Pricing and Discounts Trends by Subject
Table of Contents
Use Case:
Organizations need to monitor changes in pricing and discount activity by customer to identify emerging patterns that may indicate favoritism, fraud, bribery, or other policy concerns. A customer that begins receiving more frequent or significantly higher discounts than in a prior period may warrant further review. For example, a customer whose transactions historically received limited discounts but suddenly begin receiving substantial price reductions could reflect a legitimate commercial change, but it may also indicate inconsistent pricing practices or an inappropriate benefit.
The Pricing and Discounts Trends by Subject analytic identifies customers with meaningful changes in pricing or discount activity between two periods. It can evaluate trends based on factors such as the number and value of discounted transactions, discounts as a percentage of total transaction value, and differences between net and expected pricing. By highlighting customers whose pricing or discount patterns have shifted over time, the analytic helps organizations detect emerging risks, investigate unusual commercial activity, and strengthen compliance with pricing policies and approval requirements.
| Description | Identifies customers whose pricing or discount activity has changed significantly between two comparison periods based on configured detection patterns |
| Domain(s) | Customer Revenue |
| Analysis Type | Context Flag |
| Focus Area | Favor |
| Score Methodology | The change in pricing or discount metrics between the comparison periods is measured for each customer and ranked relative to comparable customers |
Default Scoring Criteria
Importance: 3 (default)
Enabled: True (default)
No rules are configured by default. Rules must be set by user.
Rule Configuration
To configure a rule for this risk analysis:
1. From the Admin page, navigate to Risk Settings > Risk Analysis Settings > Pricing and Discounts Trends by Subject (Customer Domain). Then, click Add A Rule.
2. Complete the following required rule fields:
| Rule Field | Description | Settings Options |
|---|---|---|
| Name | Name for the specific rule | Free text |
| Description | Description of the rule | Free text |
| Comparison Dimension | Defines how transactions are grouped for comparison when evaluating pricing and discount activity | No Dimension, Company Country, Company/Business Unit, Customer Group, Distribution Channel, Sales Division, Sales Group, Sales Office, Sales Organization, or Subject Country |
| Minimum Subjects in Cohort to Generate Percentile | The minimum number of comparable subjects required to evaluate activity and generate a risk result | 1 to 100,000 Subjects |
| Comparison Length | Defines the duration of each period used when comparing historical pricing and discount activity | Annually, Monthly, Quarterly, or Semi-Annually |
| Comparison Type | Determines how the current period is compared with previous historical periods | Absolute, Allocated-Proportionally, or Complete Period |
| Comparison Period | Specifies the historical period used as the baseline for comparing pricing and discount activity | Prior Period, Prior Year, Two Years Ago |
| Discount (Count) Pattern | Identifies materials based on the number of discounted transactions | Enabled or Disabled |
| Discount (Gross) Pattern | Identifies materials based on the total value of discounts applied across eligible transactions | Enabled or Disabled |
| Discount (Percentage) Pattern | Identifies materials based on discounts as a percentage of the total transaction value | Enabled or Disabled |
| Variance of Pricing (Gross) Pattern | Identifies materials based on the difference between the expected (anchor) price and the net price | Enabled or Disabled |
| Variance of Pricing (Percentage) Pattern | Identifies materials based on the percentage difference between the expected (anchor) price and the net price | Enabled or Disabled |
| Detection pattern | Determines which pricing or discount metric is evaluated by the rule. | Percentile |
3. Click Add A Rule Component.
4. To set a component, select a Field and Search Type from the dropdowns.
The Value field will appear after you select a Field and Search Type.
See a description of Field, Search Type and Value below:
| Field | Search Type | Value Type |
|---|---|---|
| Company | Includes OR Excludes | List is populated from customer data* |
| Company Country | Includes OR Excludes | Preset list |
| Customer (Payer) | Includes OR Excludes | List is populated from customer data* |
| Customer Group | Includes OR Excludes | Preset list |
| Distribution Channel | Includes OR Excludes | List is populated from customer data* |
| Has Free of Charge Item | Includes OR Excludes | Yes/No |
| Is Free of Charge (Line Item Only) | Includes OR Excludes | Yes/No |
| Material Type | Includes OR Excludes | Preset list |
| Sales Division | Includes OR Excludes | List is populated from customer data* |
| Sales Group | Includes OR Excludes | List is populated from customer data* |
| Sales Office | Includes OR Excludes | List is populated from customer data* |
| Sales Organization | Includes OR Excludes | List is populated from customer data* |
| Subject (Payer) Country | Includes OR Excludes | Preset list |
| Subject Account Group | Includes OR Excludes | List is populated from customer data* |
| Subject Classification | Includes OR Excludes | List is populated from customer data* |
| Transaction Reason | Includes OR Excludes | Preset List |
| Transaction Type | Includes OR Excludes | List is populated from customer data* |
*For values populated from customer data, value lists will not populate if data is not available.
Note: Where multiple rule components are set, they operate only in an “and” manner.
5. Click the Save Changes button at the bottom of the page to save your rule.
Exclusions
You can configure exclusions that remove certain transactions from the comparable data used to determine risk results. Available exclusions include:
- Transaction Amount: transactions with a total value of $100 or less are excluded.
- Transaction Type: only transactions classified as Sales are included.
- Transaction Reason: specific transaction reasons can be excluded, such as certain goods, services, corrections, returns, financial adjustments, or donations.
- Payer Classification 1: specific customer classifications can be excluded from the comparison data.
- Payer Classification 2: additional customer classifications can be excluded from the comparison data.
Transactions originating from financial documents rather than billing documents do not contain the pricing conditions required by the analytic so they are ineligible for a risk result.
Transactions marked as no longer valid are excluded from the aggregated comparison data. Only transactions with a positive pricing variance are eligible for a risk result.