Pricing Procedure

[oluwatosin_oladipo]

Hello All,

Kindly help with how to configure the following scenario.

Material A has Gross Price X, from which tax A and B are deducted. Instead of using Net price and adding up the taxes on the net price, my client would like to make use of Gross price, and then deduct the taxes from the gross price.

Regards

[oluwatosin_oladipo]

Thank You all for your input. My issue has been solved now, used the different ideas from everyone and found my final solution.

Regards

[mahendra_jani3]

Hi Oluwatosin,

It's great to know that your issue is resolved.

Will you mention here for everyone's benefit that what exact idea you have used?

Regards,

MJ.

[former_member182378]

,

Members have given good input to this thread!

I request you to clarify the following -

Please answer below questions -
1. How is gross price calculated?
2. Does gross price include the tax? (How do you calculate tax amounts?) 

The above is one of the important points in this requirement.

[oluwatosin_oladipo]

Hello Mahendra,

Below is how  I configured this requirement

Step	Ctyp	FRO	TO	SUTOT	REQT	CALTY	ACC
10	PB00			1	2
20	MWSI	10	10		10		MW2
30	MWST	10	20		10		MWS
40	PNET					25	ERL
50	TOTAL	10	10

[oluwatosin_oladipo]

The Gross price is fixed by the Company and Yes the tax is inclusive.

Regards

[former_member182378]

Oluwatosin,

Thanks for updating in this thread the final pricing procedure!

Note - step 30 MWST, the base value is PB00 + MWSI.

Or should this be (base value) PB00 only?

One comment for All -

PB00 value is the base value to calculate the tax (MWSI).

The requirement is to get the value of PB00 minus taxes.

But it does not mean that Gross price (PB00) is price including of tax.

after going through the OP's pricing procedure (Step 20 MWSI), I hope you understand my question to your post and the reason why I said that your "PB00 - Price incl. Sales Tax" is an assumption.

[mahendra_jani3]

Hi Oluwatosin,

The Gross price is fixed by the Company and Yes the tax is inclusive.

As you have mentioned that your Gross Price is tax inclusive, I will request you to go through my discussion with TW about using Calculation Type and reversal Pricing impact on finale values.

As per this logic, Company will end up paying more tax. Also check with your Finance Department, Do they take Gross Price as base for calculation Taxes and what formula they are using currently?

Regards,

MJ.

[oluwatosin_oladipo]

Yes step 30 MWST, the base value is PB00 + MWSI.

Regards

[oluwatosin_oladipo]

Thanks for the input, the gross price is the base for tax calculation.

[mahendra_jani3]

Hi Oluwatosin,

Make below settings in your pricing procedure:

Assumption: Your Gross price will be maintain in VK11 at Item level.

So

Step 10      ZPR1 = 300 (+Ve) (Gross price) (maintained in VK11)

Step 20      ZMW1 = 5% (-Ve) (Tax) (Logic (300/(1+(5/100)))

Step 30      ZMW2 = 2% (-Ve) (Tax) (Logic (300/(1+(2/100)))

• Create above 3 condition type as Statistical condition type in Pricing Procedure.
• Create Calculation type Routine with logic given by Client. (Above is an example of reverse calculation)
• Assign Routine next to Tax Condition types.

Step 40     ZPR2  (From 10 To 30) (+Ve)

Step 50     ZMW3 (From 20) (+Ve) (%) (Maintain record with 100%)

Step 60     ZMW4 (From 30) (+Ve) (%) (Maintain record with 100%)

Above setting will give you your desired result.

Do let me know if I have Misunderstood your requirement or you need any clarification.

Regards,

MJ.

[Former Member]

Hi

Oluwatosin,

kindly highlight, the how pricing will behave in Billing or Client required the Bill Invoice?

regards,

Vikram

[mahendra_jani3]

Hi Oluwatosin,

Did you try suggested process by me?

This will manage your desired requirement and your Values will be hitting respective G/L accounts.

Do let me know if you need any more inputs.

Regards,

MJ.

[oluwatosin_oladipo]

Yes I have simulated your response, Still not giving me the desired result, Kindly see my screen shots and response up there and provide any input which you might have.

Also, Kindly expatiate on the Logic of Step 20 and 30 you mentioned above

Thank You

[mahendra_jani3]

Hi Oluwatosin,

I went through your Screen shot also I had face similar requirement in my project.

• In Below logic I have tried first to calculate individual value of Taxes based on Reversal Calculation in Statistical Condition type
• Second I am just copying those values to Actual Condition types.
• As per your scenario you need total 6 Condition types (3 Statistical and 3 Actual)
• For copying price, I am suggesting to use % condition types with 100% value.

I have given how your pricing will be look like, what exact Logic you need to write in Calculation type and how the calculation will work.

I have tested this and it works fine, you can simulate this logic in Excel sheet as I have shown.

This will fulfill your requirement.

Do let me know if you need any input.

Regards,

MJ.

[j_mathur]

Hi Oluwatosin,

Standard SAP will need to have the net price and than taxes are calculated based on the rates maintained in FTXP or the country specific Tax Calculation Procedure (e.g. Brazil).

