Service Agreement Type Controls Everything

The previous section illustrated three important concepts:

The true financial impact of the three financial events - bills, payments, adjustments - is at the service agreement level, not at the account level. This means that bills and payments are meaningless on their own. It's the service agreements' bill segments, payment segments and adjustments that affect how much a customer owes.

  • Every bill segment, payment segment, and adjustment has a related financial transaction. These financial transactions contain the double-sided journal entries that will be interfaced to your general ledger. They also contain the information defining how the customer's debt is affected by the financial event (i.e., current amount and payoff amount).
  • A single bill can contain many bill segments, each of which may have a different frequency. For example, a bill could contain future charges, monthly retroactive charges based on measurement cycle, quarterly charges that must end on a quarter-end boundary.

You control the financial effects of the various financial events using a single field on the service agreement. This field is called the service agreement (SA) Type. In this section, we describe many of the tables that must be set up before you can create a SA type.

Note:

Foreshadowing. You will notice that we don't explain how to set up SA types in this section. This is because SA type controls numerous aspects of a service agreement's behavior in addition to its financial behavior. The non-financial aspects are discussed in later chapters. It's only after you have set up all of the control tables in this manual that you'll be able to finally define your SA types. Refer to Setting Up SA Types for more information.

Warning:

Take the time to define how you will record the various financial events in your general ledger before you attempt to set up these control tables. If you have simple accounting needs, this setup process will be straightforward. However, if you sell many services and use sophisticated accounting, this setup process will require careful analysis.