Applies to:

SAP ECC 6.0.

For more information, visit the Enterprise Resource Planning homepage.

Summary:
This document helps the P2P consultants to understand the free goods / bonus goods scenario in
SAP Purchasing in terms of discount in kind. How the configuration and the master data to be
maintained for their business requirement, has been explained in a simple way. Any suggestions
and improvements towards this document will be always welcome.

Author: Rabindra Kumar Sahu

Company: Capgemini India Pvt. Ltd.
Created on: 17 Aug 2015

Author Bio:

Rabindra Kumar Sahu, a SAP MM-PM consultant, is now an employee of

Capgemini India Pvt. Ltd. He has total 4+ years of experience. He has worked various industries
like Manufacturing, Beverage Automobile, and Refrigeration industry as a
Procurement/Maintenance Executive.

Contents
Discount in Kind ............................................................................................................................................ 2
Types of Free Goods ................................................................................................................................. 3
Inclusive Bonus Quantity ...................................................................................................................... 3
Exclusive Bonus Quantity ...................................................................................................................... 3
Configuration Overview ................................................................................................................................ 4
Number Range .......................................................................................................................................... 4
 Define Field Catalog .................................................................................................................................. 5
Create Free Goods Tables ......................................................................................................................... 6
Display Free Goods Tables ........................................................................................................................ 9
Define Access Sequence and Discount-in-Kind Types .............................................................................. 9
Maintain Access Sequence...................................................................................................................... 10
Define Free Goods Types ........................................................................................................................ 11
Define Condition Types ....................................................................................................................... 11
Define Calculation Schema ................................................................................................................. 13
Define and Assign Discount-in-Kind Schema .......................................................................................... 14
Maintain Free Goods Schema ................................................................................................................. 14
Determine Free Goods Schema .............................................................................................................. 15
Master Data Setup ...................................................................................................................................... 16
Material Master ...................................................................................................................................... 16
Vendor Master ........................................................................................................................................ 18
Create Condition Record for Free Goods Determination ....................................................................... 19
Create Info Record for Free Goods ......................................................................................................... 21
Business Transaction ................................................................................................................................... 21
Create a Purchase Order ......................................................................................................................... 21
Case:-Free good qty adjust with ordered quantity ............................................................................. 21
Case:-Free good qty supplied as additional with ordered quantity.................................................... 27
Free good as other material:............................................................................................................... 28
Related Content .......................................................................................................................................... 32
Disclaimer and Liability Notice:................................................................................................................... 32

Discount in Kind
Many times business transaction needs and oblige to give certain type of discount or offers in
order to drive the business in the same zeal. In sales point of view, we can say it as a grant and in
purchase perspective it can be termed as a demand. Nevertheless, this will drive the business and
yield a win-win situation on either side.

This function allows the purchaser to get a product free of charge in the form of free goods when
a certain quantity of product is ordered.

Otherwise, free goods are a kind of quantity discount, and are granted in the form of a goods
delivery that is free of charge when a certain quantity is purchased.

In the following section explains the settings (both in Master data and the configuration level)
that are necessary for the use of the free goods functionality in SAP.

Discount in kind can be in the form of free or bonus goods.

Types of Free Goods

The following types of free goods are available in SAP in terms of business,
- Inclusive bonus quantity
- Exclusive bonus quantity

Inclusive Bonus Quantity

The buyer needs to pay only for a part of the goods required. The rest of the goods are for free.
This is called inclusive free goods which mean that part of the purchased quantity is designated
as free and not billed providing the unit of measure should be same for the free goods and the
billed goods.

When 100 Magi packets are ordered, out of which 3 are designated as free goods. If we order
100 Magi packets then 3 Magi packets are delivered as free to us as ordered but we will be billed
only for the 97 Magi packets and 3 Magi packets are given as free with this, we have received
inclusive free goods.

Exclusive Bonus Quantity

The buyer needs to pay for the goods ordered and receives some additional goods as free goods.
This is known as exclusive free goods and means that free goods is granted for an additional
quantity to that in the purchase order. More is delivered than was ordered and the additional
quantity will not be billed. The goods delivered as free do not have to be the same as the material
ordered.

When five black boards are ordered, the vendor supplies five dusters as free goods. Therefore, if
we order five black boards, we receive five dusters as free goods.

Please note, with this exclusive bonus quantity functionality, we can get free goods
same/different than the billable material.
You can use same material if you won’t want to adjust the order quantity with free good quantity.

Configuration Overview
Number Range
Standard settings:

The standard system contains the entry:

Number From number To number Ext
01 0000000001 9999999999
The standard setting is delivered as an internal number range allocation.

Activities:

Check whether the standard settings meet your requirements. If necessary, specify new number
ranges according to your requirements. Maintain the respective number ranges for the number
range groups you have created. Make sure that the number ranges do not overlap.

