Products on Contract Lines
When you select a product onto a contract line, the system creates a single contract line. Products or services are often sold as part of a product kit. A product kit is a collection of products. When you select a product kit onto a contract, the system creates an individual contract line for each product within the product kit.
Setting up product groups, defining attributes to contract product groups, defining products, defining the product's list price, and associating a product with a product group are discussed in the topic about structuring contracts.
See Understanding Products and Product Groups.
This section discusses:
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Product kits
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Service (rate-based) products
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Accounting distributions
Product Kits
A product kit consists of multiple products and services. When you select a product kit onto a contract, the contract lines created for the products within that product kit inherit the attributes defined for the product kit.
PeopleSoft Contracts does not distinguish between contract lines created by the selection of an individual product onto a contract line and contract lines created by the selection of a product kit of products onto contract lines.
Service (Rate-Based) Products
The integration of PeopleSoft Contracts and PeopleSoft Project Costing enables you to associate the scope of the service product captured in PeopleSoft Contracts with the expenses and billable hours that are captured in PeopleSoft Project Costing as work is performed. You must associate contract lines representing service products with a PeopleSoft Project Costing business unit, rate, project ID, and activity ID on the Related Projects page. From this page, you first associate the contract line with a single PeopleSoft Project Costing business unit.
Next, specify a rate selection and rate for the contract line. PeopleSoft Contracts provides you with four rate selection options: Rate Set, Contract Rate Set, Rate Plan, and Contract Rate Plan. The available rate sets or rate plans depend on the rate selection option chosen.
Note:
The Rate Set and Rate Plan selection options refer to rate sets and plans with a rate type of Standard.
The advantage of linking to a standard rate set in PeopleSoft Project Costing is that you can associate the contract line with the most current standard practice rates. You might select this option for a contract involving rate-based consulting services, for which the consulting rates that you charge are the standard practice rates at the time that work is performed.
The advantage of linking to a contract-specific rate set in PeopleSoft Project Costing is that you can create a consistent set of rates that will not change during the life of the contract unless you explicitly change them for that contract. You might select this option for a contract involving rate-based consulting services, for which the customer agrees to provide consulting services for a set amount that will not change during the life of the project.
The advantage of linking to a standard rate plan in PeopleSoft Project Costing is that you can associate the contract line with multiple current standard rates. Together, these rates can enable the full costing, billing, and revenue recognition of project transactions for such areas as indirect costs, overhead expenses, and general and administrative expenses.
The advantage of linking to a contract-specific rate plan in PeopleSoft Project Costing is that you can create a consistent combination of standard and contract rate sets. This combination of rate sets can represent the most current, standard practice rates. Or, they can represent rates that will not change during the life of the contract unless you explicitly change them for that contract line.
After you associate a rate with the contract line, you can link a contract line to one or more combinations of existing or new projects and activities. Contract lines that represent fixed-fee products can only be assigned to a single project and activity combination.
See Understanding the Relationship Between PeopleSoft Contracts and PeopleSoft Project Costing.
Accounting Distributions
Upon saving a contract line, the system creates the accounting distribution. Accounting distributions are discussed in the "Understanding Accounting Distributions" topic.