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  • 1. Chapter 8: Creating Service ContractsCHAPTER 8: CREATING SERVICE CONTRACTSObjectives The objectives are: Set up service contract. Use the Service Contract window. Create a service contract quote and convert it into a service contract. Create a service contract directly: o Manually o Automatically Use the general service contract reports.Introduction Service contracts contain the service contract agreements between customers and a company. They include service level agreements and the service items serviced as a part of the contract. The service contract usually includes information concerning: The customer The starting date of the contract The service period The response time The bill-to customer The invoice period The annual amount charged How the annual amount is calculated Whether the contract is prepaid The prepaid and income accounts Each service contract line includes information concerning: Cost Line value Line amount Discount amount Discount percentage Profit Next planned service datePage 332
  • 2. Chapter 8: Creating Service Contracts Expiration date, and so onThis chapter introduces the concept of service contracts, and shows how to: Set up service contracts. Set up contract/service discounts on spare parts, labor, and other service costs. Define service hours that are valid for a contract (for example, service during holidays).The chapter includes labs to test the understanding of the material presented. Page 333
  • 3. Chapter 8: Creating Service ContractsSetting Up Service Contracts Use the Service Mgt. Setup window to set up service contracts and to specify how the program handles information about how a company: Invoices service contracts. Calculates contract amounts. Schedules upcoming service visits, and so on (refer to chapter 2 “Service Management Setup”). You can also set up service contract groups and service contract account groups. Assigning contracts to service contract groups is useful both for managing contract discounts on services and for compiling statistics. Assigning contracts to service contract account groups allows specifying non- prepaid or prepaid accounts for these contracts. Implement contract templates to create predefined layouts for a typical series of contracts. Setting Up Service Contract Groups Use the Service Contract Groups window to: Set up groups of related service contracts for statistical purposes. Limit contract discounts on services in service orders linked to a contract in the corresponding service contract group. To set up service contract group, do the following: 1. Click Departments > Service > Contract Management. 2. Under Administration, click Service Contract Groups. The Service Contract Groups window appears.Page 334
  • 4. Chapter 8: Creating Service ContractsFIGURE 8.1 THE SERVICE CONTRACT GROUPS WINDOW 3. In the Action Pane, click New to enter a new service contract group. 4. Fill in the Code and Description fields. 5. Place a check mark in the Disc. on Contr. Orders Only field for contract discounts on services to be valid exclusively for contract service orders (maintenance).Repeat steps 3 to 5 for each service contract group to be set up.Setting Up Service Contract Account GroupsUse the Service Contract Account Groups window to set up account groupsused to group the contract accounts together for the invoices of service contracts,and then link service contracts to corresponding service contract account groups.To set up service contract account groups, do the following: 1. Click Departments > Service > Contract Management. 2. Under Administration, click Serv. Contract Account Groups. The Serv. Contract Account Groups window appears. Page 335
  • 5. Chapter 8: Creating Service Contracts FIGURE 8.2 THE SERV. CONTRACT ACCOUNT GROUPS WINDOW 3. In the Action Pane, click New to enter a new service contract account group. 4. Fill in the Code and Description fields to describe the newly created service account group. 5. Fill in the Non-Prepaid Contract Acc. and Prepaid Contract Acc. fields with the G/L account numbers of the proper non-prepaid and prepaid accounts. Repeat steps 3 to 5 for each service contract account group to be set up. Setting Up Contract Templates Create service contracts or contract quotes using templates. In the Service Contract Templates window, set up contract templates as predefined layouts of contracts that include the most commonly used service contract details. The program automatically fills in the fields in the contract quote with the contents of the corresponding template fields. As an example of the contract template, view the Prepaid Contract – Hardware template: 1. Click Departments > Service > Contract Management. 2. Under Administration, click Service Contract Templates. The Service Contract Template List window appears.Page 336
  • 6. Chapter 8: Creating Service ContractsFIGURE 8.3 THE SERVICE CONTRACT TEMPLATE LIST WINDOW 3. Double-click the TEMPL0001 contract template to open the Service Contract Template window with the Prepaid Contract - Hardware contract template data.FIGURE 8.4 THE SERVICE CONTRACT TEMPLATE WINDOWView the fields on the General FastTab: No. and Description: Use these fields to identify and describe the service contract template. The number of the service contract template must be unique. Page 337
  • 7. Chapter 8: Creating Service Contracts Contract Group Code: Specify the contract group code for service contracts created using this template. Service Order Type: Specify the service order type for service orders linked to service contracts created using this template. Default Service Period: Specify the default service period for the contract lines in the service contracts. Use this value as the default value for the Service Period field on all newly added contract lines in service contracts created using this template. Price Update Period: Use the price update period to specify how often the amounts on service contracts created using this template are to be updated. Default Response Time (Hours): Specify the default response time in hours for contract lines in service contracts to be created using this template. Max. Labor Unit Price: This is the maximum unit price that can be set for a resource (for example a technician) on all service lines of service orders belonging to service contracts, to be created using this template. Expand the Invoice FastTab to view the following fields: Serv. Contract Acc. Gr. Code: Select the service contract account group to assign it to service contracts created using this template. Invoice Period: This field contains the invoice period for service contracts created using this template. There are six options: Month, Two Months, Quarter, Half Year, Year, and None. Contract Increase Text: Specify the standard text code the program prints on invoices for a service contract created using this