Pricing Procedure Pricing Procedure in Material management is way to Determine Prices in purchasing document It gives functionality to assign different Calculation types for different needs of the business. The main concept is combination of different types of Charges involved while procuring the material or services. Examples are, gross price, freight, discount, surcharge ete. It is used to determine all the conditions into one procedure so that one can easily find out subtotal for net amount. Before moving ahead you must be familiar with few terminologies in pricing procedure, 1. Gross Price: It is basie price of material without any surcharges or discount in other words it is price excluding any possible discount or surcharges Gross Price= Basie Price of the materia. 2. Net Price: Net price is price with consideration of duties and taxes into account, It is nothing but price with discount surcharges and possible taxes. Net Price =Gross Price+ Duties +Taxes. 3. Effective Price: Effective price is nothing but the net price after considering the surcharge and discounts if any. Here Surcharge means any unplanned cost. And discount may be planned discount or on the spot discount. Effective Price= Net Price + Surcharge +Discounts ‘When we create any Purchase order or any other purchasing document like RFQ this pricing Procedure will work depending on two factors your Purchasing Organization and Vendor. Pricing Procedure Determination: It is important to know basic things that how the pricing procedure will work once you create Purchasing Document. Let’s us assume that we are going to check pricing Procedure for PO We created PO for Vendor 100568 and Purchasing Organization 1000 Once you create PO system will check for pricing Procedure available. RM000 These Pricing procedure contains pricing condition. Price (PBO0), Discount (RAQ0) etc. Now these condition type will have access sequence in the system. Now this Access sequence will try to read some document from where it has to pick price. Document may be Outline Agreement, Vendor/Material/Organizational Level ete. If valued record exists the price will come in PO otherwise you need to add manually Price to item Line of PO. S.B. Chopade ([Link]@[Link])eure) feces Ce Access Sequence CEs car ‘Access Sequence 1. Outline Agreement 2. Vendor/Material/Organizati on Level e Valid Record not —- => Now let us see this in system; 1. Determine Pricing Procedure (Calculation Schema) If you go to the purchase order and click on analyse you will get an information about pricing procedure or calculation schema. You will have all the conditions type maintained in the calculation schema. Here Our Pricing procedure is RM0000 S.B. Chopade ([Link]@[Link])(5 Crate Purchase Order Deaton 1) ES ol Pak Ci out eNemp T Pewad ty Sw Tort fo et SGG0GASOSEE056 OD Ceeme) Came) Gre nema = ls) mesons: Quvenvingis on Sie | eke | oct ART Ret Asoo | ets | bbe Aes eee ee a Penn ‘rarer loans econ Contes eae mani pasted et ate) oe ect rn nd) fovea) Craton pont ta ‘con zene fer ed ep Nate =oor secre =o fea st eet md) Thre ae fol of cmd tern nth cue shown hd side: Neneh Te ‘Proce ing pace, cpa deemmtn pace, sae con pe rt, freon a) Now how this pricing procedure is triggered during the PO? To understand this let’s go to configuration of pricing procedure; S.B. Chopade ([Link]@[Link])‘SPRO->IMG-> MATERIALMANAGEMENET=9 PURCHASING-> CONDITIONS-> DEFINE DETERMINATION PROCESS->DEFINE CALCULATION SCHEMA, Change View “Schemas”: Overview © Wen ertves OE []. oc set: Cunge Fld vaues alg Sovcre i a ~ ieee ‘Aaphcaton m —— 5,00 Puchang Docent (8) on GTM xen (49 who) (2203 6TH Bere (AR wth Jorm001 GTM Purchase Price YOU WILL FIND Son nace PRICING PROCEDURE sn088 Pca HERE .You can create om eng new Pricing Procedure jo poten ncn) Paes on ye 1000 Document z entry OR you can copy 083 Cot Sn en soos Subs. set. (cx) e000 Agency buses Ade. costs ueo0s Agency busness vencor) (Change View “contro date’: Overview