Concept: Customer Contracts

Until a customer contract is approved, it remains in

Draft

status and you can freely make changes using the

Edit

option from the contract's related actions menu. After the contract is approved, you can make changes using the

Amend Customer Contract

and

Change Customer Contract

options.

You can configure contract amendment types on the

Maintain Customer Contract Amendment Types

task. Amendments enable you to capture additions, changes, and corrections on approved customer contracts. You can change the status of an entire customer contract or specific customer contract lines. You can also configure amendment numbers to track changes made on amendments. Workday automatically assigns the next version number to each new amendment. You can also specify an optional amendment number to correlate to an amendment document if one exists. Once you create an amendment, you can view the amendment history of a customer contract or contract line for any version.

Changes enable you to update details on approved customer contracts. If the customer contract has a billing or revenue recognition schedule, you can only change nonamount details.

Change orders enable you to update the quantity and amount on customer contract lines.

You can use the

Create Customer Contract Checklist Template

task to customize a checklist of requirements for your contract specialists to use when they create customer contracts. You can then associate the checklist template with a contract type on the

Maintain Customer Contract Types

task. When you create a customer contract using the contract type you associated with the checklist template, Workday automatically adds a

Checklist

tab on the contract.

You can set up and add administrative fees as a percentage of transaction amounts on your customer contracts. Example: A management fee of 3% of all time logged to a project.

You can add contract line fees to transactions with the

Project Time and Expense

contract line type.

To set up contract line fees, access the

Maintain Contract Line Fees

task. For each contract line fee, you can specify:

A positive or negative percentage.
Sales items or revenue categories to apply to the invoice line if required.
Whether to inherit worktags from the contract line or the project.

When you add a fee to a contract line, Workday replaces the existing sales item or revenue category with those from the contract line fee configuration. If the

Sales Item

prompt for the line fee is empty and the

Revenue Category

prompt is populated, Workday leaves the

Sales Item

field blank on the contract fee customer invoice line. If the

Revenue Category

prompt on the contract line fee is empty, Workday uses the revenue category from the contract line.

Each customer contract line includes a revenue category that you can enter or derive from a sales item.

To comply with Standalone Selling Price (SSP) requirements, you can distribute line amounts on customer contracts differently for billing and revenue. The customer contract header ensures that billing and revenue amounts remain equal. You can also capture discounts as negative customer contract lines.

Customer contract templates reduce the time and effort needed to create customer contracts by populating commonly used fields and values. Once you create a template on the

Create Customer Contract Template

task, you can either:

Assign the template to a contract type on the
Maintain Customer Contract Types
task.
Create a customer contract using the template on the
Create Customer Contract
task.

You can manage your customer contracts based on the contract types that you define on the

Maintain Customer Contract Types

task. The contract types that you define help you to identify, manage, and approve your customer contracts based on your business needs. You can customize contract types to include:

Checklist templates.
Contract templates.
Linked contracts.

Customer contract worktags enable you to:

Analyze and report on revenue details by customer contract.
Associate costs or transactions with the customer contract.
Reconcile revenue by customer contract at the ledger level.

You can capture customer contract worktags on operational transactions that originate from a contract, such as:

Accounting journals.
Billing schedules and installments.
Customer invoices from billing installments.
Revenue recognition schedules and installments.

You can also associate a customer contract worktag with transactions that impact revenue. Workday displays the customer contract worktag as an implicit worktag on transactions that originate from the contract. You can also enable Workday to display the customer contract worktag as an explicit worktag on transactions that relate to a customer contract. You can use the customer contract worktag on billing and revenue recognition installment lines, and you can view the worktag on resulting operational journals.

You can enable customer contract worktags on the

Maintain Worktag Usage

task.

When you associate a fair value price list with your customer contract, Workday populates the fair value amounts on your customer contract lines.

Linked and parent customer contracts enable you to associate customer contracts together for allocation and revenue purposes. You can enable linked customer contracts on the

Maintain Customer Contract Types

task. When you create a customer contract, you can then associate multiple linked customer contracts with a single parent customer contract. The linked customer contracts display on the parent customer contract and the parent customer contract displays on each linked customer contract.

Workday consolidates the linked customer contract lines and displays 1 line per revenue category on the parent customer contract. You can also view linked customer contract lines by revenue category when you create a consolidated revenue recognition schedule. You can create a consolidated revenue recognition schedule from the related actions menu of the parent customer contract.

You can set up and add discounts and premiums to fixed amount line types. You can base pricing rules on your customer contracts and apply them on the customer contract header or line.

To create pricing discounts and premiums, access the

Maintain Customer Contract Discounts and Premiums

task. Specify a positive

Percentage

for a premium, and a negative

Percentage

for a discount.

Related customer contracts enable you to associate customer contracts together for reporting purposes. When you create a customer contract, you can associate 1 related customer contract with it. Related customer contracts must share the same company and sold-to customer.