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Applying a Manual Discount

The net price of a line item in a quote or order is determined by:

• Start Price. The calculation begins with the start price, which is typically the list price or promotional price of the product in the price list. Attribute adjustments and customizable product adjustments affect the start price.
• Policy Discounts. The application applies discounts such as promotions, contract prices, and volume discounts.
• Manual Discounts. The salesperson applies manual discounts. End users can enter manual discounts for individual line items or for the entire quote or order.

For more information about start price and policy discounts, see Siebel Pricing Administration Guide.

When users work with pricing information, they can use the fields and button listed in Table 24.

These discounts are applied by the default pricing procedures, which may be modified to change the way the net price is calculated. For more information, see the workflow and Pricing Procedure reference in Siebel Pricing Administration Guide.

The following topics discuss the different ways an end user can enter a manual discount:

• Entering a Manual Discount for an Individual Line Item.
• Spreading a Manual Discount Across Line Items
• Using Discount Negotiations View

This task is part of the Common Tasks for Creating Quotes and Sales Orders.

Entering a Manual Discount for an Individual Line Item

End users can apply manual discounts to individual line items.

To enter a manual discount for an individual line item

1. Navigate to the quote or order with which you want to work.
2. Click the Line Items view tab.
3. In the Line Items list, select the line item to which you want to apply a discount.

   NOTE:  You can also apply a manual discount to an individual component of a configurable product.

4. In the link bar, click the Line Details.
5. In the Line Details form, enter information in one of the fields described in the following table:

   Field	Comments
   Manual Discount %	Enter a number that is subtracted from the price as a percentage discount. For example, if you enter 10, a 10% discount is subtracted from the net price.
   Manual Discount Amount	Enter a number that is subtracted from the net price as an absolute amount. For example, if you enter 10, a $10 discount is subtracted from the net price (assuming that the price is in dollars).
   Manual Price Override	Enter a number that is used as a discount price that overrides the net price. For example, if you enter 10, the discount price for the line item is $10 net price (assuming that the price is in dollars). Specifying a value in this field overrides any applicable policy discounts.

   NOTE:  These fields are mutually exclusive, so you can only enter a value in one of them.

Spreading a Manual Discount Across Line Items

You can enter a manual discount that is spread across all line items in two ways:

• Using the Discount field in the Header
• Using the Spread Discount Button

Using the Discount field in the Header

The Discount field allows you to enter a percentage discount to line items for quotes and orders.

If you enter a discount by using this field and then enter a manual discount for the line item, using the line item's Manual Discount Amount, Manual Discount %, or Manual Price Override field, the line-item level manual discount overrides the discount entered in the header Discount field.

If you use the Discount field, the discount applies to all products of any price type. That is, it applies to products with the price type One-Time, Recurring and Usage. When you use this field, be careful that it does not create undesired discounts for products with the price type Recurring or Usage.

To enter a percent discount at the header level for line items of a quote or order

1. Navigate to the Quotes or Orders screen, locate the quote or order with which you want to work, and drill down on the Name hyperlink for the quote or order.
2. In the Quote or Order header, click the Show More button, and in the Discount field, select or enter the discount (a percentage value) that you want to apply to the line items in the quote.
3. Add the products that receive this discount. For information about adding products, see Adding Multiple Items at One Time.

Using the Spread Discount Button

End users can also click the Spread Discount button and:

• Enter a discount amount discount percent, or target price.
• Spread this discount across all line items, across selected line items, or across line items of a particular type (products, services, or training).

If you enter a discount amount or target total price, the discount is spread across the line items in proportion to the total price selected as source, which could be list price or net price.

Spread Discount updates the Manual Discount Amount field on a line item, unless the line item already has a Manual Price Override specified, in which case it updates the Manual Price Override.

The spread discount can apply to hierarchical products and services. For example, a computer is a product made of many components. If a customer buying twenty computers gets a discount, you can enter the discount for the entire quote. When you click Spread, the discount will be spread among the twenty computers and among the components of each computer.

The discount is spread across products with the price type One-Time. Spread discount does not involve products with the price type Recurring and Usage. The Current Total field on the popup applet shows the total of all selected products with the One-Time price type.

There is special behavior for the current total field, when the discount is applied to customizable Products and their components. For example, assume quote contains a customizable product which has 10 component products. The end user selects the root customizable product and two of the component products, and then clicks Spread Discount. The current total field on the popup applet shows the total net price of the customizable product and all of its components, not just the total of just the three items that were selected.

