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Defining Conditional Charge Plans for Agreement Line Items

When conditional charge plans have been set up using the Administration - Contracts screen > Conditional Charge Plan view, users can then select the appropriate conditional charge plans for agreement line items. See Setting Up Conditional Charge Plans for more information on how to set up a conditional charge plan.

NOTE:  The day on which the agreement is terminated by the customer is the day on which the conditional charge is created. Also, if no conditional charge plan is associated with the agreement line item, the penalty is simply charged.

Scenario for Conditional Charge Plans

The administrator creates a conditional charge plan called Termination Plan. This plan specifies that if a customer arranges an early cancellation of their agreement, they must pay 8.33% (100% spread over 12 months of the year) of the agreed penalty charges for each remaining month until the end of the period covered by the agreement. A user setting up a photocopier maintenance agreement for a customer associates the Termination Plan with the photocopier agreement line item. The user then specifies that a total penalty of $150 applies for this line item if the agreement is canceled before a year has expired.

The customer with the maintenance agreement calls to cancel the 12-month contract after just six months have passed. According to the Termination Plan, the customer must now pay 8.33% of the total cancellation fee ($150) for each of the remaining six months. In total, the customer must pay 8.33% x $150 x 6 months, which is $74.97.

To define a conditional charge plan for an agreement line item

1. Navigate to the Agreements screen > List view.
2. Drill down on the Name field of a selected agreement.

   The Line Items view appears.

3. On the link bar, click Conditional Charges.

   The Conditional Charges view appears.

4. In the Conditional Charges list, create a new record.

   Some fields are described in the following table.

   Field	Comments
   Type	The type of conditional charge—for example, Penalty, Refund, and so on.
   Start Date	The date on which the conditional charge starts unless an effective date is specified.
   End Date	The date on which the conditional charge ends is no longer applied. For example, cancellation fees may only be applied if the agreement is canceled before a 12-months period has elapsed. After this period, the company may choose not to charge the customer if they cancel.
   Effective Date	The date on which the conditional charge becomes effective.
   Plan	Select the conditional charge plan which should control the conditional charge.
   Amount	The total fee that the customer must pay for this conditional charge.
   Reason	A description of the reason for creating this charge.

5. In the Advance To field, enter a date which is greater than the specified Effective Date and less than the End Date values.

   The Advance To date should represent the remaining time left for the contract.

6. Click Charge.

   Field Service calculates the total charges that must be applied to the customer in accordance with the conditional charge values. For example, if the customer has canceled their 12-month agreement after just six months, 50% of the cancellation fee must be paid over the next six months.

7. (Optional) On the link bar, click Charges to view the calculated charges for the line item.