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Purchasing creates a PO for 100 swivel chairs at $250 each, to be supplied by vendor Miller Co. No outline purchase agreement exists with this vendor. The agreed condition (discount of $10 granted on each chair purchased) is stored in an info record. No general price stipulations apply. The system carries out the following price determination process: RM0000 The system searches only for condition records belonging to condition types that are marked in the schema as non-manual. Condition type PB00 0002 Accessing of condition table 068 (plant-specific agreement item) is not carried out Accessing of 016 (contract item) is not carried out. Table 017 (info record) is accessed and the condition record is found. Condition records belonging to the other condition types are then sought. In the example, no further condition records are found because condition type RB00 (discount) is a supplementary condition belonging to condition type PB00 and thus has no access sequence of its own. The system then suggests a price of $240 per chair in the purchase order. The buyer can then enter further conditions (covering delivery costs, for example). The following graphic illustrates the steps in the process:
Determination of Purchase Price (Example) in SAP MM
Price Determination in SAP MM
Use
When you create a purchase order or scheduling agreement with time-independent conditions, the system searches for valid conditions and inserts them into the new document (this is the process of price determination).
- In the case of purchase orders, the system searches for conditions in info records and contracts (for contract release orders), and for general conditions.
- In the case of scheduling agreements with time-independent conditions, the system searches for conditions in info records and for general conditions.
If no conditions are found, but the last PO is noted in the info record, the system can adopt the conditions from this PO. You can specify how the system treats the conditions from the last PO in Customizing for Purchasing (default values for buyers).
The system can proceed in similar fashion in the event that a scheduling agreement with time-independent conditions is noted in the info record.
Price determination involves the process of determining already existing conditions only. Thus, if the buyer enters further conditions in the purchase order - over and above those inserted by the system - and a new effective price results, the latter is not calculated via the price determination process.
If the conditions were adopted from the last document and the buyer performs the New price determination function, these conditions will not be inserted again.
Date of Price Determination
In the automatic price determination process, the price can be calculated as at the document date of the PO, or as at another date (such as the current day’s date, the delivery date, or the goods receipt date). You can specify the date to which the price that is determined relates at the following points:
- In the vendor master record, in the Pricing date control field, if you wish to use the same price determination date for all a vendor’s materials.
- In the purchasing info record, in the Pricing date category field, if you wish to use a different pricing date for a certain material supplied by a particular vendor.
The value in the purchasing info record takes precedence over the value in the vendor master record.
- In the purchase order, in the Pricing date category field (found via Item ® More functions ® Additional data).
The value from the info or vendor master record is preset when a purchase order is created. However, this is only used if you change it in the purchase order and carry out a new price determination process.
The pricing date category in the PO takes precedence.
Example:
In the info record, you have specified that the price determination process is to be carried out with the conditions that are valid on the delivery date (pricing date category 2). Furthermore, you have created two validity periods (from 04. 01.1997 until 04. 31.1997 and from 05. 01.1997 until 12. 31.1997), each with different conditions.
You create a purchase order with the delivery date 05.05.1997. The pricing date category from the info record is adopted. In the course of the price determination process, the info record conditions from the validity period 05. 01.1997 until 12. 31.1997 are then adopted.
If you wish to adopt the info record conditions from the first validity period in the purchase order, you must change the pricing date category in the PO to blank and carry out a new price determination process.
Conditions for Several Purchasing Organizations in SAP MM
Use
As a rule, conditions are negotiated and maintained individually by each purchasing organization. If your system has been set up accordingly, however, you can also access and utilize the conditions that another purchasing organization (the reference purchasing organization) has negotiated, or make available the conditions negotiated by your purchasing organization to other such organizations.
The goal is for advantageous terms negotiated by the reference purchasing organization and stored in the system in the form of conditions and contracts to be made generally available to other predefined purchasing organizations. Expressed in another way, we are talking about working with conditions and contracts on a cross-purchasing-organization basis.
Prerequisites
You can make the following settings in Customizing for the enterprise structure:
- The general conditions of a reference purchasing organization can also be used for price determination purposes by other purchasing organizations.
- Several purchasing organizations can access the contracts of a certain reference purchasing organization.
Time-Independent Conditions in SAP MM
Use
(Note: up to Release 3.1H "time-independent conditions" were termed "document conditions").
No validity periods and scales can be defined for these conditions. The conditions in purchase orders are always time-independent. You can determine whether time-dependent or time-independent conditions can be maintained in quotations and scheduling agreements via the document type in Customizing. (<Document> ® Define document types.)
Subtotals (net price, effective price) are created in the case of time-independent conditions.
SAP recommends working with time-dependent conditions for quotations and scheduling agreements, since these provide a wider range of processing options.
