Contract Lines

After you create a contract header in PeopleSoft Contracts, you can begin adding contract lines to the contract. A contract line corresponds to an individual product that you are licensing. To set up a contract line, you first select a product onto a contract line.

When you select a product onto a contract line, the information that you defined for that product is stored on the contract line. The system uses the information that you defined for the contract header and for the product to create a set of defaults for that contract line. You can override much of this default information at the line level, and add details, such as applying specific discounts or surcharges. For contract lines that are service-related, you associate the contract line with a list of PeopleSoft Project Costing project and activity IDs, and a rate set or plan.

For amount-based contract lines, the system prices the contract line based on the pricing that you established for the product, either from the product's list price or PeopleSoft Enterprise Pricer. You can adjust the pricing for the contract line as required. You must navigate to the Amount Allocation page to validate the pricing for the contract. The Billing Allocation page and Revenue Allocation page is where you ensure that the sum of the contract lines equals the contract's billing amount and revenue amount, and that any contract discounts or surcharges have been fully allocated across the contract lines.

After you save a contract line with Active status, you can assign the contract line to a billing plan and a revenue plan. The billing plan and revenue plan represent the entitlements, cash and revenue, that you receive upon fulfilling the contract obligations.

The process flow for setting up a contract line consists of these steps:

  • Add the product to the list of contract lines on the Contract - Lines page.

  • If a contract line has a prepaid balance associated with it, enter the prepaid balance information on the Prepaid Balances - Prepaids page.

  • For all contract lines except those with a Recurring price type, the system populates the Contract Asset on the Accounting Distribution page with the Contract Asset account that was defined for the contract's product group.

    If no Contract Asset account was defined for the product group, the system applies the Contract Asset account that was defined for the contract's PeopleSoft Contracts business unit.

    Note:

    This Contract Asset is also populated for rate-based lines for use when the contract line is assigned to a value-based billing plan.

  • For contract lines with a price type of Amount or Percent, the system automatically populates the revenue (and contract liability if you selected the Contract Liability Recognition option on the related contracts product group) group boxes on the Accounting Distribution page when you save a contract line with a line status of Active.

  • For contract lines with a price type of Rate, revenue distribution codes are stored on the Accounting Distribution page for revenue forecasting purposes.

    However, the actual revenue distributions are established on the Accounting Rules page. These rules can be established across all PeopleSoft Project Costing ChartFields and projects, or specifically for one project with different rules for each Projects ChartField combination.

  • For contract lines with a price type of Recurring, the system automatically populates the revenue (and contract liability if you selected the Contract Liability Recognition option on the related contracts product group) group boxes on the Accounting Distribution page.

    For recurring contract lines, PeopleSoft Billing manages revenue and handles contract liability processing.

  • From the Contract - Lines page, you can navigate to other components to perform these activities:

    • For renewable products, create a renewal plan and cycle.

    • For rate-based contract lines, either link the product to existing PeopleSoft Project Costing projects and activities or create new projects and activities.

    • For other products, either link the product to an existing PeopleSoft Project Costing project and activity or create a new project and activity.

After you select all of the products onto contract lines, perform these activities on all contract lines with a line status of Active:

  • Define the contract pricing by allocating the contract header billing amount, revenue amount and any discounts across the active contract lines.

  • Assign all active contract lines to a revenue plan.

  • Assign all active contract lines to a billing plan.

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