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Dec 18, 2010 at 12:47 PM

Exemptions from discounts and surcharges

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I work for an entrepreneurial company. We do quite a range of business across many different industry sectors. We support many different types of business deals. One of our biggest challenges is managing pricing.

Wherever possible we try to set up our pricing calculation based on the most general attributes. For example: Sales Organization \ Price list type.

Unfortunately, our business is not that simple. We may have situations where the price may need to be calculated based on the customer\ material, or customer\ plant\ material combinations, etc... This is not a problem in the standard system. We've just arranged the access sequences in the appropriate manner.

Our challenge comes in with the range of discounts and surcharges. Typically, management comes to us and says, "We need to add a surcharge for all customers who buy this product. There are 5,000 customers this would apply to. "

The approach has been to create a new condition type if necessary, and to organize the access sequences in as general as possible a manner, to minimize maintenance, in order to apply the surcharge.

After a few hours, a few days, or a few weeks, the sales leadership realizes 10% of the customers need to be exempted from this surcharge. What's the best approach to do this?

We have traditionally created a new access sequence for customer\ material and added a new condition record for the combination at a rate of $0.00. The new access is then assigned above the access used to apply the surcharge. The system then finds the $0.00 value record before any others, applies it, and stops. The customer has the surcharge condition applied, but at no value. If the value is $0.00, then the record does not print on any customer facing output. The customer never sees the $0.00 charge, and we satisfy the sales management requirement.

The downside of this approach is as follows:

  • The pricing screen in the sales order gets cluttered with $0.00 value records. (i.e. Fuel surcharges, product surcharges, location surcharges, internal statistical conditions, etc..) Many of these may apply on a single order. It gets confusing for customer service and others trying to read the pricing screen.

  • When a pricing report is run we inevitably get the question why are there so many records with $0.00 value? More confusion and ultimately IT support time.

  • It becomes difficult to identify what the final price to a customer is without simulating an order. You must create\simulate an order to get at the net price the customer will pay. Now we need to introduce the SAP quotation process ( we currently don't use it), or code a program to work up a price. More IT development and or support time.

  • Numerous other reasons I can't think of at the moment

The simple approach would be to go back to sales management, tell them to forget about the discounts & surcharges, just work up a net price and be done with it. Unfortunately, the funds need to be channeled to different account assignments. Accounting wants transparency in the account assignments, and likes to see the application of the charges and discounts separated by condition types.

Caught between a rock and a hard place, what is a poor SD guy to do? Is there a better way to deal with the exemptions, minimize maintenance, and reduce the level of confusion and noise?

Any thoughts are appreciated.