Creating Contract

Objective

After completing this lesson, you will be able to describe the purpose and usage of the contract.

Contract

Visualization of business relationships in utility management, emphasizing connections between a business partner, contract accounts, and specific contracts for structured billing.

Contracts for services, such as maintenance contracts, are managed by the Sales and Distribution (SD) component.

Illustrates the relationship between a contract account, utility installations, and contracts, emphasizing division-specific, company-specific allocation and cross-contract maintenance.

With the exception of move-in/out data, all contract account data can be changed for multiple contracts of the contract account. The changed data can then be displayed and checked for consistency.

Form interface for managing contract data, emphasizing customization, unit testing, and administrative details with fields for input and checkboxes for additional actions.

  • You can maintain the contract fields in Customizing.

    SAP Fiori app. On Home page→User Profile icon→App Finder→SAP Menu→Search in SAP Menu→Customizing – Execute Project→SAP Reference IMG→SAP Utilities→Master Data→Utility Contract→Define Tabs for Utility Contracts.

  • You can determine the tab layout in the Customizing settings for the contract. You then select the layout to be used in the basic settings.

    SAP Fiori app. OnHome page→User Profile icon→App Finder→SAP Menu→Search in SAP Menu→Customizing – Execute Project→SAP Reference IMG→SAP Utilities→Basic Settings/Enterprise Structure→Define Default Layout for Tabs.

Summary of CR&B and SD contract types, including supply, purchasing, plant, company consumption, and service contracts, emphasizing their applications and billing purposes.
  • You can model various different types of contract in SAP S/4HANA Utilities. The category to which a contract belongs is defined by certain settings in the technical or business master data (such as: the plant or company consumption setting in the contract).
  • Service contracts cannot be created in move-in processing. They can only be created in the Sales and Distribution (SD) application component.
Visual representation of interconnected contract data categories emphasizing key elements for billing, scheduling, account assignments, sales, and operational transactions.
  • In the field 'Statistics Group', you specify the statistics group for a contract. This is used for determining data for sales statistics.
  • The Authorization Group prevents unauthorized access to specific objects. To be able to carry out any activity protected in this way, the user must have authorization for both the activity and the authorization group.
  • If you maintain data relevant to budget billing (for example the budget billing cycle) in the contract, the data you enter overrides the default values defined in the portion or in the Customizing settings.
  • The outsorting group determines which validations are to be carried out in billing. A contract can also be outsorted manually.
  • The meter reading block reason specifies why the contract has been blocked for meter readings. If you make an entry in this field, the contract can no longer be billed. The contract will not be released again for billing until you enter a billing release reason (the billing release reason overrides the billing block reason).
  • A billing area is an organizational unit that covers a restricted area of activity/responsibility in your company. Value movements entered in Financial Accounting can be attributed to this business area for the purposes of external accounting.
  • Schedule data is provided mainly for information purposes. It allows you to display information on when a contract was signed or cancelled, for example.
Illustration explaining joint invoicing for contracts linked to a single account, highlighting options: required, optional, or excluded, to streamline financial processes.
  • This indicator is used to specify whether a contract is to be invoiced together with certain other contracts, and if so, how?
  • If you change this indicator, that change will take effect the next time a bill is created for the contract account of this contract. If the indicator is set in the contract, the periodic, final, or interim billing documents of the contract will be invoiced together with the billing documents of other contracts of the same contract account, as specified by the joint invoicing indicator.
Diagram illustrating the flow of contracts, billing, and invoicing, emphasizing mandatory, optional, and exclusive processes for joint or individual invoices in a structured system.
  • In the first example, contracts 1, 2 and 3 have to be billed jointly. Since contract 2 has not yet been billed, the contracts are not invoiced.
  • The other two contracts cannot be invoiced. However, the customer still receives a bill, since one contract can only be exclusively invoiced.
  • You can influence the modeling of the invoicing units using event R403.
A process flow showing how contracts are classified and linked to billing types, which are then consolidated or separated into invoicing documents based on rules.
  • In the second example, you have the billing documents for contracts 1, 2 and 3, meaning they can be jointly invoiced.
  • As there is also a billing document for the optional contract, it is also included in the invoicing unit.
  • The exclusive contract is again invoiced separately.
  • You can influence the modeling of the invoicing units using event R403.

Learning

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