Price Lists and Currency are the key data items that govern how products and pricing work.

When you set up an account, you should add the currency that account will use in both pricing and invoicing. When you create an opportunity, its currency will default to the same currency as the account currency. 

A price list is used when you add product prices to an opportunity. By default, a new opportunity will use the same currency as its account. The currency for the opportunity and product prices must match. The first price list you create for each currency will be the default price list for that currency and will be automatically added to an opportunity for the matching currency. You can always change it. 

Create at least one price list for each currency that you want to use, for example, USD Pricing, EU Pricing, etc.

You can have multiple price lists for a currency if you need to have different pricing for a specific target market. For example, if you have legacy clients that were given special pricing in the past, you might create a legacy price list. For new customers, you would use the new price list in the same currency. Another example would be competitive pricing for a specific market. When you create the opportunity, you usually have a pretty good idea of which price list to use and you can select the appropriate one.

To add product prices to an opportunity, you must first add product prices to the appropriate price list. There are two ways to add product prices to price lists. You can create a product price from the product form, or you can create a product price from the price list form.

1. Product Form

1. In the Configure area, under Sales, click Products. The Active Products list appears.

Open an existing product record by clicking its name or create a new one. The product form includes a Prices tab. You will see a list of existing product prices for the current product across all price lists and currencies. To create a new product price, click the “+” button.

Continue with step 3. Set Up a New Product Price.

2. Price List Form

1. In the Configure area, under Sales, click Price Lists. The Active Price Lists list appears.
2. Click the “+” button to create a new price list.
3. Fill in the name of the new price list.
4. Enter the Start Date using the calendar. The end Date is optional.
   1. The start and end dates are used when selecting a price list on an opportunity. If today < start date or today > end date, then the price list cannot be selected on a new opportunity.
5. Select the Currency by clicking the field and pressing Enter to see a list.
6. Toggle the Default to Yes if you want this to be the default price list for any opportunity using this currency. Remember, there is only one default price list per currency.
7. Click Save. The form changes to allow more information to be added.
8. Click the Products tab. You may see a list of product prices already added to the price list.
9. Click the + icon to add a new product price to the price list.

3. Set a New Product Price

1. Click the Product field and press Enter to see a list of products from which to select.  Remember you are creating a new price for a product, the product must already exist in the products list to create a price.
2. Click the Term/Unit field and press Enter to see a list of units from which to select.
   1. Choosing a time-based unit sets the length of the term and billing period for the product price. The length of the term is determined by the unit. For example, choosing a unit of 1 Year will set the term of the product price to 1 Year. When a customer purchases this product using this product price, the purchase is valid and invoiced for 1 year.
   2. If time is irrelevant to your product price, for example, for a piece of hardware, select a non-time-based unit.
3. Toggle Yes or No if the product is a subscription or not.
   1. If the product price is a subscription, it will renew at the end of the term established by the unit in the previous step. When a product price renews, a new opportunity is automatically created for the next subsequent term. For example, if you chose a 1 year term, at the end of first year after a customer purchase, the system will create a renewal opportunity containing the product price. Winning the renewal opportunity will create another year of validity for the product price and that customer.
   2. Non-time-based units cannot be a subscription because there is no time frame to govern the length of the subscription.
   3. Time-based units can be used on a product price that is not a subscription. You can use a time-based unit to amortize payments over a period of time without renewing the product price at the end of the time period.
4. Enter the unit price you will charge for this product. This is the price for the term/unit of the product. So if you choose a 1 year term, this is the price for 1 year.
5. Click Save. The form changes to allow more information to be added. 

This form has four parts.

In Part One, General, shown above, you have the option to: 

1. Select the Price Type: Unit Price or Percent of Unit Total.
   1. Unit Price is the typical pricing method and is the default method selected. In this method, you will provide a price for the unit. For example, if you choose a 1 year unit, then you will provide a price for 1 year.
      1. Enter the Unit Price or the Monthly Price. The other field will be calculated automatically using the unit. For example, if you chose a 1 year unit, the providing a unit price will auto-calculate the monthly price = unit price / 12 or if you provide a monthly price, the unit price will auto-calculate = monthly price * 12.
      2. If there is a unit cost, enter it and the system will calculate your Gross Margin. You can also use the gross margin field to recalculate the price based on the desired gross margin.
   2. Percent of Unit Total is used to support maintenance charges where you typically charge a percentage of other lines. This method was commonly used in traditional software pricing where vendors often charged an upfront license fee and an annual maintenance fee as a percentage of the license fee.
      1. Selecting the Percent of Unit Total method will require you to select the pricing unit and the percentage. For example, you could create a non-time-based unit called “License”, then create a product called “My Company Software”. Add two prices for the product, the first will use the unit “License” and the “Unit Price” method with an upfront price, say $1000. The second product price will use the “1 Year” unit and “Percent of Unit Total” method, selecting “License” as the pricing unit and 20% as the percentage. Now if you add these two product prices to an opportunity, the first will calculate as quantity X price, but the second will calculate as License total * 20%. 

