To define a contract

To define and process a contract, complete the following steps:

Step 1. Create a contract

Define the data for the contract as described in Contract Data Set-up.

Step 2. Create contract lines

Define the data for the contract line as described in Contract Line Data Set-up. Contract lines allow you to maintain additional and detailed information required for a contract.

Step 3. Define billing cycles

Define the Billing cycle using the Billing Cycles (tpctm0130m000) session. A billing cycle is the time interval defined to generate billing statement for the contract. You can also define the billing recurrences using the Recurrences (tcccp0143m000) session. Note: Billing cycles can be defined only for contracts of the type Cost Reimbursement and Time and Materials.

Step 4. Define the contract deliverables

Define the data for the contract deliverable (items that can be hardware or non-hardware) as described in Contract Deliverable Data Set-up.

Step 5. Release items to warehousing

Release the items (deliverables) to warehouse using the Release Deliverables to Warehousing option from the Actions menu in the Contract Lines (tpctm1110m000) session. Note: LN generates the warehouse order number. You can view on the Shipping tab, in the Project Deliverables (tppdm7100m000) session. LN sets the contract deliverables' status to Released to Warehousing. Note: To release items to warehousing the status of the contract, contract line and contract deliverable must be set to Active.

Step 6. Review the shipment details

LN generates the shipment data in the Project Shipments (tppin0160m000) session after the warehousing order is processed.

Step 7. Review the cost transactions

Review the unit costs of the deliverables transferred to Project. LN transfers the unit costs booked on production orders or when the deliverables are procured. The cost data displayed, depends on the level at which the project is pegged. Note: Costs can also be reviewed for sales order lines that are project pegged.

Step 8. Generate and process the invoices

For Fixed Price Contracts

Installment invoicing

  • Use the Installments (tppin4151m000) session to create the installments.
  • Select or define the revenue code for the installment using the Standard Revenues (tppdm0515m000) or the Project - Revenues (tppdm6515m000) session.
  • You can also link the shipment lines to the installments, using the Project Shipments (tppin0160m000) session.
  • In the Installment session, select the Approved for Invoicing checkbox to transfer to Invoicing.

Delivery Based invoicing

  • Define the invoice type on the Invoicing tab in the Contract (tppdm6100m000) session.
    • Select Fixed Price Contract in the Agreement Type field.
    • Select Delivery Based in the Invoice Type field.
  • Click Release in the Project Deliverables (tppdm7100m000) session to release deliverables to warehousing and ship via Warehousing.
  • Select the lines to be invoiced in Invoicing 360 (cisli3600m000) and process and post the invoices.

For Cost Reimbursement/Time and Material Contracts

  • Review the unit costs registered in the Cost Transactions (tpppc2100m000) session.
  • Use the Create Aggregated Billable Cost (tppin1200m000) session to create aggregated billable cost lines. This enables you to view the contract aggregation settings based on the invoicing method and the transactions to be invoiced.
  • Select the billable checkbox in the Contract Billable Cost Lines (tppin1100m000) session for the transactions that are billable.
  • Select the approve checkbox in the Contract Billable Cost Lines (tppin1100m000) session to approve the transactions for invoicing.
  • Use the Transfer to Invoicing option to transfer the transactions to Invoicing.
  • For more detailed billing of unit costs, use the Cost-Plus Transactions to be Invoiced (tppin2100m000) session.
Step 9. Process the invoices
  • Use the Invoicing 360 (cisli3600m000) session to process and post the invoices. LN generates the revenues for the contract.
  • Review the contract revenues in the Projects and Financials.
Step 10. Close the contract

Set the contract to Closed after the deliverables are shipped and the invoicing process is completed.

Related topics