template. The contract increase texts informs customers prices are updated for contracts since last invoiced. Prepaid: A check mark in this field indicates that service contracts created using this template are prepaid. Allow Unbalanced Amounts: A check mark in this field indicates the Calcd. Annual Amount and Annual Amount fields cannot be equal in service contracts created using this template. Otherwise, the values in the mentioned fields must always be equal. Combine Invoices: A check mark in this field indicates combining invoices for the service contracts with invoices for other service contracts with the same bill-to customer. Automatic Credit Memos: A check mark in this field indicates the program automatically creates credit memos when, under certain conditions, contract lines are removed from service contracts. The conditions include the contracts are prepaid and that at least one posted invoice exists for each of them. Contract Lines on Invoice: Specify whether to have brief text descriptions of contract lines when invoicing service contracts thatPage 338
  • 8. Chapter 8: Creating Service Contracts are created using this template. If this field is left empty, invoices for those contracts include only information from corresponding contract headers. Invoice after Service: A checkmark in this field indicates the service contract can be invoiced only if a service order is posted that links to the contract since it was last invoiced.Specify the contract discounts on services for contracts created using thistemplate: 1. Click Related Information > Contract Template > Service Discounts to open the Contract/Service Discounts window.FIGURE 8.5 THE CONTRACT/SERVICE DISCOUNTS WINDOWThere are four fields to fill in to specify a contract discount on services in theContract/Service Discounts window: Type: Specify the type of the contract discount on services. There are three options: o Service Item Group o Resource Group o CostEach type corresponds to granting discounts either on spare parts in certainservice item groups, or resource hours for resources in certain resource groups, orcertain service costs. No.: Depending on the contents of the Type field, this field contains: either the number of the service item group, resource group, or cost the discount applies to. Page 339
  • 9. Chapter 8: Creating Service Contracts Starting Date: Specify the starting date for the contract discount on services. If this field is blank the discount is always valid. Discount %: This field contains the contract discount percentage on services, and is used to calculate the discount on service lines linked to service items in service contracts created using this template. 2. In the Type field, select Service Item Group. 3. In the No. field, click the AssistButton and select HARDDRIVE from the drop-down list of service item groups. 4. In the Starting Date field, enter the work date by typing “w”. 5. In the Discount % field, type “5”. A five percent contract discount is already set up on spare parts in the Hard Drive service item group. This discount is used to add service items that belong to the Hard Drive service item group in service orders or service invoices belonging to service contracts, which are created using the Prepaid Contract – Hardware template.Page 340
  • 10. Chapter 8: Creating Service ContractsThe Service Contract Window In the Service Management application area, a service contract has many different properties forming a unique service contract agreement. As a general overview of the available options in the service contract, the following sections describe the fields on the main FastTabs in the Service Contract window. The window consists of eight FastTabs: General Lines Invoicing Shipping Service Invoice Details Price Update Details The General FastTab FIGURE 8.6 THE GENERAL AND LINES FASTTABS OF THE SERVICE CONTRACT WINDOW No. and Description: Use these fields to identify and describe the service contract. The number of the service contract must be unique. Page 341
  • 11. Chapter 8: Creating Service Contracts To enter a new service contract number, use one of the following methods: If a default service contract number series is set up, press ENTER and the program fills in this field with the next unused number in the series. If a default service contract number series is not set up, enter the number manually. Customer No.: This field contains the number of the customer who owns the service items in the service contract. All service contracts contain two customers: One (in the Customer No. field) indicates the customer who owns the items in service. The other (in the Bill-to Customer No. field) defines the customer to whom the invoices are sent for the service contract. All customer-related information in the service contract regarding invoicing, discounts, statistics, and so on, refers to the bill-to customer. Contact No.: In this field specify the number of the contact to whom the service is delivered. Name, Address, Address 2, Post Code, City, and Phone No.: These fields contain the name, address, additional address, post code, and city of the customer whose number is specified in the Customer No. field. Contact Name: This field contains the number of the person regularly contacted when doing business with the customer in the service contract. Contract Group Code: Assign a contract to a relevant contract group. Use contract groups for statistical purposes and for contract discounts to only apply to service orders linked to contracts. Salesperson Code: Assign a salesperson to a contract. If the Salesperson Mandatory field is selected in the Service Mgt. Setup window, specify a salesperson in this field. Starting Date: This field contains the starting date of the service contract, that is, the date the service contract becomes valid. When creating a service contract, the program automatically inserts the current work date as the starting date. This date cannot be changed if the service contract is invoiced. When a date is inserted in this field, the program automatically calculates the contents of the Next Invoice Date field (on the Invoice Details FastTab). Status: This field contains the status of the service contract. There are three options: Blank – The initial status of a service contract until it is signed.Page 342
