| # Service Contracts (tsctm3100m000) Use this session to maintain the service contracts. You can define a service contract by copying another service contract into it. If you do so, the related terms are not copied. If you use service-contract templates, you can speed up the creation process of service contracts. On the Contract Changes tab, specify which of the three types of changes ( contract renewal, indexation, incidental changes are permitted for a contract. This will enable you to make changes to an active contract later on. Important! When you save the contract, the renewal duration determines the scenario based on which the coverage and cost terms are copied. Following are the two possible scenarios relevant to renewal duration: Different Duration: When the service contract duration and renewal duration are different, Only Active method as outlined below is used to copy the cost and coverage terms. Same Duration: When the service contract duration and renewal duration are same, a dialog box is displayed with two methods by which the coverage and cost terms are copied. Following are the two methods: Only Active: Only the active coverage and cost terms are copied. Coverage Terms: The coverage terms for which the expiry date matches with the expiry date of the service contract are copied. The effective and expiry date of the coverage terms renewal and the service contract renewal are same to ensure that the coverage terms are active through out the renewal duration. Cost Terms: The cost terms are calculated in proportion to the change in the duration of coverage terms. All: When you select All, the cost and coverage terms of a service contract are copied in the following manner: Coverage Terms: The coverage terms that are linked to a configuration are extended for the same duration in the year for which the contract is renewed. Cost Terms: The cost and sales amount do not change as the coverage terms are extended for the same duration in the year for which the contract is renewed. Related topics To use templates in contract management To create service contracts To calculate contract prices Service contract changes Number groups in Service To use number groups and series Service tax rules, tax code, and tax country Contract Renewal Project pegging in depot repair Service Contract The code of the service contract. Search Argument An alternative form of a description used for convenience during searching. A search key is usually an abbreviation, an acronym, or a mnemonic alternative to a full description. Contract Type A way of categorizing contracts based on similarities and shared characteristics. Each contract type is identified by an alphanumeric code of up to three characters. Effective Date The start date of the contract. Expiry Date The date the contract ends. Note Service contract expiry date must be after the service contract effective date. Status Contract Status Sold-to Business Partner Usually a customer's purchase department, the business partner who orders goods or services from your organization, that owns the configurations you maintain, or for whom you perform a project. The agreement with the sold-to business partner can include the following: Default price and discount agreements Sales order defaults Delivery terms The related ship-to and invoice-to business partner Address Code The address code. Contact The person with whom you discuss business transactions. For example, you address questions, quotations, and follow-up calls, direct mail, and promotional gifts to the contact. The contact's data include the name, telephone number, e-mail address, and other details. First Invoice Reference A reference field for extra information to be printed on various service-contract documents and lists. Second Invoice Reference This is a reference field for extra information to be printed on various service-contract documents and lists. Contract Text If this check box is selected, a contract text is printed on the service-contract document. Service Office The service department or sales office responsible for the service contract or service-contract quotation. Note The service office determines the home currency and the financial company. Sales Rep. An employee of your company who maintains contact with the sold-to business partner. The employee number of the sales representative is also used as a sorting criterion in the sales statistics. Line of Business A group of customers, suppliers, or employees that work in the same business sector. Lines of business can be used as selection criteria when generating reports or inquiries of statistical and historical data. Sales Price List The highest level used to record prices and discounts for a group of customers and/or suppliers. The price and discount can be determined by linking a price list code to a sales order. Project Pegging Project The project to which the cost is pegged. Note The Project Cost Account to which cost is pegged is a combination of Project, Element and Activity. For more information, refer to Project pegging in depot repair. Description The description or name of the code. Element The element that is linked to the project. Note The Project Cost Account to which cost is pegged is a combination of Project, Element and Activity. Description The description or name of the code. Activity The activity that is linked to the project. Note The Project Cost Account to which cost is pegged is a combination of Project, Element and Activity. Description The description or name of the code. Header Text If this check box is selected, a header text is printed on the service-contract document. Note You can only add the header text if the service-contract status is Free. Footer Text If this check box is selected, a footer text is printed on the service-contract document. Note You can only add the footer text if the service-contract status is Free. Business Partner