Let's create new pricing procedure ZMOO by BER pts seer copying RM0000. After Copying it will ask you for copying all data. After this user need to enter few times so that all the condition types in RM0000 will be copied to zmoo. .B. Chopade ([Link]@[Link])‘Change View "Schemas": Overview "mow entres (D FS) IB HER ac set: change Fe aves bg seucure na a * Bp Scheras m scteras g — Mkaton schemas Proc 22000 Purerasng Docent IDES Purchasing doc DESVERSION S102 STO vate Posten. At final stage you will get new pricing procedure is created. To know about condition types just select row of ZMOO and click on control data ney 48 oF 47 ‘You will get screen showing all condition types in your pricing procedure Change View “Control data": Overview 2 mew snows (DS I [cS Cange el ves — — fs ar Sa a Secor o S.B. Chopade ([Link]@[Link])2. Define Schema Group It’s assigned to our vendor and Purchase Organization, It helps the vendor and purchase organization to choose pricing procedure. One schema group will be assigned to vendor and one schema group will be assigned to Purchase organization. With this combination, system will fetch the pricing procedure. SPRO->IMG> MATERIAL MANAGEMENET9 PURCHASING-> CONDITIONS DEFINE PRICE DETERMINATION PROCESS->DEFINE SCHEMA GROUP You will get the options as shown below; eee notes Change Lop Where se Used rchasng bo Recoré Sinariny (Quota Arangement Fa/Quetaton Serltorber Shoppe cot Puenae Recast Prchase Orde ed Dusspanent cf Schema Grp £> Purchasing Orpantzaticn [Bator Document atu + [B® Detne corazon Caneel at + IB. pete pce Decermnaten "TB @ detne Aces Seauenced + [B® vetne conten Types [B® dete umes + 1B @ detne extisen nat + (BL. bee ceon She : & ae, + 1B Aeon Te fo are] IB & ostne tesacen/even| STONE) + 1B © bene cndten xcs 1 & wartan condton Tbe perm the aces the secfd Sequence + 1B @ ertene Fl aoa for 1B © cony contol for cond Click on schema groups: Vendor and create new and create new schema group $1 and save it After this come back and click on Schema Group for Purchasing Organization. Click new entry and create new schema group $100 for purchasing organization After this come back and click on Assignment of Schema Group to Purchasing Organization; assign schema group for purchasing organization to Purchasing organization 2000 After this create one vendor using XKO1 and in its purchasing data Assign Schema group SI as shown in figure. Vendor 0000100609 is created S.B. Chopade ([Link]@[Link])‘Change View “Schema Groups for Vendors": Overview > anon HO [ao] oxy ot? New Entries: Overview of Added Entries vYREBEER ___ Schema GrpPOrg _|Descretion sic ‘Schema Group for Retad Change View “Assignment of Schema Group to Purchasing Organization": O SORRG Pos Des. p01. 000s Puenaseg Or 0001 1 zantrdenkat ev 1500 puch. 8 2100 bet Rn Prt 2300 bast Rn Spanien 2c Best Run Falen| 250 bas Run Nederande rot. Dee Deed preys of Chopade ([Link]@[Link])(Create Vendor: Purchasing data OB H Ned SEU olny and Joey Ako Deena eRe aco Purchasng Org. [2000] Best Run UK Penney enero Condtions Order currency (pir Terms of payrmnt Incoterms im Minimum order Standard procedure vendor Pricing Date Control] _ No Control Order [Link]. [ ‘Schema Determination Here we maintain the pricing procedure for purchasing document. We maintain calculation schema combination of per each vendor — schema group and each purchase organization — schema group, SPRO-IMG->MATERIAL MANAGEMENET->PURCHASING-> CONDITIONS-> DEFINE PRICE DETERMINATION PROCESS->DEFINE SCHEMA Determination You will get Now determine Calculation schema for standard Purchase order click on that enw IE © Awa Type fr Qarey Aarne S.B. Chopade ([Link]@[Link])Change View "Determination of Calculation Schema in Purchasing": Overv > Girma oe BE __ schema GpPOr9 Sch Vode ro. _Descoton Jomo] iaasngooamerceo) (Eee ‘R000 Document TU an (CPEOO1 RM1000 with CPE 2901 Comodtes- {C8 Comedies - Mec TCH Commas Concentrates {O01 Conmodtes Metal "mc Commodties- O86 