Pricing

A pricing procedure is a schema to arrive at the final price of a product or a service. For example, if a price of a product is determined as (base price – discounts + freight + tax), you would arrange these conditions in a sequence and specify the rules for arriving at a total. Each of these pricing elements in a pricing procedure is called a condition type. The conditions can either be at header level (applicable to the entire document) or at an item level. You can either enter the values for each condition type manually or determine them automatically using a condition technique.

You can assign an access sequence to each condition type. Following the sequence, the system looks up pricing records maintained in condition tables in a specific order. The condition record is then picked up from the tables and used in the pricing schema.

5 steps to configure pricing

Step 1: Define the condition tables First, you define the condition tables, with combinations of key fields. You then set up the pricing condition records for these key combinations.

Step 2: Define the access sequences SAP uses access sequences as the search criteria to find the valid condition record during the pricing determination run. In this step, you define this access sequence and arrange the condition tables defined in step 1 in the sequence in which you want SAP to access the condition records. As in any condition technique, the rule of thumb is to arrange the tables in order from most specific to most generic.

Step 3: Set up the condition types Here you set up condition types and assign the access sequence created in step 2 to them. Each condition type represents an element in the schema. You set up prices, discounts, freight conditions, tax, and costs as individual condition types.

Step 4: Define the pricing procedure The pricing procedure is the schema to arrive at the final price. You link together the individual condition types defined in step 3 and maintain the relation between them. You can also attach complex formulae that may be required to compute any value.

Step 5: Assign the pricing procedure You then determine the pricing procedure for each sales transaction. You can control which procedure is to be used for a specific customer and sales document type. In this step, you specify these rules for determining the pricing procedure.

Transaction codes:
VK11: condition records
V/03: condition table
V/07: Access sequence
V/06: condition type
V/08: pricing procedure

Things to consider:

• How does your pricing schema look? It is often very useful to write down the complete schema in a spreadsheet. This gives you a picture of the various pricing elements and the formulae needed to arrive at a final price.
• Does the pricing schema vary by sales area? Do you have different document types that require a separate pricing schema?
• What are the pricing elements you require? Can you group them together under Prices, Discounts, Freight, Tax, and so on?
• What is the key to determining the value for each condition? Is the price of a material customer-specific? Or is it constant for all the customers in your sales area? Do you require multiple accesses to get the appropriate price? List all criteria for the price determination.
• What are the financial accounts to be updated? Where should you post the price, discount, and so on? What are the criteria for account determination?
• Are there any reporting requirements that need you to capture pricing subtotals as you go along computing the final price? You can capture gross price, net price, total discount, and so on, as intermediate subtotals and use the values in reports or in documents for customers.

Practice project:

Given below are the price related requirements provided to you by the customer. How would you configure the system so that these requirements are fulfilled?

1. Base price: The price records are simple and specific to each product. However, a special price applies to some of the customers. Hence, there should be a provision to maintain records for a key of (customer number + material number) and also a generic record irrespective of the customer (the material-specific price).
2. Discounts: The company offers several promotional discounts. Some of these discounts are specifically designed to attract certain new customers, and some are product discounts offered to a certain customer or a group of customers. (We’ll use the Customer Group field to determine discounts) Another requirement is to offer discounts based on customer hierarchy.
3. Shipping and handling charges: There should be a provision for freight charges based on the total weight of the entire shipment.
4. Besides this, we also assessed company's reporting requirements. We determined that the gross price, net price, freight, and costs have to be captured from the pricing schema for subsequent reporting and analyses.

Configure pricing:

Step 1: Define the Condition Tables

The first step is to define condition tables. To set up a condition table, you need to refer to a field catalogue. From this list, you can pick up the fields that you require in your condition table.

Menu path: IMG ➢ Sales And Distribution ➢ Basic Functions ➢ Pricing ➢ Pricing Control ➢ Define Condition Tables ➢ Conditions: Allowed Fields (OV24)

Using this transaction, you can check the fields available in the standard field catalogue. If this list does not meet your requirements, you can access a larger list of fields in the catalogue by using the drop-down list (function key F4).

For this customer, we need a table for a combination of Sales Organization and Customer Group. We first check in the field catalog and verify that these fields are available.

In some cases, you may find that the field you plan to use is not part of the field catalogue provided by SAP. In those cases, you need to append the new fields to the catalogue and populate the values of the new fields before they can be used. You will need the help of an ABAP expert to do this.

Create Condition Table

Menu path:  IMG ➢ Sales And Distribution ➢ Basic Functions ➢ Pricing ➢ Pricing Control ➢ Define Condition Tables ➢ Create Condition Tables (V/03).

This option allows you to set up a condition table. You select the fields and generate a new table.