In this case if you want to bypass the standard SAP process than you must have a good reason and you must also let the client know about the maintenance issue this may create in future.

if the tax values need to be calculated just based on the gross price, you will need to develop a calculation routine for that particular tax condition type.

Jitendra

[former_member186385]

Hi,

How you will get the Gross price to the order ?

will you input the value manually ?

If so, then you can create a tax conditions with Plus/Minus as Negative and try.

PR00	300
ZMW1	-20
ZMW2	-30
Total	250

[jpfriends079]

This can be handle through Calculation type - H: Percentage included for your tax condition types(refer std condition type MWSI - Output Tax). For better explanation with example, refer following discussion: Calculation Type - H: Percentage Included

I hope that should be helpful to you. If you still have same concerns, please do revert back.

Cheers, JP

[oluwatosin_oladipo]

Kindly help me understand better with the following scenario, how do i implement using calculation type H.

PBOO - 1000

MWSI - (-4%)

MWST- (-16%)

TOTAL - (1000)

Thta is how my invoice should look like, how can i implement this?

[jpfriends079]

The information provided is not clear.

Anyway, based on my understanding, your pricing procedure should look similar to following:

Step	Ctype	From	To	Subtotal	Reqt	Cal Type	Condition Amount	Calculation	Condition Value
10	PB00 - Price incl. Sales Tax				2-Item with pricing		1000	1000 x 1 EA	1000
15	Net Price with tax	10		1-Carry over value to KOMP-KZWI1
20	ZMW1 - 4% Tax (This is tax condition type, which can be copy of std tax cond type MWSI Where, calculation type as H)	15			10-Plant is set	16-Rounding the total	4%	4% of 1000	40
30	ZMW2 - 16% Tax (This is tax condition type, which can be copy of std tax cond type MWSI Where, calculation type as H)	15			10-Plant is set	16-Rounding the total	16%	16% of 1000	160
40	Total Taxes	20	39					Total of ZMW1 & ZMW2	200
50	Gross Price Excluding Taxes					25-KZWI1 minus tax			800
60	Total Price	10							1000

If you still have any concern, then please elaborate your pricing with calculation and figures.

Cheers, JP

Message was edited by: Jyoti Prakash

[oluwatosin_oladipo]

Attached is the screen shot of my conditions screen in the sales order, I simulated your example and still do not have the desired result. What I would like is :

Gross Price (PB00) which includes the tax amounts to be the Total Paid by the customer i.e amount debited to the customer

Tax amount to be credited to respective GL accounts

Revenue account to be credited with Gross amount excluding tax.

Kindly help with your input, Thanks for the help so far.

[jpfriends079]

Can you share your screenshot of MWSI & MWST from Transaction V/06?

Ideally, the config of tax condition type should be

Also, check some pricing procedure changes I made in my initial response. Those are added in Blue color font.

Thanks, JP

[oluwatosin_oladipo]

Thia is what I have configured. I expect the Customer Account to be Debited with the Gross Price, and the Revenue Account to be credited with Gross Price excluding Tax.

How can I achieve this? Because the account posting is still wrong . I have also changed calculation type to 'H' for Tax Condition Types.

   

[jpfriends079]

Let me re-post the pricing procedure(Tax included in price) with account key for your reference.

Step	Ctype	From	To	Subtotal	Reqt	Cal Type	Account Key	Condition Amount	Calculation	Condition Value
10	PB00 - Price incl. Sales Tax				2-Item with pricing			1000	1000 x 1 EA	1000
15	Net Price with tax	10		1-Carry over value to KOMP-KZWI1
20	ZMW1 - 4% Tax (This is tax condition type, which can be copy of std tax cond type MWSI, Where, calculation type as H)	15			10-Plant is set	16-Rounding the total	MWS	0.04	4% of 1000	40
30	ZMW2 - 16% Tax (This is tax condition type, which can be copy of std tax cond type MWSI, Where, calculation type as H)	15			10-Plant is set	16-Rounding the total	MWS	0.16	16% of 1000	160
40	Total Taxes	20	39						Total of ZMW1 & ZMW2	200
50	Gross Price Excluding Taxes					25-KZWI1 minus tax	ERL			800
60	Total Price	10								1000

PS: After each configuration change, test with a newer sales cycle, new sales order.

Cheers, JP

Your screenshot are not visible, please also add your configuration of your tax condition type.

[former_member182378]

Oluwatosin,

my client would like to make use of Gross price, and then deduct the taxes from the gross price.

Price condition types PB00, ZPB0

Tax condition types MWSI, MWST

Discount condition types ZWSI, ZWST

Descriptions step 15 and 70

Pricing procedure -

10 PB00 - statistical

15                Gross price - from 10

20 MWSI - from 10; subtotal 6

30 MWST - from 10; subtotal 6

40 ZWSI - from 20

50 ZWST - from 30

60 ZPB0 - from 10

70                Gross minus Tax - from 40, to 60; subtotal 2

[former_member182378]

JP,

Comments on your post -

Step 10: PB00 is not Price incl. Sales Tax.

PB00 is gross price. In other words only the price (without discounts, surcharges etc.)

