Free goods in sap sd are the procedure where a business offers a plan where customers will receive free products when they purchase certain items in certain quantities. In this article, we will be covering free goods determined in SAP. After you’ve made those configurations, The system automatically produces a free product’s item in the sales order.
Free Goods in SAP refers to the practice of providing materials or quantities free of charge based on the order quantity. There are two types of Free Goods: Inclusive and Exclusive. Inclusive Free Goods are when the free goods quantity is included as part of the order quantity. For example, if a customer buys 10 units, they will receive 1 unit for free. In this case, the customer is charged for 9 units, and 1 unit is given free. Exclusive Free Goods are when the free goods quantity is in addition to the order quantity. For example, if a customer buys 10 units, they will receive an extra
Table of Contents
What is free goods in sap sd?
Free items are employed by a variety of companies to draw customers. They may be used as free samples of goods to test the product’s popularity among customers or for a promotional event in which free products are offered to customers who buy a number of products. Other possible uses for free products are to provide in terms of service sectors as warranties and charity purposes.
What is the difference between promotional and sample goods?
The major difference between samples and promotional items is that promotional products can only be activated and distributed to customers who have placed an order for sales. While promotional products are not charged, they are included in an order that the purchaser must eventually pay. However, with regard to sample goods, there is no precondition for them to be provided. There is no exchange of payment except if the purchaser was subjected to the freight.
In today’s competitive business environment it’s a standard custom for businesses to offer their services or products at no cost. This practice is known as “Free Good” in Consumer Goods & Services Industry. The idea behind this concept isn’t without a reason; it differs from businesses and the goals they’re trying to achieve. In this instance, an example, a company recently created a brand new line of products. Before it is able to be effectively marketed and sold, exposure of the product to the consumer community is essential to result in increased awareness. One way to do this is to offer free products that are not commonly used as sample products. However, other businesses might offer free items to motivate customers.
For instance, a business has decided to establish a policy that provides customers with free goods each when they place an order for a specific amount of items. The intention is to inspire the client to make an additional purchase to their original purchase. There are many reasons companies might decide to provide free items, many of which fall within one of the below four categories.
- Sample goods
- Promotional
- Warranty
- Charity.
The fourth isn’t as popular however, it does exist and is worthy of being recognized for. In simple terms, a charity product is a donation that is tax-free that a company makes to the client or an organization. A warranty is an item or service the company is obligated to provide under contract to the client.
The most sought-after type of freebies for Consumer Goods companies is sample items. They are a common practice for companies that wish to enhance or keep customer relationships and increase awareness of their products or even to draw potential new customers. Although samples are provided to customers in small amounts at a time, this kind of process can be quite a costly venture for a company if they decide to give samples to a large portion of their customers. The business is not just being charged for the product but may also be charged for the expense of shipping.
The type of free goods
Inclusive Free Goods
The buyer only pays for the items ordered. The remainder of the items is provided for free. Two of the eight eggs are for free. Eight will be delivered if you buy eight eggs, and there will be no charge for two eggs. In this instance, you’ve purchased an entire bonus amount.
Exclusive Free Good
The buyer pays for the products ordered and receives extra items for free. The exclusive bonus amount can also be referred to as exclusive free items and implies that, as in combination with the, a specified quantity of goods can be guaranteed as free items. Also, the quantity delivered is greater than what was ordered, and there is no cost for the extra quantity that is given.
Exclusive different material for Free Good
The free materials that are provided as items do not need to be identical to the items ordered. When a customer places an order for 3 large trays of eggs, the customer would be offered a chicken for free!
Process Free Goods Determination in sap sd
The free item is automatically determined from the SAP according to the data recorded within the master. But, the end-user has the option of accessing the sales order’s document to initiate the free good manually. This is accomplished by referring to one of the line items on an order, or by creating an order and identifying it to a particular item type that identifies the item as an item that is free.
The second of the procedures described earlier is utilized to issue sample products. The system is not able to be able to access the master data or the control parameter that is contained in it. The number of free goods may be adjusted until delivery is completed for the purchase. The system will send an error message in the event that the quantity of goods free is greater than the number of items ordered. Once a free good agreement has been completed and the purchase is ready to ship, it’s duplicated automatically in the delivery documentation.
The free good determination is not available in the delivery process without reference to an order for sale. Along with updating, the delivery document is also added into the billing document as items that are free of cost. Any items marked as free are classified as either discounted or free items. Important integration points that should be considered when customizing we customizing SAP SD Solution:
- Determination is dependent on customizing settings within SD fundamental functions.
- Determination requires the remain in the master records
- Free products are only available by sales orders that have a document category C
- Free products are given to promote the free materials.
- The material that is free of charge is treated separately from the item that is ordered.
- Free products are not eligible by the government for delivery without reference to an order for sale.
- Cost value can be calculated as the price of the material that is free.
