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Component documentation Pricing and Conditions 

Purpose

The term pricing is used broadly to describe the calculation of prices (for external use by customers or vendors) and costs (for internal purposes, such as cost accounting). Conditions represent a set of circumstances that apply when a price is calculated. For example, a particular customer orders a certain quantity of a particular product on a certain day. The variable factors here - the customer, the product, the order quantity, the date - determine the final price the customer gets. The information about each of these factors can be stored in the system as master data. This master data is stored in the form of condition records.

The Condition Technique in Pricing

The condition technique refers to the method by which the system determines prices from information stored in condition records. In Sales and Distribution, the various elements used in the condition technique are set up and controlled in Customizing. During sales order processing, the system uses the condition technique to determine a variety of important pricing information. For example, the system automatically determines which gross price the customer should be charged and which discounts and surcharges are relevant given the conditions that apply.

Example

Example of Pricing in the Sales Order

The following figure shows how the condition technique works in the background to produce the pricing information. The diagram shows how the various elements in the condition technique work together.

This graphic is explained in the accompanying text

  1. The system determines the pricing procedure according to information defined in the sales document type and the customer master record.
  2. The pricing procedure defines the valid condition types and the sequence in which they appear in the sales order. In the example, the system takes the first condition type (PR00) in the pricing procedure and begins the search for a valid condition record.
  3. Each condition type in the pricing procedure can have an access sequence assigned to it. In this case, the system uses access sequence PR00. The system checks the accesses until it finds a valid condition record. (Although you cannot see this in the diagram, each access specifies a particular condition table. The table provides the key with which the system searches for records).
  4. In the example, the first access (searching for a customer-specific material price) is unsuccessful. The system moves on to the next access and finds a valid record.
  5. The system determines the price according to information stored in the condition record. If a pricing scale exists, the system calculates the appropriate price. In the example, the sales order item is for 120 pieces of the material. Using the scale price that applies to quantities from 100 pieces and more, the system determines a price of USD 99 per piece.
  6. The system repeats this process for each condition type in the pricing procedure determines a final price.

    For further information on the condition technique, see

    Introduction to the Condition Technique

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