The price is a very important function in SAP. It can also be very difficult to grasp, but the underlying concepts are fairly simple. Prices of items are determined mainly by a process called the Condition Technique. The technical situation is so called because it operates using a set of conditions or elements that work together to determine the price of an item.
In SAP, the technique is used to organize and manipulate the key elements that determine the price of the material to arrive at an overall price that includes the basic price, discounts, surcharges and taxes.
The price of a line (that is, a variable amount of material) is determined by a combination of 5 elements. They are:
1. The sale
2. The type of document
3. The sales organization
4. Division, and
5. The distribution channel
Combining these elements with the base material determines the total price and the actual price for a customer is determined based of the pricing procedure.
Maintaining Pricing Procedure
A price is determined for a material through the use of a pricing procedure, the highest level element of pricing. Each item uses a specific pricing procedure, determined by a unique combination of the five elements above. This selection is set up in the Implementation Guide (IMG). The pricing procedure defines the conditions permitted for a document and the sequence in which the system takes these conditions into account during pricing.
A standard pricing procedure is defined in the standard SAP system. It contains conditions most commonly used. These include material prices, discounts, and surcharges, such as freight, or tax. The pricing procedure is unique for the sales area, plus the document pricing procedure key A, and the customer pricing procedure key 1. The document pricing procedure key is in the header of the sales document, while the customer pricing procedure key is in the customer master record. This adds up to the five elements described previously. The field to the right of the pricing procedure is the condition type automatically proposed by the system.
To see how the pricing procedure for a transaction is made goto Tools –> AcceleratedSAP –> Customizing –>Project Management –>SAP Reference IMG –>Sales and Distribution –>Basic Functions –>Pricing –>Pricing Control –>Define and Assign Pricing Procedures –>Define Pricing Procedure Determination or use the transaction Code: OVKK.
Path in SAP IMG to maintain pricing procedure: IMG –> Sales & Distribution –> Basic Functions –> Pricing –> Pricing Control –> Define and Assign Pricing Procedure–> Maintain pricing procedures