Service Contracts (tsctm3100m000)

Field Information

Service Contract

The code of the service contract.

Search Argument

search argument

Contract Type

contract type

Effective Date

The start date of the contract.

Expiry Date

The date the contract ends.

Note: Service contract expiry date must be after the service contract effective date.

Status

Free

This is the initial state. You are free to modify the service contract.

Active

The service contract is frozen and changes cannot be made via the contract renewal procedure.

Expired

The contract's expiry date is in the past.

Canceled

The service contract is canceled for the reasons mentioned in the cancel reason.

Closed

The service contract is financially processed and can be moved to history.

Sold-to Business Partner

sold-to business partner

Sold-to Address

The address code.

Sold-to Contact

contact

First Invoice Reference

A reference field for extra information to be printed on various service-contract documents and lists.

Second Invoice Reference

This is a reference field for extra information to be printed on various service-contract documents and lists.

Service Contract Text

If this check box is selected, a contract text is printed on the service-contract document.

Service Office

The service department or sales office responsible for the service contract or service-contract quotation.

Note: The service office determines the home currency and the financial company.

Internal Sales Representative

sales representative

Line of Business

line of business

Sales Price List

sales price list

Project Pegging

Project

The project to which the cost is pegged.

Note: The Project Cost Account to which cost is pegged is a combination of Project, Element and Activity.

Description

The description or name of the code.

Element

The element that is linked to the project.

Note: The Project Cost Account to which cost is pegged is a combination of Project, Element and Activity.

Description

The description or name of the code.

Activity

The activity that is linked to the project.

Note: The Project Cost Account to which cost is pegged is a combination of Project, Element and Activity.

Description

The description or name of the code.

Header Text

If this check box is selected, a header text is printed on the service-contract document.

Note: You can only add the header text if the service-contract status is Free.

Footer Text

If this check box is selected, a footer text is printed on the service-contract document.

Note: You can only add the footer text if the service-contract status is Free.

Invoice-to BP

invoice-to business partner

Invoice-to Address

address

Invoice-to Contact

contact

Sales Type

The sales type applicable to the invoice-to business partner.

Tax Classification

An attribute of order header and order lines that you can use to define tax exceptions for the transactions. LN retrieves the default tax classification from the invoice-from and invoice-to business partners.

Note: 

For example, you can use the tax classification to indicate the following:

• Payment to an invoice-to business partner is subject to withholding tax and social contributions.
• Business partners with the same tax aspects for your company, for example, subcontractors, or agents, must be grouped.
• Tax must be paid in a country other than the sales office or service office’s home country.

Description

The description or name of the code.

Exempt

If this check box is selected, the service contract is exempted from tax classification.

Installment Template

The code that identifies the installment template.

Note: 

• This field is visible and mandatory if the Define Installment Template per Configuration check box is cleared in the Contract Management Parameters (tsctm0100m000) session.
• The value in this field is defaulted from the Contract Management Parameters (tsctm0100m000) session.

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: When you create the service contract, the value in this field is defaulted from the Contract Management Parameters (tsctm0100m000) session.

Indexation Template

The template used to define the percentage by which the contract amount must be indexed.

Payment Terms

payment terms

Late Payment Surcharge

late payment surcharge

Installment Text

If this check box is selected, a text is printed on installment invoices.

Currency

The currency, which is specified in the service contract.

Exchange Rate Type

exchange-rate type

Rate Determiner

Document Date

LN uses the rate that is valid on the date and time on which the documents are created. The Document Date rate determiner applies to all types of transactions. You can manually change the rate.

The rate is updated by Invoicing when the invoice is posted.

Manually Entered

You can manually enter the rate. By default, LN uses the rate that is valid on the date and time on which the documents are created. The Manually Entered rate determiner applies to all types of transactions.

Delivery Date

If the goods are not yet delivered, LN uses the rate that is valid on the order date. However, if this order date is in the past, LN uses the rate that is valid on the current date.

If the goods are delivered, LN uses the rate that is valid on the actual delivery date.

The Delivery Date rate determiner only applies to sales orders, service orders, and sales invoices. You cannot manually change the rate.

Receipt Date

LN uses the rate that is valid on the date and time on which you expect to receive the goods. The Receipt Date rate determiner only applies to purchase orders and purchase invoices. You cannot manually change the rate.

Expected Cash Date

LN uses the rate that is valid on the date and time at which payment of the sales invoice or purchase invoice is expected.

Expected cash date = expected delivery/receipt date + payment period 

The payment period is specified in the Payment Terms (tcmcs0113s000) session. The Expected Cash Date rate determiner applies to all types of transactions. You cannot manually change the rate.

The rate is updated by Invoicing when the invoice is posted.

Fixed

You can use this rate determiner only for a dependent currency system or a single currency system. The Fixed rate determiner applies to all types of transactions.

If you manually enter the rates between the transaction currency and the reference currencies, the rate is fixed. If you do not manually enter the rates, the rate is not fixed and LN uses the rate that is valid on the date and time on which the documents are created.

Fixed Hard

You can use this rate determiner only for an independent currency system. The Fixed Hard rate determiner applies to all types of transactions.

