Trade agreements (Price/ discount agreement) in Dynamics 365 for Finance and Operations - Setup

C. Preference

Here preference is given to the item code or account code in the following manner while searching for the trade agreement for sales or purchase:

Table: First preference is given to code Table. When trade agreement is searched, it checks for the agreement created for single customer (Account code: Table) or single vendor (Account code: Table) and/or single item (Item code: Table) which are given in the sales or purchase order

Group: When trade agreement is not found for code Table, then second preference is given to code Group. When trade agreement is searched, it checks for the agreement created for the group of customers (Account code: Group) or group of vendors (Account code: Group) and/or group of items (Item code: Group). Item/ customer/ vendor which are given in the sales or purchase order should be part of those groups. 

How to create price/discount groups for customers/vendors/ items are given below in this post.

All: When trade agreement is not found for code Table or Group, then third preference is given to code All. When trade agreement is searched, it checks for the agreement created for All items (Item code: All) and/or All customers (Account code: All) or All vendors (Account code: All). Items, customer or vendor which are given in sales or purchase order are part of code 'All'.

D. Prerequisites

Before we create any trade agreement in AX, it is important to complete certain prerequisites:

1. Activate trade agreement

It is important to activate certain trade agreement combinations in order to create the trade agreement for those combinations. It will reduce the risk of wrong combination being used and also improve the system performance as trade agreement search engine only searches for the active combinations trade agreements.

A. To activate price/ discount between item & customer

Path: Sales and marketing > Setup > Price/discounts > Activate price/ discount

Here you can activate item and customer combinations against the price, line discount, multiline discount and total discount by ticking the appropriate checkbox.

B. To activate price/ discount between item & vendor

Path: Procurement and sourcing > Setup > Price/discounts > Activate price/discount 

Here you can activate item and vendor combinations against the price, line discount, multiline discount and total discount by ticking the appropriate checkbox.

2. Product, storage and tracking dimension groups setup

It is very important to keep the Product, storage & tracking dimension groups setup in mind while creating the trade agreement. The dimensions which are active in the product/storage/tracking dimension groups are very important while creating the trade agreement as these dimensions are used in the order and trade agreement search engine searches through these active dimensions while searching for the price or line discount for a specific item in the sales or purchase order. It includes active 'For sales prices' and 'For purchase prices' dimensions from the dimensions groups while searching for the prices for sales and purchase. It follows the following order in search for price/discount:

1. Firstly, it searches the trade agreement for the active product/storage/tracking dimensions which are used in the order for which price or line discount is requesting

2. If not found, it searches the trade agreement for the active product dimensions which are used in the order for which price or line discount is requesting

3. If not found, it searches the trade agreement with no active dimensions from product/storage/tracking dimension groups are specified

For example: If size is the product dimensions specified for the item, site and warehouse are the storage dimensions specified for the same item, serial number is the tracking dimensions specified for the item in the order, then 

- It first checks the trade agreement for the size, site, warehouse and serial dimensions for the item. If not found then, 

- It checks for the trade agreement for the size dimension for the item. If not found then 

-Finally it checks the trade agreement where no size, site, warehouse and serial dimensions are specified. 

3. Setup trade agreement journal names 

It is important to setup trade agreement journal names as these journal names are used to create price /discount agreement journal for setting up different prices and discounts for different items, customers and vendors. Different journal names can be setup for different purpose such as price agreement journal, Discount agreement journal, Price adjustment journal, Price&discount journal from RFQ etc. so it will be easier to select appropriate journal names for specific purpose. In this way it will be easier to consolidate all the similar trade agreements for reporting and analysis purpose. Journal names are created at the following path:

Procurement and sourcing > Setup > Price/Discounts >Trade agreement journal names

                                            or

Sales and marketing > Setup > Price/Discounts >Trade agreement journal names

Following default relation can be setup for journal names. These relations can be override in the actual trade agreement journal if require:

-Price(purch.)

-Line disc. (purch.)

-Multiline disc. (purch.)

-Total disc. (purch.)

-Price (sales)

-Line discount (sales)

-Multiline disc. (sales)

-Total disc. (sales)

-Postage discount

These are nothing but various ways of creating price/discount agreement journal lines.

Add name, description and select default relation to create specific trade agreement journal name.

We can also see all the posted price/discount agreement journals created from a particular journal name. Click on 'Price/discount agreement' button on the top to view all the journals.

