SAP S/4HANA Condition Contract Management

SAP S/4HANA Sep 30, 2022

Table of Contents


As a reputed establishment that respects its customer, what would be the best thing that you can give to your valued customers? You can provide the best customer service. But apart from that, there is one thing you can give to your customer, which makes them happy and feel special. That is discounts. Specialized discounts to your customers can make them feel better, that they have saved some money because they do business with you.

SAP S/4HANA, which is the most efficient ERP available in the market, provides huge advantages to the organization with its improved and new features. It also has such features in its Logistics module where the organizations can perform and monitor their supply chain management operations.

This article will provide you, a brief explanation of the Sales rebates, S/4HANA Condition Contract management and how you can plan your migration to S/4HANA which is the first step towards the S/4HANA implementation.

SD Rebate Processing:

In organizations, we give special discounts to customers under certain conditions like sales volume, order value, and type of order in a form of rebates. These rebate indexes are predefined by the organizations.

SAP ERP system had a specific function that automated this discount process, which was known as SD Rebate Processing. This function in the SAP ECC system helps organizations process their sales rebates. In that traditional SD Rebate processing, organizations can make their rebate conditions and they can run the conditions on their existing SAP ECC system to process their rebates.

Limitations of Classic Rebate Processing:

The classic SD Rebates, over time, had some limitations, due to the vast amount of data processed. The key limitations that the traditional SD Rebates have are,

  • Rebate indexes are extensive.
  • If there are any changes in the Rebate index, then the users are supposed to rebuild the index newly.
  • Flexibility in the determination of business volume is less.
  • Rebate data is locked throughout the organization when rebuilding the index.
  • System performance is affected by the large volume of data.

Over time, these limitations in the classic SD Rebates reduce the efficiency of the rebate processing of the organizations.

S/4HANA Condition Contract Management:

With the upgrade of the entire ERP system, which is SAP ECC to SAP S/4HANA, the efficiency of the SAP ERP system has improved many times. Thanks to the HANA database, which is carefully designed and developed for speed, efficiency, and security.

This upgrade covers all the sub-parts of the SAP ERP system, which is not limited to SD Rebates. Now the new S/4HANA system no longer supports the classic SD Rebate processing. It is now replaced by a new module called Condition Contract Management in S/4HANA Settlement management.

Parts of S/4HANA Condition Contract Management:


The first part of the S/4HANA Condition Contract Management is customization. We can’t be able to process sales rebates in S/4HANA if we don’t configure or customize our system according to our requirements.

Thus customizing our S/4HANA Condition Contract Management interface will enable us to set up our interface.

Data Sources:

Data sources are the key part of the S/4HANA Condition Contract to process the sales rebates in the S/4HANA system. These data sources might include, sales orders, purchase orders, deliveries, invoices, goods movements, settlement management documents, external systems, and POS data.

These data sources help the S/4HANA Condition Contract module to perform the rebate operations seamlessly.

Conditional Contracts:

This is the crucial part of the whole segment. It is here, that the users or the organization specify the rebate information. Information like settlement calendar, business volume selection criteria, and rebate conditions are defined here.

After entering the basic parameters, we run the settlement program. This program determined business volume, which calculates the prices and creates settlement documents.

Settlement Documents:

In the end, the new S/4HANA Condition Contract module created a settlement document, which has detailed information about the settlement, and this document can also act as a reference to G/L account posting.

Advantages of S/4HANA Condition Contract Management:

Migrating from SAP ECC classic SD Rebates to S/4HANA Settlement Management gives various advantages to organizations, which enables them to perform operations effortlessly and efficiently.

  • Enhanced Settlement Management functionality.
  • Common functionality for SAP S/4HANA Sales and Procurement.
  • More flexibility since no need to rebuild the rebate index in case of a retroactive update.
  • Reduced data footprint and memory.
  • No performance reduction in sales processes.
Advantages of S/4HANA Condition Contract Management
Advantages of S/4HANA Condition Contract Management

Start thinking about your transformation to S/4HANA:

In this current digital era, every organization which runs its business digital updates itself to meet the current standards with respect to the operations and results of its business. It is important to meet the highest possible efficiency rate to keep ourselves in the business. Therefore, constant upgradation is necessary to maintain our existence.

When it comes to an organization’s operations, an update is very essential. So, updating to the current SAP system, helps organizations unleash the maximum potential of the SAP system, which comes in the form of S/4HANA. Improved features in SAP S/4HANA help organizations to enhance their operations.

But when you decide to implement S/4HANA on your current enterprise, you have to understand that it is a transformation journey where, as an organization you have to face some challenges. So, understanding the risks in S/4HANA transformation is very important, before you plan your journey toward S/4HANA.

Where should I start?

Every organization which has made its decision to upgrade its current SAP ECC system to SAP S/4HANA has this one question, ‘Where should I start?’

Before answering this question, enterprises have to understand that SAP S/4HANA migration is not a simple update to the existing system. It is about changing the complete digital core of the enterprise that currently runs on the SAP ECC system. So knowledge of how to start your S/4HANA transformation is essential for organizations.

Creating a proper roadmap for the S/4HANA migration is the first step that organizations can do. This plan helps the organizations understand the underlying challenges that they may face during the transformation process.

Once you finalize your transformation plan, choosing the right tool for your migration process is the next step toward S/4HANA transformation. Here, KTern.AI brings you a tool that is perfectly curated for your transformation.

How does KTern.AI accelerate your S/4HANA transformation?

KTern.AI is a DXaaS suite that helps organizations perform their digital transformation effortlessly and effectively. KTern.AI is a single suite equipped with five modules, where you can perform various digital transformation operations. This enables the organizations to have control and transparency on their S/4HANA migration process.

KTern.AI, built on top of SAP Activate methodology, makes the S/4HANA transformation easy for organizations. KTern.AI is equipped with the following five different modules which are,

  • Digital Maps
  • Digital Projects
  • Digital Process
  • Digital Labs
  • Digital Mines

These five modules of KTern.AI covers various phases of digital transformation from system assessment to optimization. This enables the users to perform all digital transformation operations under one unified platform.

Starting from Digital Maps, which connects to the existing SAP ECC system and performs various assessments from landscape to timeline helps the organizations understand their existing SAP ECC system before the S/4HANA transformation.

Planing the S/4HANA transformation can be done with the help of Digital Projects and with Digital Process the users can orchestrate the digital transformation projects.

Digital Labs enables the user to automate the testing process of digital transformation operations. Optimization of the projects can be done with the help of the insights, the users get from Digital Mines.

Ktern.AI helps users to have transparency throughout the S/4HANA transformation process. It also enables the users, to reduce the cost of their transformation operations.

5 Modules of KTern.AI
5 Modules of KTern.AI

Stat your S/4HANA migration with KTern.AI:

S/4HANA’s latest features enhance the efficiency of the organization’s operations in all domains of its ERP system, including the way the organizations perform their Sales Rebates in S/4HANA Condition Contract Management. Therefore, migration to the latest version is a key step that an organization can make, to run its business more effectively. Since the transformation requires a high level of planning and effective process execution, the enterprises are supposed to choose a powerful tool to reduce the challenge they might face throughout the transformation process.

An all-in-one feature of KTern.AI is curated exclusively for the organization to have such an effortless transformation process. To know and understand the features offered by KTern.AI, there is a demo version available for the users to have a detailed view of the platform. Want to learn more about us, then feel free to contact us. We are always here to support your organization’s transformation process.