Pricing Procedure Scenarios

[Former Member]

Hello All,

Can any one please explain me what are the parameters we need to take in to consideration to decide how many pricing procedure we need , or what are the different possibilities in the business. if i am dealing with 3 products and 2 distribution channels, and also i have inter company sales. So please tell me how i need to assess how many pricing procedures i need.

like what are the different combination i need to look in to, if you have any example also please give me to understand.

Thanks in advance.

Regards,

Rani

[Former Member · Accepted solution]

hi,

there are no hard and fast rules to decide the number of pricing procedures in a company. It basically and very seriously depends on the taxing structure. There can be number of plants under a company code. Suppose you have 2 plants under one company code.

One plant is an EOU (100% export oriented unit) and the other one is the DTA (domestic Tariff area). The 100% EOU will have tax exemptions from the government and the taxing structure will also be different for this plant. The taxing structure for DTA also will be different.

Now suppose you do export as well as domestic sales from both the plants then the taxing structure will vary accordingly because of the various extra taxes. So you may have 2 pric proc each for both the plants.

Now suppose if you have free of charge deliveries also then you may have another pricing procedure. If you have intercompany billing scenario then this will add one more pric proc.

You can maintain one pricing procedure but for this you need to have formula based pricing procedure.

I hope i have answered your query. Reward valuable points if solution found useful.

Regards,

Allabaqsh G Patil.

[Former Member]

Hi Rani,

There is no rule to decide on how many pricing procedures you would need. It depends on your client's business requirement.

If you really break down, pricing procedure is a formula in the system to calculate the price of a product. If a client has 'n' different ways of calculation the price you need to maintain 'n' pricing procedures.

For the example you have quoted maintain two procedures. One for the inter company sale and other for normal sales.

Hope it had helped. Reward if you felt the same

Regards

Nadarajah Pratheb

[Former Member]

hi

Pricing Procedure is indeed an heart of SD module, reason being if everything else is working fine, but price is not being calculated correctly, the purpose of billing fails.

An Overview of Determination & Configuration of Pricing Procedure is as follows:

In SD, Pricing Procedure is determined based on Sales Area (Sales Organization + Distribution Centre + Division) + Customer Pricing Procedure + Document Pricing Procedure. Sales Area is determined in Sales Order Header Level. Customer Pricing Procedure is determined from Customer Master. Document Pricing Procedure is determined from Sales Document Type / Billing Type (if configured). Once the pricing procedure is determined, Condition records are fetched. If appropriate condition records are found, the price is determined. If Mandatory pricing condition is missing, system will through an error message.

In SD, the steps to configure Pricing procedure are as under:

Step 1:

Condition table: If existing condition table meets the requirement, we need not create a new condition table. Considering the requirement for new condition table, the configuration will be done in spro as follows: IMG -> Sales & Distribution -> Basic Function -> Pricing Control -> Condition Table (select the required fields combination, which will store condition record).

Step 2:

Access Sequence: If existing access sequence meets the requirement, we need not create a new access sequence. Considering the requirement for new sequence, the configuration will be done in spro as follows: IMG -> Sales & Distribution -> Basic Function -> Pricing Control -> Access Sequence (Access sequence is made up of Accesses (Tables) & the order of priority in which it is to be accessed. Here we assign the condition table to access sequence.

Step 3:

Condition Type: If existing condition type meets the requirement, we need not create a new condition type. Considering the requirement for new condition type, the configuration will be done in spro as follows: IMG -> Sales & Distribution -> Basic Function -> Pricing Control -> Condition Type. It is always recommended to copy an existing similar condition type & make the neccessary changes. Here we assign Access sequence to Condition type.

Step 4:

a. Pricing Procedure: It is recommended to copy a similar pricing procedure & make the neccesary changes in new pricing procedure. Pricing Procedure is a set of condition type & arranged in the sequence in which it has to perform the calculation. Considering the requirement for new Pricing Procedure, the configuration will be done in spro as follows: IMG -> Sales & Distribution -> Basic Function -> Pricing Control -> Pricing Procedure --> Maintain Pricing Procedure.

b. Pricing Procedure: After maintaining the pricing procedure the next step will be determination of pricing procedure. Configuration for determining pricing procedure in SPRO is as follows: IMG -> Sales & Distribution -> Basic Function -> Pricing Control -> Pricing Procedure --> Determine Pricing Procedure.

Step 5: Condition record: Condition record is a master data, which is required to be maintained by Core team / person responsible from the client. During new implementation, the condition records can be uploaded using tools like SCAT, LSMW, etc.

Pricing Procedure:

Ø Pricing procedure: A sequential list of condition types and subtotals.

Ø All condition types permitted in pricing are contained in the pricing procedure.

Ø You determine how the system is to use conditions by specifying requirements for each condition.

Ø The sequence in which the system accesses conditions in the business document is also determined here.

Ø The reference level provides a method to specify a different basis for the condition type calculation and for grouping conditions for subtotals.

Ø The pricing procedure can contain any number of subtotals between gross and net price.

Ø You can mark a condition type in the pricing procedure as being:

--> a mandatory condition

--> a manually entered condition

--> for statistical purposes only

Pricing Procedure Determination & Overview:

Ø In this example, an order for 120 pieces of a material is created. The system must determine the price automatically.

Ø First, the relevant pricing procedure is determined based on the sales area, customer, and sales document type.

Ø The system reads the condition type of the first step. It determines the assigned access sequence for this condition type.

Ø The system reads the access sequence. The sequence of condition tables represents the search strategy for finding the relevant condition record.

Ø Each condition table represents one access which can be made for a condition record with the specified key.

Ø The system searches for valid condition records with the key specified by the condition table (accesses).

Ø If the first access does not find a valid condition record, then the system searches for the next access using the next condition table.

Ø Once the system finds a valid condition record for an access, it reads the condition record and copies the value that corresponds to the scale into the sales document.

Ø The whole process is repeated for each condition type until the system has finished the entire pricing procedure.

Pricing Configuration:

Ø The condition table contains the keys that can be used for creating dependent condition records.

Ø You can add your own condition tables using table numbers 501 through 999.

Ø An access sequence is composed of one or more condition tables.

Ø After creating the access sequence, it is assigned to a condition type.

Ø You can also create your own condition types. You determine the characteristics of each condition type, for example, whether it is for surcharges or discounts and whether it should be dependent on values or quantities.

Ø The condition types are combined in the required sequence in the pricing procedure.

Ø Finally, you need to maintain the procedure determination table for the pricing program.

The pricing procedure is determined according to:

>> Sales area

>> Customer pricing procedure field in the customer master

>> Document pricing procedure field in the sales document type.

regareds

prashanth