  • 12. Chapter 8: Creating Service Contracts Signed – The general status of a service contract the customer approved of and signed. The program automatically enters Signed in the Status field when a service contract is signed. Canceled – The status of a canceled service contract. Cancel a service contract or contract quote by changing its status to Canceled.Responsibility Center: This field contains the code of the responsibility centerassociated with the customer in the service contract or with a company.The program copies the contents of this field to the Responsibility Center fieldon the service orders linked to the contract.Change Status: This field shows whether a contract is locked or open forchanges. There are two options: Open – This option indicates a contract is opened for modifications. This is an initial change status for a newly created service contract. Locked – This option indicates a contract is locked to prevent modifications. This is an initial change status for a signed service contract.Usually, you open a service contract or contract quote, modify the information itcontains, and lock it back.If the change status of the signed contract remains Open, any changes made to itdo not take effect and it is not possible to create a service invoice for it. Page 343
  • 13. Chapter 8: Creating Service Contracts The Invoicing FastTab FIGURE 8.7 THE INVOICING FASTTAB OF THE SERVICE CONTRACT WINDOW Bill-to Customer No.: This field contains the number of the customer receiving the invoices for the service contract. All customer-related information regarding invoicing, discount, statistics, and so on, refers to the customer who receives the invoice and not to the customer who owns the items. Bill-to Contact No.: This field contains the number of the contact receiving the invoices for the service contract. Bill-to Name, Bill-to Address, Bill-to Address 2, Bill-to Post Code, and Bill-to City: These fields contain the following information for the customer whose number is specified in the Customer No. field: Name Address Additional address Post code City of the customerPage 344
  • 14. Chapter 8: Creating Service ContractsBill-to Contact: This field contains the name of the contact person at thecustomer’s site to whom invoices are sent for the service contract.Your Reference: This field contains the customer’s reference number that printson service and sales documents.Serv. Contract Acc. Gr. Code: Assign the service contract to a service contractaccount group. Entering a code in this field links the service contract to the G/Laccount it needs to post to.Payment Terms Code: This field contains the payment terms code for thecustomer in the service contract. Use the payment terms to calculate the due dateand the payment discount percentages.Currency Code: Specify the currency code for all amounts in the servicecontract.The Shipping FastTabFIGURE 8.8 THE SHIPPING FASTTAB OF THE SERVICE CONTRACTWINDOWShip-to Code: Enter a ship-to code for a different shipment address from the oneautomatically entered by the program. The code is used when the customer hasseveral ship-to addresses. Enter a code in this field to select it.Ship-to Name: This field contains the number of the customer at the ship-toaddress. Page 345
  • 15. Chapter 8: Creating Service Contracts Ship-to Address, Ship-to Address 2, Ship-to Post Code, and Ship-to City: These fields contain: Ship-to address Ship-to additional address Ship-to post code Ship-to city of the customer The Service FastTab FIGURE 8.9 THE SERVICE FASTTAB OF THE SERVICE CONTRACT WINDOW Service Zone Code: Specify the service zone code of the customer’s ship-to address in the service contract. The program copies the contents of this field to the Service Zone Code field on the service orders linked to the contract. Service Period: This field contains a default service period for the service items included in the service contract. The service period for a service item indicates the period of time that must pass between each servicing of the service item as long as the item is part of this specific service contract. When service items are added to a contract, the program uses the contents of this field as default value for the Service Period field for the service items.Page 346
  • 16. Chapter 8: Creating Service Contracts A service period cannot be longer than the invoice period of the contract if there is a check mark in the Invoice after Service field. Before adding service items to a contract quote, this field must be filled in.First Service Date: This field contains the date of the first expected service forthe service items in the service contract. When a service contract is created, theprogram automatically inserts the current work date in this field. When service items are added to a contract, the program uses the contents of this field as the default value in the Next Planned Service Date field on the contract lines. Before adding contract lines to a service contract, this field must be filled in.Response Time (Hours): This field contains the default response time for thecontract lines in the service contract. The response time is the estimated number of hours between the creation of a service order that the contract line is included in, and the time when the repair status of the contract line changes from Initial to In Process. When service items are added to the contract quote, the program uses this field as the default value for the Response Time (Hours) field for the contract lines. If the contents of this field changes, the program also changes the response time (set in hours) for those contract lines which have a response time greater than the value of the new contract response time.Service Order Type: Specify the service order type the program assigns toservice orders linked to this service contract. Fill in this field if a check mark isplaced in the Service Order Type Mandatory field in the Service Mgt. Setupwindow. Page 347
  • 17. Chapter 8: Creating Service Contracts The Invoice Details FastTab FIGURE 8.10 THE INVOICE DETAILS FASTTAB OF THE SERVICE CONTRACT WINDOW Annual Amount: This field contains the amount invoiced annually for the service contract. If there is no check mark in the Allow Unbalanced Amounts field, the contents of this field is always equal to the contents of the Calcd. Annual Amount field. It is not possible to sign or lock a service contract if its annual amount is either negative or not equal to the amount in the Calcd. Annual Amount field. If the annual amount is equal to zero, it is only possible to sign or lock the service contract if the value in the Invoice Period field is None. Allow Unbalanced Amounts: If there is no check mark in this field, the program copies the content of the Calcd. Annual Amount field into the Annual Amount field in the service contract. If there is a check mark in this field, the Annual Amount field value is not modified automatically and it must be updated manually every time line amounts change on the contract lines.Page 348
