Understanding Agreements

Before the system can process invoices and payments, an agreement must be established and its terms agreed to by both the buyer and the supplier. The buyer administrator initiates the agreement with the supplier, triggering an email to the user, roles, or both, established by the supplier organization at either the agreement or supplier location level, that there is an agreement ready to be reviewed. After the supplier adds specifications and accepts the agreement, the buyer user who initiates the agreement is notified that a final review of that agreement is necessary. The buyer administrator then performs the final review, accepting the terms, finalizing the agreement, and enabling transactions between this buyer and supplier to commence.

Certain PeopleSoft eSettlements features reference processing options that are established at the agreement level. They are invoice creation, matching, and default ChartField processing logic.

The following sections discuss:

  • Agreements in the Buyer Direct Model.

  • Agreements in the Business Service Provider Model.

Agreements in the Buyer Direct Model

Agreement setup in the Buyer Direct model is very similar to that for the Business Service Provider model, however, there are important exceptions for the Buyer Direct model:

  • Matching terms for purchase orders are not obtained from the agreement, but from the supplier, if a match control ID exists for the supplier.

    Otherwise the matching terms are obtained from the PeopleSoft Purchasing business unit for the purchase order.

  • The system uses the payment terms that are specified on the agreement for electronic invoices and self-service invoices.

    Online vouchers that are created in PeopleSoft Payables use the payment terms on the supplier profile (maintained in PeopleSoft Payables or Purchasing). If there are no payment terms for the supplier, the system obtains the terms according to the PeopleSoft Payables default hierarchy.

  • Cash collection details are not appropriate for the Buyer Direct model and are unavailable for entry.

  • Users with system administrator role types can update payment terms. In such cases the buyer does not receive email notification of the change in terms.

  • You must establish a user with a supplier administrator role type before you can register an agreement.

  • Users with system administrator role types can access both buyer and supplier agreement details.

Agreements in the Business Service Provider Model

You set up agreements in the Business Service Provider model in the same way as discussed in the following sections, but note the following differences from the Buyer Direct model:

  • Matching terms for purchase orders are obtained from the agreement.

  • You must establish a user having a supplier administrator role type before you can register an agreement.