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Chapter 10: Service Contracts - Advanced

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CHAPTER 10: SERVICE CONTRACTS - ADVANCED

Objectives

The objectives are:

Create multiple service contracts.

Update the annual amount of a service contract.

Invoice a service contract directly.

Introduction

This chapter describes the more advanced functionality relating to service

contracts, including:

How to create multiple service contracts.

The various methods to update the annual amount of a service

contract.

Within the chapter there are demonstrations to use in practicing the concepts

learned.


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Creating Multiple Service Contracts

Depending on the service level agreement(s) with a customer, it may be

necessary to cover a service item under more than one service contract. For

example, when a service item consists of mechanical components and parts that

are integrated with software components, it may be necessary to issue different

types of service contracts. Two contracts may be necessary, one to cover the

service requirements of the mechanical subset, and one to guarantee proper

service on the software subset, such as software upgrades.

By covering a service item under multiple contracts:

Its parts can be serviced separately.

The different skills needed to service different aspects of a service

item, such as mechanical components and software are considered.

Different response times and frequency for servicing can be

specified. For example, software and mechanical components usually

have different time intervals in terms of their service needs.

Generally mechanical components need more frequent maintenance

than software.

Issuing multiple contracts also addresses the types of activities performed when a

service item requires different types of service in different time periods. For

example, if a service item needs to be:

Calibrated infrequently.

Cleaned periodically.

From time to time reconfigured for different machinery processes.

When such a service item is added on a contract line, the program displays a

warning message indicating this service item already belongs to one or more

service contracts or contract quotes.

Once the message is confirmed, the program copies all relevant information

about the service item to a newly created contract line.

There are two methods of creating service contracts or contract quotes for service

items already registered in non-canceled contracts owned by the same customer:

Automatically

Manually

To automatically create a service contract or contract quote for service items

already registered in other service contracts or contract quotes, use the Copy

Document function described previously in chapter 8, section entitled “Creating

Service Contracts Automatically”.


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Demonstration: Create Multiple Service Contracts

This demonstration explains how to issue more than one service contract per

service item. This functionality allows for specifying different contract

conditions for the same service item according to different service agreements.

1. Click Home > Service Contracts.

2. From the Service Contracts list place, open service contract

SC00001. This contract includes service items 6 and 7.

3. In the Action Pane of the Service Contract window, click Actions

> New to create a new service contract for customer 10000. Use

the first contract template available, and include service items 6 and

7.

A message appears, informing that the service items are already

included in another contract, and asking whether to proceed.

FIGURE 10.1 CREATING SERVICE CONTRACT WITH ITEMS THAT ARE INCLUDED IN ANOTHER CONTRACT

4. Click Yes, and follow the same procedure for service item 7. The

service contract now looks like this.

FIGURE 10.2 THE NEW SERVICE CONTRACT CREATED FOR CUSTOMER 10000


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5. Change the response time for service item 6 to 8 hours and for

service item 7 to 6 hours.

6. Sign the contract and create an invoice for the starting period.

7. Create one more contract, for the same customer, and include the

same service items in it.

8. Configure the service hours.

FIGURE 10.3 CONFIGURING SERVICE HOURS

After creating the second service contract and including the service items, the

service contract looks like this.


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FIGURE 10.4 THE SECOND SERVICE CONTRACT CREATED FOR CUSTOMER 10000

9. Sign the contract and create a service invoice for the starting period.

10. Click Home > Service Orders.

11. In the Action Pane of the Service Orders list place, click New to

create a service order for customer 10000.

12. Insert service item 6 on the service order lines. A message appears,

informing that the service item is included in more than one contract,

and asking whether to assign a contract number to the service order

line just created.

FIGURE 10.5 CREATING SERVICE ORDER WITH THE ITEM THAT IS INCLUDED IN MORE THAN ONE CONTRACT

13. Click Yes. The Service Contract List window appears.


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FIGURE 10.6 SERVICE CONTRACT LIST FOR SERVICE ITEM 6

14. Select the last service contract on the list and click OK.

15. Follow the same procedure for service item 7, but assign the second

contract in the list to it instead. In the Service Order window, the

program registered two different contract numbers on the lines, and

the response date and time on the service order header is the earliest

between the two on the lines.

FIGURE 10.7 THE SERVICE ORDER CREATED FOR SERVICE ITEMS 6 AND 7

16. Register any cost for repair on the service lines and post the service

order and the related service invoice.