Maximum and minimum prices are honored while spreading the discount; this behavior can be configured. Spread Discount honors minimum prices. It discounts a line item until the minimum price is reached. Then it recalculates and spread the remaining discount amongst the other line items.

If you enter a Discount Amount or Target Total, Spread Discount first calculates a weighted average before distributing discounts. It calculates the weighted average as follows:

• If the Source is List Price:

  Weighted Average = Line Item List Price / Total List Price
  Manual Discount Amount = Weighted Average * Discount Amount

• Source = Net

  Weighted Average = Line Item Net Price / Total Net Price
  Manual Discount Amount = Weighted Average * Discount Amount

If the spread discount type is Selected Items and one of the selected items is the root of a product with components, the discount percent applies to or the discount amount is spread across the entire instance of the selected product with components.

To spread discounts across quote or order line items

1. Navigate to the desired quote or order.
2. Click the Line Items view tab.
3. To spread the discount among selected items, select multiple items in the Line Items list.
4. In the Totals form under the Line Items list, click Spread Discount.
5. To spread the discount among items that are a specific product type, select that type in the Product Type drop-down list.
6. In the Spread Discount dialog box, complete the necessary fields and click Spread. Some fields are described in the following table:

   Field	Comments
   Type	Select which items to which you want to spread the discount. The options are: Entire Document. Spreads discount among all the line items. This is the default if items are not multi-selected. Selected Items. Spreads discount among the selected line items. Product. Spreads discount among all line items that are products. Service. Spreads discount among all line items that are services. Training. Spreads discount among all line items that are training.
   Current Total	Displays the quote total before the spread discount is applied, if the type is Entire Document. Displays the total of the selected items before the spread discount is applied, if the type is Selected Items. If one of the selected items is a customizable product, displays the total for the entire customizable product, not just for components that are selected.
   Source Price Field	Select List Price or Net Price to determine how the discount is calculated. If you are using a Discount Percent, it is calculated as follows: Source = List Price Manual Discount Amount (MDA) = Previous MDA + (Discount Percent * List Price) Net Price = Net Price - (Discount Percent * List Price) Source = Net Price Manual Discount Amount (MDA) = Previous MDA + (Discount Percent * Net Price) Net Price = Net Price - (Discount Percent * Net Price) If you are using a Discount Amount, it is calculated as follows: Source = List Price Manual Discount Amount (MDA) = Previous MDA + ((List Price/Total List Price) * Discount Amount) Net Price = Net Price - ((List Price/Total List Price) * Discount Amount) Source = Net Price Manual Discount Amount (MDA) = Previous MDA + ((Net Price/Total Net Price) * Discount Amount) Net Price = Net Price - ((Net Price/Total Net Price) * Discount Amount) If you are using a Target Total, it is calculated as follows: Source = List Price Manual Discount Amount (MDA) = Previous MDA + ((List Price/Total List Price) * (Current Total - Target Total)) Net Price = Net Price - ((List Price/Total List Price) * (Current Total - Target Total)) Source = Net Price Manual Discount Amount (MDA) = Previous MDA + ((Net Price/Total Net Price) * (Current Total - Target Total)) Net Price = Net Price - ((Net Price/Total Net Price) * (Current Total - Target Total))
   Discount Amount	Enter the total amount of the discount. This amount will be subtracted from the current total and spread among the line items. (If you enter this, you may not enter a Discount Percent or Target Total.)
   Discount Percent	Enter a percent discount. This discount will be applied to the line items. It applies to the source specified in the Source Price field, but it updates the net price. (If you enter this, you may not enter a Discount Amount or Target Total.)
   Target Total	Enter the total price for the quote after the discount. The difference between the current total and the target total will be spread among the line items. (If you enter this, you may not enter a Discount Amount or Discount Percent.)

   After you click Spread, your Siebel application performs the spread and enters unit net price and discount amount for each line item. If the line items previously had individual discounts, they are updated based on this spread.

Using Discount Negotiations View

If you have licensed Siebel Dynamic Pricing, the end-user can use the Discount Negotiations view as a dashboard for negotiating discounts, gaining visibility into prices, and communicated those prices and discounts to customers.

Some key features of the line items list in the Discount Negotiation View include:

• Pricing Waterfall. In the discount negotiation view, the user can click the Net Price field to display the net price waterfall, which shows all adjustments that were applied to arrive at the final net price
• Margin % field. Displays the profit margin for the line item. This is calculated as (Net Price - Cost)/Net Price * 100%
• Other key features. The Discount Negotiation form provides sales users with referential price data, actionable price and discount data, as well as a quick view of how the net price was calculated.

