Exemptions from discounts and surcharges

[former_member187506]

I work for an entrepreneurial company. We do quite a range of business across many different industry sectors. We support many different types of business deals. One of our biggest challenges is managing pricing.

Wherever possible we try to set up our pricing calculation based on the most general attributes. For example: Sales Organization \ Price list type.

Unfortunately, our business is not that simple. We may have situations where the price may need to be calculated based on the customer\ material, or customer\ plant\ material combinations, etc... This is not a problem in the standard system. We've just arranged the access sequences in the appropriate manner.

Our challenge comes in with the range of discounts and surcharges. Typically, management comes to us and says, "We need to add a surcharge for all customers who buy this product. There are 5,000 customers this would apply to. "

The approach has been to create a new condition type if necessary, and to organize the access sequences in as general as possible a manner, to minimize maintenance, in order to apply the surcharge.

After a few hours, a few days, or a few weeks, the sales leadership realizes 10% of the customers need to be exempted from this surcharge. What's the best approach to do this?

We have traditionally created a new access sequence for customer\ material and added a new condition record for the combination at a rate of $0.00. The new access is then assigned above the access used to apply the surcharge. The system then finds the $0.00 value record before any others, applies it, and stops. The customer has the surcharge condition applied, but at no value. If the value is $0.00, then the record does not print on any customer facing output. The customer never sees the $0.00 charge, and we satisfy the sales management requirement.

The downside of this approach is as follows:

• The pricing screen in the sales order gets cluttered with $0.00 value records. (i.e. Fuel surcharges, product surcharges, location surcharges, internal statistical conditions, etc..) Many of these may apply on a single order. It gets confusing for customer service and others trying to read the pricing screen.

• When a pricing report is run we inevitably get the question why are there so many records with $0.00 value? More confusion and ultimately IT support time.

• It becomes difficult to identify what the final price to a customer is without simulating an order. You must create\simulate an order to get at the net price the customer will pay. Now we need to introduce the SAP quotation process ( we currently don't use it), or code a program to work up a price. More IT development and or support time.

• Numerous other reasons I can't think of at the moment

The simple approach would be to go back to sales management, tell them to forget about the discounts & surcharges, just work up a net price and be done with it. Unfortunately, the funds need to be channeled to different account assignments. Accounting wants transparency in the account assignments, and likes to see the application of the charges and discounts separated by condition types.

Caught between a rock and a hard place, what is a poor SD guy to do? Is there a better way to deal with the exemptions, minimize maintenance, and reduce the level of confusion and noise?

Any thoughts are appreciated.

[Former Member · Accepted solution]

If I have understood your requirement - you want to remove condition types of zero values from the pricing tab in order.

If you make the value of a condition record Zero - then it appears in order with blank in value field

If you change the validity dates to make sure that it does not apply in your order then the condition type itself will not appear.

So in VK12 - put valid to date as some past date.

[former_member187506 · Accepted solution]

Perhaps I am not clear.

The objective is to minimize maintenance. So a general access is used ie. "Sales org/material group " to apply the surcharge.

There a a small number of customers that may be exempted from this charge. How can we prevent these customers from having the surcharge applied when they order a product that is a part of a surcharge-able material group.

Thanks

[Former Member · Accepted solution]

Hi,

It is not advisable to go for a general access. It should be always from more specific to more general.

It seems that business process involves more functionality in pricing.

You can group your customers. You can use the fields like Customer group, Price group, Price list. If you take Customer group, you can maintain u2018nu2019 number of customer group say A, B, C , D, E, F, G, H, I , J. Create an access like Sales org / Distribution channel / customer group / Material group.

If your client wants to apply 5% surcharge to all customers, create condition records for all (A to J) customer group. If he wants to exempt some of the customer group, change the condition records for that particular customer groups. The client should be given be advice to go for any change in pricing according to the customer group or any other suitable fields (Price group or price list)

Regards,

K Bharathi

[former_member187506 · Accepted solution]

I agree with your approach. Unfortunately, management is creative with surcharges and discounts. There are many different reasons and circumstances for applying a surcharge or discount. A discount/surcharge may be applied to a specific material group, it could also be based on document currency, shipping plant , material hierarchy, or any other bit of data contained in the order, material or customer master.

A single field like customer group would not provide the level of flexibility to address complex and varied requirements.

Given the complexity of our discount structure the $0.00 value condition record may in fact be the easiest understood, and lowest maintenance solution to a complicated problem.

[Former Member · Accepted solution]

hi, I can see there are numerous variables in deciding a surcharge/discount in your clien'ts business. Did you try the manual way?

Create as many tables as possible for different scenarios and finally make them all manually changeable with limits.

Also, give the client a report which tracks all such manual changes so they can use it and explain it during audits.

Regards,

Raghu.

[Former Member · Accepted solution]

Hi,

I understand the complexity involved in your business scenarios. I have explained by grouping the customers, you can reduce the burden of maintaining the condition records. You can explore grouping of the customer and material; thereby you can maintain the condition record based on the grouping. The client also expected to work towards finding the solution.

Regards,

K Bharathi

[former_member187506 · Accepted solution]

"The client also expected to work towards finding the solution"

Unfortunately, there is no magic bullet on the part of our sales management. They are a creative lot. The percentage of excemptions is typically much smaller than the number of customers the discount and surcharge would apply to. We manually apply the $0.00 value record to a Sold-to / material access to prevent the more general Sales org/ material group from applying.

Manually identifying the specific customer / material group values would be way more work than we could support.

[Former Member · Accepted solution]

Hi,

If the client can firm up a logic and certain condition tables can be identified/ formed to meet the requirements, it is fine.

If they are creative and keep on coming up with new probabilities, it is better that they maintain the values manually.

[former_member187506 · Accepted solution]

Peeyoosh:

I like your approach. Make them feel the pain when they step out of the box.