Buses Now enter Schema group for Vendor, Schema group for purchasing organization and Pricing Procedure as shown below; New Entries: Overview of Added Entries Ee EB Lh Schema GpPOrg |[Link] Vndr_ Proc. Description Bao0y a [EMOBT Purchasing Document (Bia) After this if you will go for PO and if you put data for Vendor and purchasing org this, Procedure will be triggered Let's create one PO for vendor 0000100609 and Purchasing Organization 2000 by Using Teode ME2IN .We will use Material 60000663 (P) Create Purchase Order Dec reven meses (T Elresolseary Swe as Terotee La Bon Terie abeyinoce | conore her in ACE a After entering the data combination, our defined pricing procedure must be triggered let’s check it by clicking on analysis tab. You will observe the pricing procedure defined above is triggered over there. S.B. Chopade ([Link]@[Link])() eate Purchase Onder eames nD) ED Hil tok Gt Pheer snap (] Ehemang Set Teroe [Bisel sensi oammlaSbastmai | a ons en G50 SS CB EEAS O 7 er cco toe oer = GEE _cnetonne_| (8 Analysis Pricing Verse een rae tnd fa) wet sach ae) (eon ered ease 6 ot ie) Streace Nate) soa ‘surcarge Sen “Aces not mace (one ft) term oe eee msn =o This is how Pricing procedure is triggered in Purchase order. S.B. Chopade ([Link]@[Link])Now the next is how the pre-defined combination of condition comes in PO? Like PB00, PBXX, FRAL etc. To understand this we must know about the conditions first. 4, Condition Type ‘+ Insimple terms, condition type is used for different types of charges. Like gross price, discount, freight, rebate, ete Conditions are term agreed with vendors regarding prices Discounts and Surcharges, ete. The system determines the effective net purchase price in PO on the basis of these pricing conditions. Conditions can be ercated when you creates quotations, info record outline purchase agreement and purchase orders. Individual conditions are described by Condition Type. These may be gross price, discounts or various surcharges, eight charges ete. Condition type is key that defines the attributes, characteristics Business meaning of condition In Purchasing, conditions that are valid for certain period are called as time dependant conditions and conditions for which no validity period is defined called time independent Conditions. Conditions in info record and contracts are always time dependant whereas conditions in PO are time independent SPRO>IMG->MATERIAL MANAGEMENET->PURCHASING->CONDITIONS->DEFINE PRICE DETERMINATION PROCESS-> DEFINE CONDITION TYPE Once you click on define condition type you can create new condition type by new entry of by copying available condition type. Pa Name fA © & cuss Ducane Groups Sptantee seen Purcasrg io Recor sisanabiey sce at ust Argent sra/Quouton seainiroees ‘Oe opcmera Sevedung Aearent + 18 © ote srere cow [B @ detea Sere Desrmraton S.B. Chopade ([Link]@[Link])Now let us create new condition type ZM00 by copying already exist gross price PBOO Change View "Conditions: Condition Types": Overview oy New entries EBNES © FE. ME Ch (BC Set: Cha Typ |Condition Type Condition cass PBXK Gross Price Prices a ‘cess seq. {0002 ross Price ‘records for access | Cond. cose Pusmews postive 2 oo tty Jou ond ice Roundng rue | Commercal Stuctond. Group condton \roup cond. Roundostcoro anges wih cn bam onal enres No iatone exer conde Drreurinercent reton Wigaremcondten lose vee yattvoe Mention pricing procedure poerron reapee Reco a 31.12.9999 Pe MCCS se) condition type over here aster cata (Condon nex Enter and save the data. Now condition type ZM00 is created S.B. Chopade ([Link]@[Link])5. Access Sequence © The main concept of the Access sequence is ion type from the condition table. One access sequence can contain one or multiple condition tables. The sequence of Access controls the priority of among each other. In other words the system is told where to where to look next for valid condition record in each case. SPRO->IMG->MATERIAL