contract

[Former Member]

hi

There is no billing relevance for QUANTITY CONTRACT & VALUE CONTRACT. Then how the system wil post the amount to A/c? if he need bill then what wil be the alternative

regards

krishna

[Former Member]

contract may have no billing relevance. but when u create the release order referring the contract, that only will be billed.

u have to maintain the copy control settings accordingly

[Lakshmipathi]

Dear murali

Quantity Contract

A quantity contract is an agreement that your customer will order a certain quantity of a product from you during a specified period. The contract contains basic quantity and price information but no schedule of specific delivery dates and quantities.(If the customer provides delivery information, you can create a scheduling agreement instead).

The customer fulfills a contract by placing sales orders against it. These sales orders are known as release orders (or call-offs).

You can specify in the contract which other partners in addition to the sold-to party are authorized to release against the contract. For further information, see Authorized Partners for Release Orders.

When you create a release order, you refer to the relevant contract, and the system automatically updates the released quantities in the contract. Otherwise, processing a release order is just like processing a standard sales order.

Value Contract

The value contract contains rules that specify the kind of release orders that are allowed. You can create restrictions with regard to the customers and materials, as well as a list of partner authorizations.

In the value contract you can refer to lists of materials that have already been defined. This list could be a product hierarchy or a product proposal module. But you can also create value contracts for only one material (e.g. a configurable material). To meet both these options, two types of contract are offered in the standard system:

• Value contract type WK1*

You can specify a product hierarchy or a product proposal module for value contracts with contract type WK1. The system will always offer you this type of contract if you wish to create a contract for several materials or a certain group of materials. All the materials that were contained in the relevant product proposal, or that belonged to the specified product hierarchy would then be relevant for release.

• Value contract type WK2 (material-related)*

You can create contracts for one material (normally configurable) with this type of value contract. Contract type WK2 is commonly used in software companies, where a contract is made with the customer for one specific software product up to the value of $500,000, for example.

You can also agree on the duration of the contract for this type. The contract duration can be agreed at item level and could be different to the contract duaration specified at header level.

You can store particular price agreements for value contracts. These price agreements are possible at any level. The value contract can, for example, contain prices for individual materials, or discounts that are valid for each material released.

Releases

The customer fulfills a contract by issuing orders against the contract. The contract does not contain any exact dates for deliveries so a release from a value contract has to be made using a sales order.

When a release is made against the contract, the system automatically updates the released value in the contract. The release order value arises from the total of the open order and delivery values, and the value that has already been billed to the value contract.

The system also updates the released value for later changes (e.g. overdelivery of contract release, price changes in the billing document, partial deliveries, returns, rejection of order items, cancellation or deletion of orders, deliveries, billing documents).

You can make a release in any currency and the system automatically converts this currency into the one agreed upon in the value contract for the price date of the contract release.

Billing

You can bill the value contract either directly or per release order. If you wish to bill the value contract directly, you have to create a billing plan for the value contract. This will enable you to bill the value contract for more than one date, and for partial values. If you change the value of an item in the value contract, the system automatically adjusts the open billing deadlines so that the complete value is billed.

Completing value contracts

A value contract is completed by setting a reason for rejection. You can determine how the system responds once the target value has been reached in Customizing for value contracts (item category). Responses could include no reaction, a warning or an error message.

Constraints

A value contract that has not been completely released is not automatically billed. If you are working with the billing plan, you already have dates that have been billed and you then reduce the target value in the value contract, the system does not check whether too much has been billed. In this case you have to create a credit memo for the difference between the amounts.

Quantity and value contract items cannot be processed together in one document.

Thanks

G. Lakshmipathi