The search for a valid supplier agreement and retrieval of the price is as follows:
Flowchart
Purchase order entered
- If the supplier entered on the purchase order is part of a Business partner structure (if this function control is active), the pricing policy defined for this structure is retrieved, which is one of three levels:
- parent – the search for a supplier will be performed upwards in the structure until “stop search” is found. That supplier is selected. The system searches on all agreements in the parent structure to find an agreement on the selected supplier.
- supplier – the supplier entered on the purchase order is selected.
- best of – a simultaneous search is performed in both the Supplier agreement file and the structure. A search is performed on all valid agreements in the structure until the supplier with the best price is found. Then that supplier is selected.
- When a supplier is found, the system checks if a general agreement exists for that supplier.
- If YES, the system continues with a search for an item-related agreement connected to the general agreement. The search is performed on a combination of Supplier and First active key in the Supplier agreement keys table. If the first match is not valid, a new search is performed to find other agreements in the Supplier agreement file with the same supplier and key. The search and verification process continues using the supplier and the next active key in the sequence, until a match is found. If no matches are found, or no more active keys exist, there is no agreement for this supplier.
- If no item-related agreement exists, the general agreement is used. For this type of agreement, the Business partner structure is not considered. The supplier entered on the purchase order is always used. The purchase price will be retrieved from the Item file/Purchase prices panel.
- The system always verifies that the agreement is valid according to the agreement base and that the key matches the item on the purchase order.
- Agreement base, which must be valid compared to the purchase order entry, is either of:
- Time
- Quantity, or
- Both
- For an item to match the key, there are two different scenarios:
- The key is Item – the values entered on the purchase order for item, currency and unit of measure must match the corresponding entries in the item-related agreement.
- The key is other than Item (e.g. Item group) – an item-related agreement must exist with a corresponding key.
- The price will be retrieved according to the following hierarchy:
- Agreement price
- Supplier discount matrix
- Quantity dependent prices
- The price will be retrieved from the Item file/Purchase prices panel.
Valid definitions are: - Purchase price 1
- Order line value discount
- Discount amount
- Quantity limit discount
- Quantity dependent prices
Match found
For example: the key is Item group and the item entered on the purchase order is part of the Item group “Office equipment” (OFF). In this case, an item-related agreement must exist with the item-related key defined as Item group, with the entry OFF.
Supplier and valid item-related agreement found
Note: If several valid agreements exist for the supplier, the system selects the one with the lowest price.
No match found
Note: Purchase price 1 is the basic price defined for the item. In a supplier agreement, you can define a new price, which then will override the Purchase price 1. However, if you define a discount or a quantity dependent discount in the agreement, this discount will be calculated on Purchase price 1 (the basic price).