is generally harmless, but it cannot be undone.

    As for Pharma, if you’re a manufacturer then I suggest using the CRM Pharma extensions for manufacturers (inbound chargebacks). If you’re a wholesaler or retailer then Compensation Management will work better.

    Dec 03, 2009 @ 11:02 am


  10. Mary

    Hi,
    I am new to Vistex, i am an SAP SD consultant, need some inputs and help on vistex, sales incentives and pay back module.

    can you please help me with the configuration aspect of vistex.

    thanks

    Mar 17, 2010 @ 4:11 pm


  11. Ozzy

    Hi,

    You have presented an excellent documentation. As most of people asked in this blog, if you have additional documentation to share, it would be appreciated.

    One question: is required activate SAP IS-Retail, if this is going to be implemented in a Wholesale Industry? Since, SAP Standard does not have price document to control the price change notification.

    Thanks

    Mar 26, 2010 @ 12:02 pm


  12. admin

    Hi Ozzy,

    The compensation management functionality falls under global trade, which is part of the Logistics (LO) module. You just need to activate the EA-GLT enterprise extension to use it.

    IS-Retail (EA-RET) is not required. You do not need to activate the retail (EA-RET ) enterprise extension to use the contracts and chargebacks functions.

    I have noticed that SAP has begun naming some of the specific chargeback business functions as ISR_RET_xxxx, but I think this is because they view the Agency business functionality as part of retail.

    Apr 06, 2010 @ 3:55 pm


  13. Roy Siggins

    Great info! Just found out about this. I have been leading a couple of Vistex projects and this is really interesting stuff.
    Question: are there any SAP customers out there who have implemented this?
    Many thanks
    Roy

    May 12, 2010 @ 5:51 am


  14. Tom

    Hi,

    Thanks for this interesting post. We’re going to look into this.

    Most of the other project managers I meet never ever questioned whether Vistex was really necessary.

    It’s strange that SAP isn’t publicizing their own module. Maybe they plan to compete with Vistex eventually?

    Jul 23, 2010 @ 2:30 pm


  15. Abby David

    It is great to hear that chargebacks can be handled in standard SAP. I have been trying to find it in SPRO but I could not. Can you please tell us where this module is located within SPRO? I tried under logistics-general but I could not find it. It will be great if you can post a screen shot of this.

    Jul 28, 2010 @ 4:18 pm


  16. fish

    SAP mkes money off Vistex, as their salesforce sells it, so why would they want to publish something that is included for free.

    Aug 09, 2010 @ 4:24 pm


  17. Vic

    SAP Compensation management work with inbound EDI 812/820. Can this module handle multiple level chargebacks (i.e. fee based on units and administration charge).
    Thanks

    Aug 16, 2010 @ 12:04 pm


  18. admin

    Hi,

    The list time I looked the only included mapping was EDI 845 (contract notification). SAP may be developing others. Both modules have extensive BAPI support so implementing mappings shouldn’t be overly difficult. However, I’m not sure how well the chargeback process fits into the 812/820 transactions.

    The SAP modules are meant for wholesalers submitting chargebacks. If you are accepting inbound chargeback (or other remittance) requests, then you may want to look at the CRM contracts & chargebacks instead, since they are designed to work from the manufacturers perspective.

    As far as calculation, the SAP contracts & chargeback can do anything that SAP pricing can do (i.e. almost anything you can imagine). It can also split and combine chargebacks, for example if you want to send admin fees to one vendor and chargebacks to another.

    Aug 17, 2010 @ 1:00 pm

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