Step 15: Net price with tax -

How do you get Net price with tax, just as the next entry after step 10: Price incl. Sales Tax?

[jpfriends079]

TW

Its nice that you followed my responses. But, don't blindly follow other response. Before putting cross question to other respondent, did you try to check OP's initial requirement.

make use of Gross price, and then deduct the taxes from the gross price.

But, thanks for pointing out that PB00 ought to be statistical.

How do you get Net price with tax, just as the next entry after step 10: Price incl. Sales Tax?

If your price is included with Tax, then it's Net Price. Correct?

For me PB00 is Price including Tax.

Thanks, JP

[oluwatosin_oladipo]

Should PB00 be Statistical? If it is not statistical, there is error in account determination, and if it is statistical, there is error for net price.

[jpfriends079]

Yes, PB00 should be statistical. And that is already suggested by TW.

Thanks, JP

[former_member182378]

JP,

did you try to check OP's initial requirement.

Yes! I did check the OP's initial requirement.

In your previous post you highlighted the essence of the requirement, from OP's post -

make use of Gross price, and then deduct the taxes from the gross price.

Note - That I had highlighted the exact same part, in my post before I asked you for more clarification.

Thus I had read and clearly understood the requirement from OP's post.

The requirement is Gross price minus tax!

That does not mean that Gross price includes taxes. This is your assumption.

It could be right or wrong. The OP could clarify that.

[former_member182378]

Oluwatosin,

I suggest 

1. get a clear understanding of the make-up (logic) of the pricing procedure,

2. create the pricing procedure in an excel sheet. (like JP, MJ have done)

3. finally go to SAP and try it out.

1. Logic of the pricing procedure -

Please answer below questions -

1. How is gross price calculated?

2. Does gross price include the tax?

3. Apart from the requirement Net value = Gross price - Tax

4. Are there any discounts, surcharges?

[former_member182378]

Oluwatosin,

I has suggested a pricing procedure, below I shall give some more explanation about the same -

Price condition types PB00, ZPB0
Tax condition types MWSI, MWST
Discount condition types ZWSI, ZWST
Descriptions step 15 and 70
Pricing procedure -
10 PB00 - statistical
15                Gross price - from 10
20 MWSI - from 10; subtotal 6
30 MWST - from 10; subtotal 6
40 ZWSI - from 20
50 ZWST - from 30
60 ZPB0 - from 10
70                Gross minus Tax - from 40, to 60; subtotal 2

1. Prices -

The gross price is PB00.

In order to subtract gross price from tax, I have got the PB00 value, and kept it in condition type ZPB0.

Now if both condition types PB00 and ZPB00 signify the same - gross price, then one has to be made statistical or else gross price would be calculated twice!

That would be incorrect!

2. Taxes -

Taxes are MWSI and MWST, these values shall be calculated on the gross price PB00.

Therefore, field From = 10

3. Requirement = Gross price - Tax

Tax condition types values shall populate the sales order in field Tax (below the field Net value).

These tax values have to be "copied" in to discount condition types.

This is done by discount condition types ZWSI, ZWST.

For both these condition types, condition record has to be created - with 100%

So, the two tax condition values shall be copied in negative sign in discount condition type ZWSI and ZWST.

Now sum ZPB0 + (ZWSI + ZWST) = Gross price - (Tax amounts, which has been assigned to discounts).

please comment on the above pricing procedure.

I think calculation types, which you used would not be required.

[mahendra_jani3]

Hi TW,

Below are points which I have observed:

• As ZPB0 is at step 60 and It is Price, all above condition types will become statistical. So It's Step number needs to be changed.
• Ultimate Purpose is to post 279 $ so that will need some condition type I believe that is not there.
• See below calculation result as per your mentioned Pricing:

10) PB00      = 300 $

20) MWSI      = 5% = 15 $

30) MSWT      = 2% = 6 $

40) ZWSI     = -15 $

50) ZWST     = -6 $

60) ZPB0      = 300 $

70) Gross - Tax = 279 $

As per this calculation Gross Price is = 279 $ and as per my calculation Gross Price is 279.84 $

So in your above calculation Company end up paying Tax of 21 $ Which should have been actually 20.17 $

Why this difference occur in our end results:

It's Because, when Company say My Gross Price is Including Tax, that means, There should be reversal Calculation of pricing where If you go with Forward Calculation Starting from derived Base Price (279 $ or 279.84 $ that should match finale Gross Price 300 $.

You try with 279.84 in forward calculation with 5% and 2% total and it will result in 300 $

But if you will try with 279 it will reach 298.53 $. There will be some value difference.

No Doubt, Tax is more paid, so Government will not have issue.

Regards,

MJ.

[former_member182378]

MJ,

Appreciate your effort!

Thank you!

Also informative was the reason why our tax amounts (and calculations) are different.

[rahul_vishwakarma2]

Hi Friend,

   Check the routine in the pricing procedure. You did not have to maintained any calculation steps for the same i.e. from 10 to 20 (like this). If you had maintained the routine then routine will work for the same properly. If not then ask your technical guy to write a code as per requirement.

Hope this will help you.

Regards,

Kundan