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Administrator Guide
Last Updated: 2025-09-19
Create Customer Contracts

Create Customer Contracts

Configure the
Customer Contract Event
 business process and security policy in the Customer Contracts and Project Billing functional areas.
You can create customer contracts to specify the rules, terms, and conditions that govern the contract with your customer. Workday uses the terms that you specify to create:
  • Billing schedules.
  • Revenue recognition schedules.
  • Customer invoices.
  • Accounting.
  1. Access the
    Create Customer Contract
     task.
    When you create your contract from a template and your worktag values conflict, the customer or company-specific worktags take precedence.
  2. Complete the header:
    Option Description
    Bill-From Address
    This field is automatically populated from the Company information, and propagates through to customer invoice proposals and customer invoices.
    Displays when the
    Enable Bill-From Address and Ship-From Address on Customer Invoice
     option on the
    Edit Customer Account Options
     task is selected.
    Ship-From Address
    This field is automatically populated from the Company information, and propagates through to customer invoice proposals and customer invoices.
    Displays when the
    Enable Bill-From Address and Ship-From Address on Customer Invoice
     option on the
    Edit Customer Account Options
     task is selected.
    Contract Type
    Select a contract type that you created on the
    Maintain Customer Contract Types
     task.
    Related Customer Contract
    Select to associate 1 related customer contract with this customer contract for reporting purposes.
    Linked Customer Contracts
    Select to associate multiple child customer contracts with this parent customer contract for revenue purposes.
    Displays when you select a
    Contract Type
     enabled for linked contracts.
    Parent Customer Contract
    Select to associate this customer contract with a parent customer contract for revenue purposes. When you view the parent customer contract, Workday displays this customer contract as a linked contract.
    Multiple-Element Revenue Allocation
    Select when the contract has lines that require different revenue allocations.
    Workday then enables you to select a
    Fair Value Price List
     and define the fair value unit price and extended amount on the contract lines.
    Fair Value Price List
    Displays when you select the
    Multiple-Element Revenue Allocation
     check box.
    Default Tax Code
    Select a tax code when the contract lines contain items that are taxable. Workday populates contract lines with the tax code based on the values that you enter on the
    Create Customer
     task for:
    • Company.
    • Customer.
    • Revenue Category.
    • Ship-From Address.
    • Ship-To Address.
    Worktags
    To track revenue and expenditures between intercompanies on customer contract lines, select the
    Intercompany Affiliate
     worktag that you configured for customer contracts on the
    Maintain Worktag Usage
     report. Workday populates the
    Intercompany Affiliate
     worktag onto the customer contract lines. Workday also populates the
    Intercompany Affiliate
     worktag from the customer contract lines onto:
    • Ad hoc project transactions.
    • Billing installments.
    • Installment-type transactions.
    • Project-based transactions.
    • Revenue installments.
    • Usage-based transactions.
    Billing Template
    Select to create consolidated billing schedules. You can't include a billing template when you also include an installment or transaction billing schedule template.
  3. Complete the
    Line Details
     tab:
    Option Description
    Commodity Code
    The commodity code you select here propagates through to customer invoice proposals and customer invoices.
    Revenue Category
    Workday populates this field based on your selection from the
    Sales Item
     prompt.
    Bundle
    Workday populates this field when you select a bundled sales item from the
    Sales Item
     prompt.
    Click to update the bundled sales item information.
    To allocate revenue for bundled sales items, click the
    Bundle
     button and enter amounts in the
    Revenue Override Amount
     field.
    When you change the quantity on a contract line on the
    Goods and Services
     tab, or the quantity per bundle on a bundled sales item line, Workday populates these fields on the bundled sales item line:
    • Total Quantity
       = (
      Quantity per Bundle
       x
      Quantity
       on contract line)
    • List Extended Amount
       = (
      Total Quantity
       x
      List Unit Price
      )
    • FV Extended Amount
       = (
      Total Quantity
       x
      FV Unit Price
      )
    Line Type
    When you select
    Prepaid
     from the
    Line Type
     prompt on the
    Goods and Services
     tab and create customer invoices or customer invoice proposals, Workday displays the billable project on the customer invoice lines.
    Billable Project
    When you select a project from the
    Billable Project
     prompt on the
    Usage-Based
     tab, Workday associates the billable project with the usage-based customer contract line.
    You can't change the billable project on a usage-based customer contract line when the line is associated with:
    • A billing schedule.
    • A revenue recognition schedule.
    • An invoice.
    • Usage-based transactions.
    Quantity 2
    Unit of Measure 2
    Displays when you select
    Subscription
     from the
    Line Type
     prompt.
    Use when you need to display the quantity of items sold on your billing installments and customer invoices.
    Example: Your customer decides to purchase 20 hours of your service per month.
    Contract Line Amount
    Workday uses the contract line amount on the billing schedule.
    FV Unit Price
    Calculation: Fair Value Extended Amount ÷ Total Number of Units.
    FV Extended Amount
    Workday uses this value as the revenue override amount when you run multiple-element allocation.
    Workday updates the extended amount and the unit price when you change either value.
    Phases
    Tasks
    (Projects only)
    Select to include 1 or more phases and tasks on Project Time and Expense, Fixed Fee Project, and Value-Based Project contract lines.
    Standard Rate Sheet (Projects only)
    Select to use Standard Billing Rates by Worker or by Rules.
    Contract Rate Sheet (Projects only)
    When you select both a standard rate sheet and a contract rate sheet, Workday applies the rates from the standard rate sheet first.
    To add a contract rate sheet to any project line type, select an option from the
    Project Transaction Source
     prompt.
    To compare fixed fee amounts to time and material amounts, associate a billing rate sheet to:
    • Project Time and Expense
       line types for transaction-based billing projects.
    • Fixed Fee Project
       and
      Value-Based Project
       line types for installment-based billing projects.
  4. Complete the
    Revenue and Billing
     tab:
    Option Description
    Revenue Treatment
    Workday uses the revenue treatment to determine which ledger account in your account posting rules to credit and debit when you create invoices and recognize revenue.
    Select:
    • Accrued
       to credit the Unbilled Receivables ledger account during invoicing and debit the Unbilled Receivables ledger account during revenue recognition.
    • Deferred
       to credit the Deferred Revenue ledger account during invoicing and debit the Deferred Revenue ledger account during revenue recognition.
    • Invoice
       to credit the Revenue ledger account.
    Revenue Override Amount
    Workday uses the revenue override amount on the revenue recognition schedule.
    You can also use this field to record the revenue amount you allocate on a multiple-element arrangement contract.
    Revenue Template
    Displays when you select
    Accrued
     or
    Deferred
     from the
    Revenue Treatment
     prompt. You can associate the line with a revenue recognition template in your tenant.
    Depending on your template settings, and after contract line approval, Workday:
    • Generates installments.
    • Submits the revenue recognition schedule for approval.
  5. Complete the
    Additional Information
     tab:
    Option Description
    Worktags
    When you select a billable project on usage-based customer contract lines, select a project plan phase or project plan task that's associated with the billable project.
Workday routes the customer contract to the
Customer Contract Event
 business process for review and approval.
Create:
  • Customer billing schedules.
  • Revenue recognition schedules.