17. Click Home > Service Items.

18. In the Service Items list place, browse to service item 7, and in the

Action Pane click Related Information > Serv. Item > Service

Contracts. The Service Contract List window appears with all

existing contracts assigned to that service item.


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FIGURE 10.8 SERVICE CONTRACT LIST FOR SERVICE ITEM 7

19. Select a service contract and then click Related Information > Line

> Show Document to view that particular contract.


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Creating Contracts Using the Copy Document Function

Another function to use while creating multiple service contracts is the Copy

Document function.

1. Create a new service contract for customer 10000, and include

service item 6 on the service contract lines.


> Functions > Copy Document. The Copy Service Document

window opens. Configure it as shown in the following screenshot.

FIGURE 10.9 USING THE COPY DOCUMENT FUNCTION

3. Click OK. In this example, the service contract line in the contract

being worked on matches a service contract line of the document

being copied from. A message appears warning that not all service

contract lines can be copied.

FIGURE 10.10 A WARNING MESSAGE SUGGESTING SEEING THE LINES THAT CANNOT BE COPIED

4. Click Yes. The Service Contract Line List window appears.


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FIGURE 10.11 THE SERVICE CONTRACT LINE LIST WINDOW


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Updating the Annual Amount of a Service Contract

The annual amount of a service contract can be changed to correct the amount

that is invoiced annually. However, the annual amount can only change for a

contract that is not canceled.

The annual amount of a locked service contract must always be equal to the sum

of its contract line amounts. There are two methods to perform this procedure:

The program can balance the annual amount and the line amounts of

the contract.

The user does it manually.

For the program to perform this procedure, on the Invoice Details FastTab of the

Service Contract window, specify the way the annual amount is to be handled

by the value in the Allow Unbalanced Amounts check box.

If this check box is not selected, the program automatically updates

the annual amount of the service contract when its line amounts

change.

If the annual amount is modified, the program automatically

performs the distribution of the difference between the new and

calculated annual amounts among the line amounts and updates the

contract lines.

If there is a check mark in the Allow Unbalanced Amounts check

box, update the annual amount or line amounts of the service

contract if they are not balanced, before signing or locking the

contract.

To manually change the annual amount of the service contract, follow this

procedure:


2. In the Service Contracts list place, browse to the service contract to

change the annual amount.


> Functions > Open to open the service contract for

modifications.

4. On the Invoice Details FastTab, select the Allow Unbalanced

Amounts check box to change the annual amount and then manually

balance it with the contract line amounts.

Otherwise, clear the Allow Unbalanced Amounts check box. This

causes the program to automatically distribute the difference

between the new and calculated annual amounts among the contract

lines after the annual amount is changed.

5. Change the content of the Annual Amount field to any value.

Note that it is not possible to sign or lock the service contract if its

annual amount is negative.


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If the annual amount is set to zero, the content of the Invoice Period

field on the Invoice Details FastTab must be None when signing or

locking the service contract.

6. Proceed with either the manual or automatic distribution of the

difference between the new and calculated annual amounts,

depending on whether the Allow Unbalanced Amounts check box

is selected.

As a result, the contract lines are updated ensuring the content of the

Calcd. Annual Amount field on the Invoice Details FastTab is

equal to the new annual amount.

The Calcd. Annual Amount field shows the sum of the line

amounts in the service contract.

As mentioned above, if the service contract annual amount is changed, balance

its new value with the sum of the contract line amounts by distributing the

difference between the new and calculated annual amounts among the contract

lines, either automatically or manually.

There are three methods the program can use to perform the automatic

distribution of the difference between the new and calculated annual amounts:

Even distribution

Distribution based on profit

Distribution based on line amount

Each of these methods is covered in the next three sections. They introduce the

basics of automatic and manual distribution of the difference between the new

and calculated annual amounts.


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Automatic Distribution of the Annual Amount Difference Using the Even Distribution Method

Even distribution is an automatic distribution method used to spread the

difference between the new and calculated annual amounts equally among the

contract lines.

1. Create a new service contract with the following service level

agreement information:

a. The service contract is non-prepaid.

b. The owner of the service contract is customer 34010100.

c. The service contract account group is HARDWARE.

d. By default, the Allow Unbalanced Amounts check box

is not selected. This guarantees the program

automatically balances the annual amount and the line

amounts every time their values are modified.

2. Add five contract lines:

a. The first one is for item 8920-W. Assign 034576 as its

serial number.

b. The second one is for item 8924-W. Assign 032119 as

its serial number.

c. The third and fourth are for item 8908-W. Assign

3437901 and 3459810 as their serial numbers.

d. The fifth one is for item 8912 W. Assign 2376391 as its

serial number.

e. Sign the service contract.