  • 18. Chapter 8: Creating Service ContractsCalcd. Annual Amount: This field contains the total of all the Line Amountfield values on all contract lines of the service contract.The calculated annual amount is updated automatically every time the lineamounts change on the contract lines.Invoice Period: This field contains the invoice period for the service contract.There are six options: Month Two Months Quarter Half Year Year NoneNext Invoice Date: This field contains the next invoice date for this servicecontract. If a service contract is: Prepaid, the program inserts the first date of the next invoice period in this field. Not prepaid, the last date of the next invoice period is filled in.Amount per Period: This field contains the amount to be invoiced for eachinvoice period for the service contract.This amount is calculated based on the annual amount and invoice period of theservice contract.Next Invoice Period: This field contains the first and last dates of the servicecontract’s next invoice period.When the starting date is entered in the Starting Date field on the GeneralFastTab, the program: Calculates the first date of the next invoice period by finding the first day of the first month following the starting date. Automatically calculates the ending date of this period based on the contract’s invoice period. Automatically updates the next invoice information every time the service contract is invoiced.Last Invoice Date: This field contains the date when the service contract is lastinvoiced.Prepaid: A check mark in this field indicates the service contract is prepaid. Page 349
  • 19. Chapter 8: Creating Service Contracts If the service contract is prepaid, invoice the bill-to customer at the beginning of each invoice period. If the contract is non-prepaid, invoice the bill-to customer at the end of each invoice period. When an invoice is created for a prepaid service contract, the program inserts service ledger entries, one for each contract line, for each month of the contract’s invoice period. When the invoice is posted, the program transfers the amounts in the service ledger entries to the prepaid account. After doing so, post the prepaid contract ledger entries to the income account every month. When an invoice is created for a non-prepaid service contract, the program inserts service ledger entries for each contract line. When the invoice is posted, the program transfers the amounts in the service ledger entries to the income account. This field is disabled by selecting the check box in the Invoice after Service field. In this case, the contract cannot be prepaid, because it can only be invoiced after posting a service order linked to it. Automatic Credit Memos: Place a check mark in this field for the program to automatically create a credit memo when a contract line is removed from the service prepaid contract. To create a credit memo at least one posted invoice must exist for the service contract within the current invoice period. Invoice after Service: If you place a check mark in this field, the service contract cannot be invoiced before posting a service order linked to it since the last time it is invoiced. If the contract is prepaid (there is a check mark in the Prepaid field), this check box is disabled. Combine Invoices: A check mark in this field indicates combining invoices for this service contract with others created for service contracts assigned to the same bill-to customer. When the Create Contract Invoices batch job is run, the program combines the invoice selected with the invoices for all contracts with the same bill-to customer, thus creating one combined invoice. Contract Lines on Invoice: A check mark in this field indicates the contract lines for this service contract appear as text lines in the invoice that the program creates when the contract is invoiced, as well as general information about the contract (taken from the contract header). If this check box is not selected, the invoice only includes general information about the service contract (taken from the contract header). No. of Unposted Invoices, No. of Unposted Credit Memos, No. of Posted Invoices, and No. of Posted Credit Memos: In these fields, the number ofPage 350
  • 20. Chapter 8: Creating Service Contractsunposted service invoices, credit memos, posted service invoices, and creditmemos linked to the service contract are shown.The Price Update FastTabFIGURE 8.11 THE PRICE UPDATE FASTTAB OF THE SERVICE CONTRACTWINDOWPrice Update Period: This field contains the price update period for the servicecontract. It specifies how often the amounts on the service contract must beupdated.Next Price Update Date: This field contains the next date contract prices mustbe updated.Last Price Update %: This field contains the price update percentage used thelast time the contract prices are updated.Last Price Update Date: This field contains the date when the contract pricesare last updated.Price Inv. Increase Code and Print Increase Text: The program prints the priceincrease text specified in the Price Inv. Increase Code field on service invoicesfor contracts, informing the customer prices are updated since the contract is lastinvoiced.When a price update is run for service contracts, the program automaticallyplaces a check mark in the Print Increase Text field on the Price UpdateFastTab. Page 351
  • 21. Chapter 8: Creating Service Contracts This check mark indicates the next time the contract is invoiced the program prints the price increase information text on the service invoice for the contract. At the same time, the program automatically removes a check mark in the Print Increase Text field. The Details FastTab FIGURE 8.12 THE DETAILS FASTTAB OF THE SERVICE CONTRACT WINDOW Expiration Date: This field contains the date when the service contract expires, that is, when the service contract is no longer valid. The date in this field must not be earlier than the starting date of the service contract. Cancel Reason Code: This field contains a reason code for canceling the service contract or removing a contract line from the contract. The Use Contract Cancel Reasons field in the Service Mgt. Setup window specifies whether to enter a cancel reason code when removing a contract line or canceling the contract. Max. Labor Unit Price: This field contains the maximum unit price that can be set for a resource on all service lines for service orders linked to the service contract. If a resource is registered on any service line that has a unit price higher than the amount specified in the Max. Labor Unit Price field, the program enters thePage 352
  • 22. Chapter 8: Creating Service Contractscontents of the Max. Labor Unit Price field in the Unit Price field on theservice line. Page 353
