Establishing PeopleSoft Contracts Business Units

GL Unit

Associate each PeopleSoft Contracts business unit with a PeopleSoft General Ledger business unit. PeopleSoft General Ledger business units define the accounting processing for associated PeopleSoft Contracts business units. All contracts created for this PeopleSoft Contracts business unit use this PeopleSoft General Ledger business unit to generate entries that interact with PeopleSoft General Ledger.

OM Unit

Select a default PeopleSoft Order Management business unit for contracts created under this PeopleSoft Contracts business unit. You can only select PeopleSoft Order Management business units that are linked to the same PeopleSoft General Ledger business unit as this PeopleSoft Contracts business unit.

BI Unit

Select a default PeopleSoft Billing business unit for contracts created under this PeopleSoft Contracts business unit. You can only select PeopleSoft Billing business units that are linked to the same PeopleSoft General Ledger business unit as this PeopleSoft Contracts business unit.

Currency Code

Select the currency code that will appear by default as the contract currency on contracts created using this business unit.

Rate Type

Select the group of exchange rates used to convert contract currency amounts to the base currency of the PeopleSoft General Ledger system. You set up rate types when defining your general options.

Enforce Contract Status Security

Select to limit the list of users who can change the status of a contract to only those to whom you have given security access on the User Preferences - Contracts page.

Delete Internal Notes

Select to enable users to delete internal notes.

Update Internal Notes

Select to enable users to update internal notes.

Contract Admin (contract administrator)

Select a contract administrator for this business unit. This value automatically populates the contract administrator field on the contract header.

Contract Type

Select a value to categorize the contracts for reporting purposes.

Dist Rule Code (distribution rule code)

Select the distribution rule code for the business unit. The distribution rule code identifies the distribution rules to use for a particular product when the product is selected onto the contract within this PeopleSoft Contracts business unit. You can define any number of combination criteria and hierarchy for the distribution rules. These rules tell the system how to identify and in what order to apply the accounting distribution sets.

Contract Asset

When you manage revenue from PeopleSoft Contracts, revenue is booked to a contract asset account. When billing occurs, PeopleSoft Billing generates an offsetting entry. The system uses this contract asset account as the high-level default value for every contract entered in this business unit.

Legal Entity

Select a legal entity for this business unit. While this legal entity is not directly linked to the legal entity in PeopleSoft General Ledger, this field allows you to capture which legal entity contracted with the customer on each contract. This value, which is a default on the contract, can be overridden. This value automatically populates the appropriate field on the contract header.

Separate Fixed Billing and Revenue

Select to define and apply different amounts for billing and revenue on amount based and percent based contract lines. The value for this field is defaulted from the Installation Options - Contracts page and can be overridden. The value for this field will default to the contract when a contract is added for this business unit, but can be overridden while adding a contract.

Separate As Incurred Billing and Revenue

Select to define and apply different rates for billing and revenue on rate-based contract lines. The value for this field is defaulted from the Installation Options - Contracts page and can be overridden. The value for this field will default to the contract when a contract is added for this business unit, but can be overridden while adding a contract. This field will be set to checked for government contracting entities that previously opted to separate billing and revenue at the installation level.

Use Project ChartFields

Select this check box to enter Project ChartFields on the contract line accounting distribution pages. This field is not visible if PeopleSoft Project Costing is not installed.

Review Required for Revenue

This check box is displayed and editable if Project Costing is installed and the Review Required for Billing check box is selected on the Installation Options - Project Costing Integration page. The value for this field will default to the contract when a contract is created for this business unit. The selection on the contract controls whether or not users may recognize revenue on project costing transactions not yet reviewed and approved on the Manager Transaction Review page.

When Review Required for Billing is selected, users have an option to either require a review for revenue before revenue recognition (check box selected) or to bypass a review (check box not selected) in which case project costing transactions will be included in revenue recognition before being reviewed on the Manager Transaction Review Page. See Contract - General Page

Contract Role

Select suitable value from the prompt list. The value selected here will default to the contract, but can be overridden.

See Defining Contract Roles

Revenue Profile

Select from the available values in the prompt list. The value selected here will default to the contract.

See Defining Revenue Profile

Bill Type

Select a default bill type for contracts created under this PeopleSoft Contracts business unit. The bill type represents the category of activity being billed.

Bill Source

Select to enable PeopleSoft Billing to identify where the billing activity came from and then to associate default billing information with that billing activity.

Ship From

Select from location codes defined on the Location Definition page. This value is used as a default for each contract but can be overridden on the billing plan. The system uses the ship from value as a portion of the location information that determines value-added tax.

Prepaid Tax Timing

Select the timing of when prepaids are taxed. Select from Tax on Initial Bill or Tax on Utilization. This value appears by default on the prepaid setup for contracts created using this business unit. You can override this value on the prepaid setup pages.

Billing Plan Template

Select a billing plan template to associate with the prepaid contract line. The billing plan template automates the creation of the billing plan.

Bill Plan Detail Template

Select a billing plan detail template to associate with the prepaid contract line. Use the billing plan detail template to override the billing defaults that are defined for a contracts billing business unit and contract header.

