Service contract changes

You cannot change active service contracts in the same way that you change service contracts with the status Free. In Service, contract changes can be classified into following types:

  • Contract Renewal
  • Indexation
  • Incidental Changes

Contract Renewal

The Contract Renewal option allows you to extend the contract period. You can renew a service contract for any duration of time and copy the cost and coverage terms. When you renew a contract, you can also add more configuration lines, change the cost amount and sales amount of the configuration lines, change the cost and the sales amount of the coverage terms and so on.

Price Indexation

The Price Indexation option allows you to increase the contract amount. The increase in contract amount can be because of economic changes, to counter the effect of inflation, to counter currency fluctuations and so on.

  • The service contract change type indexation can be applied only when the Pricing Method of the configuration lines is set to Installation/Item Pricing in the Service Contract session or in the Contract Configuration Lines (tsctm1110m300) session.

    • If the Update from Contract Price List check box in the Indexation Percentages (tsctm0161m000) session is not selected, the Installation/Item Pricing percentage defined in the session is used to index the Calculated and the Sales Price in the Contract Configuration Lines (tsctm1110m300) session.
    • If the Update from Contract Price List check box in the Indexation Percentages (tsctm0161m000) session is selected, the sales price is updated with the latest price from the Contract Item Price Lists (tsctm0115m000) session.

    The Calculated and the Sales Amount in the Contract Configuration Lines (tsctm1110m300) session is indexed proportionally, based on the period between the Change Effective Date and Expiry Date specified in Contract Changes (tsctm3120m000) session.

  • If the Type field is set to Renewal with Indexation in the Contract Changes (tsctm3120m000) session, LN renews the contract and applies indexation, simultaneously. Indexation is applied irrespective of the pricing method defined for the configuration lines.

Incidental Changes

The Incidental Changes option allows you to make the changes such as addition of configuration lines, changes to prices / discounts, changes to coverage terms / cost terms and so on, to the contract agreement.

Impact of Indexation or Incidental Changes on Installments when Contract Change is Activated.

When indexation or incidental change is activated, the indexed amount is split between the installments that meet the following criteria:

  • Installments with status Free in the Contract Installments (tsctm4100m000) session
  • Installments which have start date in the Effective Period field ( in the Contract Installments (tsctm4100m000) session) that is equal to or greater than the Change Effective Date (in the Contract Changes (tsctm3120m000) session).

The indexed amount is not split between the installments that are manually created.

There are no installments with status Free in the Contract Installments (tsctm4100m000) session, when the Indexation or Incidental change is applied. LN, generates a new installment with the indexed amount in the Contract Installments (tsctm4100m000) session on the activation of the contract change. The Planned Invoice Date for the new installment is same as the Change Effective Date in the Contract Changes (tsctm3120m000) session.

if the Indexation amount or Incidental change amount is not zero, LN adds the amount to the installment amount. Thereafter, the indexation / incidental change amount is reset to zero.

The status of the installment can be changed only when:

  • When the indexation amount or incidental change amount is zero. The status of the Installment can be changed to following:
    • Accepted
    • Canceled
  • The contract change is activated.
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