A Pricing Rule defines the discount/pricing rules that apply based on set conditions.

A Pricing Rule offers various options to manage the pricing of an item, allowing you to set filters based on quantity, date, groups, and other conditions.

Similar to a Tax Rule, a Pricing Rule enables you to customize pricing based on specific criteria.

Here are a few scenarios where Pricing Rules can be utilized:

1. Implement a promotional sale policy: Offer a 20% discount if a customer purchases more than 10 units of an item.
2. Set a specific selling price for Customer “XYZ” for a particular item.
3. Ensure consistent selling or buying prices for items categorized under a specific Item Group.
4. Provide special pricing or discounts to customers belonging to a specific Customer Group.
5. Apply specific buying rates for suppliers categorized under a particular Supplier Group.

By creating Pricing Rules, you can automate the application of discounts and price list rates for items.

To access the Pricing Rule list, go to:

Home > Accounting > Pricing Rule

1. Prerequisites

Before creating and using a Pricing Rule, it is advisable to create the following first:

1. Item
2. Item Group
3. Customer
4. Supplier

2. How to create a Pricing Rule

1. Go to the Pricing Rule list and click on New.
2. Set a title for the rule.
3. Select what to Apply On from Item Code, Item Group, Brand, or Transaction.
4. Select whether you want to apply Price discount or Product discount. If you want to give free products, then select the product discount.
5. For a single item, select Item Code and select the items.
6. If you want Pricing Rule to be applied on all the items, select ‘Item Group’ and select All Item Group (parent Item Group).
7. Set the discount/price to be applied. To know more, go to this section.
8. Save.

2.1 Additional options when creating a Pricing Rule

Warehouse

Specifying a Warehouse here will result in the Pricing Rule being applied exclusively when the Item is chosen from the designated Warehouse.

Apply Rule On

Based on the attribute selected in the ‘Apply On’ field, you can set the Pricing Rule based on one of these:

• Item
• Item Group
• Brand
• Transaction (on the total amount of the transaction)

In this table, you can select the specific Item/Item Group/Brand. For example, if you select Apply On ‘Item Group’ and select ‘Raw Materials’ in the table, this Pricing Rule will be applied only on Items that belong to the Group ‘Raw Materials’.

UoM: The Pricing Rule will apply only if the UoM set here matches with the transaction.

Condition

In this field you can add a condition in python to check against field values in the transaction doctype, like shown below for Sales Invoice:

customer=='Customer Name' and status!='Overdue'


Note: that only single line python conditions will work, using fieldnames of the target doctype.

Mixed Conditions

If you choose two or more items and define the Minimum and Maximum Quantity, the Pricing Rule will only take effect if the total quantity of items matches the specified range. For instance, if you establish a Pricing Rule for Item 1 and Item 2 with a Minimum and Maximum Quantity set at 30, the rule will only be applied if the combined quantity equals 30.

Is Cumulative

Activating this option allows the Pricing Rule to be applied cumulatively. You must specify the ‘Min Amt’ and ‘Max Amt’ for this feature.

For instance, let’s consider a scenario where the Minimum Amount is set at 1,500 and the Maximum Amount at 2,000. If a transaction is created for 1,400, the Pricing Rule will not be applied. However, upon creating a second invoice amounting to 600, the Pricing Rule will be applied. This occurs because the total cumulative amount of the invoices reaches 2,000. It’s important to note that the discount will only be applied to the latest transaction that surpasses the cumulative limit.

This feature can be beneficial for offering discounts when a customer makes multiple purchases, allowing you to reward them with discounts or special prices.

3. Features

3.1 Apply Rule On Other

This feature verifies conditions based on the first item but enforces the rule on another item.

For instance, suppose you configure Item1 and Item2 in the ‘Apply Rule On’ table and designate ‘Apply Rule on Other’ for Item3. In this setup, if a transaction includes Item1, Item2, and Item3, the Pricing Rule will be applied to Item3, as the presence of the first two items triggers the rule.

3.2 Party Information

Set whether the Pricing Rule is for Selling of Buying the Item.

