1. Administering Pricing
  2. Manage Cost Lists

Manage Cost Lists

Modify a predefined cost list or create your own to set up a variety of charges, such as item cost, sales commission, or labor cost.

  • Use a cost list to set up cost plus pricing.

  • Use a cost list to calculate part of the profit margin for a charge.

  • Separate charges to help you manage and optimize charges and profit margins for an item, and help improve your pricing strategy. For example, create a separate charge for the transport charge, installation charge, recurring service charge for maintenance, and a one-time administration fee for 50 desktop computers. Pricing adds each cost as a charge to the cost list.

  • Manage charges at different levels, such as individual items or all items.

Assume you must add a cost list that includes a $35 fee for maintenance service for the AS54888 Desktop Computer. The fee recurs one time each month.

This topic describes how to create a pricing rule. For details, see Pricing Rules.

This topic uses example values. You might need different values, depending on your business requirements.

Summary of the Steps

  1. Create cost list.

  2. Add item to cost list.

  3. Add cost list to pricing strategy.

Create Cost List

  1. Create the pricing charge that Pricing uses to calculate cost for your cost list.

    You must do this before you create the cost list. For details, see Manage Pricing Charge Definitions.

  2. Go to the Pricing Administration work area, then click Tasks > Manage Cost Lists.

  3. On the Manage Cost List page, click Actions > Create.

  4. In the Create Cost List dialog, enter values, then click Save and Edit.

    Attribute

    Description

    Name

    For this example, enter Cost List for Computer Service and Rentals.

Add Item to Cost List

  1. Click Actions > Add Row, then set the value.

    Attribute

    Description

    Item

    For this example, add AS54888 Desktop Computer.

  2. Click Create Cost Charge.

  3. In the Cost Charges area, set the values.

    Attribute

    Description

    Cost Element

    Select Cost of Goods Sold.

    Use the cost element to monitor cost through the inventory and accounting life cycle. For example, monitor the material cost, overhead cost, or tax cost of an item.

    Monitor each of these costs as a separate cost element. Pricing comes predefined to use Cost of Goods Sold, but you can set up pricing to use other cost elements.

    Pricing Charge Definition

    For this example, select Recurring, then set Price Periodicity to Month.

    Use this attribute to specify the type of charge. Select a value.

    • Sale Price. Apply this cost to an item that the customer is purchasing.

    • Service Price. Apply this cost to a service that the customer is purchasing, such as a one-time charge to install and setup a network of desktop computers.

    • Recurring. Apply this cost to a recurring service that the customer is purchasing, such as monthly maintenance service for a desktop computer.

    Cost Calculation Type

    For this example, select Fixed, then enter 35 in the Cost Amount.

    Specify whether Pricing uses a fixed amount or a percent.

    For fixed, select Fixed, then enter a value in the Cost Amount attribute.

    For percent, select Percent of Price Element, then define attributes.

    • Cost Basis Element. Select the price element that Pricing uses to calculate the cost charge, such as Base List Price.

    • Cost Percentage. Enter a number that represents the percent to calculate for the cost charge. Enter a percentage of a price element, such as 10% of the base list price, ceiling price, invoice price, list price, or net price. Pricing calculates the charge value at run time.

      For example, to calculate the cost as 15% of the base list price, set Cost Basis Element to Base List Price, and sent Cost Percentage to 15.

    Cost Plus Pricing

    For this example, leave empty.

    Add a check mark to define an item price in terms of cost, such as add a $100 cost markup to the list price. For details, see Cost Plus Pricing.

    Cost Method

    For this example, leave empty.

    Select the accounting method that your company accounting policies require to account for the cost. This attribute doesn't affect pricing calculations or relationships. Use it to help document how you use the cost list.

  4. Scroll to the top of the page, then click Save > Approve.

    If you add a pricing rule to a cost list that you already approved, then Pricing automatically approves the that the rule references. It approves them for use in the cost list.

Add Cost List to Pricing Strategy

For this example, add the cost list to the pricing strategy named Corporate Pricing Strategy. For details, see Manage Pricing Strategies.

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