Understanding the Alliance Business Suite Pricing Service
Pricing is an important part of every business. Commonly, pricing presents challenges such as keeping up to date with provider price updates, calculating discounts, surcharges, taxes, shipping costs, profit margins, and more. This turns pricing into a complex process when a business trades with several commodities, goods, and services.
The Pricing Service is a middleware service designed to calculate prices based on several criteria that can be automated and applied to every Item. It takes a snapshot of the appropriate Forex Exchange Data (Live or Stored, depending on preferences) and it converts values to United States Dollars. This snapshot is linked with each record to ensure proper recalculation of exchanged values for the purpose of accounting balances and reports.
How is calculated the price of an Item?
When you create or update an Item using the Logistics Module, you will be asked to provide the Regular Price of an Item, as well as the currency you are providing this value in. The Regular Price refers to the price it takes for your business to acquire or manufacture a product or a service. This value is commonly known as the Cost of Goods (COG).
This value will be used as the base amount for the calculations ahead.
Understanding Policy-Based Calculations
The Alliance Business Model provides a convenient structure to help businesses to overcome the complexity of the Pricing Process. It contains Policies that can be applied to each Item to automatically calculate the final pricing amounts of each item.
Pricing Amounts
Calculated Item Price without Discounts, Surcharges nor Policies. Identical to Regular Price.
Calculated Total Discounts Amount. It's calculated depending on the On Discount Flag; if checked, logic will cascade to assert if the discount is either a Fixed Discount or not, (in which case it will be a percentual discount, which is the default behavior)
If the Fixed Discount flag is marked, you will need to enter the discounted amount in the same currency you've selected for the Regular Price, so be subtracted from the Regular Price, otherwise, you will need to input a percentage to be subtracted off the Regular Price.
Once the discounts have been applied, the Price After Discounts value is generated and passed to the following calculation step as the base for the Surcharges Calculation.
It refers to the Calculated Total Surcharges Amount.
It is calculated by receiving the Price After Discounts value from the previous step and applying first every default Pricing Rule Policy registered to the Passing Item's Owner and then every Pricing Rule Policy registered to the passing Item.
Calculated Total Profit Amount It is calculated by receiving the Price After Surcharges value from the previous step and applying first every default Selling Margin Policy registered to the Passing Item's Owner, and then Selling Margin Policy registered to the Passing Item.
Calculated Total Return Cost Amount
It is calculated by receiving the Price After Profit value from the previous step and applying first every default Return Policy registered to the Passing Item's Owner, and then every Return Policy registered to the Passing Item.
Calculated Total Refund Cost Amount
It is calculated by receiving the Price After Return Policies value from the previous step and applying first every default Refund Policy registered to the Passing Item's Owner, and then every Return Policy registered to the Passing Item.
Calculated Total Warranty Cost Amount
It is calculated by receiving the Price After Refund Policies value from the previous step and applying first every default Warranty Policy registered to the Passing Item's Owner, and then every Warranty Policy registered to the Passing Item.
Calculated Total Taxes Amount
It is calculated by receiving the Price After Warranty Policies value from the previous step and applying first every default Tax Policy registered to the Passing Item's Owner, and then every Tax Policy registered to the Passing Item.
Calculated Total Withholding Taxes Amount It is calculated at the Order & Invoice Level.
Calculated Total Shipping Cost Amount
It is calculated at the Order & Invoice Level.
Calculated Total Shipping Taxes Amount
It is calculated at the Order & Invoice Level.
Calculated Total Price Amount (Revenue)
It is calculated by the following Formula:
Detail Amount: Da
Discounts Amount: D
Surcharges Amount: S
Profit Amount: P
Total Taxes Amount: TT
Total Withholding Taxes Amount: TWT
Total Warranty Cost Amount: TWC
Total Refund Cost Amount: TRfC
Total Return Cost Amount: TRtC
Total Shipping Cost Amount: SC
Total Shipping Tax Amount: ST
Total Amount: (Da - D) + S + P + (TT - TWT) + (SC + ST) + TRfC + TRtC + TWC