By now, the Invoice Details FastTab in the Service Contract window looks like

this.


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FIGURE 10.12 THE INVOICE DETAILS FASTTAB OF THE NEWLY CREATED SERVICE CONTRACT

3. In the Action Pane, click Actions > Functions > Open to open the

service contract for modifications.

4. On the Invoice Details FastTab, decrease the number in the Annual

Amount field from 147.07 to “130” to grant a service discount to the

owner of the service contract. The following warning window

appears.

FIGURE 10.13 USING THE EVEN DISTRIBUTION METHOD

This warning window shows the new and calculated annual amounts of the

service contract and the difference between them. In the upper part of the

warning message, there are three options presenting the distribution methods the

program can use.

5. Select the Even Distribution method and click Yes.


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6. The program performs even distribution in the following manner:

The difference between the new and calculated annual amounts is

divided by the number of the contract lines in the service contract. In

the example, the difference is –17.07 and there are five contract

lines.

The content of the Line Amount field on each contract line is increased by the

latest calculated value. For example, the first contract line has a line amount

equal to 38.60 – 17.07/5 = 35.19.

After all contract lines are updated, the program automatically recalculates their

profits, line discount amounts, and line discount percentages.

7. After the even distribution of the difference between the new and

calculated annual amounts is completed, the Service Contract

window looks like this.

FIGURE 10.14 THE SERVICE CONTRACT WINDOW AFTER THE EVEN DISTRIBUTION

8. The Service Ledger Entries window looks as shown in the

following screenshot (some fields are rearranged for a better

overview). Notice that all service ledger entries are detailed.


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FIGURE 10.15 SERVICE LEDGER ENTRIES FOR THE UPDATED SERVICE CONTRACT

9. Lock the service contract to prevent modifications and to apply the

changes made.

The service orders, service invoices, and other documents linked to the service

contract use its new annual amount and line amounts.


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Automatic Distribution of the Annual Amount Difference Using the Distribution Based on Profit Method

Distribution based on profit is an automatic distribution method used to spread

the difference between the new and calculated annual amounts among the

contract line amounts. This type of distribution is performed proportionally to the

profit shares of the contract lines in the total contract profit.

Use the service contract created in the previous section.



modifications.

2. On the Invoice Details FastTab, increase the number in the Annual

Amount field from 130 to “138” to reduce the service discounts

given to the owner of the service contract. The following warning

window appears.

FIGURE 10.16 USING THE DISTRIBUTION BASED ON PROFIT METHOD

This window shows the new and calculated annual amounts of the service

contract and the difference between them.

3. Select the Distribution Based on Profit option and click Yes.

4. The program performs the distribution based on profit in the

following manner:

The profit percentage contribution is calculated for each contract line as the line

profit divided by the total contract profit.

The total contract profit is the sum of the Profit field values on all contract lines.

In this example, the total profit is equal to (35.19 + 48.54 + 13.72 + 13.72 +

18.83 = 130).

The content of the Line Amount field on each contract line is increased by its

profit percentage contribution multiplied by the difference between the new and

calculated annual amounts. For example, the first contract line has a line amount

equal to 35.19 + (35.19/130) * 8 = 37.36.


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After the distribution based on profit of the difference between the new and

calculated annual amounts is completed, the Service Contract window looks

like this.

FIGURE 10.17 THE SERVICE CONTRACT WINDOW AFTER THE DISTRIBUTION MADE ON PROFIT


changes made.

6. Change the work date to 28/02/10, and create a service invoice for

the service contract. The Service Ledger Entries window appears as

shown in the following screenshot. Notice that all service ledger

entries are detailed.


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FIGURE 10.18 SERVICE LEDGER ENTRIES AFTER DISTRIBUTION MADE ON PROFIT




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Automatic Distribution of the Annual Amount Difference Using the Distribution Based on Line Amount Method

Distribution based on line amount is an automatic distribution method used to

spread the difference between the new and calculated annual amounts among the

contract line amounts. This type of distribution is performed proportionally to the

line amount shares on the contract lines in the contract calculated annual amount.

Use the service contract created and updated previously.



modifications.

2. On the Invoice Details FastTab, decrease the number in the Annual

Amount field from 138 to “128” to grant the service discounts to the

owner of the service contract. The following warning window

appears.

FIGURE 10.19 USING THE DISTRIBUTION BASED ON LINE AMOUNT METHOD

It shows the new and calculated annual amounts of the service contract and the

difference between them.