Time-Dependent Conditionsin SAP MM
Use
(Note: up to Release 3.1H, "time-dependent conditions" were termed "master conditions".)
Validity periods and scales can be specified for these conditions. You can also define a price range (upper and lower limits). If the system adopts such a condition in a purchase order and the condition is then changed manually in the PO so that the price range is not adhered to, the system issues an error message.
No subtotals (net price, effective price) are created in the case of time-dependent conditions.
For more information on scales, please refer to the documentation:
SD Pricing and Conditions: Pricing Scales
SD Pricing and Conditions: Pricing with Graduated Scales
Conditions in Info Record and Purchasing Documents
Conditions in info records and contracts are always time-dependent. You can determine whether time-dependent or time-independent conditions can be maintained in quotations and scheduling agreements via the document type in Customizing. In the standard system, quotations and scheduling agreements are provided with time-dependent conditions.
The purchasing department concludes a contract with the vendor Meyer Co. regarding the purchase of 10,000 office desks. The agreement has a validity period of two years. In the first year, Meyer Co. grants a discount of 2% on each release order issued against the contract. For the second year, a quantity scale has been agreed. If Purchasing orders up to 50 desks, Meyer Co. grants a discount of 1%. If between 50 and 100 desks are ordered, the discount is 2%, and if 101 or more are ordered, the applicable discount is 3%.
SAP recommends working with time-dependent conditions for quotations and scheduling agreements, since these provide a wider range of processing options.
General Conditions
In addition to time-dependent conditions applicable to individual quotations, outline agreements, and info records, you can store time-dependent conditions representing more general pricing stipulations in the system.
You can specify general conditions at the following levels:
- Vendor
The purchasing department negotiates a 2% discount with the vendor Hubbard & Co., which the latter agrees to grant on all purchase orders placed with that company during the next half-year.
- Vendor sub-range
The conditions apply to all materials from a vendor’s sub-range. This saves you considerable time and effort with regard to data entry, since you need not maintain conditions for individual materials.
The purchasing department negotiates a 3% discount with vendor Meyer Co., payable by the latter with respect to all POs placed with that company in which more than 15 kg of materials are ordered from the sub-range "adhesives". The purchasing department orders 10 kg of component adhesive and 20 kg of liquid glue from this sub-range. Vendor Meyer Co. grants the 3% discount on this order.
- Condition group
The conditions apply to all materials offered by a vendor that belong to the same condition group (according to assignment in the relevant info records). This reduces your data-entry effort. (See also Conditions in Info Records).
- Material group, material type, Incoterms, invoicing party
Conditions and Price Determinationin SAP MM
Purpose
This component enables you to store pricing stipulations agreed with the vendor (such as applicable discounts or surcharges, or stipulations regarding the payment of freight costs) in the system. You can enter these conditions in quotations, outline purchase agreements, and info records. You also have the option of entering general conditions at vendor level, for example. The system then applies the conditions in determining the price in purchase orders (POs). You can enter further conditions in the PO itself.
There are three kinds of price in Purchasing:
- Gross price
Price without taking any possible discounts and surcharges into account
- Net price
Price taking any applicable discounts and surcharges into account
- Effective price
Net price after deduction of cash discount, with allowance for any miscellaneous provisions, delivery costs, and non-deductible taxes.
Time-Dependent and Time-Independent Conditions
A distinction is made between conditions that are valid for a certain period and conditions for which no special validity period can be specified. In the latter case, the validity period corresponds to that of the purchasing document. Whether time-dependent or time-independent conditions are created is determined via the document type.
If you enter a percentage vendor discount in a PO, this is a time-independent condition. However, if you enter this discount in a contract, the condition is time-dependent.
Conditions Requiring Subsequent (End-of-Period) Settlement
You can also store conditions that do not take effect immediately, but only at the end of a certain period (conditions governing end-of-period rebates). Settlement with regard to such conditions takes place subsequent to the settlement of vendor invoices relating to individual purchase orders.
Conditions for Several Purchasing Organizations in SAP MM
Use
As a rule, conditions are negotiated and maintained individually by each purchasing organization. If your system has been set up accordingly, however, you can also access and utilize the conditions that another purchasing organization (the reference purchasing organization) has negotiated, or make available the conditions negotiated by your purchasing organization to other such organizations.
The goal is for advantageous terms negotiated by the reference purchasing organization and stored in the system in the form of conditions and contracts to be made generally available to other predefined purchasing organizations. Expressed in another way, we are talking about working with conditions and contracts on a cross-purchasing-organization basis.
Prerequisites
You can make the following settings in Customizing for the enterprise structure:
- The general conditions of a reference purchasing organization can also be used for price determination purposes by other purchasing organizations.
- Several purchasing organizations can access the contracts of a certain reference purchasing organization.
