9/29/2019 Pricing Procedure In SAP MM

Pricing Procedure In SAP MM

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Pricing Procedure In SAP MM

Pricing
• This component is to store the pricing stipulations agreed with the Vendor (like discounts, surcharges or payment of freight etc) in the
system.
• You can enter these conditions in
- Quotations
- Outline Agreements (Contracts and Schedule Agreements)
- Purchase Info Records
• The system applies the conditions in determining the price in Purchase Order
Note: You can enter further conditions in the PO itself.
• There are three kinds of prices in purchasing.
o Gross price:
? It is the basic price of the material w/o discounts, surcharges and taxes
Gross price = Basic Price of the Material
o Net Price:
? The Gross price after considering duties & taxes into account.
Net Price = Gross Price + Duties + Taxes
o E ective price:
? The net price after considering surcharge and discount
E ective price = Net price + surcharges + discounts

Condition Technique
• The Condition Technique is used to determine the purchase price by systematic consideration of all the relevant pricing elements
• This is the technique for formulation of rules and requirements.
• The system arrives at a suggested price by applying conditions de ned by means of Condition technique.
• The Condition Technique is how the price determined?
• The Condition Technique is used for
- Pricing for price determination
- Tax Determination
- For automatic account determination
Access Sequence access a Condition Record of a Condition Type in a Condition Table is a Condition Technique. This is a simple logic
• Here the Condition Type is very important like PB00, PBXX and RA01 etc. In the background every Condition Type has its own
de nition means the purpose of the Condition Type like, is it for Pricing or Percentage, Quantity base, Accrual Fields etc is to be de ned
to work this functions.

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• Normally we use the existing ones without any risk.

• But some cases, we have to create a New Condition Types as per the organization requirement. Drop us a Query 

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Element s in price determination:

• The Important elements in price determinations are:
- Access Sequence
- Condition Required
- Condition Record
- Condition Table
- Calculation Schema
1. Access Sequence
- An access sequence is a search strategy and it searches for a valid condition record in a sequence
- It checks where prices are stored and at what condition prices are to be picked up.
- If Contract or Schedule Agreement exists, what price has to be picked-up
2. Condition Record
• It represents that actual condition value and is stored in a condition key.
Field Description                                Field name
Material no.                                               MATNR
Vendor                                                        LIFNR
Purchase Org.                                            EKORG
Plant                                                            WERKS
Purchase Info Record                              ESOKZ
3. Condition Record
• Condition types represent price/elements factors in the system
• E.g.: Discounts in the Gross, Discounts on Net, Freight, Insurance, custom Duties, and Taxes.
Note: Via Condition type you specify how the price factor is calculated.
E.g.PB00             -                        Standard Gross (Basic) Price (Automatic)
PBXX                   -                        Standard Gross (Basic) Price (Manual)
FRA1                    -                        Delivery Costs
NAVS                   -                        Non-Deduct able Input Tax
SKTO                   -                        Cash Discount
4 . Condition Table

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• A Condition Table consists of one or more condition keys and data part.
• Data Part contains a number that references a record in another table (which contains the condition
Drop records)
us a Query 

Field Catalog: Grouping of certain elds for determining prices

Material                   MATNR              komp E-mail Address *

Vendor                     LIFNR                 komk              p - item eld                       in komp & komk

Purch. Org              EKORG                komk              k - header eld                   in komp & komk US (+1) Phone *

Plant                        WERKS                komp

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Purch.Info Re        ESOKZ                  komp 

Note:
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1. Each condition type has same control data
2. Control data for condition type:
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3 All condition types have the same screens. In that eld values may be di erent.
5. Calculation Schema
• The Pricing Schema means the calculations procedure of Condition Type.
• The standard Calculation schema provided by SAP for Purchasing is RM0000
In General the Pricing structure or break up provided by vendors is under the following format
 Rs.                                      Condition Types
Gross Price                                                                           100.00                                              PB00
Discount on Gross Price (@5%):                                      5.00                                                  RA01
------------
Gross Price after Discount                                                  95.00
Excise duty @ 10% on GP after                                                                                                    ED00
Discount                                                                                  9.50
------------
Sub Total                                                                                 104.50
Sales Tax @ 10% on sub total                                             10.45                                                ST00
Freight 20% on GP                                                                20.00                                               FRA1
Packing 2% on GP                                                                    2.00                                               PK00
-----------
Total Price                                                                                 136.95
• A framework of steps used to calculate or determine costs, prices, period end rebates and taxes.
o Ex. RA01 - Discount % is calculated on PB00 - Gross Price.
o It means RA01 is based on PB00 like that we have to de ne in the Pricing Schema
o Here PB00 has the Access Sequence - 0002. But RA01 does not have the Access Sequence. Why because it is a dependent     on PB00.
But both are Condition Types.
IMG settings
De ne Price Determination Process
De ne Access Sequences
De ne Condition Types
De ne Calculation Schema
De ne Schema Group
- Schema Groups: Vendor
- Schema Groups for Purchasing Organizations

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- Assignment of Schema Group to Purchasing Organization

De ne Schema Determination Drop us a Query 

- Determine Calculation Schema for Standard Purchase Orders

• After completion of the Schema Group, we have to assign it to Vendors. Then whenever we use anyAddress
E-mail transaction
* with this Vendor, the  
concerned Schema will work as con gured by us.
• The Pricing in MM is vast because each Condition has its own importance and each Access Sequence has Phone
its own
* importance. So you  
US (+1)
need not bother about this. First you learn how to de ne the Calculation Schema through the above.

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