The business partner to which you send invoices. This usually represents a customer's accounts payable department. The definition includes the default currency and exchange rate, invoicing method and frequency, information about the customer's credit limit, the terms and method of payment, and the related pay-by business partner. Address A full set of addressing details, which include the postal address, access numbers for telephone, fax, and telex, e-mail and Internet address, identification for taxation purposes, and routing information. Contact The person with whom you discuss business transactions. For example, you address questions, quotations, and follow-up calls, direct mail, and promotional gifts to the contact. The contact's data include the name, telephone number, e-mail address, and other details. Sales Type The sales type applicable to the invoice-to business partner. Tax Classification An attribute of order header and order lines that you can use to define tax exceptions for the transactions. LN retrieves the default tax classification from the invoice-from and invoice-to business partners. Important! For example, you can use the tax classification to indicate the following: Payment to an invoice-to business partner is subject to withholding tax and social contributions. Business partners with the same tax aspects for your company, for example, subcontractors, or agents, must be grouped. Tax must be paid in a country other than the sales office or service office’s home country. Description The description or name of the code. Exempt If this check box is selected, the service contract is exempted from tax classification. Installment Template The code of the installment template. Note If an installment template is specified at contract level instead of at configuration level, the installments will be generated per header instead of per covered configuration. If no installment template is specified, the installment template must be specified for each covered configuration. Indexation Template The template used to define the percentage by which the contract amount must be indexed. Payment Terms Agreements about the way in which invoices are paid. The payment terms include: The period within which invoices must be paid. The discount granted if an invoice is paid within a given period The payment terms allow you to calculate: The date on which the payment is due The date on which the discount periods expire The discount amount Late Payment Surch. The percentage that is charged over the goods amount or over rendered services that the recipient of the invoice must pay if the invoice is not paid within a specified period. Installment Text If this check box is selected, a text is printed on installment invoices. Currency The currency, which is specified in the service contract. Exchange Rate Type A way to group currency exchange rates. You can assign different currency exchange rates to different invoice-to business partners and/or to different types of transactions (purchase, sales, and so on). Rate Determiner Currency Rate Determiner Rate/Rate Factor The factor by which an amount in a different currency is multiplied to calculate the amount in the currency base. Rate/Rate Factor The factor by which the amount in the transaction currency or the invoice currency is divided before LN converts it to a home currency. A rate factor is often used for currencies that have a relatively low price, for example, Korean Won. Rate/Rate Factor The rate for one currency base-unit. Calculate Tax If this check box is selected, taxes are applicable to the contract installments. The tax country and the applicable tax code must be specified. Tax Country The country in which you must pay/report the value-added tax (VAT). The tax country can be different from the country where services or goods are delivered. Default value If the tax code is taken from the location address, the country of the location address. Otherwise, the country of the sold-to BP address. Related topics Service tax rules, tax code, and tax country Tax Number The tax number of the service provider. Tax Code The tax code for the tax country. LN determines the default tax code as follows: If the destination sales tax is applicable, the tax rules will be consulted based on: Sold-to business partner Location address If no tax code is found, the tax rules will be consulted again based on: Sold-to business partner. Sold-to-address. If no tax code is found or if the Destination Sales Tax is not applicable, the tax code as specified for the related service department will be used. Note If the Calculate Tax check box is not selected, this field is cleared and inactive. Only tax codes listed in the Tax Codes by Country (tcmcs0536m000) session for the country you selected in the Tax Country field are permitted. BP Tax Country The tax country of the business partner. Description The description of the business partner's tax country BP Tax Number The tax number of the business partner. Business Partner The business partner from which you receive payments. This usually represents a customer's accounts payable department. The definition includes the default currency and exchange rate, the customer's bank relation, the type of reminders you send to the business partner, and the frequency of sending reminders. Address The address code. Contact The person with whom you discuss business transactions. For example, you address questions, quotations, and follow-up calls, direct mail, and promotional gifts to the contact. The contact's data include the name, telephone number, e-mail address, and other details. Service Contract This field identifies the service contract. Duration The time period for which the contract is active. Enter a numeric value and select a unit of time to define the contract duration. Following are the available units of time: Day Week Month Quarter Year Example: A