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SAP Customer Relationship Management (CRM) includes robust, enterprise-grade capabilities for managing critical pricing and billing processes. In this comprehensive expert guide, we will thoroughly explore the key procedures, configurations, and optimizations related to pricing and billing in SAP CRM.
Whether you are looking to set up pricing for the first time or enhance existing implementations, these insights will help unlock maximum value. Let‘s get started!
Demystifying SAP CRM Pricing
The pricing engine in SAP CRM is powered by the Internet Pricing and Configurator (IPC) application. As an integrated pricing platform, IPC enables complex pricing scenarios across industries and use cases.
Here are some key facts about IPC and SAP CRM pricing that you should know:
Pricing Data Storage
- Pricing data can be stored natively in CRM modules
- Alternatively, pricing can be integrated from ERP systems
- Each approach has tradeoffs to consider regarding flexibility vs accuracy
Centralized Pricing Configuration
- IPC centrally controls pricing settings and rules for all of CRM
- Eliminates need for separate pricing in individual transactions
Advanced Pricing Logic Support
- IPC facilitates volume discounts, tiered pricing, cumulative levels and more
- Flexible condition types and access sequences tailor pricing execution
Embedded Web Interface
- IPC features embedded browser-based web interface for convenient access
- Enables pricing simulation and configuration without middleware
With these capabilities, IPC delivers enterprise-class pricing sophistication within SAP CRM environments.
Now let‘s explore exactly how pricing works in SAP CRM at a deeper level.
How SAP CRM Pricing Procedures Function
When a sales rep creates a quotation or transaction in SAP CRM, the following key steps occur behind the scenes during pricing execution:
1. Pricing Procedure Determination
Based on customizing rules, the system determines the appropriate pricing procedure to leverage. Customizing allows pricing procedures to be specialized by organization, channel, customer group, product type and more.
Example: Retail vs B2B pricing procedure for a material product.
2. Condition Type Sequence Processing
The system processes each condition type in the procedure sequentially according to defined sequence logic.
Example: Base price > Customer group discount > Promotion discount
3. Access Sequence Execution
For each condition type, associated access sequences launch specialized searches to locate valid pricing data. Access sequences define specific condition tables and search priorities.
4. Select Relevant Pricing Conditions
Based on access sequence search results, the applicable pricing data records are selected from condition tables/cubes. These provide the rates for calculations.
5. Perform Pricing Calculations
Using selected condition records and item data, system calculates net prices, discounts, surcharges, taxes, totals per procedure logic. Math operations, condition limits, and requirements applied.
6. Display Pricing Results
The final net pricing results are displayed on the transaction or sales document for the sales rep and customer. Breakdown of charges often included.
This procedural workflow enables robust and flexible pricing in SAP CRM to meet business needs. Let‘s examine how to leverage key elements for pricing configuration.
Optimizing CRM Pricing with Condition Types
Condition types are a pivotal concept for controlling how system pricing behaves in SAP CRM. Condition types act as categorizations that define:
- Application – Discounts? Surcharges? Base prices? Taxes? Fees? etc.
- Behavior – Calculation method (fixed price, % discount etc.)
- Constraints – Caps, floors, requirements, eligibility rules and more
Some examples of common condition types seen in SAP CRM environments:
- Base Price (PR00) – Sets the core starting price point for pricing
- Volume Discount (VD10) – Applies discounted rates based on order quantities
- Customer Group Discount (KD01) – Discounts depending on customer tier
- Shipping Surcharge (ST01) – Transportation/shipping fees charges
- Tax (TA01) – Applies relevant sales tax amount on transactions
The beauty of condition types lies in the flexibility they provide for applying customized pricing treatments, discounts, fees, and calculations in nearly infinite ways.
Let‘s explore how to take full advantage of that power…
Custom Condition Types
Within SAP Customizing, an administrator can create new bespoke condition types tailored to your organizational needs:
Examples
- Geography-Based Discounting
- Loyalty Discount Rules
- Order Value Bracket Discounts
- Promotional Customer Discounts
- New Customer Instant Savings
- Much more…
Condition Requirements
Requirements can be set to restrict the applicability of discounts/rates dynamically based on data attributes.
Example Requirements
- Customer Age
- Industry Group
- Past Order Volume
- Invoice Payment History
- Credit Score
Through creatively leveraging new condition types and fine-tuned requirements, truly flexible pricing strategies can be achieved.
Access Sequences: Controlling the Pricing Search
Access sequences provide a powerful complement to condition types – controlling how and where pricing conditions are searched by system.