3. Select the Distribution Based on Line Amount and click Yes.

4. The program performs the distribution based on the line amount in

the following manner:

The line amount percentage contribution is calculated for each contract line as its

line amount divided by the calculated annual amount of the service contract.

The calculated annual amount of the service contract is the sum of the Line

Amount field values on all contract lines. In this example, the calculated annual

amount of the service contract is equal to (37.36 + 51.53 + 14.56 + 14.56 + 19.99

= 138).

The content of the Line Amount field on each contract line is decreased by its

line amount percentage contribution multiplied by the difference between the


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new and calculated annual amounts. For example, the first contract line has a line

amount equal to 37.36 - (37.36/138) * 10 = 34.65.



5. After the distribution based on line amount of the difference between

the new and calculated annual amounts is completed, the Service

Contract window looks like this.

FIGURE 10.20 THE SERVICE CONTRACT WINDOW AFTER THE DISTRIBUTION BASED ON LINE AMOUNT


changes made.


the service contract. The Service Ledger Entries window appears as

shown in the following screenshot. Notice that all service ledger

entries are detailed.


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FIGURE 10.21 SERVICE LEDGER ENTRIES AFTER DISTRIBUTION BASED ON LINE AMOUNT




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Manual Distribution of the Annual Amount Difference

To balance the annual amount with the contract line amounts manually, or to

have them not balanced when updating the open service contract, perform

manual distribution of the difference between its new and calculated annual

amounts. In the following example:

Update the contract lines.

Update the contract annual amount.

Balance the annual amount with the line amounts to lock the service

contract.

1. Create a new service contract with the following service level

agreement information:

The service contract is non-prepaid.

The owner of the service contract is customer 41231215.

The service contract account group is HARDWARE.

2. On the Invoice Details FastTab, select the Allow Unbalanced

Amounts check box. This guarantees the program does not

automatically balance the annual amount and the line amounts every

time their values are modified.

3. Add three contract lines:

The first one is for item C-100. Assign 99938 as its serial number.

The second one is for item LS-S15. Assign 672521 as its serial

number.

The third one is for item LS-81. Assign 673251 as its serial number.

4. Fill in the Annual Amount field with the same number as in the

Calcd. Annual Amount field, because to be allowed to sign the

contract, the annual and calculated annual amounts must be equal,

then sign the service contract.

The Service Contract window looks like this.


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FIGURE 10.22 THE NEW NON-PREPAID SERVICE CONTRACT

5. The owner of the newly created and signed service contract calls,

and wants to have discounts on servicing his service items. A

decision is made to grant a five percent discount on the first and

second contract lines.

In the Action Pane of the Service Contract window, click Actions


modifications.

6. Fill in the Line Discount % field on the first and second contract

lines with “5”.

The Invoice Details FastTab of the Service Contract window appears like this.


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FIGURE 10.23 THE INVOICE DETAILS FASTTAB AFTER APPLYING A 5% DISCOUNT

Later the same day, there is a conversation with the owner of the service contract

and it is agreed to grant him a five percent discount on all service items under the

service contract.

7. Decrease the annual amount by five percent. The new annual amount

is equal to 28.80 * 0.95 = 27.36. Fill in the Annual Amount field

with the last value.



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FIGURE 10.24 THE INVOICE DETAILS FASTTAB AFTER DICREASING THE ANNUAL AMOUNT BY 5%

The annual and calculated annual amounts must be balanced before locking the

service contract and applying all the changes made to it. The difference is

calculated between the corresponding field values, and it is decided to decrease

the third contract line amount by this difference.

8. Change the content of the Line Amount field on the third contract

line to 10.80 – (27.91 – 27.36) = 10.25.

9. Both the annual and calculated annual amounts are now equal to

27.36.

Lock the contract to apply the changes made to it.

The Service Contract window now looks like this.


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FIGURE 10.25 THE SERVICE CONTRACT WITH THE BALANCED ANNUAL AMOUNTS


the service contract. The Service Ledger Entries window appears

like this (Notice that all service ledger entries are detailed.)

FIGURE 10.26 SERVICE LEDGER ENTRIES AFTER MANUAL DISTRIBUTION OF THE ANNUAL AMOUNT DIFFERENCE


contract use its new annual amount and contract line field values.


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Invoicing a Service Contract Directly

You invoice a service contract directly from the Service Contract window if the

work date is not earlier than the next invoice date on the contract. The next

invoice date of the prepaid service contract is the first date of its invoice period.