IMGMaterials Management Purchasing Discount in Kind (Discount in Form of Bonus

Goods) Maintain Discount-in-Kind Dependencies (Cond. Table)  Number Ranges for
Free Goods
Define Field Catalog

In this step, you define the field catalog for the allowed fields

Standard settings

The standard system contains the following fields:

BSTME Order unit
EKORG Purchasing organization
ESOKZ Purchasing information category
LIFNR Vendor
MATNR Material
WERKS Plant

IMGMaterials Management Purchasing Discount in Kind (Discount in Form of Bonus

Goods) Maintain Discount-in-Kind Dependencies (Cond. Table)  Maintain Discount-in-
Kind Dependencies (Cond. Table)  Field Catalog
Create Free Goods Tables

In this step, you create free goods tables. Check to what extent you can use the free goods tables
in the standard SAP R/3 System. You can display the free goods tables.

Before you create a new free goods table, you should check whether the existing fields of the
field catalog are sufficient for your requirements. If you want to use a field in discount
determination that is not provided with this usage in the standard system, you must add it to the
field catalog. You can only add fields which are contained in the tables KOMG, KOMK or
KOMP

Before you create a new free goods table, you should check whether the existing fields of the
field catalog are sufficient for your requirements. If you want to use a field in discount
determination that is not provided with this usage in the standard system, you must add it to the
field catalog. You can only add fields which are contained in the tables KOMG, KOMK or
KOMP.
 1. Create new free goods tables. To do this, copy a similar free goods table and proceed
as follows:

o Enter the name of the table that you want to create.

Note that you can only choose a name between 501 and 999. If you do not make
an entry here, the system automatically assigns a sequential number.

o Specify whether you want to create the table with or without a validity period.

o Specify the table type for the free goods table (for example pooled table).

o Enter a description for the free goods table.

o Choose the fields that are required for the free goods table from the list of allowed
fields that are contained in the field catalog and can also be extended there.

Generate the new free goods table.

2. Enter the free goods tables in the access sequences (see the section "Define free goods
types and access sequences").
In this way, you create the link between the type of free goods, the access sequence and
the free goods record.

IMGMaterials Management Purchasing Discount in Kind (Discount in Form of Bonus

Goods) Maintain Discount-in-Kind Dependencies (Cond. Table)  Create Free Goods
Tables
Enter

Select Generate
Display Free Goods Tables
IMGMaterials Management Purchasing Discount in Kind (Discount in Form of Bonus
Goods) Maintain Discount-in-Kind Dependencies (Cond. Table)  Display Free Goods
Tables

Define Access Sequence and Discount-in-Kind Types

In this step, you define access sequences and types of free goods. The access sequence is a
search strategy that the SAP System uses to find valid free goods records for a free goods type.
You specify an access sequence in every type of free goods. This defines which fields the SAP
System checks when searching for a valid free goods record.

Maintain Access Sequence

You group together all the free goods tables that are to be taken into account to define access
sequences.

IMGMaterials Management Purchasing Discount in Kind (Discount in Form of Bonus

Goods)  Define Access Sequence And Discount-in-Kind Types Maintain Access
Sequence
Define Free Goods Types
In this step, you create new free goods types. If you define your own free goods types and access
Sequences, then the key should start with the letter Z because SAP does not use this name range
in the standard system. You should not change the access sequences and free goods types that are
contained in the standard SAP R/3 System.

IMGMaterials Management Purchasing Discount in Kind (Discount in Form of Bonus

Goods)  Define Access Sequence And Discount-in-Kind Types Define Free Goods Types

Note:

NR00 is the standard free good condition type. Ensure condition types must be defined with T-
code M/06 and are assigned to required pricing procedure before using them for maintaining
condition record.

Define Condition Types

This step you define condition types. The condition types are used to represent pricing elements
such as prices, discounts, surcharges, taxes, or delivery costs in the SAP System. These are
stored in the system in condition records.

IMGMaterials Management Purchasing  Conditions Define Price Determination

Process Define Condition Types
Define Calculation Schema

In this step, you define the calculation schemas by including the condition type “NR00” in to the
calculation schema (pricing procedure).

IMGMaterials Management Purchasing  Conditions Define Price Determination

Process Define Calculation Schema
Thus, the condition type “NR00” has been added to the pricing procedure.

Define and Assign Discount-in-Kind Schema

In this step, you define the free goods schemas. You also assign the free goods schemas to the
transactions by specifying the dependencies between the free goods schemas and the purchasing
organization schema group the vendor schema group.

Maintain Free Goods Schema

In this step, you define a free goods schema.
In the free goods schema, you define which free goods types are to be taken into account and
their sequence. When determining the free-goods discount, the SAP System automatically
determines which free goods schema is valid for a business transaction, and takes the types of
free-goods contained in the schema into account one after the other.

IMGMaterials Management Purchasing Discount in Kind (Discount in Form of Bonus

Goods)  Define And Assign Discount-in-Kind Schema Maintain Free Goods Schema
Determine Free Goods Schema
In this step, you set the determination of the free goods schema.

