Creating Service Contracts

Objectives

After completing this lesson, you will be able to:

  • Create a service contract and a service contract template

Service Contracts

Manage Service Contracts

With the SAP Fiori app called Manage Service Contracts , you can create and edit service contracts and service contract items in SAP S/4HANA Cloud Public Edition.

This includes service contracts created in the system and service contracts synchronized from external systems.

The Manage Service Contracts app is available when you have the Service Manager (CUSTOMER_SRVC_MGR) role assigned to your user.

How to Create a Service Contract

On the Manage Service Contracts screen, in the Service Contracts screen area, choose Create.

Alternatively, on the Service Contract: New screen, choose New.

As mentioned before, in SAP S/4HANA Cloud Public Edition, service, it is possible to change the determined tax destination country in the header of a service contract. The entry is normally derived from the ship-to party used in the service contract, but this determined entry can be overwritten by another entry if necessary.

The system automatically copies any billing-related texts (text types TX05 and TX06, including all available languages) from the business partner master data to texts at the service contract header. The system does this when specific conditions are met.

This feature is available in the Manage Service Contracts app and the APIs for service contracts.

You can view the earliest start and latest end dates of a service contract in the Manage Service Contracts app.

From the start dates of all service contract items contained in the service contract, the system takes the earliest one as the earliest start date of the service contract. From the end dates of all service contract items contained in the service contract, the system takes the latest one as the latest end date of the service contract. You can also use these two fields to filter service contracts.

Is is also possible to assign work breakdown structure elements (WBS elements) as attributes to a service contract (or, for that matter, a service order or a repair order). In a service transaction, a WBS element is used as an attribute of a profitability segment, which allows you to associate the cost and revenue of such a service transaction with a project and analyze profitability at project level.

Editing an Existing Service Contract

To enter a contract in edit mode, choose the pencil icon in the service contracts search result list.

On the Service Contract's object page, you can switch from display mode to edit mode by choosing the Edit or Edit List options.

Using Product Proposals During Service Contract Creation

When creating a service contract, a button named Product Proposal is available in the Product List assignment block in a service contract item. A user can use this option to select products from the bill of material (BOM) structure that has been maintained for a an item product (in the current service contract) or an equipment or product as used in the Object List. These products from the BOM structure can then be added to the product list.

When using the button, first a so-called Source Type needs to be selected (item product, products (object list) or equipment (object list)), and then the actual source object needs to be entered. For example the equipment number. If the entered source has a BOM structure assigned, this BOM structure is then expanded and the user can select products from it.

Price Agreements in Service Contracts

Customer-specific prices or discounts for services and service parts can be maintained based on price agreements in service contracts.

These pricing agreements are then copied to the service orders that are assigned to the service contracts (for which the pricing agreements have been maintained) after service contract determination.

Note
Header condition type DSC3 (discount for service contract) can be used to enter a header discount in a service contract, which is then valid for all items in the service contract.

Set Material Prices

Key users who have the Pricing Specialist (SAP_BR_PRICING_SPECIALIST) role can create the relevant condition records to maintain these price agreements (prices or discounts) for service contract items by using the Set Material Prices - Sales app.

Working with Condition Records

To maintain the condition records in SAP S/4HANA Cloud Public Edition, use the following condition types that were designed specifically for service contracts:

  • Material price in service contract (PSC0)
  • Material discount in service contract (DSC1)
  • Group discount of material price in service contract (DSC2)

In the example in the figure Working with Condition Records, a contract-specific material price of 15 USD for spare part SRV_03 is maintained.

Service Contract Determination

You can use service contract determination to search for and display existing service contracts to which service orders can be assigned.

Service contract determination works only in resource-related service orders. The service contracts are determined and assigned at the item level.

Criteria for Service Contract Determination

When using service contract determination, the following criteria apply:

  • The sold-to party in the service contract and in the service order must be identical.
  • The sales organization and the distribution channel in the service contract and in the service order must be identical.
  • The status of the service contract item must be released.
  • The date in the Requested Start field in the service order must lie within the validity period of the service contract item.

