Understanding Contracts

You create a new contract for every job or project to define how to bill, when to bill, and who to bill.

You review and analyze contract information to track the status of contracts and accurately plan the invoicing cycle.

To ensure that the contracts are billed accurately, you should understand the various parts of a contract. This table describes the parts of a contract:

Contract Part	Description
Master information	Master information is general information that relates to the entire contract, such as the customer and contract dates. The system stores this information in the Contract Master table (F5201).
Change order information	Change orders represent additional work that the customer requests that is not included in the original contract. A change order includes one or more billing lines that define the new billing terms for the additional work. Change order information is stored in the Contract Billing Line Detail table (F5202).
Billing line information	Billing line information consists of line-by-line details (billing lines) about the goods or services that you want to invoice, such as time and materials, lump sum, or unit price. The system stores this information in the Contract Billing Line Detail table (F5202).
Milestone and progress billing information	Milestone and progress billing information consists of events, percentages, and amounts that are the basis for these billing lines. The system stores this information in the Milestone/Progress Billing Information table (F5216).
Cross-reference information	The system uses cross-reference information to perform billing. The system recognizes: Account Cross-Reference Details. This information associates cost accounts with the correct billing line. This cross-reference table is used by time and materials, lump sum, and unit price billing lines. The system stores this information in the T and M, Unit Price, and Lumpsum Cross Reference Accounts table (F5212). Fee Line Cross-Reference Details. This information identifies the billing lines that are the basis for the fee calculation. The system stores this information in the Fee Billing Line Cross Reference Details table (F5213). Milestone/Progress Cross-Reference Details. This information identifies the billing lines that are used to calculate the milestone or progress billing line. The system stores this information in the Milestone/Progress Billing Line Cross Reference Details table (F52161). Component Code/Burden Cross-Reference. This information identifies the DBA or tax type for burden billing lines, or the component code for component billing lines. The system stores this information in the Component Code/Burden Cross Reference Table (F5214). Component/Burden Billing Line Cross-Reference. This information identifies billing lines that are cross-referenced to component codes or burden. The system stores this information in the Component/Burden Billing Line Cross Reference Details table (F5215).