2. You can choose to toggle the Include Maintenance to Yes. If Yes, you must also select the Maintenance Unit. You only need to do in a license and maintenance scenario.

Note the locked fields:

Bundle: This is already chosen on creation of a new product price. If it is a bundle, it will be toggled to Yes.

Price List: This is already selected by default. You are adding a product to this price list.

Product: This was named on creation of the product for the Active Products List.

Unit: This also was chosen on creation of the product.

Currency: This defaults to the currency of the price list.

In Part Two, Subscription, there are several fields to fill. Note that if you toggled No in the Subscription field above, this form will not appear.  These fields might already have been filled on creation of the product. 

Subscription Start:  You can select one or more items in this field. Select multiple items if you want to provide your users a choice when they add the product price to an opportunity.

1. Opportunity Close Date: this means that the subscription will start on the close date of a won opportunity. This is the most used option. If you win an opportunity that contains subscription product prices, the term of the subscription will commence on the close date of the opportunity and run for the term of the unit specified in the price.
2. Order Generated Date: this means that the subscription will start on the date the order is generated after the opportunity is won. This option is usually selected if there is a requirement to start the subscription after a provisioning or fulfillment period. For example, if you are selling a service and there is some work to get the service up and running where the customer should not be billed, you can use this option to delay the start of the subscription until the service is ready. Once a sale is closed won, your provisioning team can start the service. When its ready, your finance team can generate the order and start the subscription.
3. Specified Date: this means that the subscription will start on a specific date that must be selected when the product price is added to an opportunity. Use this option if you have agreed to a specific date with your customer. You can use this option to allow a customer to purchase now but delay the subscription start. For example, maybe you have promotional pricing at year end, but the customer doesn’t want to start the subscription until February 1. Using this option you can choose to start the subscription on February 1.

Default Subscription Start:  If you choose more than one option in the Subscription Start field, then you must specify which option should be the default selected option.

Renewal Term:  This field determines the term for a subscription renewal. It is not available if Subscription = No. 

1. Same Term: choose this option to renewal using the same term as the current term. For example, you’re using a 1 Year term and the renewal should also be for a 1 Year term.
2. Different Term: choose this option to use a different term in the renewal. For example, maybe the initial commitment is for 1 Year and then you allow the customer to go month to month. In this case, the initial term is 1 Year and the renewal term is 1 Month. When you select this option, you must also select the renewal project price.  

Process Renewal:  This is the number of days, in advance, to generate the renewal opportunity.  Choose a time frame relative to the term that allows you time to consult with the customer about the upcoming renewal.

In Part Three, Invoicing, there are three fields to fill. 

Invoicing Start:  You can select one or more items in this field. Select multiple items if you want to provide your users a choice when they add the product price to an opportunity.

1. Opportunity Close Date: choose this option to start invoicing on the opportunity close date. This is the most commonly selected option.
2. Do Not Invoice: choose this option to if you do not want to invoice the product price or if the product price relates to a professional services project that will be invoiced per the project.

Default Invoicing Start: If you choose more than one option in the Invoicing Start field, then you must specify which option should be the default selected option.

Invoicing Schedule:  You can select one or more items in this field. 

1. In Advance: choose this option to invoice 100% of the total price in advance on the opportunity close date.
2. Annually: choose this option to generate an invoice on the opportunity close date and every year thereafter until the completion of the term. This option is only available on multiyear terms.
3. Quarterly: choose this option to generate an invoice on the opportunity close date and every 3 months thereafter until the completion of the term. This option is only available when the term is 6 months or longer.
4. Monthly: choose this option to generate an invoice on the opportunity close date and every month thereafter until the completion of the term. This option is only available when the term is 2 months or longer.

Default Invoice Schedule:  If you choose more than one option in the Invoicing Schedule field, then you must specify which option should be the default selected option. 

In Part Four, Revenue, there is one field to fill. 

Initial Revenue Recognition (%): Here you must enter an amount percentage. This percentage is the amount that will be recognized as revenue immediately. 

For example, if you have a subscription product for $1200 annually and the percentage Initial Revenue Recognition is 50%, $600 will be recognized immediately and the remaining $600 will be recognized $50 monthly to the end of the subscription.