Amount-Based Pricing

Controls are in place requiring amount based lines to be fully allocated before a contract can be activated. This enables the system to generate appropriate billing and revenue transactions for analysis and processing.

For amount based lines, the Billing Amount and Revenue Amount fields are first defaulted from Order Management and the Enterprise Pricer based on the product ID, contract line start date, quantity and any other contract or product attributes identified as criteria for applying a price. For Billing, the system defaults a list price from Order Management and the Enterprise Pricer and this can be updated manually on the contract line. For revenue, the system defaults a revenue price from Order Management and the Enterprise Pricer which should be the organization’s standalone sales price. That is, the price the good or service would be sold for when it’s sold by itself, on a standalone basis, without any other goods or services. The revenue price (standalone sales price) default can be used as the actual revenue amount on the contract line or it can be used as a basis for automating the allocation of Total Revenue across contract lines. When selecting the automated allocation method for revenue, the system uses the revenue price for the line as a basis for calculating the line’s relative percentage to the total of all revenue prices for all contract lines on the contract. This relative percentage is then used as the basis for allocating a portion of Total Revenue to the line. The system provides options to recalculate the revenue price and to override revenue amounts on specific contract lines with the impact of such actions updating the line level revenue amounts accordingly. These same options and behavior are applicable for rate based lines.

As billing amounts and revenue amounts are updated on the amount based contract lines, the system summarizes the total fixed billing amount and total fixed revenue amount for the amount based lines. Controls are in place to ensure that the total fixed amount billing for the contract and the total fixed amount revenue for the contract are fully allocated before a contract can be activated. This is a separate control for amount based lines only and is independent of the allocation of Total Revenue done across all contract lines. The system will set the fixed billing and fixed revenue allocation status to Complete if the fixed billing and fixed revenue amounts are fully allocated across amount based lines and after doing so a contract can be activated. The contract must have a processing status of Active to bill and to recognize revenue. Changes can be made freely on the Billing Allocation page and Revenue Allocation page before contract activation. Once the contract is in active processing status, changes are processed and tracked using amendment processing. A summary of amounts entered on the Billing Allocation and Revenue Allocation pages is displayed on the Contract General page under the Summary of Amounts group box.

Pricing Hierarchy for Amount-Based Products

PeopleSoft Contracts has a pricing hierarchy for pricing amount-based products. Both the PeopleSoft Enterprise Pricer and the basic List Price functionality in Order Management are part of this hierarchy. When PeopleSoft Contracts prices an amount-based product, the system first looks to the PeopleSoft Enterprise Pricer to obtain a price. If no matching data is found in the PeopleSoft Enterprise Pricer, PeopleSoft Contracts looks for matching data using the basic list price functionality in Order Management. See PeopleBooks Enterprise Pricer documentation for details on this functionality.