Example of Creating a Contract for Billing
This example describes how to add an existing negotiated contract to perform project work into the application so that you can invoice customers and recognize revenue.
Here's the table that summarizes key decisions for this scenario.:
Decisions to Consider |
In This Example |
---|---|
What is the invoice method classification? |
Rate Based |
What is the revenue method classification? |
Percent Spent |
What are the maximum invoice and revenue amounts? |
735,000 |
Summary of the Tasks
Create a new contract by duplicating an existing contract. Verify the information on the bill plan and revenue plan. Verify the billing controls. Associate existing projects to the contract lines. Submit the contract for approval.
Prerequisites
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Verify the setup for the cost and bill rates that the project and contract use.
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Create a project and project plan.
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Create an approved cost budget.
Creating the Contract
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On the Manage Contracts page, expand the Search: Contract region.
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Select Number.
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Enter "New Company TM Percent Spent Contract Template" as the name.
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In the Search Results region, select the row for New Company TM Percent Spent Contract Template.
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Click Actions - Duplicate.
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In the Duplicate Contract window, enter the values, as shown in this table.
Field
Value
Contract Number
Your initials, followed by New Company TM Percent Spent Contract.
Start Date
1/1/2011
All other fields
Select the check boxes, except for the Associated projects and tasks.
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Click Ok.
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Click Yes in the warning message that appears.
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Click Header.
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Click Parties.
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Confirm the Customer is New Company and Associates.
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Confirm that Andrew Robinson, Contract Administrator is created as the contact for the supplier role and is selected as the owner. If necessary, add this supplier contact.
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Confirm that the Bill-to Account Number, Sold-to Account Number, and Ship-to Account Number are 1004.
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Click Save.
Reviewing the Bill Plan
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Click Billing.
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In the Bill Plans region, click Rate. Verify the Method Name is Bill Rate Invoice.
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Click General Information. Verify that the information in the Customer Information, Invoice Information, Invoice Summarization Options, and Associated Contract Lines matches the information in the following table.
Field
Value
Bill-to Customer
New Company and Associates
Bill-to Site
Tulsa (OPS)
Bill-to Contact
Betty Lewis
Billing Currency
Contract
Billing Cycle
Last Day of the Month
Payment Terms
30 Net
Bill Set
1
Labor Format
Time and Material
Nonlabor Format
Contract Line Project/Task Exp
Event Format
Event Type Format
Contract Line Number
1
Line Amount in Contract Currency
735,000
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Click Schedules and Overrides. Verify the information in the Schedules region matches the information in the following table.
Field
Value
Person Rate Schedule
T&M Employee Bill Rate Schedule
Job Rate Schedule
T&M Job Bill Rate Schedule
Nonlabor Rate Schedule
T&M Zero Markup Nonlabor Rates
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Click Save and Close.
Reviewing the Revenue Plan
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In the Revenue Plans region, click Percent Spent Revenue. Verify the Method Name is Percent Spent Revenue.
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Click General Information. Verify the information in the Associated Contract Lines region matches the information in the following table.
Field
Value
Contract Line Number
1
Line Amount in Contract Currency
735,000
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Click Billing Extensions. Verify the information in the Billing Extensions table matches the information in the following table.
Field
Value
Name
Percent Spent Revenue
Status
Active
Calculation Level
Associated project
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Click Save and Close.
Reviewing the Billing Controls
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In the Billing Controls region, verify that the values for Hard Limit Amount, Invoice Funds Available, and Revenue Funds Available are 735,000.00.
Reviewing the Contract Line Overview
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Click the Lines tab, and select the row for Line Number 1.
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Click Overview.
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Verify the information matches the details in the following table.
Field
Value
Number
1
Name
Contract Line 1
Start Date
1/1/2011
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Click Save.
You can export the tabular data of the contract lines in the Lines tab to Microsoft Excel.
Modifying the Billing Controls for the Contract Line
Modify the existing billing control so that labor expenditures are included in invoice and revenue generation.
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In the Line 1: Details region, click Billing, and select the billing control with the 735,000.00 limit.
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Click Billing Resource.
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Select Labor (Expenditure Category).
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Click Save.
Associating a Project to the Contract Line
Associate the project that was created in the Prerequisite steps with this contract.
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Click the Associated Projects tab.
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Select Actions, Add Row.
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Select Project Name. Select the project that was created in the Prerequisite steps.
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Optionally, select a Task Number. If you don't select a task number, all eligible transactions charged to this project are selected for invoice and revenue generation for the contract line.
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Click Save.
Submitting the Contract for Approval
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Click Submit.
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Review the validation results and fix any errors, then click Submit again to submit the contract for approval.