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What are the benefits of a "Trade Agreement" for Purchasing and "Purchase Agreements". We usually like to cut blanket Purchase Orders with a vendor then dial it in later.
Can a Trade Agreement price funnel into a Purchase agreement?
If you have a Trade Agreement and a Purchase Agreement for an item with a specific vendor which price takes precedence ?
Thank you!
Trade agreement is simply to default prices of purchase order and sales order lines. Example of frequent rate changes for commodities like oil.
And
Purchase agreements are for vendor commitment, both parties promising amount based on volume. Example 10,000 tons of cement weekly order for the month of January to lock prices.
Precedence or priority of price on purchase order lines
Purchase agreement>Trade agreement>Released product purchase price.
If this solved your query then mark as resolved.
1. Create a simple Purchase agreement and convert to Purchase Order and verify the impact.
2. Create a purchase agreement and also create a trade agreement on the same item. Then convert purchase agreement to PO and verify the impact.
BTW, both screens and business purpose are totally different. Purchase agreement is just like contract or a blanket purchase order to buy certain qty. Of items from "specific vendor". However Trade agreement is created for short period of time to receive discount on item/item attributes and you have more options like it can create on group of items or Group of vendors.
Sounds Good !!
If there is no further information is required for this thread, would you be so kind and mark the verified answer to help other members.
Hi King710,
Did it help you to clear understanding between purchase and trade agreement or do you need any further help/information from community?
Hi King710,
Please check the below link. A bit old post but very well explained about purchase and trade agreement and their impact in business.
They are 2 separate forms and they both represent a discount, but they are not related in as much as you do not turn a trade agreement into a purchase agreement.
As to your final question, if both a trade agreement and a purchase agreement could be used, the purchase agreement price/discount will apply.
If you have any questions, let me know. This is a topic that I have a strong background with.
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