Discounts, Freight, Surcharges in SAP SD

In SAP SD (Sales and Distribution), managing pricing and condition types is essential for businesses to handle discounts, freight charges, surcharges, and other pricing elements effectively. These conditions are applied to sales documents to adjust the final price. This tutorial covers the configuration and application of discounts, freight charges, and surcharges in SAP SD.

What are Discounts, Freight, and Surcharges in SAP SD?

Discounts: Discounts are reductions in the selling price of a product or service, often applied based on various factors like customer type, order volume, or payment terms.

Freight: Freight refers to the shipping cost or transportation fee added to the sales document to cover the delivery cost of goods from the seller to the buyer.

Surcharges: Surcharges are additional charges applied to the base price, often due to special conditions like expedited shipping, handling fees, or other specific services requested by the customer.

Step-by-Step Configuration of Discounts, Freight, and Surcharges in SAP SD

Step 1: Define Condition Types for Discounts, Freight, and Surcharges

Condition types define the specific pricing elements, such as discounts, freight, and surcharges, in SAP SD. You need to define condition types for each of these elements.

To define condition types, follow these steps:

  1. Go to transaction V/06 to define condition types.
  2. Click on New Entries to create a new condition type.
  3. For discount, use K004 (Material Discount) or create a custom one.
  4. For freight, use FRA1 (Freight Costs) or create a custom one.
  5. For surcharge, use SKTO (Surcharge) or create a custom one.
  6. Enter descriptions, and set the appropriate condition class (e.g., Discount, Freight, or Surcharge).
  7. Set the calculation type (e.g., Percentage for discounts, Fixed Amount for freight or surcharge).
  8. Save the condition types.

Step 2: Define Access Sequences for Each Condition Type

Access sequences determine the order in which the system searches for condition records when applying discounts, freight charges, or surcharges.

To define access sequences, follow these steps:

  1. Go to transaction V/07 to define access sequences.
  2. Click on New Entries to create a new access sequence.
  3. For each condition type, define the access sequence (e.g., 0002 for discounts, 0003 for freight).
  4. In the access sequence, specify the search criteria, such as customer, material, and sales area.
  5. For example, for discounts, the system might first check customer-specific records, then check sales organization-specific records.
  6. Save the access sequences.

Step 3: Define Condition Records

Condition records are used to store the actual discount, freight, or surcharge values for a specific customer, material, or combination thereof.

To define condition records, follow these steps:

  1. Go to transaction VK11 to create condition records for discounts, freight, and surcharges.
  2. Select the condition type you wish to maintain (e.g., K004 for discount).
  3. Enter the relevant key combination (e.g., Customer/Material for customer-specific discounts).
  4. Enter the valid-from and valid-to dates, as well as the condition value (e.g., 10% discount or $50 freight).
  5. Save the condition record.

Step 4: Configure Pricing Procedure to Include Discounts, Freight, and Surcharges

The pricing procedure defines the order and logic in which the various condition types (e.g., discounts, freight, and surcharges) are applied to the sales document.

To configure the pricing procedure:

  1. Go to transaction V/08 to configure the pricing procedure.
  2. Click on New Entries to create a new pricing procedure or modify an existing one.
  3. For the condition types, ensure that K004 (Discount), FRA1 (Freight), and SKTO (Surcharge) are included in the procedure.
  4. For each condition type, define whether it is mandatory or optional and whether it can be manually entered or should be automatically determined.
  5. Save the pricing procedure.

Step 5: Assign Pricing Procedure to Sales Document Types

Once the pricing procedure is configured, you need to assign it to the relevant sales document types (e.g., OR for standard orders, RE for returns).

To assign the pricing procedure:

  1. Go to transaction OVKK to assign the pricing procedure to sales document types.
  2. Choose the document type (e.g., OR for standard order).
  3. Enter the pricing procedure code (e.g., Z001) in the relevant field.
  4. Save the assignment.

Real-World Example of Applying Discounts, Freight, and Surcharges

Let’s consider a real-world example where a customer places an order, and the system applies discounts, freight, and surcharges.

  • Step 1: A customer (C1001) orders 10 units of material (M1001) at a price of $100 each.
  • Step 2: The system applies a 10% discount (K004) based on the customer’s record, reducing the price to $90 per unit.
  • Step 3: The system checks for any freight charges (FRA1) and applies a $50 freight fee for the delivery.
  • Step 4: A surcharge (SKTO) of $20 is applied due to expedited shipping requirements.
  • Step 5: The final order amount is calculated as follows:
    • Base Price: 10 units x $100 = $1000
    • Discount: 10% of $1000 = $100
    • Freight: $50
    • Surcharge: $20
    • Final Price: $1000 - $100 + $50 + $20 = $970

Conclusion

In SAP SD, managing discounts, freight charges, and surcharges is essential for determining accurate pricing in sales documents. By following the steps to define condition types, configure access sequences, and maintain condition records, you can set up an effective pricing strategy for your business. Testing and validating the configuration ensures that discounts, freight, and surcharges are applied correctly during real transactions.




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