The next invoice date of the non-prepaid service contract is the last date of its

invoice period.

To invoice a service contract, follow this procedure:


2. In the Service Contracts list place, select the service contract to be

invoiced and double-click the line to open the Service Contract

window containing the information about the contract selected.

3. In the Action Pane, click Create Service Invoice. A dialog box

appears stating that there are unposted invoices associated with this

contract.

4. Click Yes twice to confirm. The service invoice is created.

5. View the service invoice in the Service Document Registers

window by clicking the value in the No. of Unposted Invoices field

on Invoice Details FastTab.

6. To open the newly created service invoice, in the Service Document

Registers window select the line referring to it, and click Card in

the Action Pane.

Demonstration: Create a Service Invoice for a Service Contract, Modify and Post It

To create, modify, and post a service invoice for a service contract, follow this

procedure:

1. Change the work date to 1/25/2010.

2. Create a service contract containing the service level agreements for

customer 30000.

a. There are two service items included in the contract: 40

and 41.

b. The starting date of the service contract is 1/25/2010, its

invoice period is a Month, and the next invoice date is

2/1/2010.

c. No invoices are created when signing the contract.

The Service Contract window now looks like this.


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FIGURE 10.27 CREATING A SERVICE CONTRACT FOR CUSTOMER 30000

3. In the Action Pane, click Create Service Invoice. A confirmation

message appears asking whether to create a service invoice for the

starting date.

4. Click Yes. A message appears stating that an invoice is successfully

created. Click OK.

When the service invoice is created but is not yet posted, the number in the No.

of Unposted Invoices field on the Invoice Details FastTab changes from 0 to 1.

FIGURE 10.28 CREATING A SERVICE INVOICE


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5. Click the value in the No. of Unposted Invoices field to open the

Service Document Registers window containing a list of unposted

service invoices linked to the service contract. For now, the Service

Document Registers window contains only one unposted service

invoice and looks like this.

FIGURE 10.29 THE SERVICE DOCUMENT REGISTERS WINDOW WITH ONE UNPOSTED SERVICE INVOICE

6. In the Action Pane of the Service Document Registers window,

click Card. The newly created service invoice for the service

contract appears. It contains one service line with the value in the

Line Amount Excl. VAT field set to 1.30 and appears like this.


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FIGURE 10.30 THE CREATED SERVICE INVOICE FOR THE SERVICE CONTRACT

7. Set a 20 percent discount on the service line to decrease the line

amount excluding VAT. Now the content of the Line Amount Excl.

VAT field on the service line is equal to 1.04. The Service Invoice

window appears like this.

FIGURE 10.31 APPLYING A 20% DISCOUNT TO THE SERVICE LINE

8. The service invoice is ready for posting. In the Action Pane of the

Service Invoice window, click Post. A confirmation message

appears asking whether to post the invoice.


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9. Click Yes. The service invoice is posted.

10. Return to the Service Contract window. On the Invoice Details

FastTab, note that the number in the No. of Unposted Invoices field

is changed from 1 to 0 and the number in the No. of Posted Invoices

is changed from 0 to 1. The Invoice Details FastTab of the Service

Contract window appears like this.

FIGURE 10.32 THE INVOICE DETAILS FASTTAB AFTER POSTING THE SERVICE INVOICE


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Lab 10.1 – Working on Service Contract – Advanced

In this lab, you will practice working on a service contract.

Scenario

On January 04, 2010 Cronus sells the John Haddock Insurance Co. customer 8

computers (item 80007) with serial numbers PC001..PC008. The customer wants

the items to be automatically registered as service items immediately after

buying, and wants to sign two service contracts for these items.

Challenge Yourself

Create and sign the service contracts to further work on them.

Need a Little Help

1. The customer agreed on revising contract prices once a month.

2. The first contract is non-prepaid with a two month invoice and

service periods. The customer wants to ensure that the periodical

service will always be performed before invoicing. Give “Hardware

Clean & Check” as the description for this contract. Enter 240 as the

annual amount and split it evenly between lines. Also, the customer

expects a 50 percent discount on all labor related to this contract.

3. The second contract is prepaid with a month invoice period.

“Software Update” is the description for the contract. Use the Copy

Document function to copy eight contract lines from the first

contract. Set 10 as the line value, five as the line cost for each of the

seven contract lines, and 25 as the line value and 10 as the line cost

for the contract line for the PC005 since it has a more complex

software packet installed.

4. Sign both contracts; do not create invoices for the starting period.

5. On February 1, 2010 create and post a prepaid invoice for the

software contract – for February and March. Do not create an invoice

for the starting period, if asked.

