How-ToFinance & Operations

How to Manage Vendor Contracts and Pricing in Business Central

Learn how to set up purchase prices, line discounts, and vendor item catalogs in Business Central so the correct pricing applies automatically on purchase orders.

Stein Sæstad
8 min read

Business Central supports several ways to record and apply vendor-specific pricing. You can set up special purchase prices for individual items, configure line discounts, and maintain vendor-specific item numbers through the Vendor Item Catalog. When a purchase order is created, Business Central looks up the best applicable price and applies it automatically.

Special Prices vs. Standard Prices

The standard price for an item is the Last Direct Cost or the Unit Cost on the Item Card. This is the fallback when no special pricing applies.

Special prices override the standard price for a specific combination of vendor, item, and optional conditions such as minimum quantity or currency. They represent negotiated rates, for example, a volume discount you have agreed with a specific supplier.

Setting Up Purchase Prices

In Business Central version 19 and later, purchase prices are managed through Purchase Price Lists. In earlier versions, they were managed through the Purchase Prices page. The steps below cover both approaches.

Using Purchase Price Lists (version 19+)

  1. Search for Purchase Price Lists using Alt + Q.
  2. Select New.
  3. Fill in the header:
    • Code: a short identifier for the price list, for example VND-ACME-2025.
    • Description: for example ACME Corp Agreed Prices 2025.
    • Assign-to Type: select Vendor.
    • Assign-to No.: select the vendor.
    • Starting Date and Ending Date: set the validity period if this is a time-limited agreement. Leave blank for open-ended pricing.
    • Currency Code: set if the prices are in a foreign currency.
  4. In the Lines section, add a line for each item:
    • Asset Type: Item
    • Asset No.: the item number
    • Minimum Quantity: the minimum order quantity required for this price to apply (enter 0 or 1 for no minimum).
    • Direct Unit Cost: the agreed purchase price.
  5. Set the price list Status to Active when ready.

Using Purchase Prices (earlier versions)

  1. Search for Purchase Prices using Alt + Q.
  2. Select New.
  3. Fill in:
    • Vendor No.: the vendor this price applies to.
    • Item No.: the item.
    • Minimum Quantity: the minimum quantity required (enter 0 for no minimum).
    • Direct Unit Cost: the agreed price.
    • Starting Date / Ending Date: optional validity dates.
    • Currency Code: if applicable.

Setting Up Purchase Line Discounts

Purchase line discounts reduce the unit cost by a percentage for a given vendor and item combination.

  1. Search for Purchase Discounts using Alt + Q (or access them from within a Purchase Price List by adding a discount line).
  2. For each discount, enter:
    • Vendor No.
    • Item No.
    • Minimum Quantity
    • Line Discount %
    • Starting Date / Ending Date if the discount is time-limited.

Line discounts stack with special prices, if both apply, the discount is applied on top of the special price.

How Business Central Applies the Best Price

When you enter a line on a purchase order, Business Central checks all active purchase prices and discounts for the vendor and item combination. It applies the price that gives you the lowest cost, taking into account:

  • The quantity on the line vs. any minimum quantity thresholds.
  • The order date vs. the validity dates on the price.
  • The currency of the order.

If multiple price levels exist (for example, one price for 1–9 units and a lower price for 10+ units), Business Central selects the applicable tier automatically when you enter the quantity.

To see which price was applied and why, select the Direct Unit Cost field on the purchase order line and look for the Purchase Price & Line Discounts FactBox or use the lookup to view available prices.

Vendor Item Catalog

The Vendor Item Catalog lets you record the vendor’s own item numbers and descriptions alongside your internal item numbers. This is useful when the vendor’s invoices or order confirmations use different references.

  1. Open the Item Card for the item.
  2. Select Related > Purchases > Vendors to open the Item Vendor Catalog.
  3. Select New and fill in:
    • Vendor No.: the vendor.
    • Vendor Item No.: the vendor’s article number or code.
    • Vendor Item Description: the vendor’s description, if different from yours.
    • Lead Time Calculation: a date formula for the vendor’s standard lead time for this item (for example, 5D for five days).

When you create a purchase order for this vendor and item, Business Central can display or populate the Vendor Item No. on the order line, making it easier to match your order to the vendor’s confirmation.

You can also access the vendor catalog from the vendor side:

  1. Open the Vendor Card.
  2. Select Related > Purchases > Item References or Vendor Item Catalog depending on your version.

Notes on Currency and Date Validity

  • Always set Starting Date and Ending Date on time-limited agreements so prices expire automatically when the contract period ends.
  • If a vendor invoices in a foreign currency, set the Currency Code on the price list or price line. Business Central will only apply the price when the purchase order uses the matching currency.
  • Prices with no currency code apply to orders in the company’s local currency.

For setting up vendor records with consistent default values such as posting groups and payment terms, see How to Set Up and Use Customer and Vendor Templates in Business Central.