Processing Rebates and Freight

This guide demonstrates how rebates and freight accruals are automatically calculated and posted with sales transactions, and how to adjust them after posting.

Prerequisites

Before processing transactions, ensure you have completed the setup for rebate types and rebate setup entries.

Rebate Processing Example

This example walks through a typical sales order with automatic rebate accruals, using CRONUS demonstration data.

Example Scenario

Customer: A customer eligible for rebates
Items Ordered:

• 1 × Athens Desk (1896-S)
• 3 × PARIS Guest Chair, black (1900-S)

Rebate Setups:

• Trade Terms Rebate: 5% on all items
• Volume Rebate: 7.5% on specific item categories

You can read about the setup here.

Step 1: Create a Sales Order

1. Search for Sales Orders in Business Central
2. Create a new sales order
3. Select the customer
4. Add the following lines:

Item No.	Description	Quantity	Unit Price
1896-S	ATHENS Desk	1	649.40
1900-S	PARIS Guest Chair, black	3	125.10

Rebate Calculation

Rebate calculations happen automatically during posting. You cannot preview rebate amounts before posting the document. The rebate provisions will be calculated and posted as item charges when you post the invoice.

Step 2: Post the Sales Order

1. From the sales order, choose Posting > Post
2. Select Ship and Invoice
3. Click OK to post

The system posts:

• The sales invoice with the full sales amounts
• Item charges for rebate provisions (reducing profit margins)
• All rebate ledger entries

During posting, the system automatically:

• Evaluates all rebate setups matching the customer and items
• Calculates rebate provisions based on the setup percentages
• Posts rebate entries as item charges

In this example, the system identifies two matching rebate setups:

• Trade Terms (5%): Applies to all items
• Volume Rebate (7.5%): Applies based on item category

What Gets Posted

• Sales Invoice: Shows full sales amounts to the customer
• Value Entries: Include item charges for rebate provisions that reduce the net sales amount
• Rebate Ledger Entries: Track all rebate calculations
• G/L Entries: Post rebate provisions to the configured accounts

Key Points:

• Rebates post as item charges that influence the net sales amount, affecting profitability calculations and sales reporting
• The item charge configuration determines where rebates post in the general ledger (sales accounts or cost of sales accounts)
• Rebates behave like discounts without affecting the sales invoice amount shown to customers

Preview Posting

Preview Posting does not currently show rebate ledger entries that will be created. However, it does show the G/L entries that result from rebate provisions, allowing you to see the financial impact of rebates before posting. In a future version, rebate ledger entries will be added to the preview posting as separate entries.

Step 3: View Posted Rebate Entries

1. Search for and open the Posted Sales Invoice just created
2. Select the Find Entries action
3. In the Find Entries page, locate Rebate Ledger Entries
4. Click the number in the No. of Records column to open the entries

You will see two rebate ledger entries per item based on the setup:

Entry Type	Rebate Type	Original Rebate %	Amount Calculated
Provision	Trade Terms	5.00%	51.25
Provision	Volume Rebate	7.50%	76.86

Field Descriptions:

Field	Description
Entry Type	Provision (initial accrual) or Adjustment (later correction)
Rebate Type	Links to the rebate setup that triggered this entry
Original Rebate %	The percentage from the rebate setup
Amount Calculated	The rebate amount based on the original percentage
Amount Posted	The actual posted amount (same as calculated for provisions)

Understanding Rebate Ledger Entries

Each rebate ledger entry contains:

• Source document information: Links back to the sales invoice and line
• Rebate setup criteria: Customer type, item type, and codes used
• Calculation details: Method, percentages, and amounts
• Posting information: Dimensions, posting date, and descriptions
• Item charge reference: Links to the value entry with the provision

Adjusting Rebates After Posting

After posting, you may need to adjust rebate provisions to:

• Update provisions when rebate setup has been changed
• Apply rebates retrospectively to transactions posted before setup existed
• Correct provisions when setup was incorrect at the time of posting

The adjustment report uses the current rebate setup and reapplies it to historical transactions, comparing against the original provisions to calculate the adjustment needed.

How Adjustments Work

The Adjust Rebate Entries report:

1. Identifies original rebate entries using the Rebate Unique ID
2. Retrieves the current rebate setup for that Rebate Unique ID
3. Recalculates what the rebate should be based on current setup
4. Posts adjustment entries for any differences
5. Can also apply rebates to transactions posted before the setup existed

Key Concept

You don't enter new percentages in the adjustment report. Instead, you update the rebate setup itself, then run the report to reapply the current setup to historical transactions. This gives you the flexibility to correct the history or only apply changes moving forward.

