Define Maintenance Agreement for Periodic Accrual Revenues

Service agreements can be invoiced manually or during scheduled processing.

The Maintenance Customer Order (MCO) structure across Agreement Header ('Maint Agrmnt. Open (COS410)), Agreement Site ('Agreement Site. Open' (COS403)), Agreement Site – Equipment ('Maintenance Agreement Equipment. Open' (COS433)) and Agreement Lines – Service ('Maint Agrmnt. Open Lines' (COS411)) supports invoicing at agreement, site, or equipment level.

Although revenues from service agreement invoicing are obtained in advance, they can be accounted on an accrual basis, distributing the revenues across a pre-defined time range and number of periods. This is achieved by configuring the MCO with a curve and number of periods greater than one. Where required the curve and number of periods can be omitted to allow the revenues to be accounted on the invoice date.

The service agreement invoicing process involves the creation of an MCO stating equipment and amount for all those service agreements with periodic invoicing defined and included within the specified time range.

This document describes the configuration required to ensure that this method of invoicing is activated for the service agreement.

Before you start

  • Create an agreement type for periodic invoicing in 'Maint Agrmnt Type. Open' (COS405).
  • Periodic invoicing order type must be defined for the agreement in 'Maint Agrmnt. Open' (COS410). Note that this is only available for selection where the associated order type in 'Maint CO Type. Open' (COS010) is of category 25 and 'Next Manual Function' in (COS010) is 6='approve – periodic invoicing' or 7='invoice – periodic invoicing'.
  • Maintenance agreement type must be a customer specific agreement type. This can be set in 'Periodic Invoice Default. Open' (COS406), accessed using option 11 from 'Maint Agrmnt Type. Open' (COS405).

Follow these steps

To configure the maintenance agreement for periodic accruals:

  1. Activate periodic accounting in 'Maint Agrmnt. Open' (COS410).

  2. Define the 'agreement site' in 'Agreement Site. Open' (COS403).

  3. Configure 'agreement type' and invoicing interval. Either open (COS406) or use related option 11 from (COS405) and:

    • Define the agreement type with an invoicing method allowing advance invoicing
    • Specify a default invoicing interval to specify when the next invoicing period begins. For example, where invoicing interval = 1 year, when the current invoicing period is complete, the invoicing interval start and end are moved forward 1 year.

  4. If meter based invoicing is applicable for the agreement, apply these settings in (COS403). These selections are used as defaults for each of the records created in (COS433) in the downstream invoicing process:

    Set the meter based invoicing flag. This indicates if the site has equipment with meter based invoicing connected and provides flexibility to allow equipment to have different meter prices in addition to multiple lines for each equipment with different meter prices. On selection of this flag, these fields become available for update:

    Invoice type with these available options:

    1. Actual meter values only

    2. Forecast values only

    3. Forecast and reconcile. When this option is selected these fields are displayed:

      • Reconciliation interval in units of Years, Months, and Days
      • Next Reconciliation date
      • Start Reconciliation date
      • End Reconciliation date
      • Operation Plan version
      • Over usage meter unit price
      • Maximum discrepancy % over
      • Maximum discrepancy % under
      • Dynamic meter price. When set to 'Yes', price search starts from 'Meter. Enter Price Scale' (COS015) before using (COS433) prices. When set to 'No', only (COS433) prices are used.

  5. From (COS403), using related option 11, open 'Maintenance Agreement Equipment. Open' (COS433) and:

    For periodic invoicing:

    1. Create a maintenance equipment agreement with product, lot number, and service.

    2. Ensure status of service agreement in (COS433/E) is '20-Definite'.

    3. Specify prices and price index for the agreement if required. Prices can be defined if a specific price for equipment is needed. Where price is not defined in (COS433), they can be retrieved at a product level in (COS411) or from 'Service. Enter Prices' (MOS306) if none available in (COS411). Because agreements may exist for several years, their prices may be subject to change. To ensure that changes in prices can be reflected in the charges invoiced to customers, a price index can be associated with an agreement and updated during its lifetime. Base price values in base price lab, base price mtrt, base price subc and base price misc fields in (COS433/E) are adjusted when required based on a price index defined in (COS400). After update in (COS433/E) the original based prices are retained in (COS433/F) along with the details of the index used to adjust them.

    4. Ensure that the curve parameter is selected and specify the required number of periods to be applied to the invoicing range specified at step g.

    5. Specify 'valid to' and 'invoicing range'.

    6. Specify 'next invoice date'. Note that when creating the MCO for invoicing in 'Agreement Invoicing. Create MCOs' (COS610), the service agreement is only included in invoicing, if the 'next invoice date' is before the MCO creation date.

    7. Invoicing interval is defaulted from (COS403) and is used to calculate next invoice date after creating MCO for invoicing.

    8. Click next.

    9. Open (COS411) and specify agreement line with invoice method 2 and valid service defined per product, else blank.

    For invoicing with meter based invoicing:

    1. Perform steps a. to i. defined for periodic invoicing. Note that in this case the price is multiplied by the meter reading.

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