Both the business reality in the area of price lists (e.g. sales price lists) and SAP mechanics are frequently feared by end users and consultants. This is because both of these aspects involve large, complex concepts. At Hicron, we believe that explaining the SAP mechanisms for pricing will help to change the negative image of this functionality.

The basis of SAP pricing are the so-called pricing conditions, which represent various aspects of construction of the final price of the goods/service, e.g.: base price, discounts, surcharges, VAT. All price components relevant to the given process (the above-mentioned pricing conditions) are combined into the so-called pricing procedure. Using this procedure, we can establish the sequence for the construction of the final price, putting the individual conditions in a suitable order. For instance, using the base price term, we can specify that the given price component should be the first in the diagram and that further components (e.g., discounts) are to be determined based on the value of this first component. We can also add surcharges to the base price (e.g., for transport to the customer), which are going to be put in the relevant subsequent position in the diagram.

For every pricing condition, we can establish the available criteria (data in the system) to be used to determine its value. These may, for instance, include the material index number and many other criteria. Both the basis of the pricing condition and its final level may be additionally recalculated using the so-called formulas. By inserting an ABAP code representing the chosen logic, we can produce specific end effects. Pricing properties determine both the situation where price components relevant to the items of sales/purchase documents have to be established and the price components (e.g., discounts) calculated based on the total amount of the document.

The two most important properties indicated above provide unlimited possibilities of representing the price lists of the clients and adapting the standard SAP functionality to the legal requirements, regardless of the country in which the company operates.

As an interesting technical detail, it should be noted that SAP has integrated standard mechanisms to calculate the VAT amount based on the whole document. It also enables suitable recalculation of the most expensive item so that the total amount of the tax is equal to the value of the sum of the tax resulting from the order of the documents. Also, SAP provides ready-to-use pricing procedures for the individual countries of Western Europe and non-EU countries, e.g., Russia. This is tremendously important because they contain a ready-to-use configuration of the pricing conditions representing VAT in line with the applicable law of the given country.

 

Author: Marcin Dering, SAP Expert Consultant, Hicron