Contract 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 contract level, not at the account level. This means that bills and payments are meaningless on their own. It's the contracts' 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, 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 contract. This field is called the contract type. In this section, we describe many of the tables that must be set up before you can create a contract type.
Note:
Foreshadowing. You will notice that we don't explain
how to set up contract types in this section. This is because contract
type controls numerous aspects of a contract'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 contract
types. Refer to Setting
Up Contract Types for more information.
CAUTION: 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.
Related Topics:
Parent Topic: Defining Financial Transaction Options