Free goods determination

FREE GOODS DETERMINATION
By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 1
The goods which we offer to the customer without charging, in relation to the main item
quantities.
In many sectors of industry, it is common to provide products free of charge, or not to charge
the customer for some of the goods sold when a customer purchases certain goods.
Ex: X – 100
Y – 20
Any customer if he purchase X product of 100 quantity he will get Y product of 20 quantity free.
Free goods will be classified into 2 types in SAP:
1. Inclusive Free Goods
2. Exclusive Free Goods
Now we will discuss the difference between both:
Inclusive Free Goods Exclusive Free Goods
 In inclusive the free goods quantity is
included in the order quantity.
Ex: X material of 100 quantity, customer will
get X material of 20 quantity free.
If customer places order for X material of 200
quantities, main item quantity becomes 160
and free goods quantity will be 40 quantities.
 In inclusive you can offer only same
material as free goods
 In exclusive the free goods quantity is
not included in the order quantity.
i.e., the free goods quantity is
excluded from the order quantity.
Ex: If customer places order for X material of
200 quantity then main item quantity
remains 200 and system determines free
goods quantity as 40.
 We can offer same material or
different material as free.
1. Inclusive Free Goods:
Inclusive further classified into 2 types.
i. Inclusive with item generation
ii. Inclusive without item generation
We will discuss the difference between both the types

Inclusive with item generation Inclusive without item generation
 X – 160 = 1,60,000
40 = -40,000
Delivery quantity : 200 (R100)
Billing quantity : 160 = 1,60,000
 The free goods item will be
determined as sub item.
 R100 condition type determines into
free goods line item and makes net
value zero.
 X – 200
i.e., 2,00,000
- 40,000
1,60,000 (NRAB)
 The free goods item will not be
determined as sub-item.
 NRAB condition type determines and
deducts the value of free goods from
main item value.
I. Configuration for Free goods: Inclusive with item generation
Free goods are determined based on condition technique.
a. Create Condition Table:
Path: SPRO > S&D > Basic functions > Free goods > Condition technique for free goods >
Maintain condition tables
Create Condition table in the combination of Sales organization and material.

b. Maintain access sequence:
Maintain Access sequence
The standard access sequence for free goods is “NA00”
Create access sequence, place the table and do the field mapping and save.
c. Maintain Condition Type:
Maintain condition type
The standard condition type for free goods is “NA00”
We create condition type and assign the same to the access sequence in the same step.
d. Maintain Pricing Procedure:
Maintain pricing procedure
The standard free goods procedure is “NA0001”
Create free goods procedure and assign the free goods condition type.

e. Activate Free goods procedure:
Activate free goods determination
In this configuration step we assign free goods procedure to the combination of sales area,
customer pricing procedure and document pricing procedure.
f. Item category for free goods item:

g. Determine item category for free goods item:
Path: SPRO > S&D > Basic functions > Free goods > Determine item category for free goods
item
This is the automatic item category determination for free goods.
h. Maintain condition type for 100% discount:
Path: SPRO > S&D > Basic functions > Free goods > Control free goods pricing > Maintain
condition type for 100% discount
i. Maintain pricing procedure for pricing:
Path: SPRO > S&D > Basic functions > Free goods > Control free goods pricing > Maintain
pricing procedure for pricing

Requirement for R100 is “55”. Requirement “55” checks that the pricing field in item category
should be “B”.
Alternate Base Type “28” will help to deduct the total net value of the free good item.
j. Set transfer of costs to main item:
Path: SPRO > S&D > Basic functions > Free goods > Control free goods pricing > Set transfer of
costs to main item
Check “cumulate cost” field.
This particular configuration step helps to transfer the cost of free goods item to main item.
This is the configuration required for free good determination.

 The T.Code for maintaining free goods master is “VBN1”
By default system proposes inclusive free goods screen.
 Minimum quantity is the quantity which customer has to place order to get eligible for
free goods.
 From quantity is the base for calculating free goods quantity.
In the above example, if customer places order for 100 quantities then he will get 10 quantities
as free.
 Are free goods means the free goods quantity which we are offering to the customer.
 Calculation rule we have 3 types of calculation rules for free goods quantity calculation.
 Pro rata
 Unit reference
 Whole unit.
Proportionate calculation is based on order quantity and from quantity.
Ex: For 10 quantities we are offering 1 as free goods. If customer places order for 180
quantities. How many free goods he will get?
10 = 1 180*1/10 = 18
180 = ? i.e., 18 quantities are free goods.

Unit reference in unit reference from quantity will be considered as each unit. The customer
has to place order for exactly the unit quantity to get the eligible free goods.
Ex: For 10 quantities, 2 quantities free. Then for 125 quantity how many free goods?
For 10 its 1
For 20 its 2 like wise
For 120 its 12
Here customer won’t get free goods for the remaining 5 quantities.
Whole unit means, if the order quantity is exactly divisible with from quantity, then only he will
get free goods.
Ex: 10/10, 20/10, 50/10 and not for 25/10, 35/10.
 Free goods category controls whether it is inclusive free goods or exclusive free goods
and it also controls whether it is with item generation or without tem generation. Here
maintain “1”.
 Free goods delivery control, this field controls how the free goods item will be
delivered. Maintain “E” and save. E – in relation with the main item.
Scenario: Inclusive with item generation
Create order and check whether system is determining free good or not.

In the above screenshot we can see that system is proposing 20 quantity as free.
Check whether the line item net value is zero or not.
Save the order and proceed with delivery and invoice.
This is how inclusive with item generation works. System will determine free goods as sub item.
Now we’ll check with inclusive without item generation.
II. Configuration for free goods: Inclusive without item generation
The configuration for free goods inclusive without item generation will be the same except with
the pricing procedure where we are going to use the NRAB condition type.
Path: SPRO > S&D > Basic functions > Free goods > Pricing for inclusive free goods without
item generation

Requirement “59” checks that the free goods category should be “3”.
Base type “29” calculates the free goods value and deducts it from the net value.
 The T.Code to maintain free goods master is “VBN1”
Scenario: Inclusive without item generation
Create order and check.
As it is inclusive without item generation, the free goods quantity is included in the main
quantity itself.
We’ll see the pricing of the item. Double click on the line item and check under conditions.

2. Exclusive Free goods: In exclusive the free goods quantity is not included in the order
quantity. i.e, the free goods quantity is excluded from the order quantity.
Ex: If customer places order for X material of 200 quantity then main item quantity remains 200
and system determines free goods quantity as 40.
We can offer same material or different material as free.
The configuration for exclusive free goods will be same. The only change lies in maintaining the
master record for free goods.
T.Code to maintain free goods master data is “VBN1”
When we enter into the free goods master, system by default proposes inclusive view

Click on exclusive and maintain the condition master for free goods.
For exclusive we can give same material or different material as free goods.
Scenario: Exclusive free goods
Create order and check
We can see that system is proposing different material as free goods in the exclusive scenario.
Go to line item of the free good and check the pricing for the same.

This is all about the free goods determination.

Free goods determination

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