Adjustment Example: Correcting Volume Rebate

In our example, the Volume Rebate was initially set up at 7.5%, but the actual rebate should be 7.25%. Here's how to adjust it:

Step 1: Update the Rebate Setup

1. Search for Rebate Setup in Business Central
2. Locate the Volume Rebate setup entry (you can identify it by the Rebate Unique ID if needed)
3. Change the Rebate % field from 7.5 to 7.25
4. Close the Rebate Setup page

Important

Changing the rebate setup affects future transactions immediately. The adjustment report is needed to update historical transactions.

Step 2: Run the Adjustment Report

1. Search for Rebate Setup in Business Central
2. Choose Process > Adjust Rebate Entries action

Step 3: Configure the batch job Options and Filters

The Adjust Rebate Entries report allows you to filter which rebate entries to reprocess.

Options

Field	Description	Example Value
Document No.	Specfies the document number to use when posting adjustments.	VOLUME_CORRECTION
Posting Date	Specfies the posting date to use when posting adjustments.	01/01/2026
Apply Retrospectively	Check to apply rebates to entries that had no rebate at original posting	Unchecked (we're adjusting existing rebates)

Report Filters

Field	Description	Example Value
Rebate Unique ID Filter	Filter to specific rebate setup(s) by their unique ID	11
Rebate Type Filter	Filter to specific rebate type(s)
Customer Filter	Limit adjustment to specific customer(s)
Item Filter	Limit adjustment to specific item(s)
Posting Date Filter	Date range of original provisions to adjust

1. Set posting options
2. Set filters to identify the rebate entries to adjust
3. Leave Apply Retrospectively unchecked (we're adjusting existing provisions)

Step 4: Run the Adjustment

The report:

• Retrieves the current 7.25% from the rebate setup
• Compares it to the original 7.5% that was posted
• Calculates the difference
• Creates adjustment entries to correct the provisions

What Gets Posted

The adjustment creates new rebate ledger entries with:

• Entry Type: Adjustment
• Original Rebate %: 7.5% (from the original provision)
• Adjusted Rebate %: 7.25% (from the current setup)
• Amount After Adjustment: The difference between original and adjusted amounts

Original entries remain unchanged for audit trail purposes.

Step 5: Verify the Adjustment

Open Rebate Ledger Entries from search.

You should now see additional rebate ledger entries reflecting the adjustments:

Entry Type	Rebate Type	Original Rebate %	Adjusted Rebate %	Adjustment Amount
Adjustment	Volume Rebate	7.50%	7.25%	2.57

The Adjustment entry shows:

• Original Rebate %: The initial estimate (7.50%)
• Adjusted Rebate %: The corrected percentage (7.25%)
• Adjustment Amount: The correction amount (negative if reducing the provision)

Understanding Adjustment Entries

Adjustment entries:

• Calculate the difference between the original provision and what the current setup would calculate
• Post to the same item charge and G/L accounts as the original provision
• Maintain a complete audit trail showing both original and adjusted percentages
• Can be run multiple times as setup changes
• Link to the original setup via the Rebate Unique ID field
• Uses the posting date specified when you run the batch job

Retrospective Rebate Application

The Apply Retrospectively option allows you to apply rebates to transactions that were posted before the rebate setup existed.

Use Case Example:

1. Customer orders were posted in January without rebate setup
2. In February, you create rebate setups that should have applied to those January orders
3. Run the Adjust Rebate Entries report with Apply Retrospectively checked
4. The system applies the current rebate setup to the historical transactions

How It Works:

• The report re-evaluates transactions to determine matching the rebate setup criteria
• For transactions with no existing rebate entries, it creates new provision entries
• Creates entries dated according to what is specified when running the report

When to Use Retrospective Application

Use this feature when:

• Setting up rebates for an existing customer base
• Adding new rebate tiers that should apply to recent history
• Correcting missing rebates due to setup delays

Setup Required First

You must create the rebate setup before running retrospective application. The report applies the current setup to historical transactions; it doesn't create setup entries.

Best Practices for Rebate Processing

Regular Review

• Review rebate ledger entries periodically to ensure accuracy
• Reconcile estimated rebates with actual rebate agreements
• Use the adjustment report when discrepancies are found

Setup Accuracy

• Maintain accurate rebate setups to minimize adjustments
• Use ending dates on rebate setups to automatically expire old rates

Documentation

• Configure posting descriptions to clearly identify rebate types

Period-End Processing

• Run adjustment reports before closing periods to actualize estimates (if required)
• Review rebate provisions for reasonableness
• Coordinate with accounts payable for rebate payments

Freight Accruals

Freight accruals work similarly to rebate accruals in terms of automatic calculation, but differ in how they are posted.

