Stepped Pricing

Background

This document describes how to enable a pricing method that lets the rate decrease as the rental period increases (a sliding price scale). This stepped price method can be set up to either calculate a stepped price based on invoiced periods or the agreement period.

Setup

You can find the 'Stepped price' parameter in'Rental Agreement Order Type. Open' (STS020). It is saved in the 'SPRA' field in the agreement order type table STAOTP. The parameter controls if you can use the stepped price on the agreement and how you can use it.
Alternatives:
0 = No, the stepped price is not calculated and cannot be activated on the agreement line
1 = The stepped price is calculated based on invoiced periods
2 = The stepped price is calculated based on the agreement period
If this parameter is set to 1 or 2, this value is defaulted to the 'Rental Agreement. Open Lines' (STS201/B) panel footer, and you can change it before creating the agreement line.
If the stepped price is disabled on the agreement order type, you cannot add stepped price lines to the agreement.
The price list matrix for stepped price is set up in 'Rental Rates. Enter Stepped Price' (STS123). You can reach (STS123) with the option 11-'Stepped Pricing' from 'Serv Price List. Enter Rental Rates' (STS120). You can configure the stepped price model for each item number that is defined in a price list.

Limitations

Exchange handling

Stepped price alternative 1 does not work with exchange handling since a new line with 0 days used is created when an exchange is made. Days used are considered for stepped price alternative 1 calculation.

For an agreement line with stepped price alternative 2, the total agreement period for both the original line and the new line is considered during the exchange. The termination date on the exchanged line is ignored to determine the stepped price for the two lines when creating the exchange. The price from original item is kept as long as the rate type, shift, or days/week are not updated on (STS201/F).

If the agreement period is later changed or when the termination date is set on the new line, this does not trigger a new stepped price calculation on the original line.

Up rent and down rent

You can make an up rent and down rent on an agreement line with stepped price. The price from original item is kept as long as the rate type, shift, or days/week are not updated on (STS201/F).

Discount handling

You cannot use a discount model or set a manual discount when stepped price is used.

Best price

You cannot use rate type 9 (best price) in combination with stepped price alternative 2.

For stepped price alternative 1, rate type 9 is allowed, but it checks the limit value for rate type 1 (day) in (STS123). If the number of days in the agreement period equals the number of days (limit value) in (STS123), the price from (STS123) is found. If this is not the case, the price is used according to a normal price list.

Rate type Hour

You cannot use rate type 5 (hour) in combination with stepped price alternative 2.

Package handling

You cannot use line type 4 (package ID) in combination with stepped price, since there is no price list support for packages.

Allowed line types

You can only combine stepped price with line type 5, 7, and 8.

If trying to create any of the line types which are not allowed in combination with stepped price from 'Rental Agreement. Create' (STS085) or STS201MI, the line is created but the stepped price setting, the 'SPRA' field, in the STAGLI table is automatically set to 0. This is due to the fact that stepped price setting cannot be done manually in (STS085) or in STS201MI. If doing it from (STS201), a stop message is displayed instead, and the field must be manually changed.

Calculation of the number of days to invoice based on settings in (STS020)

The settings 24-hour billing, grace period, AM switch to PM, and Weekdays to invoice are all affecting the number of days to invoice in a period (normally the last invoice).

Days to invoice are still calculated based on these settings also when the stepped price is activated. However, if found that one or several days must be deducted from the number of days to invoice, the daily price used is still calculated from the stepped price found for the calendar period.

Follow these steps

Configure the rental agreement order type (STS020)

Open 'Rental Agreement Order Type. Open' (STS020) and go to the F panel. Select if the stepped price should be allowed for this order type and if so, how it should be calculated.

0 = No stepped price

1 = Stepped price based on invoiced periods

2 = Stepped price based on agreement period

If you use alternative 1, the price used during invoicing is the stepped price found to be valid for the invoiced period. This is, any previous invoiced periods plus the period included in the ongoing invoice proposal.

The stepped price presented on (STS201/F) is based on the 'Valid from' date and up to the current date. This means that the stepped price displayed on (STS201/F) may not be the same as the one used on the invoice, and it may vary depending on when you look on (STS201/F).

If you use alternative 2, the price used during invoicing is the stepped price found to be valid for the agreement period. Agreement period starts from the 'Valid from' date and ends with the termination date, if set, or with 'Valid to' date.

The stepped price presented on (STS201/F) is based on the same criteria as during invoicing. This means that the stepped price displayed on (STS201/F) may change when the termination date is set or if the agreement period is changed.

Also note, that these settings in (STS020) have an impact if stepped price alternative 2 is used:

Check out date=Start:
When check out is done and the 'Valid from' date is updated, also the stepped price is updated on (STS201/F) in the same way as if the 'Valid from' date is manually changed.
Check in date=End:
When check in is done and the 'Valid to' date is updated, also the stepped price is updated on (STS201/F) in the same way as if the 'Valid to' date is manually changed.

The Invoice from delivery setting in (STS020) does not have an impact since this does not update the 'Valid from' date. A delivery date is instead stored in (STS220), and there can be multiple delivery dates if a bulk item with qty greater than 1 is delivered. Therefore, the delivery date cannot be considered when calculating the stepped price.

Creating stepped pricing from (STS120)

From 'Serv Price List. Enter Rental Rates' (STS120) use related option 11='Stepped Pricing'. The B panel of 'Rental Rates. Enter Stepped Price' (STS123) shows all stepped price matrices configured for a specific item and price list. You can create, change, delete, or view existing matrices from the B panel.

(key fields within brackets):
- Company (CONO)
- Division (DIVI)
- Price list (PPRF)
- Currency (CUCD)
- Customer (CUNO)
- Start date (STDT)
- Item group (ITGR)
- Item number (ITNO)
- Rental rate type (CCAP)
- Days/week (ADPW)
- Limit value (LIMT)
- Shift price 1, 2, 3, 0 (4 PPCA fields)
Enter a new stepped price model for a specific item number by selecting a rate type and days/week. Click option 1-'Create' to open the E panel.
On the E panel, define limit values and rates for the selected rate type. The unit of the limit value is defined by the rate type. For example, if you select rate type 2 (week), and the price break value is set to 4, the price entered on the line is used when the rental period equals or exceeds 4 weeks.
Click Next to return to the B panel. The stepped price model is now configured for the rate type, which is reflected in the list. You can now change, display, or delete the created matrix by marking the record and selecting the appropriate option.

Agreement line entry

Creating or editing stepped price lines

If the stepped price is enabled when creating the agreement line, a check is made if a stepped price matrix exists for the item, rate type, and price list used on the specific line. If such a matrix does not exist for the specific item, rate type, and price list used, an error message is displayed, 'Stepped price does not exist for item &1 with rate type &2.'

The program 'Rental Agreement Line. Stepped Pricing' (STS202) is used to display or edit the content of the stepped price matrix for a specific agreement line. You can reach this program with option F19='Stepped price' on 'Rental Agreement. Open Lines' (STS201/F).

You can only reach (STS202) if the agreement line uses stepped pricing.

When a stepped price agreement line is created, the appropriate stepped price matrix is copied from the stepped price model connected to the price list (STPRSP), and saved in the STSPLN table, which represents the stepped price matrix connected to the agreement line. (STS202) updates the STSPLN values, so the changes have an impact on the current agreement line only.

Moreover, you can edit the matrix only if you view the agreement line in a change mode. The STSPLN table contains these fields (key fields within parenthesis):

Company (CONO)
Division (DIVI)
Agreement number (AGNB)
Version number (VERS)
Line number (PONR)
Line suffix (POSX)
Item number (ITNO)
Rental rate type (CCAP)
Days/week (ADPW)
Limit value (LIMT)
Shift price 1, 2, 3, 0 (4 PPCA fields)
Price list (PRRF)
Currency (CUCD)
Customer number (CUNO)
Start date (STDT)

On (STS201/F), the stepped price that is currently reached is displayed in the fields 'Stepped period rate' (SPCA) and 'Stepped daily rate' (SDAN). As these fields only display information from STSPLN, they are write protected.

Note: How the values in these fields are displayed depends on if you use stepped price alternative 1 or 2, see the section above describing the two alternatives.

If the first limit value for stepped price is not reached, the stepped price rate fields are not displayed. For stepped price alternative 2, this indicates in this case that the price from the regular price list is used when invoicing the agreement line.

If a change is made to the line that invalidates the currently used stepped price matrix (for example, rate type or days/week is changed), an attempt is made to find a new valid stepped price matrix in the price list. If such a matrix is found, the current STSPLN record is deleted and a new one is retrieved from the price list. If no valid matrix is found, you get an error message and cannot perform the change.

Update of agreement line (STS201)

This section is only valid for stepped price alternative 2.

If you use stepped price alternative 2, changes to the agreement period can result in a new stepped price.

Changing the 'Valid from' or 'Valid to' date on (STS201/E) triggers a new check for the stepped price against the STSPLN table. If a new limit value is found for the new agreement period, the stepped price is updated on (STS201/F), and this price is used on any further invoices. If no limit value is found for the new agreement period, the stepped price information is removed on (STS201/F) and not used during invoicing. Instead, the price from the regular price list is used.

When you set, update, or remove the termination date, this also triggers a new check for the stepped price against the STSPLN table and an update of the stepped price information in the same way on (STS201/F).

If an agreement line is prolonged, the originally agreed stepped price may sometimes need to remain.

For example, if an agreement period is set to three months, but the customer does not return at the set 'Valid to' date, this can be handled in two ways:

If the 'Valid to' date is not changed, the invoicing continues beyond the agreement period with the same price as for the previous invoices.
If the 'Valid to' date is updated to mirror the customer's new planned return date, this triggers a new check for a stepped price and may result in a lower price for the coming invoices. If the original price should remain, this can be handled by changing the price in (STS202) using F19 on (STS201/F) for the agreement line.

If an agreement line is instead terminated much earlier than agreed with the customer and invoices have already been created, there may be a need to charge the customer for this early termination.

If so, this must be handled manually, for example by adding a charge to the line or to credit previous invoices and invoice again.

Copying stepped price lines from (STS100)

When copying an agreement on 'Rental Agreement. Open' (STS100/C) or line in 'Rental Agreement. Copy Line' (STS126) with stepped price, the new agreement line gets the same stepped price alternative as the source line.

The new line also gets the stepped price matrix from the source line.

Outcome

A stepped pricing model is associated with the selected agreement lines. The stepped price matrix for the rental agreement line is included in the stream of the quotation and agreement documents.

When calculating accrued revenue for'Revenue Accruals. Update' (STS380) and 'Daily Flash Report' (STS390), the stepped price is calculated for the period in question, using the invoice interval end date from the rental agreement line. At invoice proposal creation (STS801), the rate is retrieved from the stepped price matrix, based on the stepped price setting. If the first limit value has not been reached, the regular rate is used instead.

For example, if the invoicing range is one month and agreement period is three months, stepped price alternative 1 gives a price based on one month on the first invoice, two months on the second invoice, and so on.

With stepped price alternative 2, the valid stepped price is for a period of three months already from the start. The monthly price is the same on each invoice, as long as no changes are made to the agreement line (for example prolonging or terminating the agreement line).

If there has been a stand down period during the invoice period, the number of stand down days in the period is deducted from the total invoice amount at the stepped price rate that is used on the rental line.