Explanation of part prices

There are several different prices for parts. Prices are also called "price types" or "price alternatives" in the system. In different places in the system you can choose between price types that are available or concerned at that moment.

For example, during calculation of parts it is possible to select among different price types such as Standard price, Most recent purchase price, Average purchase price, to mention a few.

There are price types that can be updated and there are price types for statistics that are generated when reporting. The internal (in-house) price types, as well as statistical price types, are always shown in the company currency.

In the Price adjustment procedure, you can update the price types that are possible to update.

Different price types possible to update

Price type	Description
Standard price	Standard price is the most important part price in the system. The standard price describes the value of the part and it is used on several occasions, for example as a calculation basis price for purchased material, stock valuation, contribution margin, etc. For purchased parts, the standard price could be a recommended price for the purchase price + purchasing costs, if any. For own manufactured parts, a pre-calculation means that is made in the system, which is saved as the standard price. You can only have one standard price for a part.
Future standard price	Future standard price is also an important price. It can be used to calculate future prices for an upcoming fiscal year. You can only have one future standard price for a part.
Comparative price	For quote, customer order, and invoice, the comparative price is always displayed in the currency of the order. The comparative price can also be used to make it easier to grasp how CM/CR is calculated on orders that are issued in a foreign currency. It can also be used to see which effect a currency change will have on the CM/CR. The comparative price is not used in the accounting/bookkeeping.
Post-calculated mean price	Post-calculated mean price is an important price in cases where a manufacturing part mainly consists of stock driven parts. The price is updated in the Post-calculation procedure using list type Part (mean price calculation) and it is a mean price based on a number of selected manufacturing orders. Post-calculated mean price can for example be used as comparative price for CM/CR in the invoicing log.
Supplier price	Supplier price is the current price for purchased parts per supplier link. The price is by default entered in the currency selected for the supplier, but the currency can also be changed on the part's supplier links. This price in the supplier link's currency will then be default when placing an order for the part from the supplier in question. Supplier prices can be staggered, i.e. you can enter one price for a certain purchase quantity of a part and enter another price for another purchase quantity, etc.
Future supplier price	Future supplier price is the next price for purchased parts per supplier link. However, future supplier price can not be selected when ordering the part from the supplier in question, but it can be used in pre-calculations and post-calculations for purchased parts and in different lists. It is also possible to stagger the future supplier price.
Customer price	Customer price is the current sales price for parts per supplier link. The price is by default entered in the currency selected for the customer, but the currency can also be changed on the part's customer links. This price in the customer link's currency will then be default when registering an order placed by the customer in question for the part. Thus, this price will override other sales prices (price lists), but those prices are still possible to select on order row. Customer prices can be staggered, i.e. you can enter one price for a certain sales quantity of a part and enter another price for another sales quantity etc.
Future customer price	Future customer price is the next sales price for parts per customer link. How the future customer price is applied is determined with the system setting Manage future sales prices. The future customer price can be selected when registering orders placed by the customer in question for the part, and also in different lists. It is also possible to stagger the future customer price.
Setup price (at purchase)	This setup price is used when a supplier has provided a setup price for a purchased part. The price alternative can be linked to supplier prices. You can see and update the setup price on the order row in connection with order registration.
Setup price (at sales)	This setup price is commonly used when determining the price for own manufactured parts, where the sold quantity affects the sales price. The price alternative can be linked to customer prices and price lists. You can see and update the setup price on the order row in connection with order registration.
Mean price	Mean price is an alternative average purchase price, which can be calculated in the Calculate mean price procedure. When calculating mean price you can select if you want to base the price on quantity or to use a time limit back in time. You can also calculate a weighted mean price (taking the purchased quantity into consideration).
Price list	Price lists are used mainly for sales prices, but can also be used for other purposes. Price list is included as a price type in most cases in the system when there might be a need to use an optional price. You can register an unlimited number of price lists for a part. The price lists that you want to apply should be created in the Price lists procedure. In this procedure you can see the created price lists with number, name, currency, and rate type for each respective list. A price list is not pre-defined, as opposed to all other price types. Each price list can contain staggered prices, that is, you can enter one price for a certain sales volume (quantity) of a part and enter another price for another sales volume etc. Price list is selected in the customer register and it determines which price will be suggested on quotes, customer orders, and invoices in cases where no customer linked price is registered for the part.

Different statistical price types

Price type	Description
Average purchase price	The Average purchase price is a weighted average price of purchase prices for a part, based on the ten most recent arrivals, and it is calculated as: (quantity x price for the 10 most recent arrivals) / total purchased quantity.
Most recent purchase price	Most recent purchase price is the purchase price found on the order row of the latest arrival reporting. The price can also be updated when you link the arrival to the supplier invoice and change the price on the invoice.
Average sales price	Average sales price is the average value of the sales prices of a part, based on a number of the most recent invoices. The number of invoices on which the price will be calculated is pre-defined as the average value of the ten latest/most recent invoices. The average sales price becomes updated when an invoice is printed and approved.
Last sales price	Last sales price is the sales price on the latest invoice. The last sales price becomes updated when an invoice is approved.
FIFO price	FIFIO price is only used for stock valuation purposes. This price is calculated according to the FIFO principle – First In First Out (see below). The stock log, which the system generates during arrival reporting, is the basis for this calculation. FIFO principle: FIFO is calculated via the old stock log records existing in the system. All records have a price which is saved during the arrival reporting. However, for a purchase order the price will be updated when the supplier invoice becomes linked to the arrival reported items. This means the FIFO value can change even though no stock transaction has taken place after the most recent stock value list was created. Stock count and direct transfer to stock will have the standard price as value. Other transactions such as negative reporting of material via manufacturing order, do not affect the calculation of FIFO. When FIFO is to be calculated, the part's balance is first checked. Then the program will find as many (positive) transactions as required to be able to valuate these parts. Example of FIFO calculation: You have a balance of 100 pieces of a part in total. The most recent action related to the part is that you first purchased 80 pieces at 20 EURO each, and then purchased 20 pieces at 10 EURO each. FIFO will then be 80 × 20 EURO + 20 × 10 EURO = 1 800 EURO. That is, a price each of 18 EURO.