Contract Liability

Select the contract liability distribution code to associate with the prepaid contract line. Booking to contract liability enables you to post to the general ledger revenue that you expect to realize in a future accounting period.

Utilize Against All Lines

Select this check box to apply the prepaid towards all contract lines.

Progress Payment Rate

Enter the progress payment rate percentage that you wish to use for your government contracts. This value appears by default on the Progress Payment Terms - General page and can be overridden.

Liquidation Rate

Enter the progress payment liquidation rate percentage that you wish to use for your government contracts. This value appears by default on the Progress Payment Terms - General page and can be overridden.

Workbench Template ID

Enter the template ID that the system uses when a user views the Contracts Workbench for this business unit. The system uses the records and fields in the Contracts Workbench that are selected for this template. The only templates that are available to choose from are those where Contracts was selected in the Workbench Type field. PeopleSoft delivers the CONTRACTS template, which is the default template for all Contracts business units.

Share Bundling Attributes

Select the check box to share bundling attributes across contracts in the business unit. When selected, the bundling attributes defined on the Bundling Attributes Page are available for the contracts created in this Business Unit. When not selected, bundling attributes on the contract are contract specific and cannot be shared.

Contract Liability Override

Select to indicate whether a user can override the contract liability option on the contract line. At the product group level, you specify whether to use contract liability for a product group. The product group attributes for contract liability appear by default on the contract line. If you select this contract liability override option at the business unit level, you can override the contract liability option that automatically populates from the product group. Therefore, if you do not turn on contract liability at the product group level, you can still select it at the contract line level as long as you selected the contract liability override option at the business unit level.

If you do not select this check box and contract liability is not specified for a product group, the contract liability option is unavailable for the contract line, and the Contract Liability tab does not appear.

Booking to contract liability enables you to post to the general ledger revenue that you expect to realize in a future accounting period. If a contract is in Pending status, you can enable or disable contract liability at the contract line level. If a contract is in Active status, you cannot change this setting on the contract line and you must use amendment processing. However, you can use amendment processing to enable or disable only if this override is selected and if no contract liability or revenue processing has occurred.

Revenue Recognition Method Override

The contract line inherits its revenue recognition method from the product definition. Select this override check box to enable users to change the revenue recognition method on a contract line. When this override check box is not selected, the system processes the revenue for the contract line by the default revenue recognition method.

Revenue Convergence Completed

Select this check box after contracts have been transitioned to the new accounting standard. After doing so, data entered on the Contract General page for Revenue Transition will be hidden.

Review Required for Revenue Override

Select the check box to allow users to change the Review Required for Revenue option on the contract.

This check box is displayed and editable if Project Costing is installed and the Review Required for Billing check box is selected on the Installation Options - Project Costing Integration page.

Edit Combinations

Select the Edit Combinations check box if you want the Accounting Rules Process (PSA_ACCTGGL) to run the combination edit process for transactions processed by the PeopleSoft Transaction Billing Processor.

Proration Method

Provides the rules that the system uses to determine how much to apportion to each event for revenue plans with a revenue recognition method of apportionment. Select from:

• By Days Within Range: The system divides the number of days in the period by the number of days in the range.

• Evenly Using all Pds: The system divides the total amount by the number of periods in the range. Revenue is recognized in equal portions for each event, regardless of the number of days in each period.

Future Period Accounting Dates

Stipulate the date that should be used as the accounting date for apportionment revenue recognition events. Select from:

• First Day in Accounting Period: Select this option to use the first day in the calendar month of the from date as the accounting date for the apportionment revenue recognition events.

• Last Day in Accounting Period: Select this option to use the last day in the calendar month of the to date as the accounting date for the apportionment revenue recognition events.

• User Defined: Select this option to specify the accounting date each time the system builds apportionment events.

Bill Plan Detail Template ID

Select a bill plan detail template ID to override the fields on the billing plan for on-demand contracts. If you select a template on this page, the billing plan detail template overrides the corresponding fields on the billing plan when a billing plan is created through Contract's integration with the PeopleSoft Transaction Billing Processor.

Review Timing

Enter a value from 0– 999 in days. The system uses this value to determine when you must begin reviewing renewable contract lines. You can override this value for each renewable contract line on the Review Renewals page using either the control or default settings that you select on this page.

Control

Select the Control option to enable users to override the Review Timing Days field on the Review Renewals page with a value that is greater than or equal to the value entered in the Review Timing field.

Default

Select the Default option to enable users to override the Review Timing Days field on the Review Renewals page with a value that is less than, greater than or equal to the value entered in the Review Timing field.

Change Billing Retroactively

Select this option to enable the system to adjust billing events retroactively when a contract line is cancelled or the contract line amount is modified during amendment processing. The option selected at the business unit level can be overridden at the contract line level.

If this option is not selected at the business unit or contract line level, the user can only adjust any remaining future events for the contract line.

Change Revenue Retroactively

Select this option to enable the system to adjust revenue events retroactively when a contract line is cancelled or the contract line amount is modified during amendment processing. The option selected at the business unit level can be overridden at the contract line level.

If this option is not selected at the business unit or contract line level, the user can only adjust any remaining future events for the contract line.