MANAGEMENET->PURCHASING->CONDITIONS->DEFINE PRICE DETERMINATION PROCESS-> DEFINE ACCESS SEQUENCE ‘ou enter in define access sequences you can copy or create new sequence. Let us create new access sequence $100 by copying 0002. After copying you need to enter few times till you get below given screen. Save this data now new access sequence $100 is created, Change View "Access Sequences": Overview Now tres (DE EB [fac Set: Change Fel Vaves Dalog structure + Daaccesses Drets ‘Overview Acces Sequence AS _Descroton J. Desroton ‘Acces sequence relat fo peng TRIG Tigger Access Sequences ‘Acces Sequence relat fo pricng JO Duty Prce of Dy Pant Acces sequence relat fo pring J Panned ap fr eh. pant Acces sequence releant fo rng s2e Tradng Contact (W828) ‘Access sequence relevant fr peng BTC Tradng Contact (WTC) ‘Acces sequence relat fo pring fara Tradng contact (WaC1) Acces seavence relevant for rng HOM Ot Conmecty Management ‘Access sequence relevant fer preng 12000 Gros Pace Acces sequence relat fo rng Select row of $100 and click on accesses. You will get window as shown [Link] this is sequence to search pricing condition Change View “Accesses”: Overview S.B. Chopade ([Link]@[Link])6. Condition record and Condition table It isa table where the system saves the all fields with the combination for individual condition records. Suppose if use Plant as the condition table, then the condition record will be created for plant only. We can use many fields in one-condition tables. These fields are available as field catalogs. Conditions are stored in system as condition record. For example a material price agreed with vendor or special discount in the system maintained as condition record. SAP recommends that condition table must be created from 501 to [Link] up to 500 tables are reserved for SAP standard. ‘SPRO->IMG-> MATERIAL MANAGEMENET > PURCHASING-> CONDITIONS-> DEFINE PRICE DETERMINATION PROCESS-> Maintain Condition table Pecomtne aes nthe mache een TE tere cratoroasn Let’s create new Condition table for plant vendor and purchasing organization. ‘You can select condition field from field catalog by double clicking on the term as shown in figure (Greate Condition Table (Pricing Purchasing): Field Overview seec tat Tecmcavew omerdeceton Fadambutes. SF vo (As runber (ham) S.B. Chopade ([Link]@[Link])Create Condition Table (Pricing Purchasing): Field Overview © scect eld Technealview Other descrotion Feld attrbutes... E> ES [E ‘Table__[580] [MateraPurch.Or9 Vendor ji With valdty period wth release status Selected fields | Feldcatig Long Key Word Long Key Word = a =oren = Vendor Materal Group Vendor Subrange Click Enter you will get prompt as shown in figure. Click YES and save this table to local data Selected fields Long Key Word ee me Do you want to generate ca © sre canceon ier Vendor "Tax cass, rateral So this is information for pricing procedure now let us create new pricing procedure using available data and creating some new data from the scratch S.B. Chopade ([Link]@[Link])1, Determine Pricing Procedure (Calculation Schema) ‘SPRO->IMG->MATERIALMANAGEMENETDPURCHASING->CONDITIONS-> DEFINE PRICE DETERMINATION PROCESS-> DEFINE CALCULATION SCHEMA, ZM00 is defined as caleulation Schema Define Schema Group SPRO->IMG- MATERIAL MANAGEMENET9 PURCHASING-9 CONDITIONS-> DEFINE PRICE DETERMINATION PROCESS->DEFINE SCHEMA GROUP We Defined Schema Group for Vendor SI Schema Group for Purchasing Organization $100 Assigned schema group for vendor to 100609 Assigned Schema Group for purchasing organization $100 to Respective Purchasing Organization 2000 3. Schema Determination SPRO-IMG->MATERIAL MANAGEMENET->PURCHASING->CONDITIONS-> DEFINE PRICE DETERMINATION PROCESS-> DEFINE SCHEMA Determination Here we assign Schema group for purchasing organization $100 and Schema group for vendor S1 to Pricing Procedure ZM00 New Entries: Overview of Added Entries Ee ‘Schema GrpPOrg _Sch.Grp Vndr Proc. Description om & [zxDO] Purchasng Document (8) 4. Condition Type SPRO>IMG-MATERIAL MANAGEMENET->PURCHASING->CONDITIONS->DEFINE PRICE DETERMINATION PROCESS-> DEFINE CONDITION TYPE Here we defined Condition type ZM00 Gross Price Access Sequence SPRO>IMG->MATERIAL + MANAGEMENET->PURCHASING->CONDITIONS->DEFINE PRICE DETERMINATION PROCESS-> DEFINE ACCESS SEQUENCE We Define Access sequence $100 by Copying 0002 6. Condition record and Condition table ‘SPRO>IMG->MATERIAL MANAGEMENET PURCHASING CONDITIONS DEFINE PRICE DETERMINATION PROCESS-> Maintain Condition table ‘We defined new condition table 980 for Material, Vendor and Purchasing Organization (Create Material MMO1 60000663 Seat Belt 16| Page S.B. Chopade ([Link]@[Link])8. Create Vendor 9. Now go to Access Sequence SPRO>IMG->MATERIAL MANAGEMENET->PURCHASING->CONDITIONS->DEFINE PRICE DETERMINATION PROCESS-> DEFINE ACCESS SEQUENCE Select row of created access sequence $100 and go to accesses Change View "Access Sequences": Overview © wen Ents (TD Eb FRM [R. Bcset: Change Fl Vas Dalog Sructue — Then click on new entry and assign new created condition table 980 to Access Sequence $100 and check field after that save data. If you click on Exclusive that means if Condition record is not available in this condition table then system will search in next condition table, Change View “Accesses”: Overview > (new eres) F © EEE. [2 8c Set: ange Fld Ves Aces science SI) Go Pct vernon eceses Mo. Ta Desoto" Reauremt excuse 18 [Drotes" Peas (Meterl Dependent) a a 10. Go to Define Condition Type SPROIMG->MATERIAL — MANAGEMENET->PURCHASING->CONDITIONS->DEFINE PRICE DETERMINATION PROCESS-> DEFINE CONDITION TYPE Select created condition type ZMO0 and double click on that. After that put Access sequence and Pricing procedure in that as shown in figure and save the data. S.B. Chopade ([Link]@[Link])Change View “Conditions: Condition Types": Details © Mow entries (3 ES ©? £) Ob £3] Ac Sat: change Fels Vaves conde. type (2800 ross Price T Access seq. HGH) Gross Price ‘Records for access ‘Control data 1 ‘Cond. css [3] Pres Phus/minus postive 3 [Link] _[€) Quantity [Link] [2 Base price Roundng rule |_| Commercal StrucCond. Group condtion \Group cond. [Link] IRoundDifcomo ‘Changes which can be made Manual entries No umitations Header conat. Ziamount/percent __(ZIQty relation item condition Delete valve Caleuatstype Master data vald from Today's date Prengproc RBG 11. Go To Calculation Schema ‘SPRO->IMG-> MATERIALMANAGEMENET-® PURCHASING-> CONDITIONS-> DEFINE PRICE DETERMINATION PROCESS->DEFINE CALCULATION SCHEMA, Change View “Schemas”: Overview Select created schema ZMOO and go to Control Data. Here just edit condition types %} newenies (BL acset Cange ree Vabes if you don't want any condition type copies just select and delete it Dag Ssucture fe + pace 8 Click on New entry and Put their New Gomme state created condition type ZM00 here we deleted PBOO. Schemas: 7210000 Purchasng Document (89) (Change View "Control data’: Overview % mew soos FR HB scsec cnmoe rat ates cia [B|pcang Seamer) Fro Te Ma Re St PSUTR Ret Cy. ST. A Ae "200 vray S.B. Chopade ([Link]@[Link])12, Maintain Condition Record (MEK2) Logistics >» Materials Management —> Purchasing —» Master Data — Conditions — Other — Change Change Condition Records Enter data as shown and maintain (Hlcndeanwfomaten Yay Cnbeaton Set sng dex Condition record, You can apply here scaling also. = Save DATA Ero ces (atl epee) Oven Areeent Re Fan Geert aif Reco ane Seas) laa fo en Sh nar ar spect) Change Grose Price Condition (2600) : Overvie Sameera ied © foe pomences nee "mms nus OOOH 13. Create PO ME2IN Create PO enter all combinations as we mentioned in condition table and check whether our created pricing condition comes in item data or not. © ives (queers | oer Stetse | neee AGRE ress | oer aes | crs | cotton ce So our Pricing Procedure worked here. You can check in analysis tab from where the values came from, S.B. Chopade ([Link]@[Link])S.B. Chopade ([Link]@[Link])