  • 23. Chapter 8: Creating Service ContractsCreating Service Contract Quotes and Converting Them intoService Contracts The first step in creating service contracts is to create service contract quotes. With a contract quote, a company is making an offer to the customer. It needs the customer’s approval to convert the quote into a service contract. Since the contract quotes and service contracts are connected, the procedures for creating them are similar. The following is an example of the procedure for creating a contract quote and converting it into a service contract. It illustrates the basic rules of managing service contracts in the Service Management application area. Before performing the procedure, make sure you have the following values on the Contracts FastTab in the Service Mgt. Setup window: FIGURE 8.13 THE CONTRACTS FASTTAB OF THE SERVICE MGT SETUP WINDOW 1. Click Home > Service Contract Quotes. 2. In the Action Pane of the Service Contract Quotes list place, click New to create a new service contract quote. If contract templates are set up, a confirmation message appears, asking whether to create a contract using a contract template. To learn about setting up contract templates, refer to the “Setting Up Service Contracts” section. 3. Click Yes. The Service Contract Template List window appears. 4. Select the Prepaid Contract – Hardware template, and then click OK to fill in the contract quote with common information. 5. In the Customer No. field, click the AssistButton and select customer 40000. The General FastTab of the Service Contract Quote window looks like this.Page 354
  • 24. Chapter 8: Creating Service ContractsFIGURE 8.14 THE GENERAL FASTTAB OF THE SERVICE CONTRACTQUOTE WINDOW 6. Before inserting any contract lines into the contract quote, the Invoice Details FastTab looks like this.FIGURE 8.15 THE INVOICE DETAILS FASTTAB OF THE SERVICECONTRACT QUOTE WINDOW Page 355
  • 25. Chapter 8: Creating Service Contracts Note the Annual Amount text box is empty, the Calcd. Annual Amount field value is zero, and the Allow Unbalanced Amounts check box is not selected. How the values in these fields are modified is discussed later on. 7. Expand the Lines FastTab. In this example, create three contract lines of different types: a contract line created from a service item, item, and text description. On the first line, in the Service Item No. field, click the AssistButton to open the Service Item List window showing all service items customer 40000 owns. FIGURE 8.16 SERVICE ITEM LIST FOR CUSTOMER 40000 8. Select service item 22, and click OK. The first contract line is filled in automatically with the relevant information for service item 22. Among the contract line field values are: Line Cost: 1.58 Line Value: 3.10 Line Discount %: 0.00 Line Amount: 3.10 Profit: 1.53 The line amount is calculated using this formula: line amount = line value – line value * line discount % / 100. The profit of the contract line is calculated as the difference between the line amount and line cost.Page 356
  • 26. Chapter 8: Creating Service ContractsNOTE: If a contract line is created for a service item which is already includedin one or more service contracts or contract quotes, a confirmation messageinforming about it appears. Click Yes to confirm for the service item to beincluded in multiple contracts. 9. On the second line, in the Item No. field, click the AssistButton to select item 80104 from the drop-down item list. The second contract line is filled in automatically with the relevant information about item 80104. Among the contract line field values are: Line Cost: 3.51 Line Value: 7.22 Line Discount %: 0.00 Line Amount: 7.22 Profit: 3.71 The line amount and profit are calculated the same way as the first contract line. 10. On the third line, in the Description field, type “Two Loudspeakers, White for PC”. Fill in the Line Cost field with “42.5” and the Line Value field with “100.3”. The contents of some contract line fields are filled in automatically in this way: Line Discount %: 0 Line Amount: 100.30 The line amount and profit are calculated the same way as for the first two contract lines.View the Invoice Details FastTab. After inserting the three contract lines asdescribed above, it looks like this. Page 357
  • 27. Chapter 8: Creating Service Contracts FIGURE 8.17 THE INVOICE DETAILS FASTTAB AFTER INSERTING CONTRACT LINES Note the annual amount of the contract is equal to the contents of the Calcd. Annual Amount field because the Allow Unbalanced Amount check box is clear. The Calcd. Annual Amount field value itself is equal to the sum of the line amounts on the contract lines: 3.10 + 7.22 + 100.30 = 110.62. After specifying the essential information for the service contract, set up its service hours. To detail when the company can deliver service under the contract, use the contract specific service hours. The program uses the service hours when it calculates the response date and time for service orders and quotes linked to the service contract. However, if specific service hours are not set up for a contract, the program uses the default service hours for the service contract. 11. In the Action Pane of the Service Contract Quote window, click Related Information > Quote > Service Hours. The Service Hours window appears. For each weekday specified in the Day column, fill in the starting and ending time as shown on the screenshot.Page 358
  • 28. Chapter 8: Creating Service ContractsFIGURE 8.18 SETTING UP SERVICE HOURS 12. Insert a check mark in the Valid on Holidays field for each line of service hours to be valid on holidays. To specify a date for some service hours to become valid from, fill in the Starting Date field on the corresponding line. In this example, make all service hours valid on holidays and not limited to any starting dates.NOTE: Another way to set up service hours for a specific contract is by copyingthe usual service working hours in a company and then updating them to theuser’s needs. Click Actions > Functions > Copy Default Service Hours tocopy the default service hours.Add the contract discounts on services for the contract quote. The discounts canbe on spare parts for specific service item groups, resource hours for resources inspecific resource groups, and specific service costs. 13. In the Action Pane of the Service Contract Quote window, click Related Information > Quote > Service Discounts. The Contract/Service Discounts window appears. Fill in the lines in this window as shown on the screenshot. Page 359
  • 29. Chapter 8: Creating Service Contracts FIGURE 8.19 ADDING THE CONTRACT DISCOUNTS In this example, set up a 10 percentage discount on the contract line containing service item 22 which belongs to the DESKTOP service item group, and give a 2 percentage starting discount on the whole service contract. To specify a date for some service discounts on the contract to become valid from, fill in the Starting Date field on the corresponding line. NOTE: Assign a contract quote to a service contract group where contract/service discounts are only valid for contract service orders (maintenance). Therefore, if a service order is created, including service items that belong to the contract, but the service order is outside the service agreement of the contract, the program does not apply the registered service discounts on the contract. Convert the contract quote into a service contract, assuming that customer 40000 accepted the service level agreement specified in the contract quote. At the same time, allow the program to create a service invoice for the period from the starting date of the contract till the next invoice date. 14. In the Action Pane of the Service Contract Quote window, click Make Contract. A dialog box appears. Click Yes to confirm converting the contract quote into the service contract. The program creates a service contract with the Signed status and the same number as the contract quote had. If a contract quote is converted into a contract before the next invoice date (and the starting date is earlier than the next invoice date in case the contract quote isPage 360
