How pricing works for Quotes/Orders
The heart of quotations and orders is the method of pricing. There are three basic methods to choose between.
0 Cost plus
1 Price list
2 Mixed pricing
In the COST PLUS method the cost of an order is automatically calculated (estimated). You then add overheads and a mark up to the total cost of the order to get a selling price for the customer.
In the PRICE LIST method each product has a price which is stored in the product library. The estimate is based on this list price and also takes account of any product and customer discounts on a per item basis. You need to set up your product library for this and also assign each product a discount code..
Each product has a PRICE field and this can contain a fixed value or the price can be based on a formula. The formula enables you to adjust the price based on variable features of each product such as the finish or style. An alternative is to use one of the Product memo fields for the Pricing information.
In the MIXED method where a product has a price in the product library the item's estimate is overridden with the price list value.
Note - Pricing method is set by a Quotes / Orders parameter: Pricing (Main screen - Parameters - Quotes / Orders parameters)
For both price list and cost plus methods you may also want to set up a discount code for each customer - use the customer database for this. The actual discount percent for each category is set using the Discount table.
You will need to set values for the overheads and mark up for the cost plus method - these are set as system parameters.
To set up tax rates use the Tax table option. The tax rate may apply to every customer (value added taxes) or differ for each customer (regional sales taxes)..
Totals - To see the totals for an order choose the Totals button at the top of the order entry screen. This shows you all the totals for the order. An example is shown below:-
Invoice date : 27/04/2002
Customer discount code: A Per order discount: 5.0
Customer tax code : Tax rate: 17.5%
Overhead : 20.0% Mark up 15.0%
Total order cost 85.00
Overhead amount 17.00
Mark up amount 17.00
Total order amount 119.00
Order discount amount 11.90
Order amount inc. dis. 107.10
Carriage 5.00
Invoice total pre tax 112.10
Tax 19.60
Total due 131.70
This is the full range of totals that are available - usually forms contain just a selection of these.
If you are using the Price list method you can also see a totals box for each line - to see this locate the cursor on the line and click on the small totals button at the top of the grid.
You can change any of totals if necessary by moving to the box and over typing the value.
Unit price and quantity - The order entry screen shows only the UNIT PRICE and TOTAL PRICE columns. These are calculated as:-
Total price = Unit price * Quantity
Both the total price and the unit price include per item discounts for the price list method.
For the Cost plus method the price per item and total per item includes the mark up and overheads. But note that this is only an estimate and there is sometimes a small difference between the per item prices and the overall price for the order. This is because the overheads and mark up percentages are applied to the total costs to get the total order price.
The raw costs for each item (that is, the cost after optimising) are called the Unit Cost and the Total Cost.
Price update from the Estimate button - The Estimate button on the Quotes / Orders screen updates prices from the Product Library and Part Library for all items in the order. Product pricing set by formula and by memo field is updated from the Product Library. Part pricing, set by the unit price information box, and fittings and operations pricing are all updated from the Part Library. Any global variable dependant prices are also updated.
The update applies to the Price List pricing method (pricing method 1) and the Mixed Pricing method (pricing method 2). The Cost Plus method (pricing method 0) is not affected, and the Estimate button here generates a price estimate based on optimisation as before.
The update overwrites any price changes the user may have entered manually. To avoid price overwriting, a warning message appears before the update. Answer OK to continue or cancel to return to the order.
Product prices are still estimated in the Mixed Pricing method when there is no entry in the Product Library.
Conserving discounts when using dimension dependant product price formulae - Products using a pricing formula dependant on the product dimensions use the current discount set in the Item Cost dialog and tabbing across the dimension fields in the Quotes / Orders grid does not change the unit price or total price in the grid. Any changes made to the product dimensions result in price changes using the current discount rate. This is only relevant if the product dimensions are editable.
