Setting Up Products

This chapter provides an overview of products and product groups and discusses how to set up products and product groups.

Understanding Products and Product Groups

Core contractual obligations are the products and services that an organization provides to its customers. In PeopleSoft Contracts, you define a standard set of products; associate them with a set of attributes that include pricing structure, tax parameters, and accounting information; and then use the products in your contracts.

Here are the steps for defining products and product groups:

Define a product group and identify it as a Contract product group type.
Define contract attributes for the product group.
Define the product.
Define the list price (optional).
Associate a product to a product group and type.
Define product rate defaults (optional).

Note. You can define a product without a product group. In that case, follow steps 3, 4, and 6 only.

This section describes:

Product groups.
Price types.
Product kits.
Ad hoc products.
Renewable products.

Product Groups

A product group is a high-level grouping of products. Product groups enable you to categorize products based on a business model. When you define an individual product or a product kit, you can optionally associate a product with a product group. If the product group is tagged as a Contracts Product Group, you can define additional attributes (Contract Product Group Options) such as the deferred revenue and unbilled accounts receivable (AR) distribution code on the Contract Product Group Options component. If you associate a product with a product group that you linked to an unbilled AR account, when that product is added to a contract line, that contract line inherits the product group's unbilled AR account information. When you select that product onto a contract line, the distribution code table is populated with the unbilled AR account information defined at the product group level. When you select products that are not associated with a product group onto a contract line, the distribution code table is populated with the unbilled AR account information that you defined for the PeopleSoft Contracts business unit on the contract header.

Price Types

Products in contracts are rate-based, amount-based, or recurring. Rate-based products have a price type of Rate, amount-based products have a price type of Amount or Percent, and recurring products have a price type of Recurring. The price type that you select for a product determines the details that you define for that product and the billing and revenue recognition methods with which you can associate the product.

This table shows the valid revenue recognition and billing methods for each price type:

Note. You select the revenue recognition method when defining a product. However, you do not select the billing method at that time.

Price Type	Revenue Recognition Method	Billing Method
Amount or Percent	Milestone, Percent Complete, Apportionment, Billing Manages Revenue	Milestone, Percent Complete, Immediate
Rate	As-incurred	As-incurred, Value-based
Recurring	Billing Manages Revenue	Recurring

Defining Rate-Based Products

You can optionally set up product rate defaults, where you can associate multiple PeopleSoft Project Costing rate sets or rate plans with a single PeopleSoft Contracts product ID. This enables you to set up unique rates in different PeopleSoft Project Costing business units and refer to them with a single PeopleSoft Contracts product ID.

Define your rate defaults on the Product Rate Defaults page by identifying a PeopleSoft Project Costing business unit with either a rate set ID or a rate plan ID. Once you make this association, the system uses this rate set or rate plan as the default for the product.

Defining Amount-Based Products

You can set up an amount-based pricing type as either a fixed amount or a percentage of the total contract value.

Defining Recurring Products

For recurring products, you must set up a contract with a Recurring billing method and a revenue recognition method of Billing Manages Revenue.

Product Kits

A product kit is a collection of products. Products or services are often sold as part of a product kit. When you select a product kit for a contract, an individual contract line is created for each product within the product kit. Product kits can contain both rate-based and amount-based products.

See Products on Contract Lines.

Ad Hoc Products

An ad hoc product is a product that you define during the contract entry process. Any ad hoc products that you define for a contract are available for use only on the contract from which they were created. Otherwise, an ad hoc product is essentially the same as a regular product. Ad hoc products share the same key structure as regular products. Consequently, an ad hoc product cannot share the same product ID with an existing product ID, or with an existing ad hoc product that is on another contract.

An ad hoc product that you define during contract entry can be converted into a regular product. When you convert an ad hoc product into a regular product, the system indicates that the product is no longer an ad hoc product, and the product is now available for selection onto other contracts. The system creates the product definition data for the new product based on the existing data for the ad hoc product on the contract line.

Renewable Products

You can designate a fixed-amount product or service as renewable when defining a product by selecting the Renewable check box on the Product Definition - Contract Options page. In addition, you must select a default Renewal Action option to designate whether the renewable product is a manual or an automatic renewal. The renewable action appears by default with the product and is stored on the renewable contract line. This renewal action drives the behavior of the renewal plan associated with the contract line. With automatic renewals, the system processes the renewal when the specified criteria is met. The renewal action can be overridden when selecting the renewable product onto a contract line. Optionally, you can select a default renewal plan template for the renewable product.

Setting Up Products and Product Groups

To define product group options and product rate defaults, use the Product Group Options (CA_PROD_GROUP_GBL) and Product Rate Defaults (CA_PROD_RATES_GBL) components. Use the CA_PROD_GROUP_CI and CA_PROD_RATES_CI component interfaces to load data into the tables for these components.

This section describes how to:

Define product groups.
Define contract attributes for product groups.
Define products.
Define contract product group options.
Define the unit of measure (optional).
Define the list price (optional).
Associate products to product groups.
Define product rate defaults.
Create products from ad hoc products.