Automatic Determination of Service Contracts at Item Level

When you create an item in a resource-related service order, the system automatically runs contract determination, selects appropriate service contract items according to the above-mentioned criteria, and displays the results.

  • The system only selects and offers for selection the service contract items whose product lists contain the product entered in the service order item.
  • Service contract items that have no entries in the contract item product list are also selected.
  • The system only selects and offers for selection the service contract items whose object lists contain the reference object entered in the service order item.
  • In addition, service contract items that have no entries in the contract item object list are also selected.

During selection of service contract items, data from service contract items is copied into the service orders, and the prices from price agreements in service contracts are applied.

Service Contract Determination for Service Orders Created Through the Service Interfaces (Using APIs)

When you create service orders by using Application Programming Interfaces (APIs), service contract determination also runs for these orders as long as you are not referring to external contracts. Be aware that with an external contract, the system does not run service contract determination. Depending on how many service contract items the system finds, service contract determination behaves as follows:

  • When only one service contract item is found, the system automatically selects the service contracts for the service order.
  • When more than one service contract item is found, the system does not select any item but sends out messages.

    In this case, you can go to the service order in the Manage Service Orders app to perform service contract determination manually.

  • When no service contract item is found, the system does not make a selection.

An Example Process

You are creating a service order (resource-related), which fulfills the criteria for service contract determination.

The SRV_03 product is maintained in the product list of the Service Contract 7000001340 item 100.

A contract-specific material price of 15 USD is maintained as price agreement.

In this example, multiple service contracts are determined.

The user selects the service contract that must be assigned to the service order.

In this example, the determined service contract is shown in the service order header details.

The service part item 10 shows the SRV_03spare part with the service-contract-specific material price of 15 USD.

In the price details of the service part item 10, the service contract-specific material price of 15 USD is displayed.

The indicator called Billing Plan is Finalized can be set at any time, to inform the system that a created ad-hoc billing plan is finalized. Once this indicator is checked, the ad-hoc billing plan can no longer be changed.

The billing status of a service contract item only changes to Completely Billed for an ad-hoc billing plan, when the Billing Plan is Finalized indicator is set and all billing request lines are invoiced. Once this indicator is set, it triggers the billing finalization process. If all billing request lines are billed, then the billing status changes to Completely Billed. If the status is not set to Completely Billed, the system tries to set the status each time a billing request line is billed, until all of the billing request lines are billed and the billing status is set to Completely Billed.

The Services Rendered Date field is available in the billing plan of a price adaptation item and an ad-hoc billing item. The value of this field can be transferred to a billing document which then impacts the tax calculation for the billing document.

The billing date is by default equal to the service contract date. An end-user can manually enter a value in the field Services Rendered Date to change the billing date.

In the table with items of a service contract, a button is available called Change Settlement Rules. Using this button, a mass change of the settlement rule fields for multiple selected items can be executed. The fields Settlement Period Rule and Billing Date Rule can be updated for the selected items.

Note

The fields Settlement Period Rule and Billing Date Rule are hidden by default in the items table. They need to be set to be displayed.

Note

This mass change option for settlement rules does not affect ad-hoc billing items.

Credit Check Integration for a Service Contract

When a service contract is saved, a credit check is triggered for the released items of the contract. The credit check is performed for each payer at the item level. This means that items with the same payer are grouped and their gross value is summed for each credit check. If the credit check result is positive, each successful item updates the commitment of a business partner in a timely manner. The commitments are then consolidated into the credit exposure which consumes the available credit limit of the business partner. If the credit check result is negative, the failed items are set back to In Process and each failed item generates a documented credit decision case.

Customers can activate or deactivate the credit management check at the service transaction level using an available SSCUI. Also some prerequisite configuration steps in Credit Management are needed.