  • 30. Chapter 8: Creating Service Contractsprepaid), the confirmation message appears, offering to invoice the contract forthe period left before the next invoice date.If the program creates a service invoice for the starting period of the contract, theprogram calculates the invoiced amount as follows:Invoiced amount = sum of the invoiced amounts for eachcontract line.Invoiced amount for each contract line = (annual amount /12) * (number of fully invoiced months in the period) +(invoiced days in partially invoiced month in the startingperiod/total days in this month).If the contract line expires before the starting period ends, the expiration datebecomes the ending date of the starting period for the line.The program posts the service invoice for the starting period to the incomeaccount of the contract, even if the contract is prepaid.After completing the example procedure, the service contract created looks likethis.FIGURE 8.20 THE SERVICE CONTRACT CREATED FROM THE SERVICECONTRACT QUOTE Page 361
  • 31. Chapter 8: Creating Service Contracts The Service Contract Quote Reports The Contract Quotes to Be Signed Report Use the Contract Quotes to Be Signed report in the Service Management application area to print a list of contract quotes to be signed (converted into service contracts). The report shows: The contract number The customer name and address The salesperson code The starting date The probability The quoted amount The forecast The Service Contract Quote – Detail Report Use the Service Contract Quote – Detail report to print a detailed list of all service contract quotes. The quoted annual amounts are totaled up for each contract quote. The report provides details about the service items and the service contract discounts, and includes the following information for each service contract quote: Customer name and address Contract number and details Service item numbers and descriptions and the item numbers, serial numbers, and units of measure Response time (hours) Service period Line values, line discounts, and line amounts Annual amount On the Options FastTab, select whether the report needs to show comments on service contract quotes. A check mark in the Show Comments field means any comments on a service contract quote print. If this field is blank, the comments do not print.Page 362
  • 32. Chapter 8: Creating Service ContractsCreating Service Contracts Directly In addition to creating a service contract from a contract quote, create a service contract directly in the Service Contract window, without creating a service contract quote first. Do this either manually or automatically. Creating Service Contracts Manually Create a service contract manually following the same procedure described in the earlier example: 1. First, fill in the general and invoicing information from the contract header and then insert contract lines into it. 2. Set up the contract specific service hours and contract discounts on service any time they are needed. Creating Service Contracts Automatically Use the Copy Document function to automatically create service contracts. This is helpful when creating a new service contract with the same service items included in the existing contract. To create a service contract automatically, follow this procedure: 1. Click Home > Service Contracts. 2. In the Service Contracts list place, click New to create a new service contract. If contract templates are set up, a confirmation message appears, asking whether to create a contract using a contract template. 3. To use the contract template when creating a service contract, click Yes. The Service Contract Template List window appears. 4. Select the contract template to use and click OK. 5. Click the AssistButton in the Customer No. field to select the proper customer from the drop-down list that opens. 6. In the Action Pane, click Actions > Functions > Copy Document. The Copy Service Document window appears. Select Contract in the Document Type field. 7. In the Document No. field, click the AssistButton to open the Service Contract List window. Select the contract to use. The program creates a new contract with all service level agreement information copied from the existing contract. After completing filling in the service contract, and the customer who is its owner accepts it, sign the contract. 8. To sign the service contract, click Actions > Functions > Sign Contract. Page 363
  • 33. Chapter 8: Creating Service Contracts 9. A dialog box appears. Click Yes to confirm signing the service contract. If the starting date of a contract is earlier than the next invoice period, a confirmation message appears offering to invoice the contract for the period left before the next invoice period. If the program creates a service invoice for the starting period of the contract, the program calculates the invoiced amount in the following manner: Invoiced amount = sum of the invoiced amounts for each contract line Invoiced amount for a contract line for a period = (annual amount / 12) * (number of fully invoiced months in the period) + (invoiced days in partially invoiced month in the period/total days in this month). If the contract line expires before the starting period ends, the expiration date becomes the ending date of the starting period for the line. The program posts the service invoice to the income account of the contract, even if the contract is prepaid, and changes the status of the service contract to Signed. The General Service Contract Reports The Service Contract – Detail Report This report is used to print a list of all service contracts. The contract annual amounts are totaled up for each contract. The report provides details about the service items, and the service contract discounts, and includes the following information for each service contract: Item numbers Descriptions Variant codes Serial numbers Service periods Contract values Contract discounts Contract amounts On the Options FastTab, select whether the report needs to show comments to service contracts.Page 364
