Managing Progress Payments
Managing progress payments includes monitoring your progress payment balances, evaluating and approving progress payment worksheets, liquidating progress payment balances and making any necessary adjustments over the life of the progress payment. You can make adjustments to the terms of the progress payments using amendment processing, or you can manage the processing of the progress payment terms themselves, including cancelling the progress payment terms, or cancelling the billing plans associated with the progress payment terms.
Throughout the life of the contract, various events can happen which may affect the progress payments billing and liquidation. These can include:
Addition of a new contract line.
Amending an existing contract line amount.
Cancelling an existing contract line.
Removing a contract line from progress payment terms.
Reversing or cancelling a progress payment request.
Warning! Because each of these events can imply a change that directly or indirectly impacts progress payment terms or processing, such as, adding a contract line or issuing a refund, it is important that the user consider the implications of their actions on progress payment bills or liquidations. The complexity of the scenario could potentially lead to invalid progress payment data and should be reviewed by the user when any changes occur on contracts or contract lines associated with progress payments.
If you set the progress payment terms to a status of Complete, no further progress payment requests or liquidation can be processed. If additional progress payments are received, you can reverse the progress payment status to Ready to continue processing. When setting progress payment terms to a Complete status, the unliquidated and committed amount must be equal to zero, and the progress payment amount must be greater than zero.
If you set the progress payment terms status to Cancelled, no progress payment requests or liquidation can occur. However, after progress payment terms are set to a Cancelled status, you cannot reset the status to Ready to resume processing.
Before you can cancel a set of progress payment terms, the progress payment amount, remaining amount and committed amount must all equal zero. To cancel progress payment terms, you must reverse any billing and liquidation that has already occurred. To cancel an immediate billing plan associated with a progress payment worksheet that has already been submitted, delete the bill lines on the Billing Worksheet.
This section discusses:
Tracking progress payment balances.
Reversing progress payment billing plans.
Deleting progress payment billing transactions.
Amending progress payment terms.
Tracking Progress Payment Balances
When managing progress payments for a contract line, the system tracks three main amounts related to the progress payment balance: progress payment amount, unliquidated amount , and committed amount.
The following example describes how the system populates and tracks these amounts throughout the progress payment life cycle.
You approve a progress payment worksheet amount for 1,000 USD and run the contracts/billing interface process. After you finalize the invoice for the progress payment amount, the system posts the following entries in the Contracts Progress Payment table (CA_PGP_TERMS):
Progress Payment Amount
Unliquidated Amount
Committed Amount
1,000 USD
1,000 USD
0
A real bill for the contract line associated with the progress payment is generated for 500 USD. You run the Contracts/Billing Interface process, a utilization row is created and the system posts the following entry to PeopleSoft Contracts:
Progress Payment Amount
Unliquidated Amount
Committed Amount
1,000 USD
1,000 USD
500 USD
The real bill is finalized in PeopleSoft Billing for the contract line and utilization row. The system posts the following entries in PeopleSoft Contracts:
Progress Payment Amount
Unliquidated Amount
Committed Amount
1,000 USD
500 USD
0
Every time that you approve a progress payment request and finalize the bill for the progress payment request amount, the system updates the progress payment and unliquidated amounts. When a liquidation occurs (from the generation of a contract line bill), the system updates the committed amount with the liquidation amount, and then clears the entry and adjusts the unliquidated balance when the bill is finalized.
The above balances are viewed on the Progress Payment Terms pages and the Progress Payment Worksheet. Progress payment requests as well as liquidation amounts are included in the total billed amount on the Contract Summary page.
Reversing Progress Payment Billing Plans
Before you can cancel a contract associated with progress payment terms, cancel progress payment terms or cancel a billing plan associated with progress payment terms, the progress payment amount, unliquidated amount and liquidated amount must all equal zero. If these fields do not equal zero, then you must first reverse these amounts.
You may need to reverse progress payment billing plans in the following situations:
Progress payment terms must be cancelled, and billing or liquidation has occurred.
The billing plan assigned to the progress payment worksheet must be cancelled and billing has occurred.
An amount-based contract line associated with a set of progress payment terms needs to be cancelled, and a billing plan has already been set up and liquidation has occurred against the contract line.
An amount-based contract line associated with a set of progress payment terms need to be amended to reduce its amount.
A contract containing progress payment terms needs to be reversed or cancelled.
