As I prepare for my Dynamics 365 certification in sales (MB2-717), I am creating blog posts based on my revision. I hope that collectively these posts may prove useful to anyone also preparing for the MB2-717 exam. In this post I will review price lists.
A price list defines the value that will be charged for a product. A price list can apply to particular “levels” or “types” of customer. For example, you may have a wholesale price list and a retail price list. Or maybe a UK Price list and a European Price List. (As exporting the goods to Europe may include additional costs and also might need to reflect the Euro price rather than pounds sterling.)
It is also possible to define “special” price lists that you may wish to associate with specific marketing campaigns, maybe a time limited one off offer. Out of the box the price list option is not shown on the marketing campaign form. But the field exists and can be added. Once this has been done, any campaign responses created against the campaign will inherit the price list. Then any quotes, opportunities or orders generated by converting the campaign responses will receive this promotional price.
Having created the price list it will be given price list items. Each product can appear as a price list item and will contain the logic required to price that individual product.
As you can imagine some companies pricing structure could be very complicated but keep in mind that for many companies pricing can be a simple affair. A software consultancy (for example) may actually just have one rate that its staff are billed at. In this example simply creating one price list with a small number of price list items could suffice.
Price lists can be related to opportunities, quotes, orders and invoices. Having added a price list to an opportunity the pricing can be system calculated based on the price list items. An alternative is to apply user defined (user provided) pricing on the opportunity. With user defined pricing we are really defining the estimated value of the opportunity manually.
Each customer can be given a default price list, below you can see that I have given “A Datum Corporation” my canned goods wholesale price list. Whenever an opportunity is created for A Datum, it will be assigned the canned goods price list defined here.
The price list maintenance option can be found under price lists in the product catalog.
Below you can see that I have created a price list for canned goods. This price lists will be for wholesale customers and will be active for the duration of 2018. Also notice that it is a sterling price list. Meaning you could have separate price lists for each currency you wish to trade in.
Notice that each price list must be linked to one (and only one) currency. Meaning multiple price lists are required if you wish to trade in multiple currencies.
Price lists can be deactivated, doing so has no impact on existing opportunities. But once done the price list cannot be assigned to new (or existing) opportunities. The deactivated price list will continue to be used until the existing opportunities (or other transactional records) are completed. Having deactivated a price list, you’ll need to ensure it is removed from the default price list field on all products. (and accounts etc.)
Price List Items
Having created the price list I can begin to add price list items. Below you can see that I have added cases and pallets of several canned goods to this price list. Notice that some items show an amount, these have been given a fixed price. The ones that don’t have an amount will be because their price will be calculated based on list price, standard cost or current cost. (But more that in a minute.)
Each price list item has a unit. Such as case, pallet. (These come from the unit group discussed in an earlier previous post.)
Next each pricing item has a pricing method. These include;
- Currency amount
- Percentage of list
- Percentage Markup – Current Cost
- Percentage Margin – Current Cost
- Percentage Markup – Standard Cost
- Percentage Margin – Standard Cost
Entering a fixed “currency amount” is the simplest approach. Any of the percentage calculations will refer back to fields held on the product. Plus if the price is calculated you then get some additional options to complete. Including the required percentage but also some rounding logic.
Rounding policy, this can be none, up, down or to nearest.
Rounding option, this can be ends in or multiples of
Rounding amount, used in conjunction with rounding policy and rounding option to calculate the final price.
To show the possible complexity of pricing I have I created a few examples. Don’t worry too much about the maths here! The MB2-717 is not a maths exam. But looking at some examples might help explain the potential complexity possible within price items. Pricing within Dynamics CRM is actually pretty flexible!
Below I have shown the product details from a sample opportunity. I have defined the pricing to be system calculated and added some existing products to my opportunity. Staying with the canned goods theme I have added Carrots, Sweetcorn and baked beans.
Note: I also have a product code for canned Peas! They haven’t been included in my “canned goods” price list items. Peas couldn’t be added to this opportunity. Meaning a price list item must exist for all products you want to add to the opportunity. (and those products must have a published status.)
But why are these values shown? Let’s take a look at some examples;
Notice that carrots have been added twice, once as a pallet and once as a case. The pallets of carrots have a price list item that is defined on 75% of list price. And has a rounding policy to round up in multiples of £10. The current list price of carrots is £1.20 per can.
I know a pallet contains 12 cases. So that is 288 cans. So a total list price of £345.60. 75% of this is £259.20.
As I have said round up to next multiple of £10, the price for my pallet is £260.00.
My price for a case of carrots is calculated in a similar way. Except I said that was 80% of list price and to apply no rounding. Hence a price of £23.04. (You can check the maths if you want!!! J)
Now let’s look at sweetcorn! This is simple. My price list item was defined to work on a currency amount. The value was £6.00 and hence one case is going to cost £6.00.
Note: If I opt to use a pricing method of currency amount no rounding needs to be applied. The price entered is the price charged.
My 10 cases of baked beans came to a total of £69.90. But how? My price list item for baked beans calculated the cost based on a percent markup from current cost. And rounded up to the end with “.99”. My beans they have a current cost of 25p per can.
A case is made up of 24 cans and I need 10 cases. So in total 240 cans.
The price for a case is calculated as 24 times the current cost. Plus a 10% markup. (24 * £0.25 + 10% = £6.60) However my rounding rule will increase this to £6.99 per case.
As I need 10 cases 10 * £6.99 gives me the final total of £69.90.
As part of your revision I suggest creating multiple price list items and then add the products to an opportunity. Ensure you understand why each product is given the particular price.
Another useful revision exercise will be to change prices to understand what happens to any open opportunities, quotes etc. You should see that price changes take effect on open opportunities and any draft quotes. But once a quotation has been approved its prices will be frozen. (To increase the price on an approved quotation you’ll need revise the quote.) Also price changes would have no impact on any won opportunities etc.
Additionally experiment with what happens when an order is created from a quotation. Typically the prices on the order will be those shown on the quotation. We do however have a “Use Current Pricing” option that would recalculate the order value using the latest price list prices.
Hopefully the maths in this post haven’t melted your brain! Price lists can get complicated but the basic concepts are actually quite straight forward. I hope this post has been beneficial to anyone revising for the MB2-717 certification.