Tiered pricing
With DYCE Feature Suite for Subscription Billing two types of tiered pricing are supported: flat and true tiered pricing. Both are maintained via sales price lists. Therefore, New sales pricing experience must be activated in Feature Management. The actual definition is made via two additional options in the Defined field. If one of the options is selected, the Amount for Price Tier can be defined for the tier.
If Flat-Tier pricing is selected, the quantity scales are created based on the minimum quantities with a total price for the tier. For True-Tier pricing, each tier has its own price. All relevant price scales are taken into account for the price determination and the sum of the tier amounts then results in the tier price.
In both cases, the calculated tier price always applies to all quantities within a price tier. As the total price remains the same for different quantities within a price tier, the unit price is calculated in each case and decreases with increasing quantities within a tier.
Create and maintain tiered pricing
To set up tiered pricing for an item, you must use the Sales Prices action from the Item card (or list). The action is located in the menu group Prices and Discounts. A price tier is defined using the Minimum Quantity. In contrast to the Business Central standard, tiered prices do not define the unit price (in combination with a minimum quantity), but the total amount for the price tier. Therefore, when selecting one of the tier price options, the Unit Price field is not editable but the new Amount for Price Tier field is.
Item prices can be defined for different scopes (entities). In the context of price lists, this is done via the Assign-to Type field. It specifies the type of entity for which the price list/line is valid. For example, prices can be defined for All Customers, Customer Price Groups or for a specific Customer. However, it is not possible to mix tier prices and non-tier prices within one area of validity.
The use of tier prices conflicts with the use of discounts. For this reason, existing discounts are removed when tier prices are created.
Example: Flat-Tier pricing
Excelsis Software Solutions is planning to introduce package prices for different user levels for its software product. A package for up to 20 users costs 159 EUR per month. The next tier is the package for up to 30 users for EUR 229. This means that a customer with 21 users makes a one-time jump from 159 EUR to 229 EUR. All units are charged at the price of the applicable price tier.
The following lines are configured for an item in the price list:
- Line 1: Minimum quantity = 0, amount = 159
- Line 2: Minimum quantity = 21, amount = 229
- Line 3: Minimum quantity = 51, amount = 399
Line 2 is relevant for a quantity of 25, so this amount (229 EUR) is taken as the total price.
Example: True-Tier pricing
Quantum Software plans to introduce package pricing for different user tiers, but with a more detailed approach, i.e. each tier has a specific price that adds up. One tier for up to 10 users costs 99 EUR per month, the next tier for up to 20 users costs 69 EUR and the next tier for up to 30 users costs 49 EUR. This means that a customer with 25 users pays a total price of EUR 217. Each price tier is calculated separately and added together.
The following lines are configured for an item in the price list:
- Line 1: Minimum quantity = 0, amount = 99
- Line 2: Minimum quantity = 11, amount = 69
- Line 3: Minimum quantity = 21, amount = 49
- Line 4: Minimum quantity = 51, amount = 39
Lines 1-3 are relevant for a quantity of 25. The sum of the amounts of all lines is 217 EUR. This amount is taken as the total price.
Use of tiered pricing
As part of pricing, tier prices are used in the sales line - both for subscription items and for items without a subscription option and in customer subscription contracts.
The consideration during usage data processing is also planned, but is currently still waiting for the necessary requirements to be provided by Microsoft in the short term.
Considering existing subscriptions
When a customer purchases additional licenses, the quantity from an existing subscription can be taken into account for tier price determination. This ensures that the customer benefits from the correct price tier based on their total quantity — existing plus new.
Fields on the sales line
Two new fields are available on sales quote and sales order lines:
- Tier Base Quantity — Specifies the quantity used as the basis for calculating tiered pricing. This value can be filled automatically from the subscription or entered manually. The field is displayed to the left of Quantity to indicate the relationship between the two values. Negative values are not allowed.
- Tier Base Subscription No. — Stores the subscription that is taken into account when calculating the tiered prices and updated with the shipment. This field is not visible and is only filled by the system.
Both fields are not copied when using Copy Document and are not archived. However, when a sales quote is converted to a sales order, both field values are transferred to the order line.
Selecting a subscription
Use the Select Subscription Qty. action in the Manage menu of the sales quote or sales order lines to populate Tier Base Quantity from an existing subscription. The action opens a list of all subscriptions belonging to the same sell-to customer. After confirming the selection, the subscription's quantity is transferred to Tier Base Quantity and the subscription number is stored internally.
The following conditions must be met for a subscription to be selectable:
- The item in the sales line and in the subscription must match.
- A subscription item must already be set in the sales line.
- All open subscription lines must have a calculation basis of 100%.
- All sales subscription lines must have a calculation basis of 100%.
- All customer and vendor subscription lines must be assigned to the same customer or vendor subscription contract (or to no contract at all).
Once a subscription has been selected, Tier Base Quantity can no longer be changed manually. To remove the subscription assignment, delete the line and re-enter it.
Pricing behavior
When Quantity is set, both Quantity and Tier Base Quantity are used together to determine the applicable price tier. Clearing Tier Base Quantity re-triggers price determination. This only applies to tier-priced items — for items without tier pricing, only Quantity is taken into account.
If a subscription is selected, the unit price shown in the sales line reflects only the delta the customer is charged for: the total amount of the existing subscription lines is subtracted from the line amount and the unit price is recalculated accordingly.
If both quantities are set but no subscription is selected, the subscription is created with the sum of both quantities on posting, while only the actual Quantity is invoiced.
Subscription update on shipment
When the sales order is posted and a subscription was selected, the subscription is updated automatically:
- All open lines of the selected subscription are closed — the Subscription Line End Date is set to the shipment date or to Next Billing Date minus one day, whichever is later.
- The subscription quantity is updated to the new total and new subscription lines with the new tier price are created.
If at least one billing line exists for the selected subscription, posting is blocked. Process or delete the billing line before posting the sales order.