Business value

Standard Microsoft Dynamics 365 for Finance and Operations supports the setup of trade agreements and retail price and discounts where the prices are expressed in the ordering unit.

In this way it is possible to setup different price for pieces, a box or a pallet. However you have to specify an agreement for each order unit, which can be a lot of work if you sell in a lot of different unit.

Often you only want to setup only one price, the price unit, and let the system determine automatically determine the sales price for the selected order unit based on the unit conversions.

E.g. when you sell paving stones, and you setup the a price agreements of 25 EUR per m2 for an item with the inventory in pieces with a unit conversion of 15 pieces per m2 and the customer orders a pallet of 100 pieces you would like to be able to setup only one agreement and that system automatically calculates a price of 166,67 for this pallet.

In standard Microsoft Dynamics 365 for Finance and Operations on the order line the price is only shown in the order unit.

The price unit function of Dynamics Price and Margin Management offers you the following features:

• The sales and purchase price in price unit has been added to the released product form
• On the item you can enter the purch/sales price in either the order unit and the parameter Search agreements for unit determines whether you have to setup only one agreement in the price unit or multiple agreements based the order unit.
• Automatic creation of additional unit of measure conversions based on the inventory unit.
• The price in price unit, the price unit have been added to the trade agreements and the retail price and discount forms.
• The price in price unit, the price unit and the quantity in price unit are shown on the order line.
• The price quantity field has been added to the retail price and discount forms.
• The following fields have been added to the retail Price simulator form:
  • Price quantity
  • Sales qty in price unit
  • Price UOM
  • Price in price unit
  • Net price per unit
  • Net price per price unit

Setup

Unit conversions

Before you can use the functionality of price units, the unit conversions need to be setup for the product.

Product and information management > Products / Released products > Product > Unit conversions 

When you setup intra/inter class unit conversions in Microsoft Dynamics 365 for Finance and Operations you have to setup all possible combinations manually.

E.g. you have an item with inventory unit ea and you want to setup the following conversions:

1 box = 25 ea

1 pallet = 250 ea

1 m = 10 ea

You also have to setup these conversions:

1 PL = 10 Box

1 box = 2.5 m

1 PL = 25 m

To make this easier the system can now create these additional conversions for you. First you setup all conversions related to the inventory unit and then execute the “Create additional unit of measure conversions" function.

The additional created conversions are marked as APC Inserted. Each time this function is executed these marked records will be deleted and recreated. If you do not want them to be deleted you can turn off the checkbox.

Released products

The parameter “Search agreements for Unit” determines how trade agreements and retail price adjustments/discounts will be searched, order unit (=standard behavior) means that you have to specify an agreement line for each order unit.

This has the advantage that you can setup different prices/discount for each order unit.

When you choose to search based on price unit, only one agreement needs to be setup for the unit that equals the price unit. Also the qty thresholds will calculated based on this setting.

Then you can setup trade agreements, retail price adjustments and discounts. On the purchase order, sales order and sales quotations the price unit and price in price unit are added to the price and discount tab.

The price in price unit and the price unit of measure on order lines and the agreements are edit/display methods. This means that a change of the price unit of measure on the item or in the setup of the unit conversions will be reflected directly on the orders and agreements. 
E.g. when you have an item with inventory unit Box and price unit is pcs you setup a unit conversion for the given qty in this box. When a supplier decides to change the box quantity we strongly suggest to create a new item instead of changing the unit conversions for this item.
When you change the price unit of measure on the item, the only effect will be that depending on the setup agreements won’t be found and the price in price unit on the order lines is displaying a different price. But for existing order lines the line amount won’t change as all price information is still captured in the standard fields Unit price, discount, discount % and line amount.

Multiples

When the inventory unit is not the smallest unit or when using interclass unit conversions you run the risk that the rounding's in the unit conversions lead to unwanted situations, where the inventory transaction quantity does not represent the corresponding sales quantity.

To prevent this you have to setup multiples, for more information see also our Multiple is mandatory feature.

Price and margin management parameters

Retail > Headquarters setup > Parameters > Price and margin management parameters > Price in price unit