A credit controller can directly release a blocked service contract item from the documented credit decision report. Once a documented credit decision case is released, the corresponding service contract item is also released and it updates the credit commitment.

The credit controller can also trigger a new credit check for a blocked service contract item. If the new credit check is positive, the corresponding service contract item is released and the commitment value is updated. If the new credit check is again negative, the corresponding service contract item remains In Process.

If a credit check is enabled for a service contract, it is possible to execute an auto-renewal. The auto-renewal process will by-pass the credit check process and directly update the credit commitment.

The example on the slide shows a service contract enabled for auto-renewal for 2 years. Before the auto-renewal, the credit check commitment is 1200 EUR, and after the auto-renewal the credit check commitment is 3600 EUR.

Rebuild Report for Service Transactions

In some rare cases, the service side credit amount might be inconsistent with the Financial Supply Chain Management (FSCM) credit exposure amount. An example: if customers change the credit segment assignment or a system issue causes a commitment update failure, the amounts can differ. In such a situation, the credit exposure needs to be rebuilt. The Rebuild Credit Management Data app can be used to do this in such scenarios.

Analytics for Service Contracts

Various analytical features for service contracts are available. The following two analytical cards for service contracts are for example available:

  • Service Contracts By Sold-To Party
  • Service Contracts By Product

Next to these two new analytical cards, you can use the app Service Contract Items - Flexible Analysis to select a flexible combination of dimensions to analyze financial accounting data for service contract items.

Text Determination in Service Contracts (and Templates)

Release 2402 of SAP S/4HANA Cloud Public Edition, service introduced the possibility to copy all header and item texts (also known as notes) from specific preceding service transactions to service contracts and also to service contract templates.

This is controlled by a process known as text determination, and allows additional messages (such as customer wishes, internal notes, problem descriptions and so on) to be copied along the document chain automatically. The feature is applicable for the following cases:

  • Creating service contracts from service contract items in solution orders
  • Creating service contracts from service contract templates
  • Copying service contracts or items in service contracts
  • Copying service contract templates or items in service contract templates

The exchange of information through texts is controlled by text types, text determination, and copying control settings. Copying control controls the copying of texts from source documents to target documents. SAP provides text controls for service contracts. The following table provides an overview of the available text types and how they can be copied from or to service contracts:

Creating and Updating Service Contracts via an API

Service contracts can also be created using an application programming interface (API). A mass update of service contracts can also be executed using an API.

Release 2402 of SAP S/4HANA Cloud Public Edition, service introduced some enhancements to the API for service contracts:

The OData version 4 API Service Contract (A2X) (API_SERVICECONTRACT) contains new entities for user status on both header and item level. New actions for updating prices on header, item, and billing-request-line levels are also included.

Note
When creating contracts via an API, make sure that a description is always entered for all elements used in all languages used. An example would be a partner function: when you add a partner function to the system (in Customizing), make sure the abbreviation and description for it are maintained in all languages used, or you will get errors when using the API.

Service Contract Templates

You can use the SAP Fiori app called Manage Service Contract Templates to create and update service contract templates. With a service contract template, you can define reusable data which then later on minimizes the time required to create a new service contract.

You can use the option Create to add a new service contract template to the list.

You can maintain for example a description for the service contract template, the validity period of the service contract template and a default for the contract duration of the follow-up service contract.

You can add standard template items, price adaptation template items and/or ad-hoc billing template items to a service contract template.

When a service contract template is released, you can use the Create Follow-Up icon to create a follow-up service contract, based on the service contract template. Once the button is chosen, a pop-up window is shown and you need to enter the sold-to party, the service contract start date (and time) for the follow-up service contract. It is also possible to create a service contract only containing some of the items from the service contract template.

You can specify the equipment when you create a follow-up service contract from a service contract template. The specified equipment is directly added to object list of the corresponding service contract items during the creation of the follow-up service contract.

Note

It is also possible to add configurable products as items to service contract templates.

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