Microsoft Dynamics AX Support

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Trade Allowance Management Blog Series – Setup

Welcome to the first in a series of Trade Allowance Management blogs.  In this blog, I will be discussing required and optional setup for Trade Allowance Management agreements.

You can use the Trade allowance management module to manage discounts that are offered by vendors to distributors, wholesalers, and retail customers.  You can use Trade allowance management to create, maintain, and quickly determine the status of trade allowances.

Trade incentives include bill backs, off invoice and lump sum incentives, which allow you to make agreements with your customers to help increase sales or meet a specific marketing objective.  

 

General Setup

The trade allowance management parameters are used to enter default information to be used by the system if the information has not been specified at a lower level and to select number sequences for the module.    There are both required and optional setup for trade allowances:

 Required Trade Allowance Setup

  1. Trade Allowance Management Parameters
  2. Merchandising Event Categories
  3. Rebate Program ID
  4. Customer and Product Category Hierarchies

 

Optional Trade Allowance Setup

  1. Marketing objectives
  2. Trade Allowance Agreement Periods

 

Required Trade Allowance Setup

Trade allowance management parameters setup:

Trade allowance management > Setup > Trade allowance management parameters

 

Overview tab

:

 

General Fast Tab:

  • End of period template:  Select the template to apply to automatically generate an end-of-period promotion from the Deduction workbench. 
    Templates are created in the Templates form (Trade allowance management > Periodic > Templates)
  • Planned status:  Select the status that must be applied to a promotion before it can be included in the analysis of planned promotion amounts.
  • Customer hierarchy:  Select the customer hierarchy group to assign to all new promotions.  When a new promotion is created, the customer hierarchy can be changed.

Lump Sum Fast Tab:

  • Expense account:  Define the default main account from which the lump sum payments are provided.  Expenses that are related to a lump sum are tracked in this account after the lump sum is paid.
  • Procurement category:  Define the default procurement category to use when a lump sum is paid to a vendor. 
    The category that the payment is posted against determines the expense account from which the payment is taken.  

Deductions Fast Tab:

  • Deduction journal name:  The journal name selected will be used for matching, denying, and writing off deductions.  You must define the journal name in the general ledger module before it can be selected here.  

Funds Fast Tab:

  • Include closed:  The checkbox can be selected to include funds with the status of closed when analyzing funds.

Bill backs Fast Tab: 

  • Default rebate program ID:  assign the default rebate program ID that is automatically assigned to all promotions or marketing activities that include rebates.  The default rebate program ID is a template that defines which main accounts are used when posting the expense and liability of a bill-back claim.  

Number sequences tab: 

Number sequences must be defined in org admin before they can be selected here

 

 


 

Merchandising Event Category setup:

Trade allowance management > Setup > Merchandising event category

 

Merchandising event categories are used on the trade allowance line.  Their purpose is to compare similar types of promotions during the analysis phase.  

Default Type:

  • Bill-back:  Bill-back merchandising events are used for trade allowances where reimbursement is given after purchase.  
  • Lump sum:  Lump sum promotions are larger amounts of payment delivered after a service is completed.  
  • Off-invoice:  Off-invoice merchandising events are taken at the time of order and automatically deducted before the customer makes a payment.  No reimbursement is necessary.

 

Rebate Program ID setup:

Sales and marketing > Setup > Rebate program > Rebate program types

Rebate program type:

  • Rebate:  This rebate type is typically processed by sending a check to the customer or by deducting the rebate amount from the customer’s invoice.
  • Freight:  Freight rebates accrue based on region and are not passed to the customer. They are used only for reporting.
  • TMA:  Trade & Merchandising Allowance (TMA) rebates accrue until they are passed on to the customer, which is usually by credit note.
  • Bill back:  Refund of a payment that a customer previously paid for an item or service.  A customer can use a rebate as a deduction on an outstanding balance or take the amount of the rebate as a credit.

 

 

Customer and Product Category Hierarchies Setup

 

Eligible customers and products are distinguished through category hierarchies.  You can use customer category hierarchies to group customers that have similar characteristics, such as region or line of business. Before you can add a customer to a fund, trade allowance agreement, or trade allowance template, you must create customer category hierarchies and add customers to those hierarchies.

Each trade allowance requires at least one product and one customer.  

Create Customer Category Hierarchies

Trade allowance management > Setup > Customer Category Hierarchy

Add Customers to a Customer Category Hierarchy

To manage customers on the hierarchy, click the add/remove customer button.

 

Product Category Hierarchy Types

There are four product category hierarchy types that can be applied to a trade allowance:

 

Retail product:  Retail > Setup > Category hierarchies > Retail product hierarchy

Supplemental:  Retail > Setup > Category hierarchies > Supplemental retail hierarchies

Procurement:  Procurement and sourcing > Setup > Categories > Procurement categories

Sales:  Sales and marketing > Setup > Categories > Sales categories

 

Product categories are set up in product information management > Setup > Categories > Category hierarchies.  

 

Optional Trade Allowance Setup

Trade allowances may be negotiated in order to meet different goals.  

 

Marketing objectives:

Marketing objectives can be created and then entered on the trade allowance to provide an explanation of the promotions and sales that are offered by your organization.

Trade allowance management > Setup > Marketing objective

 

Trade allowance agreement period:

 

Trade allowance agreement periods are used as a time frame that identifies the date ranges that need to be met to qualify for the trade allowance.  A range is defined for order dates, requested dates, requested receipt dates, and performance dates.  Trade allowance agreement periods are not required but help to streamline trade allowance setup.  Trade allowance periods can be set up to use solely for reporting purposes.

 

Trade allowance management > Setup > Trade allowance agreement period

 

 

Trade Allowance Funds Setup

Funds define an amount of money which can be allocated for trade allowances.  Funds setup defines not only the budgeted amount, but also the eligible time period, customers, and items.  Funds can be distributed among various trade allowances.  Funds can be set up to use solely for reporting purposes.

 

Fund Usage Records

Fund Usage Records can be set up to categorize reasons for using funds for trade allowance.  Enter the name of the cost center that is providing the funds and then enter a brief description of the cost center.

 

Trade allowance management > Setup > Fund usage

  
 

Funds for Trade Allowances

Funds define an amount of money which can be allocated for trade allowances. Funds setup defines not only the budgeted amount, but also the eligible time period, customers, and items.  Funds can be distributed among various trade allowances.  Funds can be set up to use solely for reporting purposes.

Trade allowance management > Periodic > Funds

 

General Fast Tab:

Type: 

     Discretionary: The fund can be used as needed.
     Non-discretionary:

Status:

     Planning (default when creating a new Fund and not ready to go live – also use for editing)

     Approved (Fund is ready to use and live),

     Closed (Fund is no longer valid)

Fund budgeted: Maximum amount for the fund.

Usage:  Cost center that provides the fund.

 

Customers FastTab

Hierarchy:  Select a Customer Hierarchy (this was discussed earlier).  You can insert all the customers in the Hierarchy or specific customers.

Items FastTab

Click Add products. In the Add products window you can select the product Hierarchy and insert from the Available products section.

 

 

This concludes the required and optional setup for a Trade Allowance Agreement. 

Next in the series is Trade Allowance Management Agreements – Lump Sum