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SAP SD (Sales and Distribution), prices, surcharges, and discounts are essential components of the pricing process. Here’s how they work:
- Prices: Prices represent the monetary value of goods or services sold. In SAP SD, prices are determined based on various factors such as material cost, customer pricing agreements, pricing conditions, and any applicable taxes. Prices can be fixed or variable and are often defined in condition records maintained in the system.
- Surcharges: Surcharges are additional charges applied to the base price of goods or services. These charges could include freight charges, handling fees, or special service fees. In SAP SD, surcharges are typically managed through condition types in pricing procedures. Condition records are used to maintain surcharge amounts for specific scenarios, such as shipping to a particular region or for expedited delivery.
- Discounts: Discounts represent reductions in the price of goods or services. They can be offered for various reasons, such as bulk purchases, promotional campaigns, or customer loyalty programs. Discounts in SAP SD are also managed through condition types in pricing procedures. Condition records are used to maintain discount percentages or amounts for specific customer groups, material categories, or sales volumes.
To configure prices, surcharges, and discounts in SAP SD, you’ll typically follow these steps:
- Define Condition Types: Use transaction code
VOV8to define condition types for prices, surcharges, and discounts. Each condition type represents a specific element of pricing, such as base price, freight, or discount. - Create Pricing Procedure: Using transaction code
V/08, create or modify a pricing procedure. The pricing procedure determines the sequence of condition types and the access sequences used to calculate pricing in sales documents. - Maintain Condition Records: Use transaction code
VK11to maintain condition records for each condition type. Condition records specify the pricing details, such as prices, surcharges, or discounts, for different combinations of key fields, such as customer, material, or sales organization. - Assign Pricing Procedure: Assign the pricing procedure to the relevant sales document types using transaction code
VOV8. This step links the pricing procedure to the sales documents where pricing determination occurs. - Test Pricing Determination: Create sales orders or quotations in SAP SD to test the pricing determination process. Verify that prices, surcharges, and discounts are calculated correctly based on the condition records and pricing procedure configurations.
Prices and Types
SAP SD (Sales and Distribution) prices and price categories are critical in calculating the value of products and services sold. This is an overview:
Prices:
Net price : refers to the basic price of a product or service before any additional charges or reductions are added. It’s the price agreed upon by the seller and buyer.
Gross Price : The gross price is calculated by adding the net price to any additional charges such as taxes, goods or handling fees.
List Price: The list price is the company’s normal price for a particular product or service. It is used as a benchmark for pricing negotiations and is frequently subject to discounts.
Effective Price: The effective price is the price after any discounts, surcharges, or other modifications have been made. It shows the customer’s final price for the product or service.
Price Types:
Standard pricing: This is the default pricing for a product or service. It is typically stored in the material master data and used as the foundation for pricing in sales papers.
Conditions-Based Pricing: Conditions-based pricing enables dynamic pricing based on parameters such as customer, quantity, time of purchase, and special offers. Condition records are used to store pricing conditions, which are then applied during pricing determination.
Promotional Price: Promotional prices are temporary price reductions that are available to customers for a short period or under certain conditions. These rates can be handled by customised pricing agreements or by creating condition records with time limits.
Volume-Based Pricing: Volume-based pricing provides discounts or special prices based on the number of items purchased. It encourages clients to buy in bulk, resulting in cost savings for both the buyer and seller.
Contract pricing : Contract pricing refers to negotiated agreements between the seller and the client for long-term purchasing arrangements. Contract pricing are frequently lower than ordinary prices and are maintained by customised contracts or agreements within SAP SD.
By default, the system takes gross price in the automatic pricing for a business transaction. In a standard SAP system, system takes customer specific price. If no such price exists, system checks for a valid price list type.
If this is also not present in the system, it takes the material price.
Material Prices in SAP SD
SAP SD (Sales and Distribution), material prices play a crucial role in various processes such as pricing determination, sales order creation, and invoice generation. These prices are typically maintained in the material master data or through condition records in the pricing procedure.
Material Master Data: The material master record in SAP contains extensive information about a material, such as its description, unit of measurement, and pricing information. You can keep track of different price-related fields in the material master, including the standard price, moving average price, and valuation class.
Pricing Procedure: SAP SD use pricing methods to determine the prices of materials during sales transactions. Pricing methods are made up of condition types that indicate various pricing factors such as the base price, reductions, and surcharges. Material prices can be determined dynamically dependent on the pricing conditions.
Condition Records: SAP condition records enable you to keep pricing information for specific combinations of materials, customers, and sales organisations. You can generate condition records for a variety of pricing scenarios, including material prices. These records can be kept centrally or disseminated among several organisational levels.
Price List Types In SAP SD
In SAP SD (Sales and Distribution), there are several types of price lists that can be used to manage pricing for products or services:
- Standard Price List: This is the basic price list that contains standard prices for products or services without any specific conditions or discounts applied.
- Customer-Specific Price List: This price list is tailored to individual customers and contains prices negotiated specifically for them. It allows for different prices for different customers based on their agreements or contracts.
- Material-Specific Price List: This type of price list contains prices that are specific to certain materials or products. It allows for variations in pricing based on the characteristics of the product.
- Quantity-Based Price List: These price lists offer discounts or price changes based on the quantity of items ordered. The more quantity ordered, the lower the unit price.
- Time-Dependent Price List: Prices in this list vary according to specific time periods. For example, prices may change based on seasons, promotions, or market conditions.
- Discount Price List: This type of price list provides discounts on products or services. Discounts can be percentage-based or fixed amounts.
- Tiered Price List: Prices in this list are structured in tiers, where different price levels apply based on certain criteria such as volume of purchase, customer type, or product category.
- Promotional Price List: These price lists are used for temporary promotions or sales events. They contain discounted prices for a limited time period.
Surcharges and Discounts in SAP SD
A standard SAP system includes a variety of common discount types. You can also define or customize discounts and surcharges as per the business requirement.
A Standard SAP system includes the below mentioned discount types −
| Discount(Key) | Kind of Discount |
| Customer(K007) | Percentage |
| Material(K004) | Absolute |
| Price group(K020) | Percentage |
| Material group(K029) | Absolute discount by weight |
| Customer/material(K005) | Absolute |
| Customer/material group(K030) | Percentage |
| Price group/material(K032) | Absolute |
| Price group/material group(K030) | Percentage |
| Rebate processing(BO01) | Group rebate(%) |
| Rebate processing(BO02) | Material rebate(fixed) |
| Rebate processing(BO03) | Customer rebate(%) |
| Inter-company processing(PI01) | Intercompany discount(fixed) |
| Inter-company processing(PI02) | Intercompany discount(%) |
| Invoice lists(RL00) | Factoring discount |
| Invoice lists(MW15) | Factoring discount tax |
While creating a condition record, you can use any of above standard discount types. While doing automatic pricing, system checks for the discount that satisfies a certain condition and it checks for a valid condition record. If a discount refers to a group like a material group or price groups,
that particular group must be assigned to a relevant customer or material master record before automatic pricing is done in the system.