Understanding Contracts

In PeopleSoft Contracts, a contract consists of two levels: the contract header and the contract line. The contract header relates one-to-many with the contract line. The contract header is where you enter the agreement information that is relevant to all the products and services that you are licensing through the contract. Agreement information may include customer information, terms and conditions, contract sign dates, and so forth. Also stored at the header level is any administrative information, such as notes and support teams, that are associated with the entire contract.

The contract line relates many-to-one with the contract header. You add products that you are licensing to the customer in accordance with contract terms and conditions to contract lines. You can add multiple lines to each contract. You link contract lines to billing and revenue plans. Each contract line has its own status, which enables you to add all products associated with a contract during contract setup and then to manage each contract line as appropriate to the line in accordance with the terms and conditions of the contract.

The information within a contract controls multiple business processes. Users within different departments might be responsible for setting up a contract, administering the billing for the contract, administering the revenue recognition for the contract, processing any amendments for that contract, and so forth. Effective contract management requires the ability to analyze contracts quickly and easily to gain insight into the specifications of the contract.

This section lists prerequisites and discusses:

• Contract classifications.

• Contract headers.

• Contract lines.

• Contract line statuses.

• Products on contract lines.