Simplify Complex Pricing Scenario with SAP B1

Aug 14th, 2021 by Narain K

Demand and supply keep the retail industry alive. If a retailer has trouble identifying customers across branches or cannot price complex requirements automatically, it can have serious consequences on their business. A confusion in pricing items or in recognizing the same customer across divisions could lead to serious inefficiency, dissatisfied customers, and unfavourably impact the overall business. It is therefore essential to rely on a flexible tool intelligent enough to accommodate the unique needs of your business.

Companies that opt for SAP Business One (SAP B1) as their ERP software, have priorities like Inventory Management, Sales and Customer Management, Finance Management, Purchasing, Business Intelligence, Analytics, Reporting, etc.

SAP B1 is best suited for growing businesses and enterprises that face an increase in demand and find it challenging to price their stock items. The following features help you take advantage of SAP Business One when pricing your goods effectively becomes the ultimate priority:

1. Special Prices: - Define special prices for your customers and vendors in addition to the standard price list or by discount groups according to item groups, manufacturers, or items.

2. Discount Groups: - Define discount groups for all business partners, or a specific customer or vendor group, or a specific business partner.

3. Period and Volume Discount: - Offer discounts for a particular period. If you've ever run a time-sensitive promotion, there may have been someone that forgot the start date and end of the promo! And tragically, instead of a 2-week promo, you've had it go for 6 long weeks! SAP B1 lets you set a time limit on such discount or promo initiatives.

4. Price List: - Create various price lists in SAP and assign those to appropriate business partners. By default, ten price lists are provided by SAP, of course, additional price lists can be created as needed. You can add, change, or delete the prices in these lists to manage your pricing strategy. In each price list, you can define up to three prices with different currencies for each item. You can either create the price list manually or by importing the prices from an Excel file or even via the SAP Business One Data Transfer Workbench (DTW) data uploading tool.

5. Effective Price: - Manage the highest and lowest price automatically using this feature at a business partner level. These two choices override the default pricing hierarchy, automatically calculating the lowest or highest price from available price sources.

6. Base Pricing Units: - You can use any of the package sizes as the base pricing units. It does not require any additional calculation. If your purchase and sales package units are the same, then you can use the unit price to set the price of each package.

7. Base Price List & Factors: - Manage your price list automatically by defining its factors and the base price. Here's an example. Create price list A1 for international customers, and price list B1 for domestic customers. Say A1 prices are 20% higher than B1. Use the B1 price list as the base price of A1, and with a factor of 1.2 to set A1 20% higher than B1. The price list A1 gets updated as per the base price list value and factor. Change the price once in the base price list to adjust all the prices in other dependent price lists. Naturally, the changes automatically reflect in all price lists that refer to the base price list.

Simplify Complex Pricing Scenarios with SAP B1

Enterprises that need customized prices can get the help of SAP B1 partners like CCS to overcome pricing hiccups without much trouble as SAP is flexible and accommodates various pricing requirements.

Challenge #1: For instance, one of our clients runs a door manufacturing and selling business based on orders. In the case of 1000 or 5000 door orders, though the item type is the same, each door has different dimensions (height x width) as specified by their end customer. And the client would have 1000 or 5000 different doors to be dispatched as finished goods.

Solution: To handle the order complexity, we define one item in the master (SAP) and treat each door separately based on its dimensions in the pricing module and the sales order gets created accordingly. On invoicing these 1000 or 5000 doors, the quantity for dispatch is selected from the sales order. Compute the height x width of each door, convert those to the base Sq. Ft. (that is the standard billing unit) and push the cumulative pricing - based on the total quantity to be dispatched - to the invoice screen. Any add-on charge per door will be multiplied by the dispatched quantity and is added to the invoice.

Challenge #2: In another scenario, we set up branch-wise price lists for one of our clients in the manufacturing and trading of aluminium sheets having multiple branches across the state. Each branch dealt with a different set of products and is mapped as a division. Here, the challenge is that a customer purchases the same item in different branches and is treated as a wholesaler/retailer/sub-dealer in one branch and defined otherwise in another branch and, this means different prices too.

Solution: To overcome this, use the custom mapping set between Division -> Product -> Pricing Groups to define the prices easily. So, the said item price can be different for the same item in two branches based on the client’s end customer definition (usually done based on the sales orders). The item price can automatically change based on the customer, division, and branch by setting an additional price list master table in SAP.

Find Out if SAP B1 Suits Your Business

Understand how SAP Business One (B1) gives you the edge you need if you prioritize easy pricing of goods, faster order fulfilment, and deliveries. Having the right set of tools to systematically approach goods procurement, sales, and finance proves extremely beneficial when your business days are hectic. Enhance your processes with SAP B1 especially given its useful features for managing vendors, inventory, procurement, and automation. Reach out to your SAP B1 Consultants at CCS today to get answers to your queries at collaborate@ccs-technologies.com.

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