Whether you are looking to transition rebate agreements from SAP SD or MM into CCM to prepare for S/4HANA, or want to leverage the new capabilities of CCM to integrate subsequent compensation processes into your SAP system, Embra Consulting is here to support you. We bring our expertise to ensure your implementation meets the highest standards.
SAP Condition Contract Management (CCM) is the new standard tool for bonus settlement within SAP. In SAP ERP, the functionalities of traditional SD/MM bonus processing and those of CCM are available concurrently. In SAP S/4HANA, CCM will definitively replace the SD/MM bonus processing, as the features of traditional bonus processing are no longer present in S/4HANA.
If you have implemented rebate agreements or subsequent compensations in the SAP system, transitioning to CCM is mandatory at the latest with the switch to S/4HANA. SAP recommends that customers standardise their business processes and IT landscape before migrating to S/4HANA. Our strong recommendation is to switch to SAP CCM early to reduce the effort involved in the transition to S/4HANA.
You can easily transfer your CCM configuration from the ERP system to the S/4HANA system. This way, when switching to S/4HANA, you have one less concern, and not least, you will benefit from the extensive improvements over the SD/MM bonus processing.
You may have encountered the terms Condition Contract Management (CCM) and Condition Contract Settlement (CCS) and are wondering about the difference. Maybe you have also heard of Agency Business and Settlement Management.
In fact, these various names simply refer to essentially identical functionalities in ERP and S/4HANA. The new bonus processing under the name Condition Contract Settlement (CCS) has already been available in ERP since SAP ERP 6.0 EHP6 SP12 (we recommend using it only from SAP ERP 6.0 EHP7 SP10). CCS utilizes functionalities from the components LO-AB (Agency Business – a logistics component that precedes finance and is e.g. used for centralized invoicing) and LO-GT-CHB (Global Trade Compensation Management). These components must be activated in ERP through Business Functions (additional licenses are not required).
In S/4HANA, bonus processing is referred to as Condition Contract Management (CCM). CCM is part of the new component Settlement Management, which consolidates and replaces the ERP components Agency Business and Global Trade Compensation Management. CCM is part of the S/4HANA Digital Core and therefore does not need to be activated as in ERP.
During the transition from CCS to CCM, minor improvements and innovations were introduced, and the IMG customising was streamlined and restructured. Additionally, the integration into core processes was selectively enhanced. Overall, CCS in ERP does not significantly differ from CCM in S/4HANA, leading us to consistently refer to it as Condition Contract Management, whether in ERP or S/4HANA.
With SAP Condition Contract Management (CCM), bonus and commission payments or other forms of subsequent compensation can be processed. Your agreements with customers, suppliers, or employees should support your business. Let your creativity flow – technical implementation is no longer a bottleneck with SAP CCM.
The solution offers high flexibility – literally all data available in the SAP system can be incorporated into a rebate agreement. For instance, different materials, material groups, or other fields from the material master, sales organisations, or other organisational units, customer groups, or individual customers can be used as criteria for determining the amount of a granted bonus. The bonus can be scaled based on invoiced sales or quantity, and the amounts for accruals and the final granted amount can be defined independently.
Very complex agreements can be clearly represented and managed in the CCM with the condition contract as the central entry and maintenance object. The user interface for contract maintenance ensures ease of use, and standard transactions are available for all common activities related to contract creation, modification, and settlement, as well as various evaluations.
You can define billing intervals and settlement dates as desired.
This also applies to the creation of accruals: You can generate accruals, for example, as with traditional SD bonus processing directly from invoices, or alternatively through so-called CCM delta accruals runs, where you can calculate the accruals amounts based on sales scales. Or you can use a combination of both!
The determination of sales data for settlement is done directly from the database tables. There is no need to build index tables, as you may have done for SD/MM rebate agreements. Which data from which tables is used is freely definable (using database views or CDS views). External data sources can also be utilised.
Furthermore, a multitude of BAdIs are available, allowing you to tailor all processes in CCM to your needs without modifications.
With the use of SD/MM rebate agreements, there was a lack of transparency and clarity regarding the rebate agreements represented in the system. Maintaining conditions was sometimes laborious and error-prone with more complex rebate agreements, and flexibility was often limited.
Such issues are a thing of the past with modern Condition Contract Management.
The following compensation scenarios (and many more) can be comfortably and transparently implemented in Condition Contract Management.
Sales-Based Customer Bonus
You grant your customers a percentage bonus on the sales invoiced. The basis here consists of the SD billing documents. Different partner roles can act as bonus partners – e.g., the sold-to-party or the bill-to-party.
You can offer a uniform bonus on all sales or define the bonus-relevance and different bonus percentages based on certain characteristics of the sold materials (inclusive or exclusive). Additionally, you can precisely include or exclude individual materials or adjust the bonus amount for specific materials.
The bonus percentages for different materials can be linked to achieving certain sales scales. For example, the bonus for a certain material group is granted only from a sales amount of exceeding 100,000 EUR and increases by one percentage point with every additional 50,000 EUR. You define the amount of your accruals independently of the actual bonus percentages. For example, you can create accruals starting from the beginning of the year, where the amount corresponds to the expected sales level at year-end. Once actual sales exceed the expected sales level, you utilize the higher bonus percentages for accruals creation – automatically, without needing to monitor sales development.
You can make individual agreements with specific customers and/or offer rebate agreements that are valid for all customers or for a specific selection of your customers.
Sales-Community for Sales-Based Customer Bonus
You grant a customer a bonus on the sales of a certain group of other customers – for example, the headquarters receives a bonus on the sales of its branches.
Scale-Community for Sales-Based Customer Bonus
Within a certain group of customers, each customer receives a bonus on their own sales. However, for the achievement of sales scales (and the associated higher bonus percentages), the total sales of the entire customer group are considered – for example, a purchasing consortium negotiates this agreement with you.
