Pricing and Conditions (SD-BF-PR)

Pricing and Conditions
Purpose
The term pricing is used broadly to describe the calculation of prices (for external use by
customers or vendors) and costs (for internal purposes, such as cost accounting). Conditions
represent a set of circumstances that apply when a price is calculated. For example, a particular
customer orders a certain quantity of a particular product on a certain day. The variable factors
here - the customer, the product, the order quantity, the date - determine the final price the
customer gets. The information about each of these factors can be stored in the system as
master data. This master data is stored in the form of condition records.
The Condition Technique in Pricing
The condition technique refers to the method by which the system determines prices from
information stored in condition records. In Sales and Distribution, the various elements used in
the condition technique are set up and controlled in Customizing. During sales order processing,
the system uses the condition technique to determine a variety of important pricing information.
For example, the system automatically determines which gross price the customer should be
charged and which discounts and surcharges are relevant given the conditions that apply.