Explaining How to Create the Basic Frame of a Contract

Objectives

After completing this lesson, you will be able to:

  • Explain the creation of contracts for various contract types

Contract Basics

Maria and Chris have started an online meeting to create the next contract with all relevant data together and discuss some new points. Maria and Chris will create a completely new contract together and during this process, Maria wants to explain something new about the different parameters of the contract and the necessary steps.

Select the play button to see a summarization from Chris about Contractual Relationships and how the journey continues.

The main and important attribute of a contract is the contract type. The contract type indicates the purpose for which the contract is used. The contract type uses the following parameters to influence how the contract behaves during various processes:

Select the play button to learn about the company code and partner assignment to a SAP Real Estate contract.

A contract in SAP Real Estate Management is always an agreement between the company (represented by the company code) and a business partner that concerns the usage of an asset, a service, or both.

Additionally, the company code predefines the contract currency, assignment to an accounting system, if it will be possible to use foreign currency in the contract, the default date that specifies the start of different processes in the company code (Date of First Posting) and other important parameters.

Organizational Elements

In SAP Real Estate Management following organizational elements are used for mapping business processes:

  • Company code for financial accounting
  • Controlling area for management accounting

The controlling area is the highest organizational unit in controlling, whereas the company code is an organizational unit in financial accounting.

The contract is assigned to the company code directly. This is one of the key fields in the header data.

The controlling area is assigned through the company code. One controlling area can be assigned to more than one company code.

Select the play button to learn about the parameters and requirements for creating a contract, including start and end dates, contract types, and the potential impact of cash flow.

In this exercise, you will create the basic outline of a new contract.

Create the basic shell of a Contract

Exercise Objective

Create a Contract of a certain Contract Type.

Business Example

After Chris has learned about the different types of contracts at SAP, the company leases-in a new office building. As a contract manager, Chris has to record the Contract in his contract management system.

In the following exercise, you will take the role of Chris: Your business concluded a lease-in contract for a new administration building. You have to create and maintain this new contract within SAP Real Estate Management.

Create a lease-in contract in SAP RE using the Contract Management app.

Note

In the exercises of this course, wherever you see ###, you need to replace these characters with your group number. To determine your group number, please do the following:

When logged on to the Fiori Launchpad of the SAP S/4HANA Cloud system, please click on the user profile icon in the top right corner of the screen. The very first line in the pop-up screen will show your user name A0###. Please use these last three digits of your user consistently replacing the ### in an exercise.

A lease-in contract is established incorporating the provided data. As you perform each exercise, you contribute more information until the lease-in contract in SAP S/4HANA Cloud is fully compiled and completed.

Table 1: Lease-In Contract (Overview) and table 2: Posting Parameters and Conditions (Overview) contain all necessary information to create a lease-in contract. Please consider that in the exercises of this course the contract will be created in separate steps. Therefore the following tables give an overview on the contract and its attributes, but are NOT the basis for exercise 2.

Lease-In Contract (Overview)

Field NameValue
Company Code1010
PartnerS4C120
Contract Start01.01.current year - 1
Contract End31.12.current year + 8
Contract NameLease-In (Office Building) Group ###
Renewal Rule1 Option for 1 Year; 6 Months Notice Period (Z100)
ObjectsOffice Building (object type J4) with object type Building (02) and cost center CTR A000/0010101101 (Financials (DE))

Posting Parameters and Conditions (Overview)

Field NameValue
Posting Parameters: Frequency
FrequencyYear
Calculation Method30 days for every month
Payment FormIn arrears
Posting Parameters: organizational assignments
Profit CenterShared Service (YB600)
Functional AreaAdministration (YB40)
Conditions
Condition Type: Credit side basic rent (V100)Condition purpose: Actual Rent (A)
Calculation Formula: Fixed Amount (A)
Unit Price: 120.000 EUR

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