Pages Used to Define Products and Product Groups

Page Name	Object Name	Navigation	Usage
Product Group Table	PROD_GROUP_TBL	Set Up Financials/Supply Chain, Common Definitions, Products, Product Group Table	Define product group IDs and indicate product group types. Create product groups or make an existing product group available for contracts.
Product Group Options	CA_PROD_GROUP	Set Up Financials/Supply Chain, Product Related, Contracts, Contracts Product Options, Product Group Options	Assign contract attributes such as deferred revenue and unbilled AR options for product groups.
Product Definition	PROD_DEFN	Products, Identify Product Details, Definition	Make products available for use on contract lines.
Product Definition - Contracts Options	PROD_CONTRACTS	Products, Identify Product Details, Definition, Contracts Options	Define the products (products and services) to use on your contract lines. From this page, you can define the product's price type and revenue recognition method. You can select revenue plan, billing plan, billing plan detail and renewal templates to associate with the product. You can also designate products as renewable and select either manual or automatic renewal actions. See Establishing Product Contract Options.
Product Attributes by UOM	PROD_UOM	Product, Identify Product Details, Attributes by UOM	Identify the unit of measure (UOM) that is valid for your product. This step is optional. However, if you are defining the list price for the product at this level; you must select the UOM. See Establishing Product Attributes by Unit of Measure.
Product Price	PROD_PRICE	Product, Identify Product Details, Assign List Price	Defining a list price for your product is optional. If you do not enter a value here, the system carries a blank value through to your contract lines where you must manually enter values for the negotiated contract line amounts. See Establishing Product Prices.
Product Groups	PROD_GROUP	Products, Identify Product Details, Assign Product Group	Associate a product to a product group and type. This page is optional if you are not using product groups. See Setting up Product Group Tables.
Product Rate Defaults	CA_PROD_RATES	Set Up Financials/Supply Chain, Product Related, Contracts, Contracts Product Options, Product Rate Defaults	Define default rate plans or rate sets to the product.
Create Products from Ad Hoc Products	CA_PROD_ADH_CREATE	Set Up Financials/Supply Chain, Product Related, Contracts, Contracts Product Options, Create Product From Adhocs	Convert ad hoc products into regular products for use on your contract lines.

Defining Contract Attributes for Product Groups

Access the Product Group Options page.

Select default attributes for the product group. The system populates the contract lines for any products assigned to this product group with the default values that you enter here.

Deferred Revenue

Indicate your deferred revenue option for the product group. The option that you select here, along with the option you select for the Deferred Revenue Override check box on the Contracts Definition - Processing Options page, determine whether a contract line enables deferred revenue.

Here are the possible scenarios:

If you select this check box, you enable deferred revenue for all products within this product group.
If you do not select this check box, you can use deferred revenue on the contract line if you select the deferred revenue override option on the Contracts Definition - Processing Options page.
If you do not select this check box and you do not select the deferred revenue override check box on the Contracts Definition - Processing Options page, then no products in this product group can have deferred revenue.

Unbilled AR Distribution Code

Select a default unbilled AR account definition. You establish the list of unbilled AR distribution codes on the Distribution Code page. If the product group has an unbilled AR account definition, then it will be used to book unbilled AR for any products associated with this product group. If you do not select an unbilled AR account for the product group, then for any products associated with this group, the unbilled AR account that is defined for the PeopleSoft Contracts business unit is used to book unbilled AR.

Defining Products

Access the Product Definition page.

Product Use

This field enables you to indicate whether or not a product is available for use on contract lines. Values include:

Contracts Only: You can use this product only with PeopleSoft Contracts.
General Use Including Contract: You can use this product with both PeopleSoft Order Management and PeopleSoft Contracts.
General Use Excluding Contract: You cannot use this product with PeopleSoft Contracts.

This field is available only if you have PeopleSoft Order Management installed on your system. If PeopleSoft Order Management is not installed, the default value of this field is Contract Only.

Defining Product Rate Defaults

Access the Product Rate Defaults page.

Effective Date

Displays the current date.

Sets/Plans by Unit

PC Business Unit (PeopleSoft Project Costing business unit)	Select a default PeopleSoft Project Costing business unit.
Rate Selection	Select whether you want to associate a Rate Set or Rate Plan with the product. The value that you select here determines the additional field (either Rate Set or Rate Plan) that appears on the page.
Rate Set	Select a default value for the rate set for the product. This field appears only if you selected Rate Set in the Rate Selection field.
Rate Plan	Select a default value for the rate plan identifier for the product. This field appears only if you selected Rate Plan in the Rate Selection field.

Creating Products from Ad Hoc Products

Access the Create Products from Ad Hoc Products page.

View all ad hoc products that you have defined, or view all ad hoc products that you defined for specific parameters such as contract number or sold-to customer. In the search criteria group box, specify your search parameters: Contract, Sold To Customer, Product Group, Contract Type, Contract Classification, Contract Status, or Line Status. The search returns all current ad hoc products for the specified search criteria. If you leave all fields blank, the search returns all ad hoc products that you have defined. In addition, select the check box next to a specific price type in the Price Type group box if you want to limit your search by price type.

Note. The search does not return any ad hoc products that you defined and subsequently turned into regular products.

Note. For contracts with a classification of Government, you can additionally select the check box next to a specific fee type in the Fee Type group box if you want to limit your search by fee type. This field appears only if you leave the Contract Classification field blank or you select a contract classification of Government. When the Contract Classification is blank and you are looking for matching criteria for a contract with a contract classification of something other than Government, select the None Fee Type option.

See PeopleSoft Enterprise Contracts for Government Contracting PeopleBook.

(select)

Select the check box next to ad hoc products that you want to convert to regular products for use on your contract lines.

Create Product

Click this button to create a product for the selected ad hoc lines.

When you convert an ad hoc product, the system creates the product definition data for the new product based on the existing data for the ad hoc product on the contract line.