Margin limits and holds

You can use a hierarchy of margin tolerances for an order line's product price type records to apply margin hold logic at invoice processing or shipping.

Margin limit options

Use PD Margin Tolerance Setup to specify line-level margin tolerances based on customer, warehouse, pricing zone, and price region, in addition to the company-level limits set up in SA Table Code Value Setup by product price type. You can specify minimum and maximum percentage values for each type of margin limit.

When you enable extended margin limits and invoicing margin limit holds, the specified tolerance limits are verified at order entry, shipping, and invoice processing. This hierarchy is used when checking the limits:

  1. Customer
  2. Warehouse
  3. Pricing Zone
  4. Price Region
  5. Company

When the first active minimum and maximum limit is found, the search is ended and all other levels in the hierarchy are ignored.

The warehouse, pricing zone, and price region margin types are affected by the operator's home warehouse settings in SA Operator Setup and Product Warehouse Description Setup.

Order entry margin checks

When you enable extended margin limits, a warning message is displayed to the user for each Sales Order Entry line item where the margin is outside the allowable tolerance, according to the margin checks hierarchy. The Sales Exceptions Report includes the hierarchy of margin limits for customer, warehouse, pricing zone, price region, and SA Table Code Value Setup-Product Price Type company level when they are set up. To display lines with the margin exception on the report, the Item Profit Margin Beyond Defined Limits report option must be set to Yes.

Invoicing margin holds

When you enable invoicing margin limit holds, orders are placed on margin hold during invoice processing when a line is outside the margin tolerance limits defined in PD Margin Tolerance Setup and SA Table Code Value Setup. If an order line or lines cause an order exception in the Sales Entry Invoice Processing Report based on the margin checks hierarchy, then the order is placed on hold, and the exception is displayed in the Sales Invoicing Exception Inquiry.

You can release the invoicing margin hold in Sales Credit Release Inquiry or on the Operational Hold Code Approval page in Sales Shipping Feedback Entry. When the margin hold is approved, the Invoicing Hold Type field on the order header is y. When the last hold on the order is removed, the Approval type changes to y.

An internal Invoicing Hold Type field is used in the order header to prevent the order from invoice processing, and this field is included in the Sales Order Master List Report.

Activation and required setups

Select the Use Extended Margin Limits option in SA Administrator Options-Documents-Sales Orders-Approval Process to enable the extended margin limits specified in PD Margin Tolerance Setup.

Select the Use Invoicing Margin Limit Holds option in SA Administrator Options-Documents-Sales Orders-Approval Process to put orders on hold in invoice processing when they are outside the margin limits defined in PD Margin Tolerance Setup. This option cannot be selected if the Use Extended Margin Limits option is deselected. Additionally, you must implement operational hold codes to allow multiple active holds per order. The line level margin limit checks consider all operational hold codes when determining an order's approval.

Specify a value in the Invoicing Margin Hold field in SA Administrator Options-Documents-Sales Orders-Approval Process. This value is added to the default set of operational hold codes in SA Table Code Value Setup as Invoicing Margin Limit Hold, and it is added as a hold code to orders that are placed on margin hold during invoice processing when a line is outside the defined margin tolerance limits.

Operator access to the PD Margin Tolerance Setup screen is determined by standard functional security in SA Operator Setup.

Optionally, create pricing zones that are specific to your business requirements in the Pricing Zone table in SA Table Code Value Setup. This table provides lookup values for the Pricing Zone fields in PD Margin Tolerance Setup and Product Warehouse Description Setup.