Guidelines for Renewing Revenue Contracts Automatically

You can automatically renew customer contracts when the initial period ends.

When you use this feature, designated customer contracts can be rolled over or converted to new periodic contracts (for example, month-to-month contracts) when the original contract term ends.

For example, a customer signs up for a two-year wireless contract. After the two-year wireless services are completed, the completed contract becomes a month-to-month contract, until the customer explicitly terminates the contract.

Accounting contracts created in Revenue Management consist of one or more performance obligations. Performance obligations contain promised detail lines that represent the item or service that's promised to the customer. Promised detail lines, or service lines, are created from source document lines.

To be eligible for renewal, contracts must meet the following criteria:

• Contract must have promised detail lines that are designated as recurring.

• Allocation status is Allocated, Exempted or Not Required.

• Freeze date is earlier than or equal to the current processing date.

Promised detail lines that are eligible for renewal processing must have the following characteristics:

• Promised detail line is recurring.

• Satisfaction measurement model is Period.

• Revenue Rule type of the satisfaction plan is Daily Rate, Partial Periods.

Promised detail lines are identified as recurring by the following attributes:

• Recurring indicator

• Recurring frequency

• Recurring pattern

• Recurring amount

When the recurring promised detail lines of eligible accounting contracts reach their satisfaction plan end date, the Create Contract Renewal Source Data process generates new source document headers and lines based on the recurring attributes. On the next execution of the Validate Customer Contract Source Data and Identify Customer Contracts processes, the lines are identified into new recurring accounting contracts.

Considerations for Processing Actions

The processing actions you can perform on accounting contracts that contain recurring promised detail lines are restricted based on whether they're performed during the initial accounting contract term or the recurring term.

You can perform the following actions during the initial term of the original accounting contract:

• Modify recurring attributes

  You can change any of the recurring attributes on the promised detail line before the contract freeze date on the original accounting contract. However, once the original accounting contract is frozen or billing is applied to the recurring promised detail line, you cannot modify the Recurring indicator of the promised detail line.

• Modify promised detail lines

  You can change the quantity, amount, and satisfaction plan date using a contract revision. Contract revisions are either material or immaterial. Perform promised detail line modifications as source document line revisions.

You can perform the following actions after the initial term of the recurring promised detail line expires and the promised detail line is part of a recurring contract:

• Termination of the contract

  Termination is the only action allowed once the promised detail lines have been renewed. The automatic renewal of the service promised detail line continues each periodic cycle until the customer explicitly terminates the contract. To terminate the service, you must send a revision line for the original order line to Revenue Management with the effective termination date.