Contract Management Parameters (tsctm0100m000)

This session contains:

  • A history list of parameter sets and their effective dates. The most recent parameter sets are at the end of the list.
  • The current parameter set, at the top of the list (without an effective date). To view historical sets, double-click one of the historical parameter sets. You can use the Print Service Parameters (tsmdm0400m000) session to print and compare the parameter sets.

To view or change the current parameters, double-click the set without an effective date that appears at the top of the list. The Contract Management Parameters (tsctm0100m000) details session starts.

If you make changes and save the new parameter setting, LN performs the following actions:

  • Adds the new set at the end of the history list.
  • Updates the current set (at the top of the list).
Note: By default, the Description field contains the date and time when the previous parameter setting was saved. To avoid confusion, if you change the parameters, change or delete the default Description text.

Field Information

Effective Date

The date and time from which the parameters are valid. The parameters are valid up to the effective date of the most recent parameter setting.

Description

The description of the parameter set. For example, the reason why the previous setting was changed.

Number Group

The default number group for service-contract quotations.

Effectivity Period

The number of days determines the (default) expiry date of a newly defined service-contract quotation.

Number of Copies

The number of extra quotation copies printed in the Print Contract Quote Documents (tsctm2400m000) session.

History

This parameter indicates the quotation information that will be stored when a quotation is moved to history. The information is stored when you run the Move Service Contract Quotes to History (tsctm2280m000) session.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to History logging

Text
Number Group

The default number group for service contracts.

Number of Copies

The number of extra contract copies printed in the Print Service Contract Documents (tsctm3400m000) session.

History

This parameter indicates the contract information that will be stored in the service-contract history. The information is stored when you run the Copy Service Contracts to History (tsctm3280m000) session.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to History logging

Step Size for Quote Term Number

The number that defines the sequence for the successive quotation coverage terms and cost terms. For example, if you enter the value 10, the numbers assigned to successive quotation coverage terms or cost terms are 10, 20, 30, and so on

Step Size for Quote Configuration Line

The number that defines the sequence for the successive quotation configuration lines. For example, if you enter the value 10, the numbers assigned to successive quotation configuration lines are 10, 20, 30, and so on.

Use Prices in Service Contracts

If this check box is selected, sales prices can be defined on the service contract configuration line.

Note: By default, the field is not checked.
Default Contract Type

The default contract type used for the service contract that can be generated automatically or manually.

Description

The description or name of the code.

Create Service Contract

If this check box is selected, a service contract is generated when the After Sales Service lines are processed.

Series for Service Contract

The default series used to generate a service contract from the after sales service integration.

Description

The description or name of the code.

Default Contract Template

The default contract template used when generating a service contract from the after sales service integration.

Description

The description or name of the code.

Contract Gross Margin Control

If this check box is selected, the gross margin calculation is performed.

If the margin exceeds the lower or upper limit a warning appears.

Only if gross margin control is implemented, attributes related to gross margin are applicable.

Note: If the Gross Margin check box is selected, the Gross Margin Base, Lower Margin and Upper Margin fields must be filled.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Unused concepts in Service

Gross Margin Base

Select whether the gross margin is calculated based on the sales value or on the cost of sales.

Lower Margin

If the gross margin calculation exceeds this limit, LN gives a warning.

Allowed values

A percentage that is greater than zero.

Upper Margin

If the gross margin calculation exceeds this limit, LN gives a warning.

Note: 
  • You must specify a percentage that is greater than zero.
  • The upper margin must be greater than or equal to the lower margin.
Installments
Installment Template

The code that identifies the installment template.

Note: 

This template is used as the default for both the Service Contract and Contract Quotation headers, if the Define Installment Template per Configuration check box is cleared.

This template is used as the default for configuration lines as well, in case the Define Installment Template per Configuration check box is selected, provided the contract does not have the installment template specified.

Define Installment Template per Configuration

If this check box is selected, the installment template is specified for every configuration line that has coverage terms linked.

Note: 
  • If this check box is selected, the Installment Template field is not visible on the header of the Contract Quote (tsctm2600m000), Contract Quotes (tsctm2100m000), Service Contracts (tsctm3100m000) and the Service Contract (tsctm3600m000) sessions.
  • If this check box is cleared, the Installment Template field is not visible on the configuration lines and it is mandatory to define the Installment Template on the header of the Contract Quote (tsctm2600m000) and the Service Contract (tsctm3600m000) sessions.