Based on your selection you can set applicability to one of the following masters.

• Customer
• Customer Group
• Territory
• Campaign
• Supplier

3.3 Quantity and Amount

Define the minimum quantity, maximum quantity, minimum amount, or maximum amount of an item for when this Pricing Rule should take effect.

Keep in mind that if the quantity or amount falls below or exceeds the specified limits, the Pricing Rule will not be applied. However, it will be enforced if you have activated the Mixed Conditions or Cumulative options.

3.4 Validity

You can also establish a date range for when the Pricing Rule will be in effect. This is particularly handy for sales promotions. If you leave the dates blank, the Pricing Rule will not be restricted by any time frame.

3.5 Margin

• Margin Type: When pricing an item for sale, you might want to maintain a specific margin. If you prefer not to manually input selling prices for each item and instead automatically apply a margin, this feature allows you to do just that.
• Margin Rate or Amount: You can establish the margin based on either a percentage or a fixed amount. For example, a 5% margin or a $50 fixed margin.

Refer to the documentation on adding margin for further information.

3.6 Price Discount Scheme

The actual rule to be applied is set in this section.

Rate: This specifies the new price for an item. For instance, if an item is usually sold for $100 but you want to offer it at $112 for a particular customer, select “Rate” and set the price as $112.

Discount Percentage: You can set a specific discount percentage, which can be assigned to a particular price list if desired. If the “For Price List” field is left blank, the discount will apply to all price lists.

Discount Amount: This option allows you to apply a fixed discount amount. For example, if an item is priced at $100 and you want to offer a discount of $7, you can set this condition using the “Discount Amount” option.

3.7 Advanced Settings

1. Threshold for Suggestion: This indicates the threshold at which the system prompts you to adjust the item quantity for the discount to take effect. For instance, if the minimum quantity for a discount is set at 10 and the threshold is 9, the system will recommend adding one more item to qualify for the discount. This also applies to the specified amount.
2. Priority: Suppose you have an item group and want to apply specific rules to one item within that group. You can achieve this by creating a new pricing rule with a higher priority. This priority setting can also be applied to customer groups and supplier groups.
3. Apply Multiple Pricing Rules: This feature allows the cumulative application of multiple pricing rules on an item. For example, if there are two pricing rules, P1 and P2, with discounts of 10% and 5% respectively, enabling this option will result in a total discount of 15%, reducing the item rate to 425.
4. Apply Discount on Rate: Enabling this option compounds the discount. Using the previous scenario, where a 10% discount is applied to an item with a rate of 500, followed by a 5% discount, this option first applies a 10% discount to 500 (resulting in 450), and then a 5% discount to 450 (resulting in 427.5).
5. Validate Applied Rule: This feature displays a validation message if the manually entered discount or rate in a transaction does not match the pricing rule. It is particularly useful when a higher-level distributor determines the discount or rate to be applied, and you need to ensure that the pricing rule is correctly applied.

4. Pricing Rule Discount Types

4.1 Price Discount

1. Within the Margin Type section, you have the option to specify whether the margin is calculated as a percentage or as a fixed amount. For example, you might set a 10% margin based on the supplier’s price list at the time of sale.
2. When a rate is specified in the Pricing Rule, it takes precedence over the rate listed in the Item’s Price List.
3. Discount Percentage can be applied specifically for a chosen Price List (either for selling or buying). To apply the discount across all Price Lists, simply leave the ‘For Price List’ field empty.
4. Discounts can also be configured in terms of a fixed amount.

4.2 Product Discount

1. To set up rules like ‘Buy 2 quantities and get 1 free quantity of the same item’, configure the Price or Product Discount as ‘Product discount’, check the Same Item checkbox, and specify the quantity.
2. To set up rules like ‘Buy 2 quantities and get 1 free quantity of another item’, configure the Price or Product Discount as Product discount, uncheck the ‘Same Item’ checkbox, and specify the ‘Free Item’ along with its quantity.

5. Related Topics

1. Promotional Scheme
2. Tax Rule
3. Supplier