Here‘s how access sequences function:
- Access sequences consist of a series search steps defined as accesses that are processed sequentially at runtime
- Each access invokes search on a specific condition table according to key inputs
- Based on the defined sequence, results are found from the most granular table first before proceeding wider
Examples
- Search Material Pricing Data by Account ID
- Search Customer Group Pricing by Industry & Credit Rating
- Search Global Campaign Discount Rates
Properly structuring access sequences promotes finding targeted, high priority pricing that supersedes more general data as desired by the business.
Similar to condition types, access sequences are also completely customizable based on your pricing data storage and search needs.
SAP CRM Pricing in the Real World
Now that we‘ve broken down the key working parts of pricing in SAP CRM, let‘s explore some real-world examples…
Tiered Volume Pricing Model
A corporation negotiates pricing tiers on a material product based on annual order volumes with customers:
Solution
- Volume Discount Condition Type
- Tiered Material Base Price Condition Type
- Access Sequence First Checks Customer Annual Volume Custom Table before default
Customer Group Campaign Pricing
A company wants to provide targeted 15% discounts on certain products to Preferred Customer members to drive loyalty.
Solution
- Preferred Customer Discount Condition Type with 15% rate
- Member ID Requirement and Check in Access Sequence
- Search Priority before Standard Discount Rates
New Customer Instant Savings
An online retailer needs a 25% discount on first-time orders over $500 to attract new buyers.
Solution
- New Customer First Order Discount Condition Type
- Order Value & Customer Age Requirements
- Check Access Sequence for Customer Age before applying
The possibilities are truly endless once you gain a handle on creatively applying SAP CRM pricing elements like condition types, access sequences and requirements.
Billing: Closing the Loop with SAP CRM
Pricing provides the crucial upfront capability for accurate order quotes and transactions. Equally as important is support for back-end billing processes to complete the downstream revenue cycle in SAP CRM environments.
Here is an overview of billing with SAP CRM:
Key Capabilities
- Capture relevant billing data across transactions
- Generate and manage customer invoices
- Handle rebills, cancellations, disputes
- Produce PDF or printed invoices
- Integration to post billing data to FI, CO and BI systems
Benefits
- Closed-loop quote-to-cash from CRM
- Reduce dependency on ERPs for billing
- Single view of customer transaction lifecycle
- Leverage CRM data in billing documents
- Familiar user experience for billing staff
Let‘s explore a bit deeper on how billing processing works within SAP CRM environments…
SAP CRM Billing Document Processing
The creation of customer invoices from sales and service transactions involves three key steps:
1. Capture Relevant Billing Data
As transactions occur, the system collects relevant billing details like:
- Party responsible for payment
- Sales/delivery date
- Products/services invoiced
- Agreed pricing
- Taxes
- Payment/delivery terms
2. Generate Billing Documents
Leveraging the accumulated data, CRM triggers creation of consolidated billing documents or invoices:
- Single transaction invoice
- Collective invoice for multiple transactions
- Special case invoices like cancellations, rebills etc.
3. Output Processing
Final billing documents can then be:
- Printed/downloaded as PDF invoices
- Sent via email
- Integrated into finance modules like FI/AR
- Loaded to BI/analytics for reporting
This end-to-end billing creation process keeps invoicing, documentation and posting streamlined fully within SAP CRM.
Getting Granular: Billing in the CRM Web UI
Within SAP CRM‘s web-based user interface, billing capabilities deliver transparency and management functions for billing staff and account managers.
Some examples include:
Finding Billing Documents
Power users can conveniently search, access and view billing documents related to their customers and transactions.
Checking Status
Billing status shows if documents are open, paid, due soon, overdue, disputed or on hold for credits. Helps prioritize collections efforts.
Adding Notes
Freeform text notes can be added to billing documents for clarifications, reminders or instructions to staff.
Creating Follow-On Documents
New cancellation invoices, rebills or disputes can instantly spin off existing documents.
Granting CRM web UI access allows billing staff or account managers to quickly research customer billing details on-demand for problem resolution.
Conclusion: Master Achieved
Like an enterprise-grade pricing engine, SAP CRM provides tremendous breadth and depth when it comes to built-in pricing and billing functionality.
Spanning automated calculation procedures, flexible configuration options, web UI integration, and end-to-end billing support, these tools can tackle nearly any quote-to-cash requirement imaginable.
Yet realizing the full value requires really grasping the conditional logic, sequences, and customization capabilities at your fingertips.
So hopefully this guide has helped demystified CRM pricing, illuminated the process flows, provided creative examples, and demonstrated how to tailor pricing to achieve business needs.
The journey to pricing proficiency involves learning existing practices plus exploring new possibilities. But once pricing is producing results, it fuels revenue growth, unlocks discounts, drives loyalty and enhances competitiveness across the organization.
Here‘s to your pricing success path ahead!