Sales-Based Supplier Bonus
A supplier grants you a percentage bonus for items purchased from them. The basis here can be, for example, the orders or the incoming invoices.
Regarding bonus percentages, you have the same flexibility as with the sales-based customer bonus.
Quantity-Based Bonus
For both customer and supplier bonuses, you can set bonus amounts per quantity or volume (e.g., number of pieces or liters) instead of bonus percentages per sales volume.
Commission Settlement for Sales Staff
You grant your sales staff a commission for their sales (e.g., a percentage of sales or a fixed commission amount per item).
Is the responsible sales employee recorded in the SD billing document with a separate partner role? Then these documents serve as the data basis just like in the case of customer bonuses, and the bonus recipient is determined through this partner role.
Do you have a custom-developed solution for monitoring your sales employees? Then CCM uses this data as the basis for commission calculation.
Royalties
When selling certain items, you benefit from the marketing activities of a partner company. You have agreed with your business partner to pay a certain amount per item sold.
In the condition contract, the partner company acts as the bonus recipient, and the sales documents for the corresponding items form the basis for fee settlement.
During the settlement of condition contracts, bonus or other compensation claims are calculated based on defined sales data and may be posted in financial accounting.
Multiple condition contracts for different bonus recipients can be based on the same sales data (the business volume base can be further restricted to a subset within each contract).
Within a single settlement run, several condition contracts can be settled. A settlement run typically considers a single settlement date, on which either accruals or the actual compensation claims to be granted for the settled condition contracts are calculated. Already settled amounts and accruals to be reversed are taken into account in the settlement program.
For each contract, one or more documents from SAP Settlement Management (in ERP: Agency Business) are generated during a settlement run, which are then either released directly or in a separate process step (e.g., after approval) for accounting, resulting in the generation of corresponding documents and postings to the relevant accounts.
Perhaps the most significant innovation of Condition Contract Management (CCM) compared to the old bonus processing is the introduction of the so-called business volume base. The business volume base consists of one or more freely definable CDS or database views. Any tables can serve as data sources for the business volume base.
In the condition contract, which represents a bonus or other compensation agreement, the business volume base is assigned, and selection criteria can be defined through inclusion or exclusion of certain values, establishing a subset of the business volume base. This allows for a very elegant and transparent way to define the underlying data basis of a condition contract.
Furthermore, the condition contract defines the bonus recipient (e.g., in the case of a rebate agreement with a customer or a commission agreement with an employee) or, more generally, the bonus partner. In the case of a supplier-side rebate agreement, the bonus partner is the supplier, while your own company acts as the bonus recipient. However, condition contracts for several partners are also possible (e.g., if you grant the same bonus to all your customers based on their purchases).
A distinctive feature of CCM is the maintenance of bonus and accruals conditions (which ultimately determine the amount of accruals or compensation to be granted) directly within the condition contract. Of course, you have the flexibility that the well-known configuration elements such as condition tables and access sequences provide. For example, you can independently set the amount of the bonus for certain material numbers (or for any other criteria included in the business volume base).
Additionally, the condition contract includes a settlement calendar, status (e.g. for an approval process), and other administrative and control data.
As part of the settlement process, the settlement program determines, based on the settlement calendar specified in the condition contract, the contracts to be settled and the type of settlement (accruals, partial settlement, final settlement, etc.) for a particular settlement date.
Using the defined business volume base and the associated selection criteria, the relevant business volume base for each contract is determined. This value, along with the bonus or accruals conditions defined in the contract, is then passed to a special pricing procedure. These pricing procedures are familiar from the SD or MM module, allowing you the flexibility of pricing with formulas ( for condition base or value determination) or requirements for conditions.
The outcome of the settlement process is documents from Settlement Management, generated according to defined split criteria. These split criteria are defined within the business volume base and determine which fields with differing field content will result in a new settlement document (header split) or a new settlement document item (item split) – for example, one document per distribution channel and one document item per material. The determined settlement data is aggregated in the documents according to these split criteria.
Depending on the respective compensation scenario you want to model, you configure whether the settlement will be done on a debit-side, credit-side, or only pro forma basis (i.e., without posting in financial accounting).
Finally, (possibly after prior review and approval of the documents), the generation of accounting documents is initiated from Settlement Management. This type of integration is well known from other SAP components. Here, you can utilize the usual mechanisms for account determination (either SD or MM account determination) and through a variety of transfer rules, you can influence the content of any field in the documents to be generated without modifications.
Below is a brief selection of specific functions and features of the CCM:
Example: For a condition contract with a one-year validity, you have set in the associated settlement calendar that accruals should be formed monthly. In February, the accruals booked in January are reversed, and the billing program re-evaluates the accruals for the total sales of the year (January and February) and books them accordingly. This logic applies across all settlement dates and is similarly applicable for partial settlements within the year (during which a certain bonus may have already been booked and potentially paid out).
This principle ensures that each settlement run is based on the most current data. Changes, for example, to the bonus/accruals conditions (perhaps resulting from renegotiations) or even master data changes (you might decide belatedly to classify a certain material as bonus-relevant) will be retroactively applied with the next settlement run for the entire validity period.
Consequently, incorrect settlements practically self-correct once you have resolved the underlying error. This eliminates the need for labor-intensive and error-prone correction runs typical in traditional bonus processing.
For this situation, CCM offers what are known as delta settlements, following the principle described in the previous section: Schedule delta settlements, for example, at the end of January and the end of February of the following year. The system calculates the bonus with the data available at that time and establishes the difference compared to the bonus determined in the previous settlement run. This difference is then subsequently booked and paid out.