The Spider Web of Service Agreement Sales Price for Dynamics 365 Made Easier

Get a little confused when thinking about the best way to set up Sales Prices for Service Agreements?  Want to make sure invoices are going out with a high level of first-pass accuracy?  Would like to reduce the number of pricing adjustments and increase customer satisfaction?  Want to make price increase time a little easier?

There are many paths to creating and managing Sales Prices in Dynamics AX.  But before any Sales Price information is entered, thought must be given to the approach to be taken.  An understanding of price strategy is critical to insure Sales price is accurate when invoicing the customer.  Pricing can be very generic or can get very specific down to the transaction type, project, category and worker if required.

Pricing will be applied to transactions based on searching the Sales Price tables, by transaction type using priority logic.  Since the pricing can be conditional, the price applied will be the price found that meets the most conditions or criteria.  Currency is the most powerful criteria or condition.  Currency must be a match.  Effective date is also a condition.  If the price record found is expired, it will be bypassed in the search.  It is a good idea to always set up basic default pricing for each transaction type by entering “All” pricing, to be demonstrated below, so every transaction will have some Sales Price applied.

Where the data is entered, determines the criteria automatically assigned to the Sale Price.  But regardless of where the Sales Prices are entered, the data is stored in one place. The criteria for Sales Price, in addition to date and currency, is Project, Category, and Worker.  Once the criteria are used to select a Sales Price, the Sales Price amounts entered will be interpreted and applied based on the Sales Price Model identified for hours and expenses.

• Quantity (Qty) – Sales Price per quantity
• Contribution Ratio – Contribution Ratio as percentage of Sales Price
• Charges Pct – Cost Price plus Markup percentage
• Charges Amount – Cost Price plus Markup amount

It is not necessary to use a Sales Price Model for Subscription and Fee Sales Prices.

Item Sales Pricing is set up in Inventory Management (i.e. price groups) and/or Sales and Marketing.

The ability to set up Project transaction pricing has been available in AX 2009 and AX 2012.  The functionality has evolved from version to version to account for terminology updates and functionality adds, such as Subscriptions.

Project Management Sales Pricing

Sales Price for the Transaction Types of Hours, Fees and Expenses can be set up in the Project Management and Accounting module.  Navigate to Project Management and Accounting > Setup > Prices to find:

• Sales price (hour)
• Sales price (expense)
• Sales price (fee)
• Sales price (subscription)

Sales Price (hour)

Setting up the Sales Prices for Hours transactions should be thought of from “how” the majority of the billable hours are billed to the customer.  Exceptions to the rule then can be handled with more specific entries into the Sales Price tables that will be found and applied at the proper time. If the majority of the time, hours are invoiced based on the type of work, enter Sales Prices at the Category level.  If hours are billed to the customer based on who does the work, enter Sales Prices with the Resource criteria.  If pricing is specific to customers or projects, those Sales Prices can be entered and will be applied when those criteria are matched between the table and the transaction.  If pricing is specific to a group of customers, it may be a good idea to use Price Groups and assign those customers, to the group.  Price groups can also be used to group pricing at the project or project contract level.

Hour Sales Prices can be defined to be very generic or very specific to the Role, Category, Resource (worker), Project ID, Project Contract ID, Customer, and/or Price Group level.

Here is an example of the “All” record mentioned above that will be used in the situation where no other pricing record can be found for the Hours transaction.  Notice the value is not $0.00 as that may be a valid Sales Price in some cases.

An Alert can be created to notify when the $9999.00 per qty Sales Price is posted so proactive corrective action can be taken.

Sales Price (expense)

Expense Sales Price should also be thought of in terms of “how” the majority of the expenses are invoiced to the customer.  They can be generic or as specific as necessary.  Are they needed By Resource (worker)? By Project?  By Project Contract? By Customer?  By Price Group?  By Category?  Or a combination of criteria?  If Expenses are marked up based on Category or for all expenses, for example, enter the mark-up percent with the Sales Price Model of “Charges Percentage”.  The Cost of the Expense transaction will be marked-up by that percentage.

Sales Price (fee)

Sales Prices for Fee transactions should also be set up based on the majority of the Fee transactions and the billing strategy in place.  And again, exceptions to the rule can be set up at the more specific level of detail.  Fee Sales Prices can be set up to be generic or very specific to the Category, Resource (Worker), Project, Project Contract, Customer and/or Price Group level.

Remember, Fees are charges invoiced to the customer, not generated from expense or hours transactions.  Examples of Fees would be Set Up Fees, Tear Down Fees, Room Fees, and other one-time charges.  Fee Transactions carry no Cost.

Here is an example of the “All” record mentioned above that will be used in the situation where no other pricing record can be found for the Fee transaction.

Sales Price (subscription)

Setting up Sales Prices for Subscriptions can be set up in Project Management and Accounting or in Service Management.  Both paths update the same Dynamics AX table.  Sales Prices established in this table are used as the “Base Price” in new subscriptions as long as the period code and currency of the Sales Price and Subscription match.

Subscription Sales Prices can be created to be very generic as well as very specific to the Category, Project, Price Group and/or Subscription level.  Resource (worker) is not a criterion for Subscription Sales Price.

To create Subscription Sales Prices in Service Management, navigate to Service Management > Setup > Service Subscriptions > Sales Price (subscription).

Individual Subscription Fees can be either the Base Price obtained from the Subscription Sales Price table (after matching criteria, currency and period code), or an Indexed Sales Price.  This is achieved by selecting the appropriate Get Pricing from option: “Indexed Base Price” or “Price Setting”. 

When prices require updating, Base Sales Price or Index can be updated from the All Service Subscriptions list page.  Multiple selection can be used for updating the Index.  The Sales Price and Index can be updated using a % or specific value.  They can also be updated using the Periodic Task Index Subscription which can be found by navigation to Service Management > Perform Periodic Tasks > Service Subscriptions.

Service Agreement Sale Prices

Now Price Tables have been established and maintained.  There is yet another option for setting prices specific to Service Agreements.  Setting up Service Agreement specific Sales Prices at the time of Service Agreement creation results in entries to the individual Sales Price Tables discussed above, at the most detailed level.

Navigate to Service Management > Service Agreements, Service Agreements.  Once the proper Service Agreement is highlighted or the user is in the Service Agreement, locate the Sales Prices area where you will find listed Hours, Expense, and, Fees.

To make an entry in the Sales Price form, Click New.  Following is an example using the Sales Price (hour) option.  Notice it looks very familiar.

Enter the effective date for the line item.  This makes it easier to enter pricing increases planned for the future, and especially price increases specific to the Service Agreement.

The Sales Pricing entered from within the Service Agreement can be viewed and maintained from the specific Sales Price Tables accessed through Project Management and Accounting.

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