Contract Terms for Service Contract and Service Contract Quotation

A coverage term stores agreements on the duration, the cost covering method, and the costs of the agreements. This can be created for (a combination of) a service contract (quotation), installation group, coverage type, term type, or sequence number. The cost and sales amounts of the term are also stored. The defined coverage terms are valid for the duration of the service contract. It is also possible to phase these terms, depending on time or on the value of the main counter of a counter model. The coverage terms can be specified in the cost terms.

The contract quotation Coverage Term and the contract Coverage Term are defined in Contract Quotation Coverage Terms (tsctm1120m200) and Contract Terms (tsctm1120m300) sessions.

You can configure the pricing terms for the configuration line in the service contract or service contract quotation. This configuration pricing term can also be used as a pricing template. For a configuration line, you can select a price term of the type time and material (with detailed pricing data) or the fixed repair price. The time & material is used to define a sales price for the material, labor, or other costs. The fixed price is used as a fixed repair price for the maintenance and/or service performed for the item. To set up the pricing term, you must set the Contract Price Type field to Time and Material or Fixed Repair Price in the Contract Configuration Lines (tsctm1110m300) session.

For a service order, you can configure the coverage terms as well as the pricing terms (of the type time and material only) for the same configuration line. The sales prices for the transactions are first defined by LN and then the coverage terms are defined. The sales price on the cost terms is the agreed price, however, the covered sales amount and covered cost amount is the coverage.

To define the contract pricing term of the type Fixed Repair Price, you can set the Contract Price Type field to Fixed Repair Price in the Contract Configuration Lines (tsctm1110m300) session. A fixed price is a commitment based on an agreed price. When more or less time, material, etc., is spent, only the gross margin is affected and the customer pays only the agreed price. If a fixed price is configured per order, each transaction (field service activity or maintenance sales order part maintenance line) is invoiced for the specified service contract price; irrespective of the cost booked against that order.