  • 34. Chapter 8: Creating Service ContractsA check mark in the Show Comments field means any comments to a servicecontract print. If this field is blank, the comments do not print.The Service Contract – Customer ReportUse this report to print a list of service contracts for each customer in a selectedtime period. The report contains the following information: Status of the contract Next invoice date Invoice period Amount for each period Annual amountThe Serv. Contract – Salesperson ReportUse this report to print a list of service contracts for each salesperson for aselected period. The following information is shown for each service contract: Customer number Name Description Starting date Annual amountThe report can be used, for example, to calculate and document a salescommission. Page 365
  • 35. Chapter 8: Creating Service ContractsLab 8.1 – Creating a Contract Quote and Converting It to aContract In this lab, you will practice creating a contract quote and converting it to a contract. Scenario Peter Saddow, working for CRONUS International Ltd, is discussing a service agreement with a customer. The customer wants to pay as little as possible and the negotiations on the contract details are proving to be difficult. The customer hints his service items may need extra service and he wants to have contract discounts on servicing certain items. However, you do not want contract discounts to apply to the service items if they are invoiced as not being linked to the service contract. Challenge Yourself Create a new contract template and use it when creating a service contract quote; convert the contract quote to a service contract. Need a Little Help? 1. Limit the Maintenance Contract service contract group discounts so they are only used for invoicing the contract. 2. Set up a contract template using the following information: The contract group for this template is Maintenance Contract. The default service period is equal to one month. The default response time is 24 hours. The service contract account group for this template is Hardware. The invoice period is equal to one month. The contracts created using this template are non-prepaid. The annual amount and the sum of the line amounts of the contract lines in each service contract created using this template must be equal. 3. Use the contract template recently created, to create a contract quote using the following information: The contract description is Five Enterprise Pentiums. Guildford Water Department is the owner of the contract. The starting date of the contract is 1/25/2010. The first service date is 2/28/2010. 4. Add the contract lines to the service contract quote, following these instructions:Page 366
  • 36. Chapter 8: Creating Service ContractsCreate four contract lines including item 80007 with serial numbers: 4581259,1452854, 1254698, and 1254851. Add one contract line including service item18, which is already registered in another contract owned by this customer.The customer wants to have a lower annual amount than the total of the lineamounts on the contract lines. 5. Decrease its value to 150, forcing the program to evenly decrease the line amounts on the contract lines.The customer can have service only during opening hours. His company is closedin the afternoon on Fridays, but is open on Saturdays. 6. Set up the contract service hours, so they are the same as the default service hours, but the ending time on Fridays is 12:00 PM, and the service hours on Saturdays are 10:00 AM to 2:00 PM. 7. File and lock the contract quote.Later, the customer expresses dissatisfaction with the service level agreement setin the contract quote. He wants the service pricing to be changed. 8. Update the contract quote type to reflect it is being modified. 9. Insert a discount of 25 percent for travel costs to the service zone this customer’s site belongs to. In this example, the Guildford Water Department customer lives in the West service zone, and therefore, his service cost is TR_WEST. 10. Insert a discount of 10 percent for all labor on the service items in the contract quote. 11. File and lock the contract quote.The customer is still not completely satisfied with the information in the contractquote. He wants to modify the response time on the contract lines. 12. Update the contract quote type to reflect it is being modified. 13. Change the response time for each service item to 16 hours. 14. Lock the contract quote.Finally, the customer approves the service contract quote. 15. Check the filed contract quotes to view the history of the contract quote development. 16. Convert the contract quote to a service contract and create an invoice for the starting period.Step by StepSet up a contract template. 1. Click Departments > Service > Contract Management. Page 367
  • 37. Chapter 8: Creating Service Contracts 2. Under Administration, click Service Contract Groups. 3. In the Service Contract Groups window, verify that the Disc. on Contr. Orders Only field contains a check mark. 4. Click OK. 5. Under Administration, click Service Contract Templates. 6. In the Action Pane of the Service Contract Template List window that opens, click New. 7. In the Service Contract Template window, fill in the following fields: On the General FastTab: Description: “Non-prepaid Contract – Maintenance” Contract Group Code: MAINT Default Service Period: “1M” Default Response Time (Hours): “24” On the Invoice FastTab: Serv. Contract Acc. Gr. Code: HARDWARE Invoice Period: Month FIGURE 8.21 SETTING UP A SERVICE CONTRACT TEMPLATE 8. Click OK to save the changes and close the Service Contract Template List window. Create a service contract quote. 1. Set the work date to 1/25/2010. 2. Click Home > Service Contract Quotes. 3. In the Action Pane, click New to create a new service contract quote. 4. On the General FastTab, in the Contract No. field, press ENTER to automatically assign the number. 5. Click Yes to the message that follows to confirm creating the contract using a contract template.Page 368
  • 38. Chapter 8: Creating Service Contracts 6. In the Service Contract Template List window, select the line for TEMPL0005 and click OK. 7. Change the value in the Description field to “Five Enterprise Pentiums”. 8. In the Customer No. field, select 50000. 9. Expand the Invoice Details FastTab and verify that the Next Invoice Date field is set to 2/28/2010.FIGURE 8.22 THE GENERAL AND INVOICE DETAILS FASTTABS OF THENEWLY CREATED CONTRACT QUOTE 10. Expand the Lines FastTab and create four contract lines using the data from the following table: Item No. Serial No. Line 1 80007 4581259 Line 2 80007 1452854 Line 3 80007 1254698 Line 4 80007 1254851 11. Add the fifth line: In the Service Item No. field, select 18 and press ENTER. 12. Accept the following message. Page 369
  • 39. Chapter 8: Creating Service Contracts FIGURE 8.23 THE MESSAGE INDICATING THE ITEM’S BELONGING TO ANOTHER CONTRACT/QUOTE 13. Expand the Invoice Details FastTab and verify the values in the Annual Amount, Calcd. Annual Amount and Amount per Period fields. FIGURE 8.24 CREATING THE CONTRACT LINES AND VERIFYING THE AMOUNT FIELD VALUES 14. On the Invoice Details FastTab, change the value in the Annual Amount field to “150”. 15. Press ENTER. The following message appears:Page 370
