--- sourceDocument: Australia Sales Customer Relationship Management sourceDocumentLink: https://www.servicenow.com/docs/r/australia/order-management Release : - australia ft:locale : - en-US ft:publication_title : - Australia Sales Customer Relationship Management ft:clusterId : - omgmt bundleId : - omgmt workflow : - Customer and Industry --- # Derived product pricing # Configuring derived pricing {#ariaid-title1} Release version: Australia Updated March 12, 2026 ![](https://www.servicenow.com/docs/portal-asset/ico-clock) 2 minutes to read Summarize ![AI sparkle icon](https://servicenow.com/docs/portal-asset/ai-sparkle-icon) Summarized using AI This content was generated using new OpenAI-powered functionality. Results are provided on an as is basis and are not guaranteed to be accurate or complete. ## Summary of Configuring derived pricing Derived pricing in ServiceNow allows pricing administrators and managers to automatically set product prices based on other products or transactional values such as quotes or orders. This dynamic pricing adjusts automatically when products with derived pricing are added to transactions, ensuring pricing remains accurate without manual intervention. The system manages lifecycle actions for derived pricing lines including creation, updates, and removal as conditions change. Show full answer Show less ## Key Features * **Dynamic Pricing Rules:** Define rules relative to other products or transaction values like Total Contract Value (TCV) or Annual Contract Value (ACV). * **Automatic Application:** Derived pricing applies automatically to quotes and orders, handling line additions, updates, and removals without manual edits. * **Derived Pricing Matrix:** Central configuration tool to manage elements such as target and source product offerings, transaction header values, pricing formulas, and pricing scopes. * **Pricing Scenarios:** Supports use cases like pricing accessories relative to base equipment, add-ons as a percentage of related products, and services priced as a percentage of total purchased products. * **Pricing Adjustments:** Allows specifying price floors, ceilings, percentages, and aggregate formulas (SUM, MIN, MAX, AVG) to calculate final derived prices. ## Practical Considerations * Derived pricing works on both quotes and orders but is not supported for sales agreement type quotes. * Enabling derived pricing requires selecting the "Derive price" option on price list lines and setting optional floor and ceiling prices. * Pricing admins and managers use the Derived Pricing Matrix to create and manage the relationships and calculations for derived pricing rules. ## Benefits for ServiceNow Customers Implementing derived pricing helps streamline pricing management by automating price calculations based on defined relationships and transactional contexts. This reduces manual pricing errors, improves consistency, and accommodates complex pricing models such as add-ons and bundled offers. The system ensures pricing accuracy throughout the sales lifecycle, enhancing efficiency for pricing teams and sales agents. Automatically set the pricing for a product by deriving its pricing from other products or pricing sources such as transactional values in quotes or orders. ## Derived pricing overview {#configuring-related-product-pricing__section_u1f_xmr_lhc} As a pricing admin or manager, you can define rules for deriving product pricing dynamically, relative to other products or transactional values such as the total contract value (TCV) or annual contract value (ACV). When products with derived pricing are added to a transaction, such as a quote or order, the derived pricing is applied automatically. The system manages the lifecycle of derived lines by adding new system-generated lines when pricing rules require them, updating existing lines when pricing conditions change, and removing lines that no longer apply. Derived pricing can be used in various scenarios. For example: {#configuring-related-product-pricing__table_gfn_hdg_mhc__entry__2} | Pricing scenario | Industry use case | |-|-| | Price accessories relative to related base equipment | Manufacturing: Sell an extended warranty that is 10% of the price of a high-end industrial machine. | | Price add-ons that are based on Product X and Y total | Telecom: Sell 24x7 support as an add-on that is 10% of all the subscription products in a quote. | | Price add-ons based on a percentage of all products purchased | SaaS: Sell product support service as an add-on that is 15% of subscription fees for all software products purchased. | [Table 1. Use cases for derived pricing] {#configuring-related-product-pricing__table_gfn_hdg_mhc} Derived pricing for a product involves the following items, which you manage through the Derived Pricing Matrix:{#configuring-related-product-pricing__table_nlg_5yh_mhc__entry__2} | Item | Description | |-|-| | Target product offering | Product offering for which pricing is derived. | | Source product offering | One or more product offerings whose pricing is the basis for the target offering. | | Transaction header value (context variable) | Field from the header for a transaction, such as quote, that is used as the pricing basis to calculate the derived price, such as the annual contract value (ACV). | | Scope | Level from which the context variable is used: * Bundle * Cart * Account {#configuring-related-product-pricing__ul_rpv_5fm_k3c} | | Formula calculation | Percentage used to calculate the derived pricing | | Price point | Price at which the product is sold: * Unit list price * Unit net price * Cumulative net price * Monthly recurring price * Annual recurring price {#configuring-related-product-pricing__ul_hxl_tys_k3c} | | Aggregate | Formulas (SUM, MIN, MAX, AVG) used to determine a single derived product price when pricing is derived from more than one source product. Percentages and price floor and ceiling amounts are then applied as pricing adjustments to calculate the final derived product price. | [Table 2. Elements in derived pricing] {#configuring-related-product-pricing__table_nlg_5yh_mhc} ## Scope: Quotes and orders {#configuring-related-product-pricing__section_scope_quotes_orders} Derived pricing applies to both quotes and orders. When you configure rules in the Derived Pricing Matrix, the system automatically applies those rules to derived line items in both transaction types. The system handles all line-level changes (adds, updates, and removals) without requiring manual edits from agents. ## Limitations for derived pricing {#configuring-related-product-pricing__section_ed5_d4g_mhc} Derived pricing does not work for quotes of type sales agreements. ## Setting up derived pricing {#configuring-related-product-pricing__section_upp_2wr_lhc} To implement derived pricing, complete these tasks:{#configuring-related-product-pricing__table_wj5_chs_lhc__entry__3} | Task | Description | Role | |-|-|-| | [Enable related (derived) pricing for a price list line](https://www.servicenow.com/docs/2LeuaYaH7DZ163YsKF8fUw "Create a price list line and associate it to a product offering.") | When creating a price list line, select the Derive price option. You can also set the Floor price and Ceiling price for a price list line. | Pricing admin or manager | | [Create rules for derived product pricing](https://www.servicenow.com/docs/Imy~KrE8N66jsiyqdMyPsQ "Define product pricing rules for deriving the price of a product dynamically based on the pricing of related products or a pricing source.") | Use the Derived Pricing Matrix to define the product relationships and calculations used when deriving product pricing. | Pricing admin or manager | [Table 3. Derived pricing configuration tasks] {#configuring-related-product-pricing__table_wj5_chs_lhc}