6. On February 15, 2010 the customer calls and informs that a new

software will be installed on PC001..PC004. Remove these service

items from the software contract, and create a credit memo for the

second half of February and March for these items since they were

invoiced.

7. On March 10, 2010 create a service order for the contract and

register and post four hours of Linda’s work for all the service items

according to the hardware contract.

8. On April 1, 2010 create and post an invoice for the hardware contract

for February and March. Do not create an invoice for a starting

period. After that, update prices for both contracts by three percent.

9. On April 10, 2010 the customer calls, and they want to add a service

item to the hardware contract. Add service item 10 which is already


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registered. Create an invoice for the starting period of the new

contract line.

Step by Step

Create a sales order.

1. Set the work date to 1/4/2010.

2. Go to Departments > Sales & Marketing > Order Processing.

3. Under Lists, click Sales Orders.

4. In the Action Pane of the Sales Orders list place, click New.

5. On the General FastTab, fill in the Sell-to Customer No. field with

30000.

6. On the Lines FastTab, create a line with the following values:

Type: Item

No.: 80007

Quantity: “8”

7. Click Actions > Line > Item Tracking Lines.

8. In the Item Tracking Lines window, click Actions > Functions >

Create Customized SN.

9. In the Enter Customized SN window that opens, fill in the fields as

shown in the screenshot.

FIGURE 10.33 ASSIGNING SERIAL NUMBERS TO THE ITEM

10. Click OK.

The Item Tracking Lines window now contains eight lines with the

corresponding serial numbers.


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FIGURE 10.34 VERIFYING ITEM TRACKING LINES FOR ITEM 80007

11. Click OK to return to the Sales Order window.

12. In the Action Pane, click Post.

13. Select the Ship and Invoice option and click OK.

Create and sign a non-prepaid service contract.


2. In the Action Pane, click New to create a new contract.

3. With the cursor in the Contract No. field, press ENTER.

4. Click Yes to confirm using a contract template.

5. In the Service Contract Template List window, select TEMPL0002

and click OK.

6. In the Customer No. field, select 30000.

7. In the Description field, change the value to “Hardware Clean &

Check”.

8. On the Lines FastTab, click the AssistButton, select the service item

with serial number PC001from the Service Item List window that

opens and click OK.

9. Repeat step 8 to create the rest of the seven contract lines with the

corresponding serial numbers.

10. On the Service FastTab, in the Service Period field, type “2M”.


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11. On the Invoice Details FastTab, click the AssistButton in the

Invoice Period field and select Two Months.

12. Verify that the Invoice after Service check box is selected.

13. On the Price Update FastTab, type “1M” in the Price Update field.


FIGURE 10.35 CREATING A NON-PREPAID SERVICE CONTRACT

14. In the Annual Amount field, change the value to “240” and press

ENTER.

15. In the Contract Amount Distribution window that opens, select

Even Distribution and click Yes.

The program updates the values according to the even distribution

method.


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FIGURE 10.36 THE LINES AND INVOICE DETAILS FASTTAB AFTER THE EVEN DISTRIBUTION

16. In the Action Pane, click Related Information > Contract >

Service Discounts.

17. In the Contract/Service Discounts window that opens, fill in the

following fields:

Type: Resource Group

Discount %: “50”

18. Click OK.

19. In the Action Pane, click Sign Contract and accept the message that

follows.

20. Click No to the message suggesting creating an invoice for the

period 01/04/10..01/31/10.

Create and sign a prepaid service contract.

1. In the Action Pane of the Service Contracts list place, click New.

2. With the cursor in the Contract No. field, press ENTER.

3. Click Yes to confirm using a contract template.

4. Select TEMPL0003 and click OK.

5. In the Customer No. field, select 30000.

6. In the Description field, change the value to “Software Update”.

7. In the Action Pane, click Actions > Functions > Copy

Document.

8. In the Copy Service Document window that opens, fill in the

following fields:


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In the Document Type field, select Contract.

In the Document No. field, click the AssistButton and select the

contract created previously in this lab for customer 30000.

FIGURE 10.37 COPYING SERVICE DOCUMENT

9. Click OK.

The program populates the Lines FastTab with eight lines.

10. Select the line with Serial No. PC005 and change the values in the

following fields:

Line Value: “25”

Line Cost: “10”

11. For the rest of the lines, change the values in the following fields:

Line Value: 10”

Line Cost: “5”

12. On the Price Update FastTab, type “1M” in the Price Update field.

13. In the Action Pane, click Sign Contract and accept the message that

follows.

