D. Rajen Iyer - Effective Pricing with SAP ERP

Pricing is a complicated subject and is used in several functionalities, including Sales and Distribution (SD) and Materials Management (MM). Currently no book in the market specifically focuses on pricing. We decided to write a book that addresses pricing not only in SD but also in MM to enable you to learn pricing applications for both functionalities in one book. The book has been written with step-by-step instructions so that you can understand the concepts easily. The concepts are also illustrated through numerous business examples throughout the book.

The concept of pricing has been around since SAP SD was introduced. It has been used across other functions, so the challenge was to explain the concept and how it moves through different functionalities and business cases. This book is a complete reference guide for SAP ERP pricing users, consultants, and analysts, both from the technical and functional point of view.

starts by discussing pricing as a general business process and what that means in the SAP ERP environment. Youll get a clear picture of the scope of the book, and what skills youll walk away with after reading it. We detail the pricing overview, condition technique, and its strong concept application across many areas.

discusses where pricing is used in SD documents. Specifically, it covers how pricing procedures work in SD documents such as sales orders, contracts, and schedule agreements. It also explains how customer hierarchies work. The pricing procedure overview, application in SD documents, customs pricing procedures, and customer hierarchies as applicable to your business are also covered.

addresses condition techniques in SD, which is the mechanism SAP ERP uses to calculate SD pricing. Youll learn how the condition technique needs to be set up and what its most important aspects are. This chapter also covers key topics related to pricing, such as formulas and condition-based values.

covers the special pricing topics within SD, such as promotions and deals, EDI pricing, and rebate agreements. Youll learn how conditions can be grouped together cumulatively to arrive at a price. This chapter also explains how pricing works if free goods are offered (e.g., buy one, get one free).

addresses a very important aspect of pricing design: how performance can be improved by optimized access, minimizing tables per access, and other tips. Youll also learn the technical aspects of pricing such as commonly used user exits, pricing tables, and structures. This chapter covers pricing by optimizing pricing performance in SD and MM documents. The chapter also explores the SD pricing tables, SD pricing user exits, MM pricing technical considerations, and examples of a pricing interface to external systems using user exits.

shows how pricing data is migrated from legacy applications to SAP ERP. Youll also learn about the key takeaways from a cutover perspective, including the data migration steps, pricing data migration and cutover, and customer planning key points.

covers pricing with MM documents. Youll learn about the MM pricing document overview, the pricing procedure calculation schema as applicable to MM, and pricing in purchasing documents.

covers the condition technique in MM, which is the mechanism SAP ERP uses to calculate MM pricing. Youll learn how the condition technique needs to be set up and what the important aspects are. It also covers key topics related to pricing, such as formulas and condition-based values.

, we provide examples of planned delivery costs, foreign currency, weight-dependent/volume-dependent pricing, and other pricing applications.

is about variant configuration: if the product being sold has various options (i.e., an automobile), youll learn how pricing can be calculated by taking the different configurations into account.

discusses the Financial Accounting (FI) aspects, such as how the General Ledger (GL) accounts are determined. Youll learn how to segregate the list price, the discount offered, and the taxes from a financial perspective. This chapter focuses on how the revenue and discount accounts are set up in conjunction with the pricing procedure.

covers the FI aspects with MM. Youll learn how the GL accounts are determined for different pricing elements. In other words, youll understand how to segregate list price, discounts offered, and taxes. Youll also learn how the revenue and discounts accounts are set up in conjunction with the pricing procedure. The chapter starts with the account determination overview and then moves to the FI postings for MM and its application.

explains some of the key reports used in pricing, and it discusses how business users can set up and lay out their own pricing reports in SD and MM. Having gone over the key application of pricing from SD, MM, and interface to FI, this chapter addresses the reporting aspect of pricing with pricing reports and lists, custom SD pricing reports, standard MM pricing reports, and custom MM pricing reports.