Rebates and Trade Merchandise Spending
Many process manufacturers, especially those in consumer packaged goods and commodity industries, use rebates and trade spending programs to promote their products. Process Industries for Microsoft Dynamics AX provides users with effective tools to monitor and manage these promotional programs.

Process Industries for Microsoft Dynamics AX calculates rebates in the same way it calculates sales commissions. However, the system credits the amount to the customer rather than to the salesperson. In most cases rebates are cash payments or discounts taken against a customer’s invoice. On the other hand, trade merchandise spending programs usually involve an amount of money accrued by a customer to be spent for events and promotional items.

Figure 2. Process Industries for Microsoft Dynamics AX enables a manufacturer to define specific rebate and trade credit policies for each customer.

Rebates are typically defined by a customer code and item code, and can be calculated in several ways:

Amount per kilo or pound
Amount per case
Percent of sale

Rebates are calculated at invoicing, posted to the general ledger, and accrued. Rebate amounts are not shown on the customer invoice, but the rebate can be paid to the customer in the form of an account credit or a cash payment. Calculation methods used by Process Industries for Microsoft Dynamics AX are:

Rebates by customer by product
Rebates by customer group by product
Rebates by customer by product group
Rebates by groups of customers by groups of products

Trade and Merchandise Allowances
In addition to rebates, Process Industries for Microsoft Dynamics AX supports trade and merchandise allowances (TMA). Trade and merchandise allowances are defined in the same way as rebates, but TMA amounts are posted to general ledger accounts. TMA amounts are typically defined by product category and may vary by customer or customer chain. For example:

Customers usually spend TMAs on promotional items offered by the manufacturer. With Process Industries for Microsoft Dynamics AX, multiple rebates or TMA programs can be defined and applied to a single order. However, the system calculates and applies all rebates and TMA amounts individually.
Defining Data for Rebates and TMA Programs
In using rebates and trade merchandising, users can specify several kinds of data, including:

Rebate type or trade merchandising allowance type.
Calculation as a percentage of gross sales, percentage of net sales, dollars per case, or dollars per UOM.
Definition by all, group, and table for customer and item.
Effective date and expiration date.

Payments and accruals can be calculated at several intervals:

Monthly
Quarterly
Yearly

In most rebate and trade promotion programs, the manufacturer pays different customers in different ways. Some customers will have the rebates or merchandising allowances credited to their accounts, while others will request direct payment.

Reporting and Documentation
Process Industries for Microsoft Dynamics AX provides easy-to-read reports reflecting actual sales amounts (the invoice amount after all discounts, rebates, and trade spending allowances). With this report, managers are able to assess the true margin generated by specific items or programs.

The system also provides a monthly report by customer showing:

Opening accrual amount
Additional accruals
Payments and accounts receivable (A/R) deductions
Closing balance

Process Industries for Microsoft Dynamics AX also creates a rebate and TMA statement for each customer. Using this report, the customer and the manufacturer’s salesperson can see what credits the customer has earned over a given time for various products and programs, helping to keep salespeople informed and strengthen customer relationships.