Sales Pricing Integration

Owned by Julie Doyle-Whitelock (Deactivated)
Last updated: Feb 18, 2019
7 min read

Framework has the ability to link the Variation Price Book (VPB) items to database assemblies to easily maintain cost and retail pricing of VPB items and also to create Estimates through exporting of those assemblies.

Using the Variation Price Book (VPB) beyond a simple reference tool for displaying retail pricing with links to database assemblies can become a powerful business tool that requires less maintenance than a traditional options book.

These benefits include

  • The ability to measure anticipated margins at any document stage.
  • Increase profitability by using known current cost prices.
  • Increase productivity by exporting the BOQ’s used within the Framework documents to create Estimates.
  • Retail prices can be automatically kept up to date via the use of formula’s in the VPB items, you will always know the selling price is maintained.
  • An item linked to an assembly to generate cost price is easily maintained as a consequence of normal supplier price database updates.
  • Ensures that both Sales Estimators and Production Estimators are selling and ordering the same items.

What to Do

Requirements

Pre-requisites

  • Assemblies
  • Set up of areas in the Framework VPB (if required)
  • Area pricing in WMS (if required)
  • Access to the Sales Pricing module in WMS (for using Sales Worksheets)
  • License for Integration Timberline Sales Pricing
  • License for Integration Document/Estimate Creation

Things to Consider

  • WMS worksheet set up (refer to WMS help files)
  • Assembly numbering (what has been defined as base for WMS assemblies?)
  • Analysis

Planning

The most important aspect of adding BOQ links to VPB items is to consider how the item is going to be used from a sales estimating and production estimating prospective. Defining the structure of the VPB and where the items are located within it is the first stage of avoiding duplicate items.

It is recommended that where possible not to duplicate assemblies for like items but to use base styled assemblies assigned to multiple VPB items. Examples of this will be given in the setting up steps further in this document.

Questions that you would need to ask may include:

  • Will the item be a standard items or table item in the VPB.
  • Is the item a fixed unit of measure? (i.e. cannot be varied on specific jobs)
  • Is the item a fixed BOQ quantity? (i.e. not able to be varied in the document item quantity)
  • Can the item be varied (i.e. item quantity can be varied in the document)?
  • Will the item contain more than one assembly?
  • Can the item be used in all areas or is this area specific?
  • Does the cost of the items vary between areas?
  • Consider VPB structure (is the item house specific or is it a generic item)
  • Will the retail price of the item be generated from formula or updated manually?
  • VPB Standard Items vs. Table Items

The decision to use a standard VPB item or table item has to be made each time a new item is added to the VPB. A basic rule of thumb is to use a standard item for single variation items where no duplication exits (i.e. an item that applies to all house types or a house specific item) and to use a table item where the same item is repeated many times for different house types and has a different price for each item.

Resource Commitment

Resources allocated to link BOQ’s to VPB items should have senior experience in both Sales Estimating and Production Estimating and be competent with the calculation methods of the VPB linking methods and applicable Estimating software.

Implementation

BOQ Link – Variable units of measure

If an item is going to be used as a variable unit of measure it is recommended that the assembly be set up as a base unit of 1.

Example:. if a VPB item for a roof tile upgrade is used there is no need to create dozens of assemblies for each house type as a single assembly can be used the assembly would be setup for 1m2 of roof tile upgrade.

The use of a table item would be the most suitable for this type of VPB item as the same description is used multiple times and the table structure is used to suit the multiple house types.

The same assembly is applied to all items within the table and the quantities are set in the item general tab and BOQ link tab for the specific house type. This then has the flexibility that if a standard house has been modified then the quantity in the item on the document is simply changed to suit the modification and the cost and retail price are increased or decreased pro rata.

It is important to note that using this type of item the QTY method needs to be set to “Standard – consider VPB qty”.

BOQ Link – Items with more than one assembly

As previously mentioned it is always good practice to use a base or breakdown of assemblies to eliminate duplication. Framework VPB items have the ability to link to more than one BOQ. These items can vary in quantity and method of take off.

(e.g. we will use the previous example of a roof tile upgrade to show the use of multiple BOQ items. For example, consider a particular roof tile item that requires sarking, instead of creating a new assembly for the roof tile profile with sarking, it is more efficient to have an assembly for 1m2 of sarking then add this assembly to the item also. So now the same assembly can be used in multiple items within the VPB and the sarking base assembly can also be used elsewhere in the VPB.

