Promotion Pricing and Rebate Programs Overview

In CloudSuite Industrial, you can use the Price Promotions and Rebates form to set up promotion pricing and rebate programs to give your customers incentives for buying. These programs offer a great deal of flexibility in the way they are applied. You can limit them by salesperson, customer, item, product code, and more; or you can leave them unrestricted.

About Promotion Pricing Programs

Promotion pricing programs adjust item prices for your customers at order entry. You can create programs that offer a discount percent, discount amount, or new fixed price. You also can offer free items for the purchase of items; for example, a Buy One Get One sale.

  • Setup: When you define promotion pricing programs, you can set a minimum net price or minimum order quantity. You also can limit single-item promotions by a maximum discount amount or maximum quantity to discount. See Setting Up Promotion Pricing and Rebate Programs.
  • Application: You apply promotions to customer order lines as orders are entered on the Customer Order Lines and Customer Orders Quick Entry forms.
  • Invoicing: When you generate summary lines for consolidated invoices, the Consolidated Invoice Workbench form displays promotion codes at the customer order line.

About Rebate Programs

Rebate programs provide payment credits for your customers to use in the future.

  • Setup: Before creating a rebate program, you must specify a deferred revenue account and related unit codes on the Accounts Receivable Parameters form. This account is used to record deferred revenue rebate credits generated by invoices when customer order lines qualify for rebate programs.

    When you define the rebate program, you must set a fair value, redemption rate, and time period during which credits can be used for payment. You also can set amount or quantity thresholds that must be achieved before credits can be applied. See Setting Up Promotion Pricing and Rebate Programs.

  • Invoicing: CloudSuite Industrial reviews all defined rebate promotion programs during invoice generation and then creates deferred revenue invoice distributions for any rebate code that is eligible to be associated with an existing customer order line.

The invoice distribution process creates earned rebate entries on the Earned Rebates form and Earned Rebate Credit Workbench for any invoice line that references a rebate code. The earned rebate status is Pending, and the amount is determined by the rebate fair value. The invoice distribution also calculates deferred revenue using the rebate fair value and rebate redemption rate. The deferred revenue is applied using the amount invoiced for a given customer order line. 

Example:

This example shows journal entries for a single line invoice for $250 that is eligible for a rebate program with a 30 percent Rebate Fair Value and 80 percent Rebate Redemption Rate. This creates the basis for the invoice distribution entry to deferred revenue: $250 * .30 * .80 = $60.

  • Earned Rebate Credit Processing: Pending earned rebate entries can be applied to customer payments throughout the rebate number of periods. Selected rebates are processed using theEarned Rebate Credit Workbench form. After processing, the rebates are converted to open credit memos to be combined with payments or other credits to satisfy customer accounts receivable. Their status is changed to Applied. In the example above, the earned rebate extended to the customer, based on the rebate fair value, is $75.
  • Unused Earned Rebate Processing: Earned rebates that remain unused after the rebate program reaches its expiration date must be expired, so the rebate amount can be returned from deferred revenue to current revenue. Unused rebates are expired on the Earned Rebates form.
  • Program Closing: Open credit memos that result from the processing of qualified earned rebates are applied to open invoices during normal A/R payment distribution. If the estimated redemption rate is over or under actual redemption, then at the end of the program, you must make a manual adjustment.

Limitations

  • Promotion pricing does not apply to estimates or customer order blanket lines.
  • Promotion pricing does not apply to configurable items.
  • The Copy Orders and Estimates form does not copy promotion codes to new customer orders.
  • Promotion programs cannot be defined for progressive billing and price adjustment invoices.
  • CloudSuite Industrial RMA and RMA credit memos do not consider promotion programs when creating invoice distributions.
  • When you apply a promotion to a customer order line, a sales discount cannot also be applied.
Related topics