Understanding the Pricing Procedure in SAP MM

What Is Pricing Procedure In Sap Mm

Pricing procedure in SAP MM is a crucial aspect of managing pricing in the Materials Management module. It involves defining and configuring various elements that determine how prices are calculated for different materials and services within an organization. This article will delve into the details of pricing procedures, explaining their significance, components, and configuration process in SAP MM.

Condition Technique

The pricing procedure in SAP MM involves using the Condition Technique to calculate the purchase price. This technique systematically considers all the important pricing elements to determine the final cost.

This is the method used to create guidelines and specifications.

The system generates a proposed price by using conditions set through the Condition technique.

How is the price determined using the Condition Technique?

Pricing procedure in SAP MM involves determining prices, calculating taxes, and automatically assigning accounts for financial transactions.

The process of accessing a specific record for a particular condition type in a table is known as the condition technique. This is a straightforward concept that involves following a sequence to find the desired information.

Here the Condition Type is very important like PB00, PBXX, and RA01, etc. In the background every Condition Type has its own definition means the purpose of the Condition Type like, is it for Pricing or Percentage, Quantity base, Accrual Fields, etc is to be defined to work these functions.

Usually, we utilize the available pricing procedures without any potential danger.

However, there are instances where it becomes necessary to generate new condition types based on the specific needs of the organization.

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What Is the Pricing Procedure in SAP MM?

The key factors in determining prices are crucial.

– Sequence of steps to access information

– Necessary condition for a specific task

– Recorded details of a particular condition

– Table containing conditions and their values

– Structure used for calculating data

1. Access Sequence: An access sequence is a method used to find the appropriate condition record in a specific order. It determines where prices are stored and which conditions need to be considered when selecting prices. It also takes into account any existing contracts or schedule agreements to determine the relevant price information that should be retrieved.

2. Necessary Condition: This indicates the current value of a condition and is saved under a specific condition key.

Field Description refers to the explanation or details provided for a specific field in SAP MM. It helps users understand the purpose and functionality of that particular field.

Material no. MATNR

Vendor is represented by the term LIFNR in SAP MM.

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Purchase Organization, also known as EKORG in SAP MM, refers to the entity within a company responsible for managing and executing purchasing activities. It is an organizational unit that plays a crucial role in procurement processes by handling vendor selection, negotiation of terms and conditions, placing purchase orders, and ensuring timely delivery of goods or services.

Plant in SAP MM is represented by the term “WERKS”.

ESOKZ is a code used in SAP MM to represent the Purchase Info Record. This record contains information related to pricing procedures in SAP MM.

3. Condition Record: Condition types are used to indicate the different factors that affect pricing in the system.

For instance, examples of pricing elements in SAP MM include deductions applied to the total amount, deductions applied after all other calculations have been made, charges for transportation, costs for insuring goods, fees imposed by customs authorities, and taxes.

Please keep in mind that the pricing procedure in SAP MM determines how the price factor is calculated.

PB00 – Standard Gross (Basic) Price (Automatic) is a predefined pricing procedure in SAP MM that automatically calculates the standard gross price for a product.

PBXX – Standard Gross (Basic) Price (Manual) is a pricing procedure in SAP MM that involves determining the standard gross price manually.

FRA1 – Delivery Costs

NAVS stands for Non-Deductible Input Tax in SAP MM.

SKTO – Cash Discount. This abbreviation stands for the term “Cash Discount” in SAP MM.

4. Condition Table: A condition table is made up of a set of condition keys and data segments.

The Data Part includes a numerical value that serves as a reference to a specific entry in another table, which holds the condition records.

Field Catalog: A collection of specific fields used to determine pricing.

Material MATNR komp.

Vendor LIFNR is a field that appears in both the komp and komk tables for item-related information.

Purchasing Organization, also known as EKORG, is a header field in the komp and komk sections.

The information about the purchase is rewritten as “Purch.Info Re” and it is related to the specific plant or location, which is indicated by “WERKS”. This information is connected to the components of a product, known as “komp.

Plant ESOKZ komp is a code used in SAP MM for identifying a specific plant.

1. All condition types share identical control data.

2. The control data is specific to each condition type.

3. Although all condition types have the same screens, the values entered in those fields may vary.

5. Calculation Schema: The Pricing Schema refers to the method used for calculating Condition Types in SAP MM.

SAP offers the RM0000 calculation schema as the default option for purchasing in their system.

Typically, vendors present their pricing details in a specific format.

Details Rs. Pricing Elements.

The price before any deductions or discounts, at a rate of 5%, is -100.00 in the PB00 pricing procedure.

Discount of 5.00 on the total price is coded as RA01 in SAP MM.

10% excise duty is applied on the gross profit after deducting ED00.

10% sales tax will be applied to the subtotal of 10.45, with the code ST00.

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A pricing procedure in SAP MM is a structured sequence of actions employed to compute or establish expenses, rates, rebates at the end of a period, and taxes.

