Defining contract parameters

Select the activity that you want to associate with the contract.

The amount displayed is the total contract amount defined on Contract Detail (BR10.2).

Select the currency code for billing contract amounts. This code will appear on the invoice. All amounts calculated on the billing and revenue transactions will be stored in this currency.

Specify the exchange rate from the contract currency to the activity group base currency. This exchange rate is used when the Fixed Exchange field is set to Yes. It will exchange billable and revenue amounts to the contract currency if the transaction cost amounts are in a currency other than the contract or activity group base.

If the Fixed Exchange field is set to No, then billable and revenue amounts are exchanged to contract currency using the exchange rate in effect on the transaction date. The default setting is 1.0000000.

Select Y (Yes) or N (No) to indicate whether the contract currency exchange rate is fixed or whether it fluctuates during the life of the contract.

• If you select Y (Yes), then the current exchange rate assigned to the contract in the Exchange Rate field is always used. If you use a fixed exchange rate, then you will not have any gains or losses. The default setting is Yes.

• If you select N (No), then the Currency Table assigned to the contract activities on Activity Group (AC00.1) is used and the rate fluctuates according to your currency exchange table.

Select the method by which revenue associated with an activity is calculated:

• P (Percent Complete): Recognizes revenue as services are performed based on the percentage of completion calculation.

• A (Accrual): Recognizes revenue for billable costs as they occur, regardless of whether the costs are billed.

• M (Milestone): Revenue is recognized during the life of an activity when a milestone (a significant point in the activity) is reached.

• T (Cost Plus): Recognizes revenue on cost plus markup.

• 9 (User-Defined): Recognizes revenue for billable costs based on a unique user-defined code.

  Note: If you select P (Percent Complete), then you must select a value in the Revenue Calculation field.

Select how revenue is calculated for Percent Complete revenue recognition:

• Method A — Percent Complete (A) calculated as total costs divided by the total budgeted amount. Use this method when you want the system to calculate percent complete for completed contract revenue recognition.

• Method B — Gross Margin (B) calculated as gross profit divided by total contract. Use this method if you intend to follow the originator of expense.

  Note: If you use accrual, cost plus, or milestone, then leave this field blank.

Select Posting/Segment (P), Contract/Non-Segment (C,) Posting/Acct Cat/Segment (1), or Contract/Acct Cat/Non-Segment (2) to indicate at what level revenue will be calculated.

Select Yes (Y) or No (N) to indicate whether to ignore revenue ceilings when running Revenue Calculation (BR130) for the contract if you are using the Accrual or Cost Plus revenue method. If your revenue method is not Accrual or Cost Plus, then this field must be blank.

If you select Yes, then the revenue will continue to be calculated even if revenue ceilings have been exceeded. This allows the revenue transactions being created to be tied back to the originating transactions.

Select Amount (A) or Unit (U) to indicate the budget type.

If you use percent complete calculation, then select the account category group with which you want to associate the contract. This is the default account category group.

The account categories in the group are used to calculate the total cost-to-date and total budget amounts.

Select whether activity transactions associated with unpaid Accounts Payable invoices will be excluded from billing. To enable tracking of the payment status for these transactions, this field must be set to Yes at the time the invoice is released in Accounts Payable.

Select the Accounts Receivable company that is associated with the contract activity.

Select the customer who is associated with the contract activity.

Select the invoice parameters which will be associated with this customer for this contract.

Define invoice options on Customer (BR11.1). See Defining customer invoice options.

Specify a customer purchase order that is assigned to the contract. This number appears on the invoice for customer cross reference.

Specify the letter of credit number through which the contract is paid.

Specify the document number for the letter of credit. The document number is unique for different contracts.

If you want the revenue transaction to post to the company and accounting unit from the original transaction (revenue follows the originator of the expense), then select a General Ledger account/subaccount combination. Or, to always post the revenue transaction to a specific company and accounting unit, select a GL code that you want to post contract revenue to. After selecting an account/subaccount combination or a GL Code, select a revenue type account category for the transaction.