Path for Labor Rates

The first level of the search path that LN uses to retrieve the labor rate.

The labor rate can be defaulted from the following possible values defined for each level:

  • Department
  • Service Area
  • Serialized Item Group
  • Installation Group
  • Reference Activity
  • Task
  • Skill
  • Not Applicable

Recognize Revenue

Determines the method by which the revenue recognition process is to be handled.

Select either of the following:

  • Interactive
  • Direct by installment
Revenue Recognition Based on

The method based on which the revenue recognition is determined

Allowed values

Number of days per period

The basis of revenue recognition per period is by the number of days per fiscal period. The number of days the contract is live in the fiscal period determines the amount that needs to be recognized for that fiscal period. The contract duration in days, based on the start date and end date of the contract, forms the basis of the contract price per day. The following formulas are used:

amount to be recognized = (net contract amount / total days of contract) * number of days	contract or configuration belong to the fiscal	period
net contract amount = (total contract sales amount) * (100 – p)%

Where 'p' is the percentage specified in the Provision field of the contract header. If 'p' is zero, the net contract amount is the current total contract sales amount.

Cumulative days

The number of days elapsed since the last recognition for the contract forms the basis to calculate the amount to be recognized. The creation date of the contract revenue is considered and the fiscal period to which the creation date belongs will be the fiscal period in which the amount will be recognized. The following formulas are used:

amount to be recognized = ((net contract amount / total days of contract * cumulative number of days to date) – cumulative recognized revenue until date)
net contract amount = (total contract sales amount) * (100 – p)%

Where 'p' is the percentage specified in the Provision field of the contract header.

Earned Revenue Factor (Cost per Period)

When from Service Order Control , Call Management or Maintenance Sales Control , the material, labor and other lines are costed, the cost incurred for the contract is transferred to Contract Management and stored against the fiscal period in which the costing occurred. The following formulas are used:

ERF = total contract sales amount/ total estimated costs amount to be recognized = (cost incurred for the period * ERF)
net contract amount = (total contract sales amount) * (100 – p)%
net	configuration amount = (total configuration sales amount) * (100 – p)%
Earned Revenue Factor (Cumulative Cost)

The cost incurred since the last recognition for the contract forms the basis to calculate the amount to be recognized. The creation date of the contract revenue is considered, and the fiscal period to which the creation date belongs, will be the fiscal period in which the amount will be recognized. The following formulas are used:

ERF = total contract sales amount/ total estimated costs amount to be recognized = (lesser of A or B) – cumulative recognized revenue until date

A = cumulative cost incurred to date * ERF

B = net contract amount

net contract amount = (total contract sales amount) * (100 – p)%

If recognition is at the configuration level:

ERF = contract configuration	sales amount / estimated costs for configuration amount to be recognized = (lesser of A or B) – cumulative recognized revenue until date

A = cumulative cost incurred to date * ERF

B = net contract configuration amount

net contract configuration amount = (total contract configuration sales amount) * (100 – p)%
Not Applicable
Recognize Revenue per Configuration

If this check box is selected, revenue recognition is done per 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 done for the contract as a whole.

Step Size for Contract Term Number

The number that defines the sequence for the successive contract coverage terms and cost terms. For example, if you enter the value 10, the numbers assigned to successive contract coverage terms or cost terms are 10, 20, 30, and so on.

Step Size for Contract Configuration Line

The number that defines the sequence for the successive contract configuration lines. For example, if you enter the value 10, the numbers assigned to successive contract configuration lines are 10, 20, 30, and so on.

For Serialized Items
If this check box is selected, you can activate up to two contracts in total for a Serialized Item and only for the Owner or the In-use-by BP of that Serialized Item.
Note: 
  • By default, this check box is cleared.
  • You cannot clear this check box if multiple active contracts exist for a single Serialized Item, after the current date.
  • The Owner or the In-use-by BP of such a Serialized Item may not be changed or cleared in any way as long as there is an active contract for that Business Partner.
For Installation Groups
If this check box is selected, you can activate up to two contracts in total for an Installation Group and only for the Owner or the In-use-by BP of that Installation Group.
Note: 
  • This check box is displayed only if the Installation Groups check box is selected in the General Service Parameters (tsmdm0100m000) session.
  • By default, this check box is cleared.
  • You cannot clear this check box if multiple active contracts exist for a single Installation Group, after the current date.
  • The Owner or the In-use-by BP of such an Installation Group may not be changed or cleared in any way as long as there is an active contract for that Business Partner.
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