Pricing for Subcontracting

Production companies negotiate prices with subcontractors for producing an item. The price a company has to pay depends on the quantity of the item or on the time the subcontractor needs (for example, hours or days). It is also possible to grant discounts depending on a special quantity.

To accommodate the special pricing needs for subcontracting, purchase prices and line discounts from standard Microsoft Dynamics 365 Business Central can be added to work centers for calculation in the Subcontracting Worksheet. The prices can be set for units or times (based on the Unit Cost Calculation from the Work Center Card).

Pricing by Time

Pricing by time means that capacity is bought by a subcontracting vendor. The amount of time it will take the subcontractor to complete the work is defined in the Routing plan. The Unit of Measure Code is normally defined on the Work Center Card.

To set up pricing by time

  1. Choose the Lightbulb that opens the Tell Me feature icon, enter Work Centers, and then choose the related link.
  2. Open the relevant Work Center Card.
  3. In the Posting FastTab, enter Time in the Unit Cost Calculation field. With this setting, an entry for the Unit of Measure of the Run Time has to be available.
    When calculated in the Subcontractor Worksheet, the time calculation is based on the Unit of Measure of the Run Time.
  4. On the Related menu, choose the Work Ctr. > Prices action to open the Purchase Prices page. The page is filtered by the Subcontractor No. entered in the Posting FastTab of the Work Center Card.
  5. Pricing for times are entered in the Purchase Prices page like in standard Microsoft Dynamics 365 Business Central. For a vendor, various items can be set up with different prices for different quantities.
  6. It is also possible to assign line discounts by choosing Work Ctr. > Line Discounts on the Related menu.
    The line discounts are also entered the same as in standard Microsoft Dynamics 365 Business Central. Various items for a vendor are set up with different discounts based on different quantities.

When the Create Purchase Order function is run, the cost from the Subcontracting Worksheet, not the routing, is transferred to the purchase line.

Pricing by Unit

Pricing by unit means that special pricing per item per vendor is set up based on the units of measure of the service Item (that is linked to the Work Center) that the subcontractor will produce.

To set up pricing by unit

  1. Choose the Lightbulb that opens the Tell Me feature icon, enter Work Centers, and then choose the related link.
  2. Open the relevant Work Center Card.
  3. In the Posting FastTab, enter Units in the Unit Cost Calculation field. With this setting, an entry for the Unit of Measure Code of the item must be available.
    When calculated in the Subcontractor Worksheet, the price calculation is based on the Unit of Measure of the assigned service item.
  4. On the Related menu, choose the Work Ctr. > Prices action to open the Purchase Prices page.
  5. Pricing for units are entered in the Purchase Prices page like in standard Microsoft Dynamics 365 Business Central. For a vendor, various items can be set up with different prices for different quantities.
  6. It is also possible to assign line discounts by choosing the Work Ctr. > Line Discounts action on the Related menu.
    The line discounts are also entered the same as in standard Microsoft Dynamics 365 Business Central. Various items for a vendor are set up with different discounts based on different quantities.

When the Create Purchase Order function is run, the cost from the Subcontracting Worksheet, not the routing, is transferred to the purchase line.

Pricing with Foreign Currency

Pricing for foreign currency is handled with standard Microsoft Dynamics 365 Business Central functionality in the Purchase Prices and Purchase Line Discounts pages through the use of the Currency Code field.

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