Define a Maintenance Agreement for Calendar-based Periodic Invoicing

This document explains how you define maintenance agreements for agreements in 'Maint Agrmnt. Open' (COS410) that should be invoiced based on recurring dates or periods. Such agreements are used for setting up maintenance agreements for customers who have one or several maintenance units that should be charged a fixed amount on a calendar basis, for example, monthly or quarterly. The service agreements can then be invoiced manually or with scheduled runs using 'Create MCO for Invoicing' (COS610). (COS610) will create Maintenance Customer Orders in 'Maintenance Customers Order. Open' (COS100) that are used for invoicing the agreement.

This document also explains in detail how to apply and maintain pricing for such agreement and the logic for how prices will be retrieved from invoices generated for such agreements.

This document does not explain:

Outcome

A maintenance agreement for calendar-based periodic invoicing is defined in 'Maint Agrmnt. Open' (COS410) with agreement site 'Agreement Site. Open' (COS403) and agreement equipment lines 'Maintenance Agreement Equipment. Open' (COS433).

Before you start

Follow these steps

To configure the maintenance agreement for periodic invoicing:

  1. The maintenance agreement in 'Maint Agrmnt. Open' (COS410) must have the following setup:

    • An agreement type that has been configured for periodic invoicing must be used.
    • The agreement must be customer-specific.
    • A ‘Periodic invoice order type’ must be selected (COS410/F). This maintenance customer order type will be used when creating MCOs for periodic invoicing. For manually created MCOs, ‘order type’ will be used.
  2. Create agreement lines 'Maint Agrmnt. Open Line' (COS411):

    • If pricing will be defined and maintained using 'Maint Agrmnt. Open Line' (COS411) or 'Service. Enter Prices' (MOS306), at least one agreement line for price method 2 must exist.
    • If pricing will be defined and maintained in 'Maintenance Agreement Equipment. Open' (COS433), it is not a requirement to have an agreement line in 'Maint Agrmnt. Open Line' (COS411) for price method 2.
  3. From 'Maint Agrmnt. Open' (COS410), using related option 17, start 'Agreement Site. Open' (COS403). The fields are pre-populated based on the information connected to the agreement type in 'Maint Agrmnt Type. Open' (COS406) and the 'Maint Agrmnt. Open' (COS410) agreement start and end dates.

    The information can be changed manually. The values defined in 'Agreement Site. Open' (COS403) act only as default values that will populate on the agreement equipment lines in (COS433). The values in 'Maintenance Agreement Equipment. Open' (COS433) will be used for the periodic invoice creation.

    Field Description
    Valid from and to dates The dates between which the agreement is valid
    Invoicing range

    Start date of the next invoicing range

    After the first periodical invoicing run, this field is automatically recalculated.

    End inv

    End date of the next invoicing range

    After the first periodical invoicing run, this field is automatically recalculated.

    Next invoicing date

    The date when invoicing should be performed next

    The date is calculated considering payment terms, invoicing interval, invoicing method and invoicing range start. The service agreement will only be in included in the periodic invoicing run if the 'next invoice date' is before the date of the periodic invoice run.

    Invoicing interval

    The interval that specifies when the next invoicing period will begin

    For example, where invoicing interval = 1 year when the current invoicing period is complete, the invoicing interval start and end are moved forward to 1 year.

    Invoicing mtd

    The invoicing method used

    The invoicing method controls if advanced or arrears invoicing is used.

    Meter-based invoicing

    Note that meter-based invoicing is not described in this document.

    Select 'No' to use calendar-based periodic invoicing.