14. Click No to the message suggesting creating an invoice for the

period 01/04/10..01/31/10.

Create and post a prepaid invoice for the Software Update contract for February

and March.

1. Set the work day to 2/1/2010.

2. Go to Departments > Service > Contract Management.

3. Under Periodic Activities, click Create Service Contract Invoices.

4. On the Options FastTab of the Create Contract Invoices window,

fill in the following fields:

Posting Date: 2/1/2010

Invoice to Date: 3/31/2010

Action: Create Invoices

5. On the Service Contract Header FastTab, set the following filters:

Contract Type: Contract


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Prepaid: Yes

Contract No.: The number of the Software Update contract.

FIGURE 10.38 CREATING A PREPAID INVOICE FOR THE SOFTWARE UPDATE CONTRACT

6. Click OK and confirm the message that follows.

7. On the Invoice Details FastTab of the Service Contract window,

click the value in the No. of Unposted Invoices field.

8. In the Service Document Registers window that opens, click Card.

9. In the Action Pane of the Service Invoice window, click Post and

accept the message that follows.

Remove contract lines.


2. For the Software Update contract, on the Lines FastTab, for the first

four lines, enter “2/15/2010” in the Contract Expiration Date field.

3. On the Invoice Details FastTab, select the Automatic Credit

Memos check box.

4. Click Departments > Service > Contract Management.

5. Under Periodic Activities, click Remove Service Contract Lines.

The Remove Lines from Contract window appears.

6. On the Options FastTab, enter the work date in the Remove Lines

to field.

In the Reason Code field, click the AssistButton and select the NO

VALID reason code in the Reason Codes window that appears.

In the Action field, select Delete Lines.


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7. On the Service Contract Line FastTab, set the following filters:


Contract No.: “SC00030”

Service Item No.: “81..84”

FIGURE 10.39 REMOVING LINES FROM THE SOFTWARE UPDATE CONTRACT

8. Click OK.

9. A message appears stating that four contract lines were removed.

Click OK.

10. A message appears stating that a credit memo was created. Click

OK.

11. Return to the Service Contract window, and on the Invoice Details

FastTab, click the value in the No. of Unposted Credit Memos

field.

12. In the Service Document Registers window that appears, click

Card to open the created credit memo.


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FIGURE 10.40 SERVICE CREDIT MEMO CREATED FOR THE FOUR REMOVED LINES

13. In the Action Pane, click Post and accept the message that follows.

14. Close the Service Document Registers window to return to the

Service Contract window.

Create a service order and register the labor according to the hardware

contract.

1. Set the work day to 3/10/2010.

2. Go to Departments > Service > Contract Management.

3. Under Periodic Activities, click Create Contract Service Orders.

4. On the Options FastTab of the Create Contract Service Orders

window, fill in the following fields:

Starting Date: 1/4/2010

Ending Date: 3/31/2010

Action: Create Service Order



Prepaid: No

Contract No.: The number of the Hardware Clean & Check service

contract.


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FIGURE 10.41 CREATING A CONTRACT SERVICE ORDER

6. Click OK.

7. Click OK to the message stating that one service order was created.

8. Go to Home > Service Orders, browse to the last order in the list

and double-click it to open the Service Order window.

9. On the Lines FastTab, click Actions > Order > Service Lines.

10. In the Service Lines window, create a line:

Service Item No.: Click the AssistButton and select any item from

the Service Item Lines window.

Type: Resource

No.: LINDA

Quantity: “4”

11. In the Action Pane, click Actions > Functions > Split Resource

Line and accept the message that follows.

The Service Lines window now looks like this.


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FIGURE 10.42 THE SERVICE LINES WINDOW AFTER SPLITTING THE RESOURCE LINE

12. In the Action Pane, click Post, select Ship and Invoice and click OK.

Create and post an invoice for the hardware contract.


2. Repeat steps 1 to 6 from the “Create and post a prepaid invoice for

the Software Update contract for February and March” step by step

section to create invoices for February and March for the hardware

contract.

Use the data in the following screenshot to fill in the fields in the

Create Contract Invoices window.


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FIGURE 10.43 CREATING AN INVOICE FOR THE HARDWARE CONTRACT

3. Repeat steps 7 to 9 from the “Create and post a prepaid invoice for

the Software Update contract for February and March” step by step

section to post the created service invoice.

Update prices for both contracts by three percent.