contract can be active for 1 year, 1 quarter and so on. Numeric Value: 1 Time Unit: Day, Week and so on. Duration The unit of time that defines the duration for which the contract is active . Following are the available units of time: Day Week Month Quarter Year Example: A contract can be active for 1 year, 1 quarter and so on. Numeric Value: 1 Time Unit: Day, Week and so on. Effective Date Depending on its context, an effective date can be the first day on which a contract quotation is valid, the first day on which a service contract is active, or the first day on which you can use a template for quotations or contracts. The effective date often includes the effective time. Expiry Date Depending on its context, an expiry date can be: The last day on which a contract quotation is valid. The default expiry date for a quotation is the quotation date + effectivity period of quotations [days], as set in the Service Order Parameters (tssoc0100m000) session; The last day on which a service contract is active. After this date it becomes expired; The last day on which you can use a template for quotations or contracts. Note that the expiry date often includes the expiry time. Pricing Method The method indicating how the contract price is determined. The following pricing methods are available: Sales Value of Configuration Budgeted Service Costs Item Pricing Percentage of Sales Value If the pricing method used is Sales Value of Configuration, a percentage value is required. Note This percentage value must be greater than zero. Contract Quotation A quotation to a business partner for the provision of a service contract. Overtime If this check box is selected, you can use overtime in the service contract's implementation. Service Contract The code of the service contract. Contract Renewal If this checkbox is selected, you can renew a service contract with Active or an Expired status. If you clear this checkbox the Renewal Period field is disabled. Note To perform indexation and renewal simultaneously, select both the Price Indexation and Contract Renewal check box. Related topics Contract Renewal Renewal Period The time period for which the contract is active. Enter a numeric value and select a unit of time to define the time period. Following are the available units of time: Day Week Month Quarter Year Example: A contract can be active for 1 year, 1 quarter and so on. Numeric Value: 1 Time Unit: Day, Week and so on. Note The field is disabled in case the Contract Renewal checkbox is cleared. Renewal Period The unit of time that defines the duration for which the contract is active . Following are the available units of time: Day Week Month Quarter Year Example: A contract can be active for 1 year, 1 quarter and so on. Numeric Value: 1 Time Unit: Day, Week and so on. Marked for Expiry If this check box is selected, this contract will be ignored during a global renewal process. Price Indexation If this check box is selected, you can apply indexation to the service contract price. Indexation enables you to lower or raise the price of the service contract at given intervals. Note To perform indexation and renewal simultaneously, select both the Price Indexation and Contract Renewal check box. Related topics To apply indexation to multiple contracts Index Start Date The effective date for the indexation. Indexation Interval The period after which indexation is carried out. Example If the service-contract duration is two (2) years and the indexation period is six months, indexation is carried out four times. Indexation Interval The period unit of the indexation period. Incidental Changes If this check box is selected, you can make incidental changes to this service contract. Currency The currency that is specified in the service contract. Penalty If incidental changes are carried out on an active service contract, you can enter here a penalty amount that the sold-to business partner must pay. Revenue Recognition Based on Revenue Recognition method Provision This is a percentage value by which a portion of the total contract amount can be kept without recognizing till the end of the period. When the contract period is over, the provision amount can be recognized. This provision will enable to take care of any contingences like cancellations, closure or changes to contract that can affect the revenue to be recognized. In order to prevent over-recognition of the amount, usually a certain provision is given. Based on the buffer that the company deems to be necessary, provision percentage is given. Recognize Revenue per Configuration If this check box is selected, revenue cognition is carried out for each configuration of the contract. This will give additional information as to how much each of the configurations under the contract is contributing to the total revenue. If this check box is cleared, revenue recognition is performed for the contract. Configuration Lines Starts the Contract Configuration Lines (tsctm1110m300) session. Contract Changes Starts the Contract Changes (tsctm3120m000) session. Generate Contract Changes Starts the Generate Contract Changes (tsctm3202m000) session. Totals Starts the Contract Totals by Contract Change (tsctm1506m300) session. Close Service Contracts Starts the Close Service Contracts (tsctm3201m000) session. Expire Service Contracts Starts the Expire Service Contracts (tsctm3200m000) session. Copy Service Contracts to History Starts the Copy Service Contracts to History (tsctm3280m000) session. Generate Subcontract Agreements Starts the Generate Subcontract Agreements (tsctm1210m000) session. Coverage Terms Starts the Template Coverage Terms (tsctm1120m100) session. Contract Installments Starts the Contract Installments (tsctm4100m000) session Estimated Revenues Starts the Estimated Contract Revenues per Period (tsctm4550m000) session. Contract Revenues Starts the Contract Revenues (tsctm4160m000) session. |