Key Difference: Rebates vs. Freight

• Rebates: Post as item charges to value entries that influence the net sales amount
  • Behave like discounts without affecting the sales invoice
  • Can be coded to sales accounts (reducing revenue) or cost of sales accounts via item charge configuration
• Freight: Post as non-inventoriable costs (similar to applying a purchase item charge to a sales shipment)
  • Recorded as separate costs without affecting sales value

While rebates affect net sales in value entries, the item charge setup determines whether they post to sales or cost of sales G/L accounts.

Freight Processing Overview

When posting a sales order with shipping information:

1. Automatic Calculation: The system evaluates freight setups matching:

   • Shipping agent and service code
   • Destination country/region and postal code
   • Shipment method and location
   • Date range

2. Freight Calculation: Based on the calculation method:

   • Weight-based: Total weight × Rate Per Unit
   • Volume-based: Total volume × Rate Per Unit
   • Quantity-based: Total quantity × Rate Per Unit
   • Fixed Amount: Fixed rate per order

3. Minimum and Rounding: Applied per the freight type configuration:

   • Minimum amount enforced (per line or per order)
   • Surcharge added
   • Amount rounded per configuration

4. Posting: Freight provisions posted as:

   • Non-inventoriable item charges (costs that don't affect sales value)
   • G/L entries to freight accrual accounts
   • Freight ledger entries for tracking

   Note: Unlike rebates, freight charges are posted as non-inventoriable costs, meaning they don't reduce the net sales amount but are tracked separately as additional costs.

Freight Ledger Entries

The app also creates Freight Ledger Entries, which are used to audit freight accruals.

Adjusting Freight After Posting

Similar to rebates, freight provisions can be adjusted after posting:

1. Search for Freight Setup
2. Choose Process > Adjust Freight Entries
3. Set filters to identify freight entries to adjust
4. Enter corrected rates or amounts
5. Post the adjustment

The adjustment creates new freight ledger entries maintaining a complete audit trail.

Freight Adjustments

Use freight adjustments to replace estimated freight costs with actual carrier charges when invoices are received from shipping providers.

Common Scenarios

Scenario 1: Retrospective Rebate Application

Situation: A customer qualifies for a new rebate tier based on cumulative volume.
Solution: Create a new rebate setup with appropriate filters and use the adjustment report to apply the new rate to historical transactions within the qualifying period.

Scenario 2: Correcting Setup Errors

Situation: A rebate setup had an incorrect percentage (e.g., 7.5% instead of 7.25%).
Solution: Update the rebate setup to the correct percentage. Run the adjustment report to reapply the current setup to historical transactions, creating adjustment entries for the difference.

Scenario 3: Freight Accrual Actuals

Situation: Freight was accrued at estimated rates, but actual carrier invoices have different amounts.
Solution: Use the freight adjustment report to update provisions to match actual costs, maintaining accurate profit margins.

Scenario 4: Multiple Rebates on Same Transaction

Situation: A customer qualifies for both trade terms and volume rebates.
Solution: The system automatically applies all matching rebate setups, creating separate ledger entries for each rebate type.

Troubleshooting

Rebates Not Calculating

Check:

• Rebate setup date ranges include the posting date
• Customer and item filters match the sales line
• Rebate type has an item charge configured
• Subscription is active

Incorrect Rebate Amount

Check:

• Rebate percentage in setup
• Calculation method matches expectations
• Multiple rebate setups might be applying
• Use adjustment report to correct if needed

Cannot Adjust Rebate Entry

Check:

• Filters in adjustment report match the target entries
• Posting date permissions
• Subscription is active

Adjustment Not Creating Entries

Check:

• Rebate setup still exists and matches the original setup's Rebate Unique ID
• Current rebate setup differs from the original percentage (no adjustment if they're the same)
• Filters in adjustment report match the target entries
• Posting date permissions allow posting adjustments
• Subscription is active

Retrospective Application Not Working

Check:

• Rebate setup exists with criteria matching the historical transactions
• Filters include the correct date range for historical transactions
• Apply Retrospectively option is checked
• Transactions don't already have rebate entries (retrospective only applies where none exist)

Next Steps

Need Help?

Contact us if you have questions about processing or adjusting rebates and freight accruals.