1. Click Departments > Service > Contract Management.

2. Under Periodic Activities, click Update Service Contract Prices.

The Update Contract Prices window appears.

3. On the Options FastTab, type “3” in the Price Update % field.



Contract No.: Type the numbers of the two service contracts.


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FIGURE 10.44 UPDATING PRICES FOR BOTH CONTRACTS

5. Click OK.

6. Open the two contracts and verify that the program has updated the

annual amounts and contracts lines of the two service contracts.

FIGURE 10.45 THE HARDWARE CLEAN & CHECK CONTRACT AFTER UPDATING PRICES


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FIGURE 10.46 THE SOFTWARE UPDATE CONTRACT AFTER UPDATING PRICES

Add a new contract line and create an invoice for the new line.


2. Open the Service Contract window for the Hardware Clean &

Check contract.

3. In the Action Pane, click Actions > Functions > Open to open the

contract for modifications.

4. On the Lines FastTab, click the AssistButton in the Service Item

No. field and select item 10 from the Service Item List window that

opens.

5. Click Yes to the message stating that the item belongs to other

contracts.

6. In the Action Pane, click Lock to apply changes and then click Yes

to the message that follows.

7. A message appears suggesting to create an invoice for the period

04/10/10..04/30/10. Click Yes.

8. Click OK to the message stating that the service invoice was created.

9. On the Invoice Details FastTab, click the value in the No.of

Unposted Invoices field to open the Service Document Registers

window.

10. Click Card to open the created service invoice.


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FIGURE 10.47 SERVICE INVOICE FOR THE NEW CONTRACT LINE

11. In the Action Pane, click Post and accept the message that follows.

12. Close the Service Document Registers window to return to the

Service Contract window.

FIGURE 10.48 THE HARDWARE CLEAN & CHECK CONTRACT WITH THE NEW LINE ADDED


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Summary

The advanced functionality of service contracts includes the following

procedures:

Creating multiple service contracts:

o Manually.

o Using the Copy Document function.

Updating the annual amount of a service contract:

o Manually.

o Automatically (using the even distribution, distribution based on

profit, and distribution based on line amount methods).

Invoicing a service contract directly.


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Test Your Knowledge

1. What are the two methods of creating service contracts or contract quotes for

service items already registered in non-canceled contracts owned by the same

customer?

2. True or False:

The annual amount of a locked service contract must always be equal to the

sum of its contract line amounts.

3. What are the three methods the program uses to perform the automatic

distribution of the difference between the new and calculated annual

amounts?

4. Complete the following sentence:

A service contract is invoiced directly from the Service Contract window if

the ___________ __________ is not earlier than the next _______________

___________ on the contract.


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5. What window opens when clicking the value in the No. of Unposted

Invoices, No. of Unposted Credit Memos, No. of Posted Invoices, and No.

of Posted Credit Memos fields on the Invoice Details FastTab of the

Service Contract window?


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Quick Interaction: Lessons Learned

Take a moment and write down three Key Points you have learned from this

chapter:

1.

2.

3.


Page 502

Solutions

Test Your Knowledge

1. What are the two methods of creating service contracts or contract quotes for

service items already registered in non-canceled contracts owned by the same

customer?

MODEL ANSWER:

There are two methods of creating service contracts or contract quotes for service

items already registered in non-canceled contracts owned by the same customer:

automatic and manual.

2. True or False:

The annual amount of a locked service contract must always be equal to the

sum of its contract line amounts.

MODEL ANSWER:

True.

3. What are the three methods the program uses to perform the automatic

distribution of the difference between the new and calculated annual

amounts?

MODEL ANSWER:

There are three methods the program can use to perform the automatic

distribution of the difference between the new and calculated annual amounts:

even distribution, distribution based on profit, and distribution based on line

amount.

4. Complete the following sentence:

A service contract is invoiced directly from the Service Contract window if

the ___________ __________ is not earlier than the next _______________

___________ on the contract.

MODEL ANSWER:

A service contract is invoiced directly from the Service Contract window if the

work date is not earlier than the next invoice date on the contract.

5. What window opens when clicking the value in the No. of Unposted

Invoices, No. of Unposted Credit Memos, No. of Posted Invoices, and No.

of Posted Credit Memos fields on the Invoice Details FastTab of the

Service Contract window?

MODEL ANSWER:

When clicking the value in the No. of Unposted Invoices, No. of Unposted

Credit Memos, No. of Posted Invoices, and No. of Posted Credit Memos fields

on the Invoice Details FastTab of the Service Contract window, the Service

Document Registers window opens.

Technology

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