Dynamic Pricing

What is Dynamic Pricing?

Dynamic pricing is a pricing strategy where the cost of a product or service fluctuates based on market demand, competitor pricing, customer behavior or other factors. Businesses use dynamic pricing to optimize revenue, adjust to changing market conditions and incentivize customers to use their products or services when demand is low.

This approach is common in the e-commerce, travel and energy industries. For example, a cloud provider may charge higher prices for computing or data export services during the workday or offer special pricing during off-peak hours.

Related terms

Credit Memos

A credit memo, also known as a credit memorandum or a credit note, is a document issued by a seller to a buyer. It acts like a voucher that reduces the amount the buyer owes.

Deferred Revenue

Deferred revenue is a payment that is made in advance of the completion of a contract. It is not considered “earned” and is recorded as a liability on the books until the terms of the contract are fulfilled. Accrued revenue is the opposite of deferred revenue, whereby revenue has been earned and recognized but not yet received.

Dynamic Pricing

Dynamic pricing is a pricing strategy where the cost of a product or service fluctuates based on market demand, competitor pricing, customer behavior or other factors.

IFRS 15 Compliance

International Financial Reporting Standard (IFRS) 15 establishes a revenue recognition model for companies operating outside the United States. It governs how these businesses record and report information about the details, pricing and timing of revenue from customer contracts.

Invoice Approval Workflow

An invoice approval workflow is a structured process that governs the review, verification, and approval of invoices within an organization before they are paid.

Invoice Processing

Invoice processing is the entire workflow a business follows to manage incoming invoices from suppliers or vendors, all the way from receiving them to paying them. It's essentially how companies ensure they're paying the right amount, to the right vendor, at the right time.