| Multiple discount levels |  |
| Many organizations offer or receive more than one discount at a time. This is a common business practice that is supported by the multiple discount level functionality of the Pricing module. Discount levels are used to set up flexible criteria to allocate discounts to, for example, sales orders and lines or purchase orders and lines. In ERP LN, you can define up to five levels of discounts. The number of discounts that you can allocate to, for example, a sales order or a purchase order depends on the number of discount levels entered in the Number of Discount Levels field of the Pricing Parameters (tdpcg0100m000) session. In this session, you can specify how many discount levels your organization uses and define for each level how it is used. For example, you can define that for level one the first discount found is used, and that subsequent levels are used cumulatively. For each level, you can define an order line discount and an order discount. You must define a matrix definition and a discount matrix for both the line discount and the total discount. For further information on discount matrices, refer to To set up a discount matrix. A discount can be expressed by a discount percentage or a discount amount. Amounts are calculated by unit and are deducted from the gross amount. Percentages can be calculated over the gross amount or the remaining net amount at the previous level. Example A supplier of chairs defined three levels of discounts: Level 1: A discount is given to all customers located in a certain area. Level 2: A discount is given on the basis of the ordered quantity. Level 3: A discount is given for specific items. The supplier discounts 100 dollars to all customers from New York who place an order (level 1 discount). In addition, a 5% discount is given to each customer who buys more than 500 chairs at 100 dollars each (level 2 discount). The invoice calculation for a customer from New York who buys 600 chairs is as follows:
Level | Discount % | Amount | Method | Discount | Net
1 | - | 1 | Gross | $ 100 (1*100) | $ 59,900
2 | 5% | - | Net | $ 2,995 (5%*59,900) | $ 56,905
Related topics Discount retrieval To set up a discount matrix |