IMGMaterials Management Purchasing Discount in Kind (Discount in Form of Bonus

Goods)  Define And Assign Discount-in-Kind Schema Determine Free Goods Schema
Master Data Setup

Material Master
In material master, under purchasing data, select the “Material qualifies for discount in kind”
indicator. If the material subject to discount in kind for only purchasing, then select the key “2”
for this purpose. Otherwise, select other options available (such as key “1” for purchasing &
sales, key “3” for only sales).
For material code 100265 “Material qualifies for discount in kind” is optional because this code
will be used in case Exclusive bonus.

Vendor Master
In vendor master, under purchasing data, mark the Grant discount in kind field.
Create Condition Record for Free Goods Determination

We need to create condition record for free goods for the combination of vendor, material, plant
and the purchase organization with the corresponding validity period. Use t code, “MBN1” for
the creation of condition record. The same can be created while info record creation also.
T code: MBN1 (For Procurement) or VBN1 (For Sales)
Select the standard condition type NR00 or any customized condition type of your requirement.
SAP providing standard condition type as “NR00” for Procurement and “NA00” for Sales.

Here, enter the minimum quantity to be ordered in order to avail the free goods / bonus goods
and the ratio of the quantity, free goods in the respective field. If it is Inclusive rebate, enter the
key value “1” in the free goods category.
Example:

Minimum quantity = 300 pieces Free goods quantity (Quantity of the Material on which free
good term is applicable) = 100 pieces Free goods agreed = 3 Stk. (Order qty 100: Free qty 3)

If Order quantity = 250 pieces: No free goods will be there as order quantity as not meeting the
minimum quantity criteria.

If Order quantity = 400 pieces: 12 pieces free goods,

= document quantity / free goods quantity * free goods (400/100*3=12)

Calculation type for determining free goods quantity:

The calculation rule defines the manner in which the free goods amount is calculated from the
free goods quantity, additional quantity and the document quantity.

The standard provides 3 types of calculation type

1) Proportional 2) unit-reference 3) whole unit

Example:
Free goods quantity = 100 pieces Additional quantity is =3 Document quantity is (Order
quantity) =280
If type is proportional (280/100*3=8.4 down ~8),

If type is unit-reference (280 200/100*3=6 for rest 80 qty =0, 6+0=6)

If type is whole unit that case free qty=0 because 280is not an number which is multiple
of 100)

Free goods: Percentage rate:

The percentage rate is calculated differently for the same quantity unit of free goods quantity and
additional quantity depending on whether the free goods are inclusive or exclusive

Free goods quantity (Order Qty) = 100 pieces (= N) Additional quantity (Actual free Qty) = 3
pieces (= Z)

Inclusive: Percentage rate = (Z/N)*100=3%

Exclusive: Percentage rate = (100/(N + Z))*Z = 2.91 %

Create Info Record for Free Goods

Business Transaction
Create PO to check how the free good functionality is working after activating necessary
configuration and maintaining master data.

Create a Purchase Order

Case:-Free good qty adjust with ordered quantity

 Create PO with “Inclusive “option.

Here you can notice, Order quantity has been adjusted with free quantity .free qty is a part of
order quantity here.
MAP = (2307048/400) = 5,767.62

Note:

If you will try to do GR for 200 qty, System will not change the free quantity accordingly in
same document. If any change is required you need to modify the PO itself.
Invoice document:

Negative case testing:

You can see here order quantity entered here is less than the minimum order quantity for free
which is set 300.

Here system is calculating free quantity as below because calculation tyepe (rule) is assigned
with value “1”.
(350/100)*3=10.5 nearly equal to 11.

Change in calculation type 2 (Unit –reference) and then try to create PO for 350 quantities.
Calculation: 340 /100=3.4 =3*free quantity =3*3=9

Change the calculation type to 3 (whole unit).

Here free quantity will be Zero because 350 is not a multiple number of 100.

Case:-Free good qty supplied as additional with ordered quantity

Click on the color marked button to switch over to exclusive. You can switch over between
“Inclusive” and “Exclusive” as per below screenshot.
Here you can notice PO quantity has not been adjusted with free quantity.

Free good as other material:

Free good condition can be maintained through T-code MBN1 or else same can be achieved
from Info record itself.
Create PO:
System has calculated free good quantity (200/10*5=100)

Negative test case:

Here for first line item system has not explored the free quantity because quantity is less than
100.system is not going to check other line item of the same material code for exploring the free
quantity.
Related Content
http://help.sap.com/saphelp_46c/helpdata/en/86/db2c7dd435d1118b3f0060b03ca329/content.htm?fr
ameset=/en/86/db2c7dd435d1118b3f0060b03ca329/frameset.htm&current_toc=/en/32/72369adc56d
11195100060b03c6b76/plain.htm&node_id=296&show_children=true#jump296

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