A service contract serves as an agreement between the customer and the service provider. Hence, a service contract is defined per customer and is valid for multiple site. Optionally, you can group the service contracts using a contract type, e.g., WARRANTY and SERVICE.
Although the service contract is defined per customer you have the option of connecting additional customers. This serves two purposes:
The service level agreement defines the time limits that are applicable to
the service contract based on the priority or criticality or combination of
priority and criticality of the issue reported by the customer.
The SLA
can define for the whole service contract or or in each service line level (more
information on service lines can be found further below). SLA covers three different
times:
For work orders or work tasks originating from a service contract, the SLA order templates on the service contract will be used to generate SLA order which will calculate the SLA Latest Start and/or SLA Latest Finish dates on the work task.
Under price agreements you can define special agreements as well as look up sales prices.
Special Agreements - During the course of providing a service it is not uncommon for customers and service providers to change the basic prices they had agreed upon at the time of creating a service contract. In such cases, instead of revising the service contract, a customer agreement with the correct price will be connected to the service contract to be used explicitly. Here the prices defined in the customer agreement overrides the prices defined in the service contract.
Sales Part Price - Serves as a reference point for customers to look up sales parts independent of where they are used. The sales prices displayed will be filtered based on the customers, the site the service contract is connected to, and the currency that is applicable. The search result will also include the sales prices used under special agreements provided the special agreements fall within the dates of the search. Prices are retrieved from the customer agreement and/or the sales price lists (IFS/Pricing) entered for the primary customer of the service contract.
Determines the parameters to be applied when invoicing a service contract.
Price Unit - Specifies the time period for which the periodic price to be invoiced (defined on the service line) is valid. Consider the following example: A service line contains the periodic price of $1200, the customer will be invoiced every quarter, i.e., March, June, September and December.
| Unit Length | Unit |
Price to be Invoiced ($) |
Explanation |
|||
| March | June | September | December | |||
| 1 | Month | 3600 | 3600 | 3600 | 3600 | Since the periodic price of $1200 is only valid for a month and invoicing is done once in 3 months the price to be invoiced is accumulated to $3600. |
| 3 | Month | 1200 | 1200 | 1200 | 1200 | Since both the valid period and the invoicing period are the same, i.e., 3 months the total price to be invoiced remains the same at $1200. |
| 1 | Year | 300 | 300 | 300 | 300 | In this example the periodic price of $1200 is valid for 12 months therefore it will be divided among the invoicing period. |
Invoice Rule - Determine if you want to invoice at the beginning of the period (prior) or at the end of it (post).
Periodic Invoice Parameters - Specifies how often a service contract should be invoiced. In the case of our example, invoicing is done every quarter (3 months).
Revaluation Parameters - Determines how often and at what percentage a revaluation should be performed on the service contract if applicable. The percentage can be positive or negative, e.g., a price of $100 revaluated at 5% the price will be revised to $105. If revaluated at -5% the price will be revised to $95.
Agreement Invoice Rule - Used to apply discounts for the services rendered or for the costs incurred. It can also be used to define prices based on costs. An agreement invoice rule can be for a sales group or cost type (i.e., Personal, Material, External, Expenses, Fixed Price and Tools/Facilities). Furthermore, you can specify whether work task sales lines with zero invoice amounts which are associated with the agreement invoice rule, sales group or cost type of the connected service should be included in or excluded from the customer invoice.
Invoice Type on Service Line - Determines how work tasks connected to the service line should be invoiced, and also if periodic invoicing is to be done. Available values are:
An agreement invoice rule can be applied to all invoice types. In the case of Free of Charge and Fixed Price the agreement invoice rule can be used to give discounts to additional charges that are not covered by the aforementioned invoice types. Additionally for each invoice type you can enter a cap price, i.e., the maximum amount the customer can be charged. If the total amount to be invoiced for a certain period (e.g., 1 year) exceeds the cap price, the customer will not be charged the excess amount. The invoice period is determined by the price unit (discussed above). Note: Observe that the sales parts used in the invoice types above are non-inventory sales parts.
Benefit Rule on Service Line - Determines the type of benefit which is limited to a number of initial calls for executing the particular service through a work order. Once the number of executed work orders exceeds the specified limit, the invoicing switches to as defined in invoice type (discussed above). This number of calls that the benefit plan is applicable to can be defined full time or per period. This period also is determined by the price unit mentioned above. Available values for benefit rules are:
An agreement invoice rule can be applied to all benefit rules as well. In cases of Free of Charge and Free of Charge per Period, customer is invoiced according to the agreement rule, and not invoiced for uncovered cases by it. However Price Override and Price Override per Period definitely require an agreement invoice rule which is meant to cause overriding of prices.
Period allocation is a common requirement where a customer is invoiced a fee for the service contract which will be applied for future periods. The service contract allows you to distribute amounts that should be invoiced over time. When an invoice plan detail line is created for preview or when a line is invoiced a period allocation rule is automatically attached to the line. The period allocation method used by default is Proportional. You can change the rule by using the relevant right mouse button option.
