SAP MM

Pricing Procedure
-GANESH PADALA
www.ganeshsapscm.com
What is pricing procedure?
The main concept of pricing procedure is combination of different type charges, like Gross
price, freight, discount, surcharges etc etc.
We use pricing procedure to determine these all conditions into one procedure, where we can
find the sub-total for net amount.
To understand pricing procedure we have to comfortable with these below things:
1. Condition Table
2. Access Sequence
3. Condition Type
4. Condition Record
5. Schema Group
6. Calculation Schema
7. Schema Determination

Pricing Structure:
Gross Price –> 100 INR
Discount -> -10 INR
Surcharges-> 20 INR
Net Price -> 110 INR
Freight Charges -> 30 INR
Insurance Charges -> 10 INR
Effective Price/Final Price – 140 INR
Let's discuss about all these points in details.
1. Condition Table
It's a table where we can save the all fields with the combination for individual condition
record. Suppose if I use Plant as condition table, then the condition record will be created for
plant only.
We can use many fields in one condition tables.
2. Access Sequence
The main think of Access sequence is, it searches condition record for condition type from
condition table.
One access sequence contains many condition tables.
Suppose we maintain 4 condition tables in one access sequence. Then when a condition type
is searching for condition record via this access sequence, the access sequence will allow
searching only this 4 condition tables.
3. Condition Type
In simple term condition type is used for different types of charges. Like gross price,
discount, freight, rebate etc etc.
Suppose we purchase a material for price 10, we get a discount of price 2. Then the price 10
will be goes to a condition type and the price 2 will be goes to another condition typ

2.547 = 2.55
4. Condition Record
Condition record contains the record which is maintained against condition table with regards
to condition type.
It can be fetched via access sequence and condition type.
Suppose we maintain a condition record against condition table (vendor) with regards to
condition type. Then whenever the vendor used this condition type, the condition record will
fetched.
Condition Tables are assigned to Access Sequence
Access Sequence is assigned to the Condition Type
Condition Record can be maintained for the Condition types for which the access sequence is
assigned
5. 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 assign to vendor and one schema group assign to Purchase
organization. With this combination, system will take the pricing procedure.
Schema Group Vendor and it is assigned to Vendor in Vendor Master Purchase Data
Shema Group Purchase Organization and it is assigned to Purchase Organization in
configuration
6. Calculation Schema
Here we maintain sequence for the pricing calculation, like gross price, discount, rebate,
surcharges etc. We maintain here the calculation for all condition type and group together all
required condition types for our pricing procedure.
7. 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.

1. Step:
Number that determines the sequence of the conditions with in a procedure.
It indicates the position of the condition type in pricing procedure.
Ex.: 10, 15 etc.

2. Counter:
System uses the counter to count the steps and also it can be used to count mini steps of
same condition types. So that number of steps can be reduced in the pricing procedure
and hence enhancing the system performance.
Access number of the conditions with in a step in the pricing procedure
During automatic pricing, the system takes into account the sequence specified by the
counter.

3. Condition Type:
It represents pricing element in pricing procedure as a base price, discount, freight and
tax.
 The condition type is used for different functions. In pricing, for example, the condition
type lets you differentiate between different kinds of discount; in output
determination, between different output types such as order confirmation or delivery
note; in batch determination, between different strategy types.
Ex.: PB00 - Price, RA00- Discount, FRA1-Freight

4. Description:
System copies description of condition type from its description (M/06).

5. From and 6. To:

1. From: This can be used as a base to the condition type for calculating further value.
2. From and To: The range between the steps from and to can be used to specify the range
between same condition types. So that depending upon the condition type, the system deducts
or adds the total value of those condition types from specific common source.

7. Manual:
This indicator specifies whether the specific condition type can be determined manually
during Purchase order processing.
If we check the box then the entry is going to be manual, if we uncheck it, it is going to
be automatic.
For Base Price and Taxes, the entry should be automatic.
For Discounts and Freights, The entry should be manual.
If we check the box, in ME21N when we go to conditions at the header/item level, the
condition type will not be listed. If we require we will have to manually enter it.
If we uncheck the box, in ME21N when we go to conditions at the header/item level, the
condition type will be listed.

8. Required:
This indicator specifies that particular condition type is mandatory in the pricing
procedure.
If we check the box, then in ME21N at the header/item level in the conditions tab, if we
delete the value in the condition type and try to save the document then system will
not allow us to do it and throws an error.
If we uncheck the box, then in ME21N at the header/item level in the conditions tab, if
we delete the value in the condition type and try to save the document then system
will allow us to save it, without giving any error.
Mandatory check box should be checked in condition types which are compulsorily
required in pricing procedure. Ex.: PB00, MWST.
 If the condition type is checked with mandatory option, then value should be maintained
for that condition type, otherwise the system will not allow the user to process the
document.

9. Statistical:
This indicator if it is activated will not allow the value of the condition type to be taken
into net value calculation.
It is used only for information purposes only.
This indicator causes a surcharge or discount to be set in the document statistically (that
is, without altering the value).
This is commonly used for condition types
SKTO - Cash Discount
Sub Totals etc

10. Print:
The value of this field specifies whether line item can be printed or not in the Purchase
document and at what level it is to be printed.

11. Subtotal:
The value of this field determines where the values of subtotals to be captured i.e. in
which table and which field.
Controls whether and in which fields condition amounts or subtotals (for example, a
material discount or the price of a material) are stored.
If the same fields are used to store different condition amounts, the system totals the
individual amounts.
These condition amounts or subtotals are used as a starting point for further calculations.
You may, for example, want a subtotal of all the discounts included in the pricing of a
Purchase order.

12. Requirement:
It is a routine that is written by an ABAP consultant according to the business
requirement.
By defining Requirement in condition technique we can restrict the access of condition
type.

14. AltCty - Condition formula for alternative calculation

type:
 It is again a Routine that is written by ABAP Consultant.
It is an alternative formula for the condition type that can be used instead of standard
formulas.

15. AltCBV - Alternative formula for condition base

value:
Formula for determining the condition basis as an alternative to the standard.
It is again a Routine that is written by ABAP Consultant.
It is used as a basis to calculate value of the condition type instead of using it from the
"FROM" column.
Ex.: Freight – FRA1.
Freight is calculated based on weight, volume etc. and not on the base price. In pricing
there is no entry of weight from which the value can be referred like we do for
discounts using base price. We have to get the value from the Material master.
In this column we can mention the value as 12 - Gross Weight or 13 - Net Weight.
During pricing, the system will consider the value that is mentioned in this column and
determine the freight based on this value.
Suppose we have Net weight: 100 kgs and Gross Weight: 150 kgs. And if we mention 13
in this column then the Freight condition FRA1 will be calculated using the weight as
100 kgs.

16. AcyKy - Account Key/ Accrls - Accruals:

The values of the Sales Revenues, Sales Deductions, Freight Revenues, Tax Revenues,
and Rebate Accruals etc. are going to be posted in the respective G/L accounts in Fi
Module.
In order to do this we assign account keys/ accruals to the different condition types based
on their classification. The classification shown below.
Freight clearing    FR1
Freight provisions    FR2
Customs clearing    FR3
Customs provisions    FR4
Purchasing freight account    FRE
External activity    FRL
Incidental costs of external activities    FRN
For Ex:
For all Freight Conditions we assign FR2 as Account Key and FR1 as Accrual
Key
For all Custom Conditions, we assign FR4 as Account Key and FR3 as Accrual
Key

This account keys and accruals are in turn assigned to respective G/L accounts. So the
system posts respective values in respective G/L accounts in Fi-Co Module. These
assignments are done in OBYC.