    Note: The remaining fields are not described. For more information about revenue accrual and meter-based invoicing, refer to the listed documents in the See also section.
  4. From 'Agreement Site. Open' (COS403), using related option 11, start 'Maintenance Agreement Equipment. Open' (COS433):

    • Create a maintenance equipment agreement with product, lot number, and a service.
    • Ensure that the status of service agreement in (COS433/E) is '20-Definite'.
    • Specify the 'valid to' and 'invoicing range'.
    • Specify the 'next invoice date.
    • The invoicing interval is defaulted from 'Maintenance Agreement Equipment. Open' (COS433) and is used to calculate next invoice date after creating MCO for invoicing.
    • The invoicing method is defaulted from 'Maintenance Agreement Equipment. Open' (COS433) and controls if advance or arrears invoicing is used.
    • The agreed quantity specifies the quantity for the line, usually for one agreement line. If another quantity is specified, the price will be multiplied with the quantity.
    • Specify pricing for labor, material, subcontracting, and miscellaneous. See Apply and define pricing for periodic invoicing.
    • The sales price per unit is multiplied with the quantity, giving the line amount.
    • Specify a meter. For non meter-based periodic invoicing, a calendar-based meter must be selected.
      Note: The remaining fields are not described. For more information about revenue accrual and meter-based invoicing, refer to the See also section.

Apply and define pricing for periodic invoicing

Pricing for maintenance agreements with periodic invoicing can be defined on different levels depending on how prices should be maintained.

Defining prices in a service price list

You can define and maintain prices for periodically invoiced agreements in the service price list in 'Service. Enter Prices' (MOS306). The benefit of defining prices in the service price list is that you do not manually need to update each individual agreements prices. Price updates done in the service price list will automatically be applied on new invoices created for all maintenance agreements.

To define pricing for periodically invoiced agreements using the service price list (MOS306), these conditions must be met:

Maintain pricing per agreement line

Pricing for periodically invoiced agreements can be defined per agreement line in (COS411/E). Any price updates must be made per each agreement line.

To define pricing for periodically invoiced agreements per agreement line (COS411), these conditions must be met:

Logic for price retrieval for periodic invoicing

When an MCO and MCO lines for periodic invoicing are created through 'Create MCO for invoicing' (COS610), the first step is to retrieve the applicable agreement and agreement lines for the equipment defined in 'Maintenance Agreement Equipment. Open' (COS433). The prices that will apply on the MCO lines (COS101/E) used for periodic invoicing are retrieved according to the following logic:

  1. If a price is defined in (COS433/E), the price from 'Maintenance Agreement Equipment. Open' (COS433) will be used on the MCO line.

  2. If no price defined in 'Maintenance Agreement Equipment. Open' (COS433), a check is made to see if there are prices defined in (COS411) according to the following logic:

    • A check is made to see if there are any agreement lines in (COS411) with price method 2.
    • The agreement lines are read from the most specific identity to the most generic identity. Prices from the most specific agreement line in (COS411) will be selected and applied on the MCO line.
      Note: The most specific record is one where product, service and structure type in (COS411) is equal to the agreement equipment line (COS433). The least specific identity is a blank agreement line with price method 2.
  3. If there are no prices defined in (COS411/E), the program MOCHKEFF is used to check if a valid service exists in 'Service. Open' (MOS300) for the service defined in (COS433). The service will be reads when retrieving prices from the service price list 'Service. Enter Prices' (MOS306).

    • A check is made to see if there are any services in (MOS300) for the service defined on the agreement equipment line in (COS433).
    • If a service ID exists in (MOS300) for the service and product combination defined in (COS433), this is selected.
    • If a valid service in (MOS300) for the product and service combination in (COS433) is not found, then MOSCHKEF continues to check if the service ID exist for any other service category (i.e. model/sales model, blank product etc.) until a valid service in (MOS300) is found. The service categories are read from most specific identity to most generic identity. The most specific identity will be selected.
      Note: The most specific identity is one where both service and product in (MOS300) is equal to the agreement equipment line in (COS433). The least specific identity would be a blank product service in (MOS306) where the service ID equals the service specified on the agreement equipment line (COS433).
    • The prices defined for the service ID on the service price list defined on the maintenance agreement in (COS410/E) will be applied on the MCO line.
      Note: If no service prices exist for the selected service then blank price will be applied on the MCO line.
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