The following fields in the discount negotiation form provide end users with data useful for negotiating discounts:

• Referential Pricing Data:
  • Cost. The cost of the product from the price list
  • List Price. The list price of the product from the price list
  • Minimum Price. The floor price of the product as set by Product or Pricing Administrators in the Price List.
  • Maximum Price. The ceiling price of the product as set by Product or Pricing Administrators in the Price List.
  • Current Volume Discount. The current volume discount that has applied to the line item, if applicable
  • Next Volume Discount. The next volume discount that would apply if to the line item if the quantity were incremented to meet the next volume discount requirements
  • Upsell. Upsell message for next volume discount quantity break.
  • Margin %. Displays the profit margin for the line item. This is calculated as (Net Price - Cost)/Net Price * 100%
  • Line Discount %. Displays the total discount % for the line item. This is calculated as (Total Line Discounts/Net Price) * 100%
• Actionable Pricing and Discount Data:
  • Price List. Allows the user to choose a price list for the line item that may differ from the price list on the header
  • Currency. Allows the user to choose a currency code for the line item that may differ from currency on the header. This allows the sales user to quote individual line items on the same quote or order in different currencies.
  • Entitlement. Allows the user to associate a pricing entitlement with the line item.
  • Promotion. Allows the user to associate a promotion with the line item.
  • Manual Discount Amount. The end user can enter a manual discount amount for a line item. (The three fields that apply discounts to individual line items, Manual Discount Amount, Manual Discount % and Manual Price Override, are mutually exclusive. The end user can only use one of them.)
  • Manual Discount %. The end user can enter a manual discount percentage for a line item.
  • Manual Price Override. The end user can specify an override price for the
  • Line item. This price is used as the net price for the line item. Specifying a value in this field overrides any applicable policy discounts.
  • Override Policy Discounts. Selecting this check box overrides any policy discounts such as volume discounts and contractual discounts, generated by the application. The system does not apply policy discounts to that line item. Discounts depend only on manual discounts. Use this flag if you want the Manual Discount Amount or Manual Discount % to replace the policy discounts rather than being applied in addition to the policy discounts. This flag is deselected by default. Whenever the user selects or deselects this flag, the item is repriced. In earlier releases, this field was named Keep Discount.
• Data used to calculate the net price:
  • Start Price. The start price of the product, including any customizable product adjustments or attribute adjustments.
  • Policy Discounts. The sum of discounts applied by the application (such as volume discounts, contractual discounts, etc.)
  • Manual Discounts. The sum of manual discounts applied by the user.
  • Net Price. The Net Price of the item. Calculated as Start Price - Policy Discounts - Manual Discounts.
  • Qty. The quantity of the item.
  • Extended Net Price. Calculated as Extended Qty * Net Price
  • Sub Total. The One-Time total. If the line item is a customizable product, this will be the Sub Total of the Net Price for the customizable product and any components with a Price Type of One - Time.
  • Monthly Sub Total. The Monthly Sub total for the line item. If the line item is a customizable product, this will be the Sub Total of the Net Price for the customizable product and any components with a Price Type of Per Month.

These fields of the Discount Negotiation form provide a top-down view of how the net price was calculated.

Using this view, the salesperson can see what the profit margin for the product is with the policy discounts that the pricing administrator has set and with different manual discounts that the salesperson is considering offering to the customer. The salesperson can set the manual discounts in this view, and see the margin for each.

To use the Discount Negotiations view

1. Navigate to the quote and line item that you are negotiating the discount for.
2. Click the Pricing view tab.

   The Discount Negotiation form is under the Line Items list.

Example of Calculation of Discount Amounts

This section gives an example of how the application calculated the discount price for three products, based on:

• Start Price. $100 list price for each product, defined by the pricing administrator.
• Policy discounts. Contractual and market discounts that the pricing administrator defined. Contractual discounts are applied first.
• Manual Discounts. Specified by the end user.

The data for the three products in the example is shown in Table 25.

The prices calculated for the three products based on this example data is shown in Table 26. This table assumes that the pricing procedure has been set up to apply the contractual discount first and then the market discount. It also assumes that the user did not select the Override Policy Discount Field.

If the end user selected the Override Policy Discount field, the products would have the prices shown in Table 27. In every case, the price calculation would just be based on the start price and manual discount and would ignore any system generated discounts such as Volume Discounts, Contractual Discounts, and so on.