If you manually enter the rate between the transaction currency and the reporting currencies, the rates are fixed. The local currency rate is based on the document date of the actual document.

If you do not manually enter the rate between the transaction currency and the reporting currencies, the rates are not fixed and LN uses the rates that are valid on the date and time on which the documents are created.

Fixed Local

You can use this rate determiner only for an independent currency system. The Fixed Local rate determiner applies to all types of transactions.

If you manually enter the rate between the transaction currency and the local currency, the rate is fixed. The other rates are based on the document date of the actual document.

If you do not manually enter the local currency rate, the rate is not fixed and LN uses the rate that is valid on the date and time on which the documents are created.

Fixed Local and Hard

You can use this rate determiner only for an independent currency system. The Fixed Local and Hard rate determiner applies to all types of transactions.

If you manually enter the rate between the transaction currency and the home currencies, the rates are fixed. The local currency rate is based on the document date of the actual document.

If you do not manually enter the rates between the transaction currency and the home currencies, the rates are not fixed and LN uses the rates that are valid on the date and time on which the documents are created.

Rate/Rate Factor

The rate for one currency base-unit.

Tax Country

tax country

Default value

If the tax code is taken from the location address, the country of the location address. Otherwise, the country of the sold-to BP address.

Own Tax Number

The tax number of the service provider.

Tax Code

The tax code for the tax country.

LN determines the default tax code as follows:

If the destination sales tax is applicable, the tax rules will be consulted based on:

• Sold-to business partner
• Location address

If no tax code is found, the tax rules will be consulted again based on:

• Sold-to business partner.
• Sold-to-address.

If no tax code is found or if the Destination Sales Tax is not applicable, the tax code as specified for the related service department will be used.

Note

• Only tax codes listed in the Tax Codes by Country (tcmcs0536m000) session for the country you selected in the Tax Country field are permitted.

Business Partner Tax Country

The tax country of the business partner.

Description

The description of the business partner's tax country

Business Partner Identification Number

The tax number of the business partner.

Pay-by Business Partner

pay-by business partner

Pay-by Address

The address code.

Pay-by Contact

contact

Duration

The time period for which the contract is active. Enter a numeric value and select a unit of time to define the contract duration. Following are the available units of time:

• Day
• Week
• Month
• Quarter
• Year

Example: A contract can be active for 1 year, 1 quarter and so on.

Numeric Value: 1

Time Unit: Day, Week and so on.

Period Unit of Contract Duration

The unit of time that defines the duration for which the contract is active . Following are the available units of time:

• Day
• Week
• Month
• Quarter
• Year

Example: A contract can be active for 1 year, 1 quarter and so on.

Numeric Value: 1

Time Unit: Day, Week and so on.

Pricing Method

pricing method

Percentage of Sales Value

If the pricing method used is Sales Value of Configuration, a percentage value is required.

Note: This percentage value must be greater than zero.

Derived from Quote

contract quotation

Overtime

If this check box is selected, you can use overtime in the service contract's implementation.

Contract Renewal

If this checkbox is selected, you can renew a service contract with Active or an Expired status.

If you clear this checkbox the Renewal Period field is disabled.

Note: To perform indexation and renewal simultaneously, select both the Price Indexation and Contract Renewal check box.

Renewal Period

The time period for which the contract is active. Enter a numeric value and select a unit of time to define the time period. Following are the available units of time:

• Day
• Week
• Month
• Quarter
• Year

Example: A contract can be active for 1 year, 1 quarter and so on.

Numeric Value: 1

Time Unit: Day, Week and so on.

Note: The field is disabled in case the Contract Renewal checkbox is cleared.

Period Unit

The unit of time that defines the duration for which the contract is active . Following are the available units of time:

• Day
• Week
• Month
• Quarter
• Year

Example: A contract can be active for 1 year, 1 quarter and so on.

Numeric Value: 1

Time Unit: Day, Week and so on.

Marked for Expiry

If this check box is selected, this contract will be ignored during a global renewal process.

Price Indexation

If this check box is selected, you can apply indexation to the service contract price. Indexation enables you to lower or raise the price of the service contract at given intervals.

Note: To perform indexation and renewal simultaneously, select both the Price Indexation and Contract Renewal check box.

Indexation Start Date

The effective date for the indexation.

Indexation Interval

The period after which indexation is carried out.

Example

If the service-contract duration is two (2) years and the indexation period is six months, indexation is carried out four times.

Indexation Interval Period Unit

The period unit of the indexation period.

Incidental Changes

If this check box is selected, you can make incidental changes to this service contract.

Penalty

If incidental changes are carried out on an active service contract, you can enter here a penalty amount that the sold-to business partner must pay.

Based on

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

Provision

This is a percentage value by which a portion of the total contract amount can be kept without recognizing till the end of the period. When the contract period is over, the provision amount can be recognized. This provision will enable to take care of any contingences like cancellations, closure or changes to contract that can affect the revenue to be recognized. In order to prevent over-recognition of the amount, usually a certain provision is given. Based on the buffer that the company deems to be necessary, provision percentage is given.

Recognize Revenue per Configuration

If this check box is selected, revenue cognition is carried out for each 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 performed for the contract.