You can define which allocation method the system should use by default by specifying the relevant method (Proportional, Even, Mixed) in the PERIOD_DISTR_METHOD object property.
Under services you can define what type of services, i.e., work types, the customer is entitled to. These are known as service lines. Therefore a service line is meant per work type and includes details related to the objects, their structures and even objects of locations, that the service line is applicable to, invoicing parameters, periodic prices, SLA and execution of work. Related to execution of work, you can also connect Work Task Templates to the service line as executions per site and maintenance organization. Work Task Templates inserted in the execution are not retrieved to the Jobs and Templates tab of the PM action. Instead, these Work Task Templates are directly retrieved to the Jobs and Templates tab of the work orders created from the PM action. Each service line can be connected to a parent service line to form hierarchical structures. Service lines are of three types:
Maintenance Service Lines - Applicable to objects of connection type EQUIPMENT and CATEGORY. If the service line is for objects of type EQUIPMENT you can, optionally, define a location for that object (locations are functional objects that have the Geographical Object option enabled). If the service line is for objects of type CATEGORY you can enter the number of objects that is covered by the service line.
Vehicle Service Lines - Applicable to objects of connection type VIM. Under vehicle services you define service lines for VIM serial top part or a top part structure.
Part service lines - Used for pricing in the Component Repair Order (CRO) flow. It can be used for all the CRO repair order types: Work Order, Repair Shop Order, Disposition Shop Order and External Service Order.
Each service line has a list of periodic price lines. A periodic price line displays the price that will be invoiced per service line for the given period. This has the following statuses:
Once invoicing is done, you can close the periodic price line. The price line will have a record of who closed the line and the date it was closed.
Enter a maintenance plan for the customer by creating PM actions. If the PM actions you create are calendar based, you will be able to view and modify the generated maintenance plan within the service contract. To generate a work order from a PM action you can use the Calendar Generation, Event Generation or Condition Generation dialog boxes. You can also manually generate a work order directly from the service contract.
A service contract can be invoiced in several ways:
Through a work task - Where a service contract and a service line that is connected to the work task will take effect once the work task is transferred to IFS/Customer Order. Note: sales lines with zero invoice amounts will not be transferred to the customer order for invoicing if the basic data is configured accordingly. A service contract (and service line) can be connected to a work task in one of the following ways:
The entire service contract - When invoicing a service contract as a whole, the system checks if the invoice period defined on the Service Contract/Invoice Parameters tab falls within the time period of the service line or periodic price (defined on the Service Contract/Services (or Vehicle Services) tab). If yes then the relevant periodic price (of the service line) will be invoiced. For example:
| Invoice Period | Service Line No | Periodic Price Valid Period | Eligible for Invoicing? (Y/N) |
| 01-01-2007 to 31-01-2007 | 1 | 01-01-2007 to 31-01-2007 | Y |
| 01-01-2007 to 31-01-2007 | 1 | 01-02-2007 to 28-02-2007 | N |
| 01-01-2007 to 31-01-2007 | 2 | 01-01-2007 to 28-02-2007 | Y |
A service line - Instead of invoicing an entire service contract you can opt to invoice a service line. In such cases you first need to generate a preview of the invoice lines before you can invoice it.
If a delivery address is defined on the Parties tab of the object for which the Set Revenue option is enabled on the Scope tab for the contract customer, that delivery address would be selected for the customer orders created for periodic invoicing. If no delivery address is defined, the default deliver address of the contract customer would be automatically selected. Additionally, if an alt. customer is defined on the service line and a delivery address is defined on the Parties tab of the selected object for the alt. customer, that delivery address would be selected for the customer orders created for periodic invoicing. If no delivery address is defined, the default deliver address of the alt. customer would be automatically selected.
Invoicing multiple service contracts - Choose this option to invoice multiple service contracts. Service contracts can be filtered based on the site, contract type and customer. You can also specify the number of days ahead of which you want to generate invoices. The task can be done directly or scheduled as a background job to be executed automatically at predefined intervals.
To be able to invoice multiple service contract lines on one and the same
invoice, the setup of the customer must allow the use of collective invoices.
Make sure the customer is defined to use collective invoices in Customer/Sales/General.
After invoicing the service lines from the service contract, the collective
invoice can be created in the Create Collective Customer Invoices.
Planned - A new service contract will always receive the Planned status. A planned service contract cannot be used to generate work orders.
Active - An active service contract is ready to be connected to a work order, PM action or to be invoiced.
Negotiated - The status of contract is set to Negotiated when you need to adjust an active contract.
Closed - A contract is closed when it is no longer in use.
Freezing a contract - This is not a status, rather it is an option to temporarily freeze a service contract due to reasons such as the customer failing to make a payment. It is not possible to connect a service line from a frozen service contract to a work order. However, a frozen service contract can be invoiced.
View a graphical representation of cost/revenue analysis for the service
contract. It consists of several graphs which display detailed breakdown of
costs and revenue. Further user has the possibility to hide any unnecessary
graphs as well.
Duration for which the service contract need to be analyzed
can be selected as either of these options Contract Duration/ YTD/
One year.
These graphs comprises of following information: