Manage Pricing Discrepancies on Sales Orders Received via EDI

  • by Anton Karnaukhov, Senior IT Manager, Pacific Coast Companies, Inc.
  • May 1, 2006
When it comes to receiving sales orders electronically, it is crucial to maintain total control over pricing. Here’s how.
Key Concept
Electronic Data Interchange (EDI) is the exchange of electronic data between business partners who use a number of different hardware and software solutions. The exchange can involve documents such as sales orders, invoices, and advanced shipping notices. The data exchanged is always formatted according to predefined standards. In the United States, the most widely used EDI standard ASC X12 is coordinated by the American National Standards Institute (ANSI). Use ANSI X12 transaction set 850 and SAP IDoc type ORDERS01 for incoming sales orders.
It is no wonder that almost every company that uses SAP R/3 or ERP Central Component (ECC) today has one or more Electronic Data Interchange (EDI) implementations in place. EDI not only provides an inexpensive way of exchanging data with various business partners, but also streamlines the monitoring and controlling of incoming and outgoing documents.

Certain EDI transactions require you to use more control methods because of their direct impact on your company’s revenue. For example, incoming sales orders are often subject to pricing disputes. Automated EDI sales orders with incorrect pricing, if not checked, could cause a lot of turmoil. The company could end up in a situation in which customers are refusing to pay the invoices or, even worse, experience a loss of loyal customers all due to the lack of monitoring and controlling of price discrepancies on incoming sales documents.

As more and more sales orders are received via EDI, it is vital to ensure that all expected incoming pricing is checked against the sales and distribution pricing maintained in your R/3 or ECC system. They both provide standard functionality to help you identify pricing discrepancies between the customer’s expected sales price and the sales price your system determines on incoming EDI sales orders.

The steps below guide you through the process of configuring R/3 to capture the customer’s expected price on incoming EDI sales orders and check that price against a customizable factor of deviation from the actual sales price as determined by the Sales and Distribution (SD) module of R/3. You will also gain an understanding of how to block an incoming sales order from further processing if the price discrepancy is unacceptable, and find out how to access standard reporting tools that allow the release of blocked EDI sales orders within your system. Although my example is from an R/3 system, the process is the same for ECC.

Anton Karnaukhov

Anton Karnaukhov is a senior IT manager at Pacific Coast Companies, Inc., in Sacramento, California. He earned an MBA degree at Heriot-Watt University and a BS/BA degree with a specialization in computer information systems at Western Carolina University. Anton has more than eight years of SAP implementation and development experience focusing on business intelligence and logistics modules in the manufacturing and resale industries.

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