1.

BUSINESS REQUIREMENT

EUROSPANs pricing structure encompasses the pricing conditions below. There are 2 ways EUROSPAN gives discounts; Cash discounts which can be on value, quantity or monthly target. Free of charge products.

EUROSPAN is legally restricted from giving anything for free. In the case of free of charge sales, the invoice (hardcopy) have to appear some value just for custom declaration purpose. This can be managed by the item category changes of each materials in the same sales order- can be done by the functional consultants while doing the configuration. Since it is an export sale no Taxes captured in SAP system, provision has been given to extend the sales process for the local sales anytime. In Returns order, no taxes are reclaimable. In finance, the freight Charge to the customer would be Control against the forwarding Agent Invoice Below is an example of the current EUROSPANs pricing structure.

Actual Pricing Structure Price Element Retail Selling Price Retail Margin Ex-factory Price Excise FOB price CRF price Freight Cost Net Factory Price Cost Gross Margin Value 5.500 0.225 5.280 1.750 XXX XXX XXX 3.525 2.160 1.370 Price to customers Cost of sales Net Factory Price less Cost Description Price to end-consumer Retail margin to customer Total price to customer Sales Tax, Health Tax & Add-On Tax

1.2 1.2.1

BUSINESS BLUEPRINT

PRICING CONDITION TYPES

The pricing elements to be created for EUROSPAN are shown as below:

ZEU1 ZEU2 ZEU3 ZEU4 ZEU5 TOTAL DISCOUNT ZEU* TOTAL TAX ZEUA VPRS

Standard Price Actual Price Volume Discount Price Discount Additional Discount = ZEU3 +ZEU4 + ZEU5 Tax if any = ZEU* Net Std Price (ZEU1 TOTAL TAX) Cost

All pricing elements such as prices, tax and discounts are created as pricing condition records in SAP. Initial pricing information will be uploading by our Project team and subsequent changes will be done by the users. During sales order processing, SAP will automatically retrieve certain pricing information from Eurospan. These prices will in turn be copied into the billing document at the time of billing creation.

Sample Condition Record Template as follows: (Price, Discounts, etc)

Standard Price Standard Price represents the standard price per SKU. This is the standard selling price plus all taxation. This price will be maintained in SAP by Eurospan. There are no accounting postings for this condition as it is a statistical value.

The condition type is:

Condition Type ZEU1

Description Standard Price

Key Combination Automatic calculation

Actual Price Actual Price represents the selling price to customer. This price is the Standard Price less a discount. There are no accounting postings for this condition as it is a statistical value.

The condition type is

Condition Type

Description

Key Combination

ZEU2

Actual Price

Automatic calculation

Net Factory Price Net Factory Price represents the Standard Price less all taxation. This price is maintained in SAP pricing master. There are no accounting postings for this condition as it is a statistical value. The condition type is Condition Type ZEU3 Description Net Factory Price Key Combination Material

Price Discount Price Discount is the price difference between Standard Price and Actual Price. This amount will be calculated and posted to accounting. The condition type is Condition Type ZEU4 Description Price Discount Key Combination Formula

The accounting entries at the time of billing are as follow; Accounting entries: Account Key DR CR Description of account posted Discount Own Manufacture Customer

Additional Discount Additional Discount is the additional discount that may be given to customer. The condition type is Condition Type ZEU5 Description Additional Discount Key Combination Manual entry by Sales Team

The accounting entries at the time of billing are as follow; Accounting entries:

Account Key DR CR

Description of account posted Discount Own Manufacture Customer

Sales Tax Payable (Applicable for local sales if any) Sales Tax Payable is the tax amount to be paid to the tax authorities by customer. This is a fixed amount per pack to be paid by customers. The condition type is: Condition Type ZEU7 Description Sales Tax Payable Key Combination Material

The accounting entries at the time of billing are as follows;

Accounting entries: Account Key DR CR Description of account posted Customer Account Sales Taxes

Net Std Price Net Standard Price is the Standard Price less all taxation. This amount is a calculation and will be posted to accounting as the revenue amount. The condition type is:

Condition Type ZEUA

Description Net Std Price

Key Combination Formula

The accounting entries at the time of billing are as follows;

Accounting entries:

Account Key DR CR

Description of account posted Customer Account Sales Own Manufactured

VPRS VPRS is the Cost condition. The value is automatically derived from the price in the Material Master. The condition type is:

Condition Type VPRS

Description Cost

Key Combination Not applicable

Price List Price List allows you to create a list of prices valid at a certain date for a certain list of products/product groups/models. You can use price lists to make your current prices available in list form at any time.