Defining Your Pricing Model in Sage MAS 500

Thursday, September 2, 2010 by Jeff Steel

As part of the base product, MAS 500 has some a wide variety of choices for determining the price of an item. Each time a sales order is entered, the program checks the customer, date, item and quantity to determine the pricing method to use. The key to understanding the pricing options is to understand the hierarchy of how MAS 500 comes up with a price for an item. The following precedence hierarchy is used when determining a price of an item:

1. Contract Pricing (Item) – This is where per customer and warehouse you define what a customer will pay for an individual item.
2. Contract Pricing (Product Price Group) – This is where per customer and warehouse you define what a customer will pay for a product price group. A product price group is assigned to an item. An item may have only one product price group.
3. Inventory Pricing (Customer Price Group) – This is where per item and warehouse you define the customer price group. A customer price group is assigned to a customer. A customer may have only one customer price group.
4. Inventory Pricing (Standalone) – This is where per item and warehouse you define the price for an inventory item.
5. Matrix Pricing by Customer Price Group (or by Product Price group) – Once the product price groups and customer price groups are established, this is where you can enter specific price information for a product price group and/or customer price group combination.
6. Product Price Group – If no matrix pricing is established, pricing options can be established when building the product price groups.
7. Customer Price Basis – On the customer record, you can define per customer how to calculate the price of the item. You choose a price base for the customer. The choices are: Average Cost, List Price, Price sheet 1, Price sheet 2, Price sheet 3, Price sheet 4, replacement cost and standard cost. You can also define a percentage to add to the base price for the customer.
8. Standard Price of the Item – If none of the above exists then the standard price of the item is used.

MAS 500 can also establish promotional pricing. Here you can establish a date range for the promotion as well as add items to the promotion. In determining the sale price if a promotion exists, MAS 500 will use the 8-step hierarchy from above and also calculate the promotional price and will return to the sales order the lower of the two prices.

When establishing pricing in the difference variations, MAS 500 gives us the ability to establish an effective date and expiration date. Besides different methods for calculating the price (Eg..Discount %, Discount Amt., Markup %, Markup amt.), MAS 500 also lets us define quantity break pricing if needed.

The different pricing features of MAS 500 allow flexibility to match your current pricing model. The key is defining how your pricing model works now. In most cases, once defined, MAS 500 has been able to fit the needs of pricing products to customers. 

By Ohio Sage MAS 500 Consultant, Jeff Steel