Pricing terms define the limits and discounts that apply to catalog and non-catalog items on which a contract is based.

When adding an item from a supplier's catalog, some data defaults, including the Description, Supplier Part Number, Commodity Code, Unit of Measure, and Unit Price. Use care changing default information. For example, if you change a catalog item's UOM, a new non-catalog item is added to the contract sourcing request (CSR) (and to the related CR). The original catalog item remains on the request (for historical purposes).

Accounting fields are hidden until you add a term. Once you have added a term you can edit it to change the default accounting values.

When you source a non-catalog item and want to apply Quantity based volume pricing, you must remove the negotiated price and enter tiered pricing levels, starting with zero as the first tiered level.

You can also add and edit item level pricing terms from the Pricing Terms tab on the Summary screen.

1. Enter a full description of the item, including details about the item discount or other information you have agreed on with the supplier.
2. If necessary, enter the supplier part number (this must be a unique value) and supplier auxiliary part ID. Multiple items with identical part numbers can be used if their auxiliary part IDs are different.
3. If necessary, select a commodity code, unit of measure, and for:
• Catalog items, a unit price.
• Non-catalog items, a Negotiated Price as provided by the supplier. If you don't enter a negotiated price, you must define tiered pricing. Note: If a non-catalog item's price is specified by a contract, you cannot change the price.
4. Set item limits either by quantity (purchasing a specific quantity of an item) or by amount (spending a specific amount of money for an item). This setting determines whether items will be received and invoiced based on quantity or amount.
5. Enter the minimum amount of money that must be spent, and the maximum amount (excluding the tolerance percentage, if specified) that can be spent on the item over the life of the contract.

Although minimum amount limits are not enforced, you can use them to encourage users to create release orders that meet the specified minimum, thereby receiving the best prices.

6. If your company's business policy supports it, enter a tolerance percentage to allow users to exceed the maximum amount you specified. The tolerance gives users additional flexibility to purchase certain items.
7. Specify whether or not receiving is required (select Yes or No).
8. Select the discount pricing that applies to the item.
• None if no discount applies. For non-catalog items, select this option only if you have entered a negotiated price.
• Discounted Price and enter the discount price. This option is only for catalog items. When your requisition references a contract that contains commodities or items with a discounted price, this price appears on the requisition (and subsequent release order) instead of the standard catalog price.
• Discount Percent and enter the discount percentage. This option is only for catalog items. When you create a requisition to purchase a commodity that is listed on a contract, and have permission to create release orders against the contract, the commodity pricing on the resulting release order reflects this discount percent.
• Tiered Pricing and then click Define Tiers to enter tiered pricing details.
• Formula Pricing and then click Define Formula to enter formula pricing details. The formula displays beneath the Define Formula button.
9. If this is a category item that includes related contractible factors, view or edit the factors:
   1. Show a factor's details by clicking the triangle next to the factor name.
   2. Choose a discount type for the factor. The discount types available for a factor depend on how it was defined when the category containing it was configured. Possible discount types you can choose include:
      • None if no discount applies.
      • Amount and enter the discount price to use instead of the existing catalog price.
      • Fixed Value is used in numerical factors (such as monetary ones). Note for a factor that specifies a monetary percentage (for example, Overtime Markup Percent) that a Fixed Value entry is interpreted as a decimal percentage. For example, entering 9 equals an entry of .09 when evaluated.
      • Adjustment Percent and enter the discount percentage to apply to the existing catalog price.
      • Tiered Valuation and then click Define Tiers to enter tiered pricing details.
      • Formula Valuation and then click Define Formula to enter formula pricing details. The formula displays beneath the Define Formula button.
   3. Choose a Qualifier that limits or modifies the factor's pricing terms. The possible qualifiers depend on how the factor was defined when the category containing it was configured. Possible qualifiers include:
      • Fixed means the factor's pricing term is explicit.
      • Negotiable means during collaboration, this factor can be changed.
      • Not to Exceed indicates the pricing terms define the highest price for this factor.
10. If available, choose whether to compound this item or contractible factor pricing discount with any applicable parent agreements' discounts by selecting Yes for the Compound with applicable parent's pricing terms? setting.
11. If this is a subagreement, choose whether to Add accumulators to parent agreement. If this is set to Yes, any parent agreement above it in the hierarchy that also has its Include subagreement accumulator setting to Yes will add the appropriate amounts (released, invoiced, or received) from this item or contractible factor in its own amounts.
12. Change the default accounting values, if necessary.
13. To split accounting among different accounts, cost centers, and so on, click Split Accounting.
14. Click Add Additional Items to add another Item Level term for a new item, Done to return to the previous screen and review the pricing terms, OK to save your changes and return to the previous screen, or Cancel to return to the previous screen without saving the changes.