Select or specify the General Ledger account/subaccount and account category that you want to post revenue adjustments to. This must be a revenue type account category.

If you want the retainer transaction to post to the company and accounting unit from the original transaction, then select a General Ledger account/subaccount combination. Or, to always post the retainer transaction to a specific company and accounting unit, select a GL code that you want to post the contract retainer to. After selecting an account/subaccount combination or a GL Code, select an accrual type account category for the transaction.

Select the GL code and account category where you want to store earned/unbilled amounts. This code is used for unbilled transactions. These entries are posted to the contract activity in the Billing and Revenue Management application. This must be an accrual type account category.

Select the GL code and account category where you want to store billed/unearned amounts. This code is used for billed transactions. These entries are posted to the contract activity in the Billing and Revenue Management application. This must be an accrual type account category.

Select the GL code and account category where you want to store pass thru amounts. These entries are posted to the contract activity in the Billing and Revenue Management application. This must be a pass thru type account category.

Select the GL code and account category to use for loss entries. This must be a cost type account category.

Select the GL code to store reserve losses or loss transactions in.

Select Yes in this field to include the activity in revenue calculation. This field must be Yes in order to type a billing and revenue contract ceiling in the Contract Amount field.

Specify the activity amount in the contract currency. The total amount entered for all contracts will determine the contract ceiling amount displayed on the Tolerance tab on Contract Parameters (BR10.1).

Select Include (I) if you want to set tolerance amounts for billing. If you do not, then select Exclude (E).

For billing, tolerances allow you to override a ceiling amount.

For example, if the ceiling is set at $20,000 and the tolerance amount is $2,000, a ceiling amount of $22,000 is used.

Select Include (I) if you want to set tolerance amounts for revenue recognition. If you do not, then select Exclude (E).

For revenue, regular revenue recognition stops at the original ceiling amount. Any amount that exceeds the ceiling but is within the tolerance amount that you specify is considered revenue-at-risk.

Specify an amount by which you will allow the contract to exceed the ceilings on the contract and billing records.

If you include a tolerance on the ceiling amount when Include for Revenue field is set to I, then you must select a journal code that will be used when the system automatically creates revenue-at-risk entries. You can define auto tolerance journal codes on Journal Codes (BR12.1).

Select the default activity to use on invoice edit transactions. This value can be overridden on the invoice edit forms.

Select the default account category to use on invoice edit transactions. This value can be overridden on the invoice edit forms.

Select the default GL company to use on invoice edit transactions. This value can be overridden on the invoice edit forms.

Select the default accounting unit to use on invoice edit transactions. This value can be overridden on the invoice edit forms.

Select whether invoice adjustments should be pro-rated for billing and revenue:

• 1 Prorate - the invoice adjustments will be prorated at a detail level for the contract for records that display on Invoice Edit Contract (BR20). If the contract is not set to Pro-Rate, then the adjustments would just roll up to the proper level in BR20 for viewing. Prorate for Revenue Realization is based on the Revenue Account Unit method selected. The default method is prorate.

  Note: Pro-rating will not be done against retainers, retention, fees, milestones, or ceiling overages. These are all types of records that do not display on lines in BR20.

• 2 No Prorate use Defaults - creates one realization entry for each adjustment line created by the Invoice Edit Contract (BR20.1) program. The default settings used are the Company, Accounting Unit and Activity (defaults fields listed above in Invoice Edit Defaults) and Account, Sub-Account and Account Category from the GL Codes, Acct Cat tab on Contract Parameters (BR10.1).

• 3 No Prorate Use Activity - creates one realization entry for each adjustment line created by the Invoice Edit Contract (BR20.1) program. The default Activity used is the one that is on the original detail line on Invoice Edit Activity (BR20.3) or Invoice Edit Activity and Account Category (BR20.4).

Select Activity Company Account Unit (A) or Trans Company Account Unit (T). The default is Trans Company Account Unit (T).

Select whether individual transactions can be summarized along with other like transactions. The default setting is No.