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Material based versus value based credits
In this article, material based and value based credits in SD are described and their differences are clarified. Examples from SAP® demonstrate the processes.
Credit notes in SD
A credit note in SAP® corresponds to a sales document category (VBTYP = “O”) in the billing. Basically, there are two different processes which initiate a credit note:
If the credit note is based on redelivered goods, it is called material based credit note. If the credit note is not based on a material delivery, it is a value based credit note. Both processes have their origin in the sales document, i.e. no credit note can be created without a reference. Both processes will be explained in detail in the next chapters.
Material based credit note
In most cases sales order, where goods were delivered to the customer, precedes a returns order. The following reasons can lead to a return:
- Wrong goods were delivered
- Too much was delivered
- The goods were damaged
If goods are returned, a returns order (VBTYP = “H”) must be created first in transaction VA01. Afterwards, a returns delivery (VBTYP = “T”) can be created from the returns order in transaction VL01N and the goods receipt can be posted. The last step is the creation of the returns credit note and the creation of the FI document.
The process is explained by the example of customer 51 and credit note 90000097. You see here that a credit note was created which includes 10 bicycle trousers and has a value of 310 Euro.
Figure 1: Returns credit note 90000097
Of course, you would like to see the process flow now which has caused the credit note. If you press the button “Display document flow” top left, the following process is shown:
Figure 2: Document flow with credit note as initial point
We see here that a sales order was created on which a returns order is based. However, only the process is visible which is relevant for the returns credit note. To see all succeeding documents of sales order 177, this sales order should be chosen as initial point. If you mark line “Standard Order” and click the button “Display document” afterwards, you get to the document display of this sales order (transaction VA03).
Figure 3: Displaying the standard order 177
If you click the button “Display document flow” now, the complete document flow is shown:
Figure 4: Document flow with a standard order as initial point
You can see in the process flow that originally a standard order was created which includes 100 pieces of bicycle trousers with a value of 3100 Euro. The goods were delivered, i.e. an outbound delivery was created and the goods issue was posted. The sales order was billed afterwards. 10 pieces with a value of 310 Euro were returned; therefore a returns order was created. A returns delivery was created and the goods receipt was posted. A returns credit note was created.
Value based credit note
A value based credit note does not refer to a delivery process. For instance, a value based credit note is created, if the customer gets a price deduction due to bad quality without sending the goods back. If too much was calculated to the customer, a credit note with this amount is created. A bonus is granted by means of a credit note, too.
Normally, the process begins with a credit memo request (VBTYP = “K”) which is created from a credit note in the billing (VBTYP = “O”). The document flow will be illustrated by means of customer 48 and credit note 90000086. You see here that a credit note with 100 bicycle trousers and a value of 3100 Euro was created.
Figure 5: Display a value based credit note
value based credit note
When clicking the button “Display document flow”, you get the following overview.
Figure 6: Document flow with a value based credit note
You see on the basis of the document flow that a credit memo request was created from which a credit note was then created. So there was no material movement. As already mentioned, it is not possible in SD to create a credit note without reference to a sales document. Therefore a credit memo request is required.
Conclusion
In this article, the difference between material based and value based credits was illustrated by means of two simple examples. Indeed, the processes are often more complex in practice then it was shown in the examples.
If you have any questions on this topic or want to place a comment, feel free to contact me on info@dab-gmbh.de.