Pricing management module became available in  10.0.33 version (generally available since April 2023) but still marked as  ‘preview’ in Feature management form. This is the first article in a series  dedicated to uncovering the fantastic breadth of possibilities in pricing  management available to users of Microsoft Dynamics 365 through the new  Pricing Management module.

This article is dedicated to a brief overview of the  Pricing Management module and will give you a general idea of the  capabilities of the new functionality, helping you decide whether it's  necessary to delve into its details. I will elaborate on these details in  subsequent articles dedicated to the Pricing Management module.

So, what capabilities does this module offer?

In brief, the use of the Pricing Management module  allows configuring and managing the structure of the sales price, the  components that make up the price, as well as variable factors and attributes  that can influence the final sales price. Additionally, each component that  contributes to the sales price can be allocated to various accounts, enabling  the creation of transparent and clear analytical and financial reports.

Let's start with a brief overview of the components  that can constitute the final price. All possible price components are  presented in the image below:

Below is a brief description of each component that  you can use when forming the sales price.

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Base price

There are four possible options to use as a base  price during calculations.

• Activated standard item cost is the  “Base price – inventory price” component. You can use this base price only if  your inventory model is “Standard cost” otherwise the base price will be 0 as  well as the calculated sales price.

• Item base price is the “Base price –  purchase price”. It lets you set prices for each item by using either  calculated values or manually entered values. Calculated prices use the  following formula: Item base price = Vendor list price ± Vendor  term agreements.

• Released product sales price this is  the “Base price – sales price” component. In this case, price calculation  mechanism uses the sales price for the Item from the released product record.  It's calculated by using the following formula: Unit price = Base  price ± Margin component price adjustments.

• Trade agreement price is the “Sales  agreement price” component. The price that reflects a negotiated pricing  strategy for a collection of customers and a group of specific products. You  can configure the system so that it uses one of the following formulas to  calculate the unit price based on the sales trade agreement price:

–    Unit price = Sales trade agreement price (if no margin  component price adjustment applies)

–    Unit price = Sales trade agreement price ± Margin  component price adjustments

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Margin components

You can set up layers of margin  components to adjust the base price up (positive) or down (negative). Margin  component price adjustments have a calculation sequence and can be compounded  to get the total adjustment price.

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Discounts

There are six types of discounts that you can use in  various configurations and pricing structures.

·       Simple discounts - simple discounts  reduce the product price by a percentage or amount. 

·       Quantity discounts -  quantity discounts are given to customers when they purchase a specific  quantity of a product.

·       Threshold discounts -  threshold discounts are given to customers when the total for a transaction  reaches one or more specified amounts. Threshold discounts are applied after  other discount types, because their eligibility is determined by the total  order value. 

·       Mix-and-match  discounts - mix-and-match discounts are given to customers when they purchase  a specific combination of products.

·       Free item – free item  discount allows you to automatically add one or more products to the order,  which the customer will receive for free along with the order.

·       Coupon – coupon  discount is required to qualify the valid coupon number (together with the  sales order) for applying the discount in the calculation of the sale price.

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Charges

Based on the customer that you're  working with or the item that you're selling, you might want to apply  specific additional charges. Automatic charges, or auto charges, are  automatically applied when you create a sales order. You can define auto charges  for specific customers or items. 

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Rebates

These are Off-invoice discounts. You can have  multiple price component code of this type. This component code calculated  based in rebates configured in Rebate management module. A rebate is the return of part of the  purchase price by a seller or a buyer.

As you can see, the functionality of the Pricing  Management module provides extensive capabilities for shaping your specific  price structure. But what should you do when different cases require the use  of various price structures and price component values? To implement maximum  flexibility in the mechanism of sales price formation, Microsoft suggests  utilizing price attributes.

The possible options are presented in the image below:"

Pricing management provides a set of prefilled price  attributes from fields in related tables that are associated with products,  customers, orders, and order lines. It also lets you create custom price  attributes and associate them with orders, customers, and items. You can use  those price attributes when you create pricing rules and conditions. Then,  when an order is placed, the pricing engine will then use the associations to  determine the appropriate price.

But that’s not all yet! Based on one of the order  header price attributes you can configurate different price structures (Price  trees).

I hope that this brief overview has been useful to  you. If you are interested in the possibilities offered by the Pricing  Management module, if you want to learn how to configure a flexible price  structure and see possible examples of use, then follow me and stay in touch  for news. Very soon, I will publish the second article in the Efficient  Pricing Mastery series.