  • 40. Chapter 8: Creating Service ContractsFIGURE 8.25 THE CONTRACT AMOUNT DISTRIBUTION MESSAGE 16. Select Even Distribution and click Yes. The Lines and Invoice Details FastTabs now look like this.FIGURE 8.26 SERVICE CONTRACT LINES AFTER THE EVEN DISTRIBUTIONSet up the contract service hours. 1. In the Action Pane of the Service Contract Quote window, click Related Information > Quote > Service Hours. 2. In the Action Pane of the Service Hours window that appears, click Actions > Functions > Copy Default Service Hours. 3. Click Yes to confirm copying the default service calendar. 4. Change the service hours: For Friday, change the Ending Time field value to “12:00 PM”. Page 371
  • 41. Chapter 8: Creating Service Contracts Add the line for Saturday and type “10:00” and “2:00” in the Starting Date and Ending Date fields respectively. 5. Select the Valid on Holidays check box for each day. FIGURE 8.27 SETTING UP THE CONTRACT SERVICE HOURS 6. Click OK. 7. In the Action Pane of the Service Contract Quote window, click File Contract Quote. 8. Click Yes to confirm filing the contract quote. 9. In the Action Pane, click Lock. Update the contract quote with the discount data. 1. To open the contract quote, in the Action Pane of the Service Contract Quote window, click Actions > Functions > Open. 2. On the General FastTab, in the Quote Type field, select Quote 2. 3. In the Action Pane, click Related Information > Quote > Service Discounts. 4. In the Contract/Service Discounts window, create two lines: For the first line, select Resource Group in the Type field and type “10” in the Discount % field. For the second line, select Cost in the Type field and type “25” in the Discount % field.Page 372
  • 42. Chapter 8: Creating Service ContractsFIGURE 8.28 SETTING UP THE CONTRACT DISCOUNTS 5. Click OK. 6. In the Action Pane of the Service Contract Quote window, click File Contract Quote. 7. Click Yes to confirm filing the contract quote. 8. In the Action Pane, click Lock.Update the contract quote with the response time data. 1. To reopen the contract quote, in the Action Pane, click Actions > Functions > Open. 2. On the Lines FastTab, change the value in the Response Time (Hours) field to “16” for all contract lines. 3. On the General FastTab, in the Quote Type field, select Quote 3. 4. In the Action Pane, click File Contract Quote and accept the message that follows. 5. In the Action Pane, click Lock. The Service Contract Quote window looks like this. Page 373
  • 43. Chapter 8: Creating Service Contracts FIGURE 8.29 CHANGING THE RESPONSE TIME HOURS Convert the contract quote to a service contract. 1. To view the list of filed contract quotes created while working on the service quote, click Related Information > Quote > Filed Contract Quotes. The Filed Service Contract List window appears. FIGURE 8.30 VIEWING THE FILED SERVICE CONTRACTS 2. To reopen the contract quote, in the Action Pane, click Actions > Functions > Open. 3. Click Make Contract. 4. Click Yes to confirm converting the contract quote into a contract. 5. Click Yes to confirm invoicing the newly created service contract for the starting invoice period.Page 374
  • 44. Chapter 8: Creating Service Contracts 6. Click OK to the message informing that the service invoice is created. 7. Click Home > Service Contracts. 8. Browse to the last contract in the list and double-click it to open the Service Contract window.FIGURE 8.31 THE SERVICE CONTRACT CREATED FROM THE SERVICECONTRACT QUOTE 9. Click Departments > Service > Contract Management. 10. Under Lists, click Service Invoices. 11. Browse to the service invoice for customer 50000 and date 1/25/2010 and double-click it to open the Service Invoice window. Page 375
  • 45. Chapter 8: Creating Service Contracts FIGURE 8.32 THE SERVICE INVOICE CREATED FROM THE SERVICE CONTRACT QUOTEPage 376
  • 46. Chapter 8: Creating Service ContractsSummary The chapter describes the following ways service contracts can be created: Creating a service contract from a contract quote Creating a service contract directly in the Service Contract window (manually or automatically) Creating service contracts involves the following procedures: Filling in the fields on the General FastTab. Filling in the fields on the Invoice Details FastTab. Setting up the contract specific service hours. Setting up contract discounts on service. Page 377
  • 47. Chapter 8: Creating Service ContractsTest Your Knowledge 1. What are the three types of contract discounts on services? 2. True or False: The Customer No. field in the Service Contract window contains the number of the customer to whom the invoices are sent for the service contract. 3. Is it possible to create a contract line for a service item which is already included in one or more service contracts or contract quotes? 4. What function is used to create service contracts automatically? ( ) Select Contract Lines ( ) Copy Document ( ) Sign Contract ( ) Change Customer 5. What is used in the Service Management application area to create predefined layouts for a typical series of contracts?Page 378
  • 48. Chapter 8: Creating Service Contracts Page 379
  • 49. Chapter 8: Creating Service ContractsQuick Interaction: Lessons Learned Take a moment and write down three Key Points you have learned from this chapter: 1. 2. 3.Page 380
  • 50. Chapter 8: Creating Service ContractsSolutions Test Your Knowledge 1. What are the three types of contract discounts on services? MODEL ANSWER: There are the following three types of contract discounts on services: service item group, resource group, and cost. 2. True or False: The Customer No. field in the Service Contract window contains the number of the customer whom the invoices are sent for the service contract. MODEL ANSWER: False: The Customer No. field in the Service Contract window contains the number of the customer who owns the items in service. 3. Is it possible to create a contract line for a service item which is already included in one or more service contracts or contract quotes? MODEL ANSWER: Yes, it is possible to create a contract line for a service item which is already included in one or more service contracts or contract quotes by accepting the message informing about it. 4. What function is used to create service contracts automatically? ( ) Select Contract Lines (√) Copy Document ( ) Sign Contract ( ) Change Customer What is used in the Service Management application area to create predefined layouts for a typical series of contracts? Complete the following sentence: MODEL ANSWER: Contract templates are used to create predefined layouts for a typical series of contracts. Page 381
  • 51. Chapter 8: Creating Service ContractsPage 382