4. Create price/discount groups 

Create price groups, line discount groups, multiline discount groups and total discount groups for the items, customers or vendors so it can be used in trade agreement journals for setting up prices and discounts for the group. 

Groups can be created by selecting appropriate options among Price group, Line discount group, Multiline discount group and Total discount group.

A. Customer price discount group

We can create price or discount groups for the customer by selecting appropriate options from the following path:

Path: Sales and marketing > Price/discounts > Customer price/discount groups 

                                                  or

         Inventory management > Setup > Price/discount > Customer price/discount groups 

We can also view the trade agreement and create the one for the customer price/discount group selected. Select the group --> Click on 'Trade agreements' button to view the appropriate options.

B. Vendor price discount group 

We can create price or discount groups for the vendors by selecting appropriate options from the following path:

Path: Procurement and sourcing > Setup > Price/discount > Vendor price/discount group

                                        or

         Inventory management > Setup > Price/discount >  Price/ discount groups > Vendor price/discount groups 

You can view the trade agreement and also create the one for the vendor price/discount group selected. Select the group --> Click on 'Trade agreements' button to view the appropriate options.

C. Item discount group 

It creates the Line discount group, Multiline discount group and Postage group for the items. It doesn't include the total discount group as total discount is applicable to item code All and not to item code Group.  

You can create discount groups for the items from the following path:

Path: Sales and marketing > Price/discounts > Item discount groups

                                              or

         Procurement and sourcing > Price/discount > Price/discount groups> Item discount groups

                                             or

         Inventory management > Setup > Price/discount > Item discount groups 

You can view the trade agreement and also create the one for the item discount group selected. Select the group --> Click on 'Trade agreements' button to view the appropriate options.

5. Item/ Customer/ Vendor master setup

A. Assign item discount groups for items

Once Item line discount groups and Item Multiline discount groups are created (Refer point 4 section C),  those are assigned to items and discount agreements are created for those groups. When any such item is used in the sales or purchase order, the discount pertaining to that group will be applicable to the item in the order.

Path: Select specific item in the released products > Purchase or Sell fast tab > Discounts field group > Line discount group/ Multline discount > Assign groups to these fields as applicable

Note: For total discount, checkbox needs to be ticked for the item in order to include the item in the calculation of total discount.

B. Assign customer price/discount group to customers & vendor price/discount group to vendors

- Once vendor price/ discount groups are created (Refer point 4 section B), those are assigned to vendors and agreements are created for those groups. When order is created for any such vendors, the price and discount for the group is applicable to the order (Order header/Order lines)

Path: Select vendor > Purchase order defaults fast tab > Discount field group > Multiline discount/ Total discount group/ Price group/ Line discount group > Assign groups to these fields as applicable

- Once customer price/discount groups are created (Refer point 4 section A), those are assigned to the customers and agreements are created for those groups. When order is created for any such customer, the price and discount for the group is applicable to the order (Order header/ Order lines)

Path: Select customer > Sales order defaults fast tab > Discount field group > Multiline discount/ Total discount / Price / Line discount > Assign groups in these fields as applicable

6. Account receivable parameters Setup

Different values are setup in the account receivable parameter to set the behaviors of sales trade agreement.

Path: Account receivable > Setup > Account receivable parameters > Prices

• Setting up the date type i.e. Today's date, requested ship date or requested receipt date Depending on the date type selected here, the appropriate date will be picked up from the sales order to find the valid sales trade agreement. Default value is 'Today'
• Optional: Setting up the generic currency and exchange rate type: Trade agreement can also be created for generic currency and then use exchange rate to convert generic currency into a specific order currency in real time when price is requested from the sales or purchase order. When creating the trade agreement for generic currency, make sure to tick 'Include generic currency' checkbox in the agreement journal. This setup is only applicable to price trade agreement and not to the discount agreements.
• Optional: Apply smart rounding after currency conversion: It is checked when you would want to apply smart rounding to the price when it is returned from the valid trade agreement. In order to apply smart rounding you would need to setup the behavior for smart rounding for foreign currencies in the system. It is nothing but returning the price keeping in view the smallest denomination i.e. price returned with ending 0.99 or 0.95 or 0.98. When price for generic currency is converted into order (Foreign) currency then before returning the price, smart rounding rules are applied depending on setup done in the system for different foreign currencies in order to decide the ending of the price i.e 156.95. 199.99 etc.
• Discount: Default values is 'Line'. It decides how Line discount and Multline discount are used together in the sales order lines. We can select different values depending on how we want discounts to get applied, These values are:

         - Line