- The free items may also come in the form of discounts to the value of the item.
- Value The goods amount is an amount proportional to the sold amount.
For delivery, We have the ability to decide if the free items are handled separately or if they are copied only to the delivery in order to make partial delivery or for full delivery.
Free goods Configuration in sap sd
Maintain fields catalog
The field catalog contains the fields that are can be used for the Condition table. This is an optional task for incorporating additional fields in the condition table. if we want to use the customer-specific fields that are not contained in the field catalog. To include customer-specific fields in the field catalog, Please follow the below steps to include a new field in free goods determination.
IMG -> Sales and Distribution -> Basic functions -> Free goods -> Condition Technique for Free goods ->Maintain field catalogue(Tcode-OMA5)
Maintain Access Sequence
This task describes how to create Access Sequences for Free Goods. Access sequences are assigned to condition types that query the condition tables to find valid condition records. access sequences are lists of the access keys for condition tables. Each access key consists of a combination of fields and represents the access key for one particular condition table. The sequence of the access keys determines the order in which the condition tables are accessed. As a rule, the database is searched from the most specific to the most general
SAP Customizing Implementation Guide ->Sales and Distribution -> Basic Functions -> Free Goods ->Condition Technique for Free Goods ->Maintain Access Sequence
Transaction Code -V/N1
Maintain condition tables
If the existing condition table meets the customer-specific requirement, we need not create a new condition table. This is an optional task for incorporating an additional condition table. if we want to use the customer-specific table that is not contained in the Condition table. To include a customer-specific table in the condition table, Please follow the below steps else we can ignore these steps
IMG ->Sales and Distribution ->Basic functions -> Free goods ->Condition Technique for Free goods ->Maintain condition tables
Transaction Code -V/N2
Maintain Condition Type
By specifying a condition type the various conditions in the system are differentiated from each other and grouped together into condition classes such as prices, discounts/surcharges, taxes, and expenses, etc. The condition type controls below behavior of a specific condition type.
- The scale basis for the condition scale (i.e. amount, quantity, weight, volume).
- The use of normal or graduated scales.
- The calculation type (i.e. percent of initial amount, fixed amount, rate per unit of measure, weight, or volume).
- Whether the system treats the condition type as a discount or a surcharge.
SAP Customizing Implementation Guide -> Sales and Distribution ->Basic Functions ->Free Goods -> Condition Technique for Free Goods -> Maintain Condition Type
Transaction Code -V/N4
Maintain Free Goods Determination Procedure
A pricing procedure defines a group of condition types in a particular sequence. It also determines which subtotals appear during pricing, to what extent pricing can be influenced manually, which basis the system uses to calculate percentages discounts, and surcharges and which requirements for a particular condition type must be fulfilled before the system takes the condition into account.
SAP Customizing Implementation Guide -> Sales and Distribution ->Basic Functions ->Free Goods ->Condition Technique for Free Goods -> Maintain Pricing Procedures
Transaction Code -V/N5
Determine Item Categories for Free Goods
Specify relevant entries for all order types and item categories for which you want to use free goods determination. Maintain the following entries
The Item Category for Free Goods(standard TANN) is determined as below. The determination combination has Usage as FREE and a Higher Level Item Category as TAN
IMG > SD > Basic Functions > Free goods > Determine item categories for free goods items
In the standard system, pricing for free goods is deactivated. In this SPRO IMG activity, We could activate pricing with the value ‘B’. In this way, the system determines a price which is then removed by a 100% discount during the next IMG activities.
Activate Free Goods Determination
In order for SAP to recognize which customers free goods apply to, assigning the procedure to specified sales organizations, channels and divisions will activate the process. In this configuration, variances can be created for all relevant sales areas. Once they have been specified the end-user can then assign each to the free goods pricing procedure.
SPRO -> Sales and Distribution ->Basic Functions -> Free Goods ->Condition Technique for Free Goods-> Activate Free Goods Determination
Transaction Code -V/N6
How does systems calculate free goods?
Control Free Goods Pricing
Let’s understand pricing procedure controls in Free goods determination in sap sd
Maintain Copy Control
We maintain the copy controls at the item category level. The control with the Structure/New FreeGoods’fieldis most relevant for free goods. Here we can control whether the free goods should also be transferred when we copy from one order to another, or whether we should re-determine them
IMG > SD > Basic Functions > Free goods > Maintain copying control
Maintain Free Goods Condition Data
In these steps, we need to create master data conditions for free goods using transaction code (VBN1)
Hope these articles cover all procedures to set up Free Goods in SAP. Here are a few more articles that will assist to understand new technology
Conclusion
Configuring free goods in SAP SD is a crucial process that requires attention to detail and proper setup of master data. By understanding the different types of free goods and ensuring accurate determination, you can effectively enhance your sales and distribution processes.
