Define a Maintenance Agreement for Calendar-based Periodic Invoicing

This document explains how you define maintenance agreements for agreements in 'Maint Agrmnt. Open' (COS410) that should be invoiced based on recurring dates or periods. Such agreements are used for setting up maintenance agreements for customers who have one or several maintenance units that should be charged a fixed amount on a calendar basis, for example, monthly or quarterly. The service agreements can then be invoiced manually or with scheduled runs using 'Agreement Invoicing. Create MCOs' (COS610). (COS610) creates maintenance customer orders in 'Maintenance Customers Order. Open' (COS100) that are used for invoicing the agreement.

This document also explains in detail how to apply and maintain pricing for such agreement and the logic for how prices will be retrieved from invoices generated for such agreements.

This document does not explain:

  • The configuration for agreements with meter-based invoicing
  • The configuration for periodic revenue accruals.

Outcome

A maintenance agreement for calendar-based periodic invoicing is defined in 'Maint Agrmnt. Open' (COS410) with agreement site 'Agreement Site. Open' (COS403) and agreement equipment lines 'Maintenance Agreement Equipment. Open' (COS433).

Before you start

  • A service must be defined in 'Service. Open' (MOS300).
  • A calendar-based meter must be defined in 'Meter. Open' (MMS051).
  • A maintenance agreement type for periodic invoicing in 'Maint Agrmnt Type. Open' (COS405) must be created.
    • The maintenance agreement must be specific. This is defined on (COS405/E) by setting the agreement type code to 1-'Specific'.
    • The default periodic invoice method must be defined for the agreement type. This is defined in 'Periodic Invoice Default. Open' (COS406) through option 11 from (COS405).
  • A maintenance customer order type for periodic invoicing must be defined in 'Main CO Type. Open' (COS010):
    • Order category set to 25.
    • Next manual function set to 6-'Approve - periodic invoicing' or 7-'Invoice - periodic invoicing'.
  • The maintenance agreement type must be a customer-specific agreement type. This can be set in (COS406) through option 11 from (COS405).
  • A customer-specific maintenance agreement must be created in 'Maint Agrmnt. Open' (COS410).

Follow these steps

Follow these steps to configure the maintenance agreement for periodic invoicing:

  1. The maintenance agreement in (COS410) must have the following setup:
    • An agreement type that has been configured for periodic invoicing must be used.
    • The agreement must be customer-specific.
    • A periodic invoice order type must be selected on (COS410/F). This maintenance customer order type is used when creating MCOs for periodic invoicing. For manually created MCOs, order type is used.
  2. Create agreement lines in 'Maint Agrmnt. Open Line' (COS411):
    • If pricing is defined and maintained using (COS411) or 'Service. Enter Prices' (MOS306), at least one agreement line for price method 2 must exist.
    • If pricing is defined and maintained in (COS433), it is not a requirement to have an agreement line in (COS411) for price method 2.
  3. From (COS410), using related option 17, start (COS403). The fields are pre-populated based on the information connected to the agreement type in (COS406) and the (COS410) agreement start and end dates.

    The information can be changed manually. The values defined in (COS403) act only as default values that are specified on the agreement equipment lines in (COS433). The values in (COS433) are used for the periodic invoice creation.

    Field Description
    Valid from and to dates The dates between which the agreement is valid
    Invoicing range Start date of the next invoicing range

    After the first periodical invoicing run, this field is automatically recalculated.

    End inv End date of the next invoicing range

    After the first periodical invoicing run, this field is automatically recalculated.
    Next invoicing date The date when invoicing should be performed next

    The date is calculated considering payment terms, invoicing interval, invoicing method and invoicing range start. The service agreement will only be in included in the periodic invoicing run if the 'next invoice date' is before the date of the periodic invoice run.

    Invoicing interval The interval that specifies when the next invoicing period will begin

    For example, where invoicing interval = 1 year when the current invoicing period is complete, the invoicing interval start and end are moved forward to 1 year.
    Invoicing mtd The invoicing method used

    The invoicing method controls if advanced or arrears invoicing is used.

    Proj element The project elements to be connected. These are optional and can be used for follow-up, such as accounting.
    Meter-based invoicing Note that meter-based invoicing is not described in this document.

