Understanding Products

In PeopleSoft Contracts, a contract must have contract lines to be billed. When you initiate the Generate process from PeopleSoft Proposal Management, the system sends data from the proposal to the appropriate pages in PeopleSoft Contracts.

Contract lines are required because they control the processing for the billing and revenue recognition activities. Every contract must have at least one contract line associated with it. The contract line is connected to the contract during the Generate process. In PeopleSoft Contracts, each contract line has a product ID defined. A product ID is a good or service that you provide to a customer.

In PeopleSoft Contracts, there is a distinction between the products that you define:

  • Fixed Amount Products.

    These are goods that are associated with a fixed monetary amount (for example, software, maintenance contracts, building structures, and so on). You create these products on the Product Definition pages and process transactions through PeopleSoft Contracts. When you set up fixed amount products for PeopleSoft Proposal Management, select Amount as the price type on the Product Definition - Contracts Options page, and then select a revenue method. The system ignores the other fields on the page during the Generate process.

  • Rate Based Products.

    These are services that are associated with a rate (for example, consulting services, time and labor expenses, and so on). PeopleSoft Project Costing controls these products, but PeopleSoft Contracts manages the processing. When you set up rate-based products for PeopleSoft Proposal Management, select Rate as the price type on the Product Definition - Contracts Options page, and then select a revenue method. The system ignores the other fields on the page during the Contract Generation process.

To bill your customers, you need to define products that represent the contract lines on your contracts. You must define at least one product, but you may define as many products as you require.

Note: For PeopleSoft Proposal Management, the Product Use field on the Product - Definition page must be set to either Contracts Only or General Use. On the Proposal Management Contracts BU Setup page, you cannot select products with product uses that are defined as General Use Excluding Contracts. For PeopleSoft Proposal Management, the product IDs defined on the Proposal Management Contracts BU Setup page are defaults for the activity level. They are required on the BU Setup page, but you may override them at the activity level because contract lines bill at the activity level.

You can find instructions for defining products in the PeopleSoft Contracts documentation.