Understanding Contract Price Adaptation Items and Contract Renewals

For long-term service contracts with customers, prices of individual items are usually determined once, then remain fixed for the duration of the contract. For scenarios that require flexible pricing, price adaptation for service contracts offers two methods to update the pricing:

• Set the billing date, settlement start date, or settlement end date in a billing request line as the pricing date of a service contract item. Varying prices can then be determined according to varying pricing dates.
• Maintain the prices of service contract items manually at billing request line level.

It is also possible to specifically define an item in a service contract as a price adaptation item. When you create a service contract item by using the Manage Service Contracts app, you can choose a product and assign item category SCN2 (SC Itm (Pri. Adptn.)) to it. This is intended to be used exclusively for price adaptation, meaning that flexible pricing is now active for this item.

Note

To have the price of a service contract determined once and subsequently fixed for the entire contract duration, use item category Service Contract Itm. Note that you cannot switch to this item category once you have selected the SC Itm (Pri. Adptn.) item category (SCN2) for price adaptation.

For the second option mentioned previously (maintain the prices of service contract items manually at billing request line level), on the Billing Plan tab, you can maintain the prices of service contract items manually at billing request line level. To maintain prices on billing request line level of a service contract item, navigate to the billing request line details level. Here you can change the price for each billing request line in the price details screen.

You can also maintain the prices on service contract billing plans with a fast entry screen for price adaptation. The Change Prices - Fast Entry option in the Billing Plan section of the screen can be used for this.

Select one or multiple settlement periods and enter the relevant prices. To save the prices, choose Save Changes. After saving, the maintained prices are updated in the billing request lines of the billing plan.

A specific item category is available for ad-hoc billing items in a service contract: SCN3 (SC Itm (Ad-hoc Bill)). An ad-hoc billing item uses an ad-hoc billing plan. This means that end-users can manually create and update the billing request lines in the ad-hoc billing plan, based on their business requirements. An ad-hoc billing plan is initially empty. The option Bill Remaining Net Value can be used to automatically calculate the remaining net value of a service contract and to then create a billing request line accordingly.

In SAP S/4HANA Cloud, you can extend a service contract in Service Contract Management (3MO) via the service contract renewal change process. Existing service contracts are updated by change processes. In both contract management and accounting, these change processes lead to changes in the follow-up process. Change processes for a service contract are available on both header and item level. It is possible to use the Contract Renewal - One Item Only option for changes at item level. The item must have the status Released.

If you want to execute a contract renewal for a service contract in SAP S/4HANA Cloud, follow these steps:

1. Choose Change Processes on the service contract item level.
2. Choose Contract Renewal – One Item Only from the dropdown list.
3. Enter a duration for the renewal period. If necessary, change the Date Received date field.
4. Choose Execute Change Process.

As the result, a new item for the renewal period is created with the status Open. The user must release the new item to activate it. This is shown in the figure, Steps when Renewing a Service Contract, as step 5 in the contract renewal change process.

There is also a price agreement copy function available for service contracts. When copying service contracts or service contract items, already maintained price agreement condition records will also be copied. When executing service contract change processes like an item renewal process, the system will copy already maintained price agreement condition records and add them to the renewal item.

When executing change processes that create (as a result) a new service contract (change of sold to party), the system will also copy already maintained price agreement condition records and add them to the newly created service contract.

You can also edit and delete price agreements in a service contract. You can delete existing price agreement condition records directly in a service contract. Editing capabilities for existing price agreement condition records are also available. It is recommended that you do not change the Valid To date of a price agreement condition record in a service contract item. Only three price agreement condition types are provided: PSC0, DSC1, and DSC2. It is not possible to create other price agreement condition types.