What Is Pricing Procedure in Purchase Order?
In SAP MM (Materials Management), the pricing procedure in a purchase order determines how the price of a material is calculated. It includes various price-related elements such as discounts, surcharges, freight costs, and taxes that influence the final purchase price. By defining a pricing procedure, businesses can automate consistent pricing logic across vendors and materials, minimizing errors and ensuring compliance with procurement strategies.Why Is the Pricing Procedure Important?
- Standardizes pricing logic across the organization
- Automates calculation of all price-related components
- Ensures compliance with negotiated vendor terms
- Minimizes manual errors in procurement documents
Key Components of Pricing Procedure in Purchase Order
1. Condition Table
The condition table defines how the system stores and accesses condition records. It specifies the key fields (e.g., vendor, material, purchasing organization) that identify a unique price record.2. Condition Record
These are master data records that hold specific values for discounts, freight, taxes, etc. When a purchase order is created, the system automatically fetches values from these condition records.3. Condition Type
The condition type defines the kind of price component:- PR00 = Base Price
- RA01 = Discount
- FRB1 = Freight
- MWST = Tax
4. Access Sequence
This specifies the order of priority in which the system looks up condition records from different condition tables.Example:
If both vendor and material are maintained, the system
first checks the most specific table (Vendor + Material) and then the general
one (Vendor only).
5. Calculation Schema (Pricing Procedure)
This is the heart of the pricing structure. It outlines:- Which condition types are used
- In what order they apply
- Whether they are mandatory
- How they are calculated (manual/automatic)
6. Schema Group – Vendor
This allows categorizing vendors to apply different pricing logic.Example:
Domestic and international vendors may have different
freight calculations or tax rules.
7. Schema Group – Purchasing Organization
Used to group together purchasing organizations that follow the same pricing schema.Step-by-Step Configuration of Pricing Procedure in Purchase Order
| Step | Action |
|---|---|
| 1 | Create Access Sequence |
| 2 | Create Condition Types |
| 3 | Define Pricing Procedure (Calculation Schema) |
| 4 | Link Condition Types to Access Sequence |
| 5 | Create Schema Group for Vendor |
| 6 | Create Schema Group for Purchasing Organization |
| 7 | Assign Schema Group to Vendor Master |
| 8 | Assign Schema Group to Purchase Organization |
| 9 | Maintain Conditions in Info Records or Contracts |
Navigation Path in SAP (SPRO Configuration)
To customize the price determination process, follow this SAP path:SPRO → IMG → Materials Management → Purchasing → Conditions → Define Price Determination Process
How the Pricing Works in a Purchase Order
When a PO is created:- The system identifies the vendor and purchasing organization.
- It picks the appropriate schema group.
- The pricing procedure is determined using schema groups.
- Relevant condition types are applied in sequence.
- The final price is computed based on base price, freight, taxes, and any discounts/surcharges.
Example Scenario
You buy 100 units of a material with:- Base Price: $10 each
- Discount: 5%
- Freight: $20
| Component | Amount |
|---|---|
| Base Price | $1000 |
| Discount (5%) | -$50 |
| Freight | +$20 |
| Total PO Value | $970 |
FAQs About Pricing Procedure in Purchase Order
1. What is a pricing procedure in SAP MM?A pricing procedure is a set of condition types used to calculate the net price of a material in a purchase order.
2. What is the access sequence in pricing?
An access sequence is the search strategy that SAP uses to find the most specific condition record in the condition table.
3. Can we have multiple pricing procedures?
Yes, different purchasing organizations or vendors can use different pricing procedures based on schema group assignments.
4. What is a calculation schema?
A calculation schema defines the structure and order in which different price conditions (like base price, freight, tax) are applied.
5. Where are condition records maintained?
Condition records are maintained in purchasing info records, contracts, or scheduling agreements.
6. Can condition types be applied manually?
Yes, condition types can be configured for manual entry if required.
Conclusion
Understanding and configuring the Pricing Procedure in Purchase Order is essential for maintaining pricing accuracy in SAP MM. With a clear grasp of condition types, access sequences, and calculation schemas, businesses can ensure consistent and error-free procurement.