How a price is worked out
Every time a sales order is saved, each line goes through the same six steps. Amounts are rounded to two decimal places at each step.
Step 1: the base price
The unit price comes from the first of these that exists:
Subtotal = unit price × quantity.
| Line | Where the price came from | Unit price | Quantity | Subtotal |
|---|---|---|---|---|
| 40 Ceramic Mugs | Wholesale price list (40 is below the 50 break) | 4.50 | 40 | 180.00 |
| 10 Cotton T-shirts | General base price (not on the price list) | 12.00 | 10 | 120.00 |
How the price list and the "best" rule are chosen is explained in Price lists and Pricing rules.
Step 2: discounts
Three kinds of discount are added together: customer, volume and promotion. For each kind, the best matching rule is used (one per kind).
| Value type | Amount |
|---|---|
| Percentage | subtotal × % |
| Fixed amount | amount × quantity |
The total discount can't be more than the subtotal.
| Line | Customer 5% | Volume 3% (50+) | Promotion 10% (Nov, mugs) | Total discount |
|---|---|---|---|---|
| Mugs | 9.00 | doesn't apply (40) | 18.00 | 27.00 |
| T-shirts | 6.00 | doesn't apply | doesn't apply (mugs only) | 6.00 |
Step 3: surcharges
Extra charges added before tax, such as packaging or personalisation. Percentage of the subtotal, or a fixed amount per unit.
| Line | Surcharge | Amount |
|---|---|---|
| Mugs | Gift box 0.25 × 40 | 10.00 |
| T-shirts | none | 0.00 |
Step 4: tax
Taxable amount = subtotal − discounts + surcharges. Tax is a percentage (or fixed amount per unit) of that.
| Line | Taxable | Tax 20% | Line total |
|---|---|---|---|
| Mugs | 180.00 − 27.00 + 10.00 = 163.00 | 32.60 | 195.60 |
| T-shirts | 120.00 − 6.00 = 114.00 | 22.80 | 136.80 |
Step 5: freight (once per order)
Freight is added once to the whole order, after tax: a fixed amount, or a percentage of the order subtotal. Freight is not taxed by the pricing engine.
Order: 195.60 + 136.80 = 332.40, plus freight 8.00 = 340.40.
Step 6: rounding (once per order)
A rounding rule rounds the final total to a step (for example the nearest 0.05 or 1.00). The difference is shown as a rounding adjustment.
340.40 rounded to the nearest 1.00 = 340.00, adjustment −0.40.
The order totals
| Total | Amount |
|---|---|
| Subtotal | 300.00 |
| Discounts | 33.00 |
| Surcharges | 10.00 |
| Tax | 55.40 |
| Freight | 8.00 |
| Rounding | −0.40 |
| Order total | 340.00 |
Manual discounts
A Manual Discount % typed on the order line is applied after this calculation. It replaces the line's customer, volume and promotion discounts (it doesn't add to them), and tax is recalculated. The breakdown then shows it as Manual override. Above 10% it needs approval. See Sales: pricing and approvals.
When prices are recalculated
| Action on the order | Prices |
|---|---|
| Save a new order | Calculated |
| Edit and save a draft | Calculated again; the breakdown is replaced |
| Copy an order | The copy gets the original's breakdown, then its own when saved |
| Confirm, dispatch, invoice | Not recalculated: the saved prices are used |
The Unit Price shown while typing an order is only an estimate from the Catalog: "Estimate only — final price is calculated on save".
Next: Read the breakdown.