    Select 'No' to use calendar-based periodic invoicing.
    Note: The remaining fields are not described. For more information about revenue accrual and meter-based invoicing, refer to the related topics.
  4. From (COS403), using related option 11, start (COS433):
    • Create a maintenance equipment agreement with product, lot number, and a service.
    • Ensure that the status of the service agreement on (COS433/E) is 20-'Definite'.
    • Specify the 'Valid to' and 'Invoicing range'.
    • Specify the 'Next invoice date.
    • The invoicing interval is set as default from (COS433) and is used to calculate next invoice date after creating MCO for invoicing.
    • The invoicing method is set as default from (COS433) and controls if advance or arrears invoicing is used.
    • The agreed quantity specifies the quantity for the line, usually for one agreement line. If another quantity is specified, the price is multiplied with the quantity.
    • Specify pricing for labor, material, subcontracting, and miscellaneous. See Apply and define pricing for periodic invoicing.
    • The sales price per unit is multiplied with the quantity, giving the line amount.
    • Specify a meter. For non meter-based periodic invoicing, a calendar-based meter must be selected.
      Note: The remaining fields are not described. For more information about revenue accrual and meter-based invoicing, refer to the related topics.

Apply and define pricing for periodic invoicing

Pricing for maintenance agreements with periodic invoicing can be defined on different levels depending on how prices should be maintained.

  • Defining prices in a service price list in 'Service. Enter Prices' (MOS306) .
  • Defining prices per agreement line in (COS411).
  • Defining prices per agreement equipment line in (COS433).

Defining prices in a service price list

You can define and maintain prices for periodically invoiced agreements in the service price list in (MOS306). The benefit of defining prices in the service price list is that you do not manually need to update each individual agreements prices. Price updates done in the service price list will automatically be applied on new invoices created for all maintenance agreements.

To define pricing for periodically invoiced agreements using the service price list in (MOS306), these conditions must be met:

  • No prices should be defined in (COS433), which means that all pricing fields should be blank.
  • An agreement line with price method 2 must exist and have blank prices on (COS411/E).
  • In 'Service. Open' (MOS300), a service must exist for the service defined in (COS433).

Maintain pricing per agreement line

Pricing for periodically invoiced agreements can be defined per agreement line on (COS411/E). Any price updates must be made per each agreement line.

To define pricing for periodically invoiced agreements per agreement line in (COS411), these conditions must be met:

  • No prices should be defined in (COS433) which means that all pricing fields should be blank.
  • An agreement line with price method 2 must exist and should have prices specified on (COS411/E).

Logic for price retrieval for periodic invoicing

When an MCO and MCO lines for periodic invoicing are created through (COS610), the first step is to retrieve the applicable agreement and agreement lines for the equipment defined in (COS433). The prices that apply on the MCO lines on (COS101/E) used for periodic invoicing are retrieved according to the following logic:

  1. If a price is defined on (COS433/E), the price from (COS433) is used on the MCO line.
  2. If no price defined in (COS433), a check is made to see if there are prices defined in (COS411) according to the following logic:
    • A check is made to see if there are any agreement lines in (COS411) with price method 2.
    • The agreement lines are read from the most specific identity to the most generic identity. Prices from the most specific agreement line in (COS411) are selected and applied on the MCO line.
      Note: The most specific record is one where product, service and structure type in (COS411) is equal to the agreement equipment line (COS433). The least specific identity is a blank agreement line with price method 2.
  3. If there are no prices defined in (COS411/E), the program MOCHKEFF is used to check if a valid service exists in 'Service. Open' (MOS300) for the service defined in (COS433). The service is read when retrieving prices from the service price list in (MOS306).
    • A check is made to see if there are any services in (MOS300) for the service defined on the agreement equipment line in (COS433).
    • If a service ID exists in (MOS300) for the service and product combination defined in (COS433), this is selected.
    • If a valid service in (MOS300) for the product and service combination in (COS433) is not found, then MOSCHKEF continues to check if the service ID exist for any other service category (i.e. model/sales model, blank product etc.) until a valid service in (MOS300) is found. The service categories are read from most specific identity to most generic identity. The most specific identity will be selected.
      Note: The most specific identity is one where both service and product in (MOS300) is equal to the agreement equipment line in (COS433). The least specific identity would be a blank product service in (MOS306) where the service ID equals the service specified on the agreement equipment line (COS433).
    • The prices defined for the service ID on the service price list defined on the maintenance agreement on (COS410/E) are applied on the MCO line.
      Note: If no service prices exist for the selected service then blank price is applied on the MCO line.
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