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author's profile photo Former Member
Former Member

discounts on PO

Dear All,

this is my first question in this forum. Just yesterday i have signed up.

i just want to ask you in purchase order, discount should calculated on which price( on gross or on net ? ) & how? what is the condition type for the same.

waiting for your reply.

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    author's profile photo Former Member
    Former Member
    Posted on Jan 10, 2008 at 07:10 AM

    Hi,

    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.

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    • Former Member

      Dear Siddharth,

      Your information is very useful,

      I will try to undestand first what is the policy/ procedure of my company for the discount structure, are they taking on the net or gross price.

      thanks again.

  • author's profile photo Former Member
    Former Member
    Posted on Jan 10, 2008 at 07:18 AM

    Hi,

    Further adding to the configuration of the condition types:

    H

    Base price

    PB00

    A condition type with the condition category H must always exist in the calculation schema. Exception: Stock transfers.

    If an access sequence is assigned to the condition type, you must assign a supplementary calculation schema to the condition type. Otherwise, the system is not able to calculate a net or effective price.

    If you manually enter a price in the purchasing document, it is inserted into the condition type.

    B

    Delivery costs

    FRA1

    If you use this condition category, you can enter separate invoices for material costs and delivery costs (e.g. freight charges).

    You must flag the condition type as "provision-relevant".

    You must assign a transaction/event key in the schema (for account determination purposes).

    N

    Non-deductible input tax

    NAVS

    Depending on the tax code in the PO item and the tax calculation schema, the system calculates the non-deductible tax portion and inserts it in the condition type with the category N.

    The condition type has the calculation rule "absolute amount".

    Normally, the access sequence that regulates tax code determination is assigned to the condition type.

    D

    Vendor’s confirmed price

    EDI1, EDI2

    If the vendor confirms a price via EDI, the system inserts the price in the condition type with category d.

    E

    Cash discount

    SKTO

    The system derives a percentage from the terms of payment and inserts it in the condition type with the category E.

    The condition type is included in the calculation on a statistical basis only.

    U

    Precious metal discount/surcharge

    GAU1, GAU2

    G

    Moving average price

    P101

    The system inserts the moving average price/valuation price of the material in the condition type with category G. This makes sense if no purchase price exists (e.g. in the case of stock transfers).

    J

    Sales price excl. taxes (only for Retail)

    MVK2 (prior to Release 4.5A, MVK1)

    The system inserts the currently valid sales price (excluding tax) for the ordering store in the condition type with category J. If sales price valuation is active in the valuation area of the store, the condition type should exist in the calculation schema used for determining the purchase price.

    W

    Sales price incl. taxes (only for Retail)

    MVK0

    The system inserts the currently valid sales price (including tax) for the ordering store in the condition type with category W. If sales price valuation is active in the valuation area of the store, the condition type should exist in the calculation schema used for determining the purchase price.

    regards,

    Siddharth.

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