Configuring Transfer Pricing
Transfer Pricing is the price at which two related parties perform business transactions between themselves. Every organization follows a regulatory guideline specific to their country to derive transfer prices for the products. This formula states one of the ways in which Transfer Pricing is calculated.
Transfer Pricing = Full Cost (sum of all fixed and variable costs) + Markups
Let's assume the Sales Rep exposes a currency field 'Manufacturing Cost' and sends collaboration request to another Factory user.
Cost Model available with the Sales Rep
Cost Name | Value |
|---|---|
Packaging | $100 |
Transportation | $50 |
Manufacturing | - |
Cost Model with the Factory User
Cost Name | Value |
|---|---|
Manufacturing | $70 (Cost of Raw Material + Labor) |
Raw Material | $30 |
Labor | $40 |
The administrator needs to create a Transfer Map so that Sales Reps can send out a collaboration request. For this requirement, the Transfer Price Map would look as the following:
Field | Value |
|---|---|
Source Field | Apttus_Config2__Manufacturing__c |
Source Charge Type | Standard Price |
Target Cost Model | Factory Cost Model |
Target Field | Requested_ManufacturingNetPrice__c |
Target Object | Apttus_Config2__LineItem__c |
Configuration
- In CPQ Console, go to + (All Tabs) > select Cost Models.
- Select the required cost model.
- From the Transfer Prices related list, click New Transfer Price to create a Transfer Price mapping.
- Enter the following details and click Save.
Field | Description |
|---|---|
Source Field | The API Name of the field for which you want the pricing details. |
Source Charge Type | Mention the Charge Type of the Source Field, whether it is a Standard Price, License Fee, Subscription Fee or any other. |
Target Cost Model | Enter the name of the destination Cost Model from which you want to get the price of a field. |
Target Field | Enter the API Name of the field as given in the Target Cost Model. |
Target Object | Enter the API Name of the Target Object which the Target Field is a part of. For example, if the Target Field is 'Net Unit Price' and is defined on the Line Item object, the Target Object will be Apttus_Config__LineItem__c. |
Procedure
- Create a new Quote using price list.
- Click Configure Products button. Add products and go to Cart.
- Using the collaborator icon send the request to Factory User.
- Factory User receives the Collaboration Request. Applies adjustments or enters the price and clicks Submit For Merge. Please refer Assigning the configuration to the Collaborator or Queue for details.
- The Transfer price is set to copy Net Price from Collaborator's Quote to a cost type named "Cost From Factory" of requester's Quote.
- Open the requester's Quote. Go to Cart and click Merge in the Collaborator pop-up.
- Click Analyze Quote to analyze the product cost.