- Creating SAP MM RFQs
- Selecting SAP MM Vendors Who Are to Receive RFQs
- Issuing SAP RFQs and Obtaining Quotations
- SAP MM Quotation
- SAP MM Request for Quotation
Time-Independent Conditions in SAP MM
Use
(Note: up to Release 3.1H "time-independent conditions" were termed "document conditions").
No validity periods and scales can be defined for these conditions. The conditions in purchase orders are always time-independent. You can determine whether time-dependent or time-independent conditions can be maintained in quotations and scheduling agreements via the document type in Customizing. (<Document> ® Define document types.)
Subtotals (net price, effective price) are created in the case of time-independent conditions.
SAP recommends working with time-dependent conditions for quotations and scheduling agreements, since these provide a wider range of processing options.
Time-Dependent Conditions in SAP MM
Use
(Note: up to Release 3.1H, "time-dependent conditions" were termed "master conditions".)
Validity periods and scales can be specified for these conditions. You can also define a price range (upper and lower limits). If the system adopts such a condition in a purchase order and the condition is then changed manually in the PO so that the price range is not adhered to, the system issues an error message.
No subtotals (net price, effective price) are created in the case of time-dependent conditions.
For more information on scales, please refer to the documentation:
SD Pricing and Conditions: Pricing Scales
SD Pricing and Conditions: Pricing with Graduated Scales
Conditions in Info Record and Purchasing Documents
Conditions in info records and contracts are always time-dependent. You can determine whether time-dependent or time-independent conditions can be maintained in quotations and scheduling agreements via the document type in Customizing. In the standard system, quotations and scheduling agreements are provided with time-dependent conditions.
The purchasing department concludes a contract with the vendor Meyer Co. regarding the purchase of 10,000 office desks. The agreement has a validity period of two years. In the first year, Meyer Co. grants a discount of 2% on each release order issued against the contract. For the second year, a quantity scale has been agreed. If Purchasing orders up to 50 desks, Meyer Co. grants a discount of 1%. If between 50 and 100 desks are ordered, the discount is 2%, and if 101 or more are ordered, the applicable discount is 3%.
SAP recommends working with time-dependent conditions for quotations and scheduling agreements, since these provide a wider range of processing options.
General Conditions
In addition to time-dependent conditions applicable to individual quotations, outline agreements, and info records, you can store time-dependent conditions representing more general pricing stipulations in the system.
You can specify general conditions at the following levels:
- Vendor
The purchasing department negotiates a 2% discount with the vendor Hubbard & Co., which the latter agrees to grant on all purchase orders placed with that company during the next half-year.
- Vendor sub-range
The conditions apply to all materials from a vendor’s sub-range. This saves you considerable time and effort with regard to data entry, since you need not maintain conditions for individual materials.
The purchasing department negotiates a 3% discount with vendor Meyer Co., payable by the latter with respect to all POs placed with that company in which more than 15 kg of materials are ordered from the sub-range "adhesives". The purchasing department orders 10 kg of component adhesive and 20 kg of liquid glue from this sub-range. Vendor Meyer Co. grants the 3% discount on this order.
- Condition group
The conditions apply to all materials offered by a vendor that belong to the same condition group (according to assignment in the relevant info records). This reduces your data-entry effort. (See also Conditions in Info Records).
- Material group, material type, Incoterms, invoicing party
Conditions and Price Determination in SAP MM
Purpose
This component enables you to store pricing stipulations agreed with the vendor (such as applicable discounts or surcharges, or stipulations regarding the payment of freight costs) in the system. You can enter these conditions in quotations, outline purchase agreements, and info records. You also have the option of entering general conditions at vendor level, for example. The system then applies the conditions in determining the price in purchase orders (POs). You can enter further conditions in the PO itself.
There are three kinds of price in Purchasing:
- Gross price
Price without taking any possible discounts and surcharges into account
- Net price
Price taking any applicable discounts and surcharges into account
- Effective price
Net price after deduction of cash discount, with allowance for any miscellaneous provisions, delivery costs, and non-deductible taxes.
Time-Dependent and Time-Independent Conditions
A distinction is made between conditions that are valid for a certain period and conditions for which no special validity period can be specified. In the latter case, the validity period corresponds to that of the purchasing document. Whether time-dependent or time-independent conditions are created is determined via the document type.
If you enter a percentage vendor discount in a PO, this is a time-independent condition. However, if you enter this discount in a contract, the condition is time-dependent.
Conditions Requiring Subsequent (End-of-Period) Settlement
You can also store conditions that do not take effect immediately, but only at the end of a certain period (conditions governing end-of-period rebates). Settlement with regard to such conditions takes place subsequent to the settlement of vendor invoices relating to individual purchase orders.
See also:
SAP Retail Subsequent (End-of-Period Rebate) Settlement
SD Conditions and Pricing
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