Ex. RA01 – Discount % is calculated on PB00 – Gross Price.

In the Pricing Schema, we need to define that RA01 is derived from PB00.

Here PB00 has the Access Sequence – 0002. But RA01 does not have the Access Sequence. Why because it is dependent on PB00. But both are Condition Types.

Understanding Pricing Procedure in SAP MM

Explain the Process of Price Determination Describe the Order in Which Conditions are Accessed Explain the Different Types of Conditions Define How Calculations are Made Define Groups for Calculation Schemas

– Vendor Schema Groups

– Purchasing Organization Schema Groups

Explain Schema Determination: Determine Calculation Schema for Standard Purchase Orders.

Once the Schema Group is finalized, it needs to be allocated to Vendors. This ensures that whenever we engage in any transaction with these Vendors, the assigned Schema will function according to our configuration.

The Pricing in MM is extensive as each Condition and Access Sequence holds its own significance. Therefore, there is no need to worry about it. Initially, focus on understanding how to define the Calculation Schema using the information mentioned above.

What does pricing procedure mean?

In simpler terms, the pricing procedure helps us decide how much something should cost when we purchase it using SAP MM. We can customize the calculations based on different factors such as quantity, discounts, taxes, or any other criteria that affect the final price.

To set up a pricing procedure, we follow these steps:

1. Create an access sequence: This defines the order in which system checks for conditions (such as discounts or taxes) that apply to our purchase.

By configuring a pricing procedure correctly in SAP MM module, businesses can ensure accurate and consistent determination of prices while processing purchasing transactions.

The SAP pricing procedure field: what does it entail?

1. Combine different types of charges in the pricing procedure.

2. Create a custom pricing procedure according to your needs.

3. Assign the schema group purchase organization to the purchasing organization.

4. Press enter and save your changes.

The T code for pricing procedure in SAP MM

The V/08 transaction code is used in SAP MM to create a new pricing procedure. To create the pricing procedure, you need to utilize the condition technique. The first step in this process is to create a condition table using the V/03 transaction code.

A condition table is an essential component of the pricing procedure creation process. It helps define various conditions that affect pricing, such as material, customer group, and sales organization. By creating a condition table using V/03, you can specify these conditions and their corresponding values.

Once you have created the necessary condition tables, you can proceed with defining access sequences for your pricing procedure. Access sequences determine how SAP MM accesses different condition records based on specific criteria like priority or validity period.

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How can I access pricing procedures in SAP?

To view the pricing procedure in a sales order, follow these steps:

1. Go to transaction code VA03 to display the sales order.

2. Navigate to the Header section and click on the Sales tab.

3. Look for the Pricing Procedure information.

To find your pricing procedure in transaction code V/08, you need to be a registered user.

List:

– Access VA03 transaction code

– Display sales order

– Go to Header section

– Click on Sales tab

– Locate Pricing Procedure information

– Use V/08 transaction code

What is the purpose of pricing procedures?

The main function of a pricing procedure is to define the list of price elements that are to be used in a specific business context. Price elements in a business document can be price conditions or subtotals.

Setting a pricing procedure: How is it done?

Pricing Procedure in SAP MM is a crucial aspect of managing pricing strategies for products and services. It involves a series of steps that help organizations determine the most appropriate price for their offerings.

Step 1: Selecting the pricing objective

The first step in the pricing procedure is to identify and select the pricing objective. This involves understanding what the organization aims to achieve through its pricing strategy, such as maximizing profits, gaining market share, or maintaining competitive prices.

Step 2: Determining demand

Once the pricing objective is established, it is important to analyze market demand for the product or service. This includes evaluating factors like customer preferences, buying behavior, and overall market trends. By understanding demand patterns, organizations can set prices that align with customer expectations and optimize sales potential.

Step 3: Estimating costs – ensuring profits

To ensure profitability, it is essential to estimate all relevant costs associated with producing and delivering the product or service. These costs may include raw materials, labor expenses, overheads, transportation charges, and any other direct or indirect expenses incurred during production. By accurately assessing costs against expected revenues at different price points, organizations can determine suitable profit margins.

P.S.: Pricing procedures play a vital role in determining optimal prices for products and services in SAP MM module. Organizations must carefully consider various factors such as cost estimation techniques while setting prices to ensure profitability without compromising on competitiveness.

By conducting this analysis companies are able gain valuable insights into how much value customers place upon certain features/services provided by rival firms which will enable them make informed decisions regarding where best position themselves relative others operating within their industry sector.

Step 5: Choosing your pricing method

Step 6: Determining the final price

The final step in the SAP MM Pricing Procedure is to determine the actual price that will be charged to customers. This involves considering all factors discussed earlier – including demand patterns, cost estimates, competitor analysis, and chosen pricing method. By carefully evaluating these elements and making necessary adjustments if required; organizations can arrive at a fair and profitable price point that meets both customer expectations and business objectives.