BOQ Import / Export Method

When adding BOQ links to VPB items be mindful of how these are going to be used. Various options area available to be set on both import through Sales Pricing and export through Document Integration.

The options “Mandatory on import/export”, Optional on Import/export” and “Do not import/export” are available to be set on both the importing and exporting in Framework. This allows us options to link BOQ’s to set sales pricing that we do no want to export into an estimate and also link BOQ’s that we want to export into an estimate but do not want to influence the retail price/cost.

Area Pricing

Items that are area specific both in terms of price and validity can be maintained in the item dialog box / area pricing tab.

If the item is only to be used in specific areas and not to be used elsewhere then in the “For Unlisted Area’s?” drop down list choose “item is not allowed” and only place the area’s in the area price list that apply.

By Adding the areas to the area pricing, (if base item is the same) integration maintains the cost and retail price of the item via the WMS Sales Worksheets communities (i.e. WMS area pricing). If Building in areas outside the base area where there may be a difference in supplier pricing WMS can manage the difference in supplier pricing by using different rates and or different suppliers in multiple areas, this is referred to as “Communities” in WMS.

Once the suppliers pricing is set and the preferred suppliers are nominated in the supplier / Communities table, we are now ready to set up the Sales Worksheet. Firstly the Precision Estimating assemblies will need to be replicated into WMS, this is done through the WMS Estimating Integration. Once complete open the sales worksheet module of WMS. Open the Models / Options by Communities module under Sales Pricing and simply drag the assemblies into the area required. Then open the Sales Worksheet module, create a new sales worksheet and drag the items from the left side column under each community into the worksheet, then save once complete.

If the VPB item requires different estimate items or changes to the BOQ, this can be maintained by creating a unique BOQ for the VPB item in the specific area and adding this to the BOQ reference of the area pricing. This is particularly useful for building methods that may be different for the same item in different areas.

Validity

For items that can be used only for specific house product or a variety of house product it is important to apply the validity of items.

Example

An item is created for an air conditioning unit for an 18kw, 20kw etc.. with different number of outlets etc.., these would only need to be created once then the validity applied to each house that the item can be used on, thereby ensuring that the incorrect air conditioning unit cannot be used on the wrong house type and also the need not to create replicated items for air conditioning suitable for each house type is not required.)

Use validity to control the VPB item that are not applicable in specific areas where costs maybe unknown, or suppliers are unavailable (or have not yet been sourced)

Retail Pricing - Formula based

If formula’s are to be used to generate retail pricing of items, it is recommended that formula “Variables” be created to maintain consistency in formulas and a quick and easy way to change mark ups if required.

  1. In the VPB Version screen click on edit and go to the variables tab
  2. Click on new to add a new variable. (e.g. a variable for a 25% mark up can be named as such and a value of 1.25 input. A variable for GST of 10% can be named GST and a value input of 1.1)
  3. Continue to add variables as required then click Ok when complete.

Multiple variables can be set to define different mark ups. This may be set as variables for 20%, 25%, 30%, etc..)

Therefore if the business decides to increase a mark up from 25% to say 27% the variable value is simply changed and all items that contain that variable in the retail formula tab are updated.

Unique formula strings can be applied on individual items.

Retail Pricing – Market Value based

If the retail price of the item is to be set based on market value and not formula’s then the retail formula is simply omitted from the item in the VPB, retail price is manually input into the retail price field on the General tab. By maintaining a BOQ linked to the item to generate cost price, each time integration is run, filters can be applied to show only items that have an increase in cost or a reduction in margin (by specified values), allowing a new market value price to be set if desired or left at the current price.

Framework Integration

Once all the above has been considered and implemented we can now run the Framework Sales Pricing Integration.

  • Flow diagrams
  • Project Plan (contact Insula Software to be provided with a specific project model of the implementation process for your environment).
  • UATs & Signoff
  • Training
  • Go Live

Ongoing Management

  1. It is important to remember that each time new assemblies are created and assigned to items in the VPB that these are replicated in the WMS database, assigned the appropriate communities and added to the relevant WMS Sales Worksheet.
  2. Periodic running of integration to ensure current cost pricing is maintained. This is usually run to coincide with regular new issues of the VPB in line with published price lists.
  3. Frequent release of VPB versions (even if sell pricing is not changing) for accurate margin analysis.