A contract line needs to be unassigned from Progress Payment terms.
Liquidation rows are associated with the bills generated from the billing plans that are assigned to the amount-based contract lines associated with the progress payment terms. As real bills are generated for the items, liquidation occurs against the available progress payment amount for the contract line. When you reverse progress payment bills, you reverse the billing plan attached to the progress payment worksheet. When you reverse bills associated with the contract line linked to the progress payment terms, the system also reverses any liquidation that has occurred, and updates the unliquidated amount and the progress payment amount.
Note: You can only reverse a progress payment billing plan (associated with a progress payment worksheet) for the amount that has not yet been liquidated. You cannot create a negative unliquidated amount.
For example, you have processed two progress payment requests for 5,000 USD each, for a total of 10,000 USD. You then process a bill for items delivered for 12,000 USD which results in an 8,000 USD liquidation amount against the progress payment amounts, and a net billed amount to the customer of 4,000 USD. If you then processed a reversal for one of the progress payment amounts for 5,000 USD, the system would not allow it, as the reversal would create a negative unliquidated amount of –3,000 USD (2,000 USD unliquidated amount remaining less 5,000 USD progress payment reversal equals a –3,000 USD unliquidated amount).
In this scenario, before processing the reversal for the progress payment request, you would first need to reverse the billed amount for 4,000 USD (reversal of the billed 12,000 USD and also reverses the 8,000 USD liquidated amount), and then process the reversal for the 5,000 USD progress payment bill.
When cancelling progress payment terms all billing and liquidation that has occurred against the progress payment terms must first be reversed.
Note: It is strongly recommended that you perform any refunds or manual adjustments in the PeopleSoft Contracts system to maintain synchronicity between PeopleSoft Billing and PeopleSoft Contracts for progress payment billing data.
Deleting Progress Payment Billing Transactions
In some situations, after a bill is issued for a contract line associated with progress payment terms where liquidation has occurred, and sent to PeopleSoft Billing, an adjustment may be required. In this situation, you can delete the billing row along with the liquidation utilization row and reset the related amounts.
When you run the Contracts/Billing Interface process for progress payment requests, the system processes the bill lines in the same manner as regular immediate billing plans. After the system passes the bill lines to the Billing Worksheet, you can either accept the bill row or delete it.
If you delete the bill row, the billing plan is reset to a status of Recycledand the system processes the liquidation the next time that the Contracts/Billing Interface is run.
Amending Progress Payment Terms
Progress payment terms are associated with a status. When the progress payment terms are in a pending status, you can define your terms details and make any adjustments that are needed. After the progress payment terms are set to Ready status and processing has occurred against the progress payment terms, you must use amendment processing to make most adjustments to the terms. PeopleSoft Contracts uses amendment processing to enable you to maintain a historical record of any changes that impact the obligations and entitlements associated with the contract.
For progress payments, the following actions are controlled by amendment processing:
Modification of the progress payment or liquidation rates.
Note: Any modifications to the progress payment and liquidation rates made at the PeopleSoft Contracts business unit level do not automatically update the rates defined on the progress payment terms page. Instead you must manually update the progress payment and liquidation rates displayed on any existing progress payment terms. Any newly defined progress payment terms then use the new rates defined at the PeopleSoft Contracts business unit level.
Modification of the amount-based contract lines assigned to the progress payment terms. This includes adding new lines or deleting existing contract lines.
Modification to the Use for All Contract Lines check box.
If you originally set up your progress payment terms to apply to all amount-based contract lines on the contract, and then later decide that the progress payment applies to only certain amount-based contract lines on the contract, you must use amendment processing to apply this change.
Note: If new amount-based contract lines are added to a contract that is associated with the progress payment terms, the new contract lines must first be applied to the contract using amendment processing. Then you would need to create a second amendment to associate the newly added contract lines to the progress payment terms, unless the Use for All Lines in Contract check box has been selected when Progress Payments terms have been setup. If this check box is selected, then the system automatically associates the newly added contract lines to the progress payment terms.
Addition of a new set of progress payment terms to the contract after it has been set to an active processing status.
Note: If you have a set of progress payment terms in pending status on a contract that has a processing status of Active, you can modify that set of progress payment terms outside of amendment processing. However, after progress payment terms are set to Ready status, amendment processing must be used to make any changes to the progress payment terms.