A service contract serves as an agreement between the customer and the service provider. Hence, a service contract is defined per customer and is valid for one site. Optionally, you can group the service contracts using a contract type, e.g., WARRANTY and SERVICE.
Although the service contract is defined per customer you have the option of connecting additional customers. This serves two purposes:
The service level agreement defines the time limits that are applicable to the service contract based on the severity or priority of the issue reported by the customer. While a service contract as a whole contains an SLA (only one SLA can be entered per service contract), it is also possible to have different SLAs connected to each service line (more information on service lines can be found further below). SLA covers three different times:
For work orders originating from a service contract, the SLA on the service contract will be used to calculate the SLA Requested Start and/or SLA Requested Finish dates on the work order.
Under price agreements you can define special agreements as well as look up sales prices.
Special Agreements - During the course of providing a service it is not uncommon for customers and service providers to change the basic prices they had agreed upon at the time of creating a service contract. In such cases, instead of revising the service contract, a customer agreement with the correct price will be connected to the service contract to be used explicitly. Here the prices defined in the customer agreement overrides the prices defined in the service contract.
Sales Part Price - Serves as a reference point for customers to look up sales parts independent of where they are used. The sales prices displayed will be filtered based on the customers, the site the service contract is connected to, and the currency that is applicable. The search result will also include the sales prices used under special agreements provided the special agreements fall within the dates of the search. Prices are retrieved from the customer agreement and/or the sales price lists (IFS/Pricing) entered for the primary customer of the service contract.
Determines the parameters to be applied when invoicing a service contract.
Price Unit - Specifies the time period for which the periodic price to be invoiced (defined on the service line) is valid. Consider the following example: A service line contains the periodic price of $1200, the customer will be invoiced every quarter, i.e., March, June, September and December.
| Unit Length | Unit |
Price to be Invoiced ($) |
Explanation |
|||
| March | June | September | December | |||
| 1 | Month | 3600 | 3600 | 3600 | 3600 | Since the periodic price of $1200 is only valid for a month and invoicing is done once in 3 months the price to be invoiced is accumulated to $3600. |
| 3 | Month | 1200 | 1200 | 1200 | 1200 | Since both the valid period and the invoicing period are the same, i.e., 3 months the total price to be invoiced remains the same at $1200. |
| 1 | Year | 300 | 300 | 300 | 300 | In this example the periodic price of $1200 is valid for 12 months therefore it will be divided among the invoicing period. |
Invoice Rule - Determine if you want to invoice at the beginning of the period (prior) or at the end of it (post).
Periodic Invoice Parameters - Specifies how often a service contract should be invoiced. In the case of our example, invoicing is done every quarter (3 months).
Revaluation Parameters - Determines how often and at what percentage a revaluation should be performed on the service contract if applicable. The percentage can be positive or negative, e.g., a price of $100 revaluated at 5% the price will be revised to $105. If revaluated at -5% the price will be revised to $95.
Agreement Invoice Rule - Used to apply discounts for the services rendered or for the costs incurred. An agreement invoice rule can be for a sales group or cost type (i.e., Personal, Material, External, Expenses, Fixed Price and Tools/Facilities). Furthermore, you can specify whether work order posting lines with zero invoice amounts which are associated with the agreement invoice rule, sales group or cost type of the connected service should be included in or excluded from the customer invoice.
Invoice Type on Service Line - Determines how work orders connected to the service line should be invoiced, and also if periodic invoicing is to be done. Available values are:
An agreement invoice rule can be applied to all invoice types. In the case of Free of Charge and Fixed Price the agreement invoice rule can be used to give discounts to additional charges that are not covered by the aforementioned invoice types. Additionally for each invoice type you can enter a cap price, i.e., the maximum amount the customer can be charged. If the total amount to be invoiced for a certain period (e.g., 1 year) exceeds the cap price, the customer will not be charged the excess amount. The invoice period is determined by the price unit (discussed above). Note: Observe that the sales parts used in the invoice types above are non-inventory sales parts.
Period allocation is a common requirement where a customer is invoiced a fee for the service contract which will be applied for future periods. The service contract allows you to distribute amounts that should be invoiced over time. When an invoice plan detail line is created for preview or when a line is invoiced a period allocation rule is automatically attached to the line. The period allocation method used by default is Proportional. You can change the rule by using the relevant right mouse button option.
You can define which allocation method the system should use by default by specifying the relevant method (Proportional, Even, Mixed) in the PERIOD_DISTR_METHOD system parameter (in IFS/Application Services).
Under services you can define what type of services, i.e., work types, the customer is entitled to. These are known as service lines. A service line is entered per object or object structure and includes details related to SLA, invoicing parameters and periodic prices. In addition you can also connect a standard job to the service line. You can only connect standard jobs that have the same work type as the one entered on the service line. Standard jobs inserted in the service line are not retrieved to the Jobs tab of the PM action. Instead, these standard jobs are directly retrieved to the Jobs tab of the work orders created from the PM action. Each service line can be connected to a parent service line to form hierarchical structures. Service lines are of two types:
Maintenance Service Lines - Applicable to objects of connection type EQUIPMENT and CATEGORY. If the service line is for objects of type EQUIPMENT you can, optionally, define a location for that object (locations are functional objects that have the Geographical Object check box selected). If the service line is for objects of type CATEGORY you can enter the number of objects that is covered by the service line.
Vehicle Service Lines - Applicable to objects of connection type VIM. Under vehicle services you define service lines for VIM serial top part or a top part structure.
Each service line has a list of periodic price lines. A periodic price line displays the price that will be invoiced per service line for the given period. This has the following statuses:
Once invoicing is done, you can close the periodic price line. The price line will have a record of who closed the line and the date it was closed.
Part service lines are used for pricing in the Component Repair Order (CRO) flow. It can be used for all the CRO repair order types: Work Order, Repair Shop Order, Disposition Shop Order and External Service Order.
Enter a maintenance plan for the customer by creating separate PM actions. If the PM actions you create are calendar based, you will be able to view and modify the generated maintenance plan within the service contract. To generate a work order from a PM action you can use the Calendar Generation, Event Generation or Condition Generation dialog boxes. You can also manually generate a work order directly from the service contract.
A service contract can be invoiced in several ways:
Through a work order - Where a service contract and a service line that is connected to the work order will take effect once the work order is transferred to IFS/Customer Order. Note: posting lines with zero invoice amounts will not be transferred to the customer order for invoicing if your basic data is configured accordingly. A service contract (and service line) can be connected to a work order in one of the following ways:
The entire service contract - When invoicing a service contract as a whole, the system checks if the invoice period defined on the Service Contract/Invoice Parameters tab falls within the time period of the service line or periodic price (defined on the Service Contract/Services (or Vehicle Services) tab). If yes then the relevant periodic price (of the service line) will be invoiced. For example:
| Invoice Period | Service Line No | Periodic Price Valid Period | Eligible for Invoicing? (Y/N) |
| 01-01-2007 to 31-01-2007 | 1 | 01-01-2007 to 31-01-2007 | Y |
| 01-01-2007 to 31-01-2007 | 1 | 01-02-2007 to 28-02-2007 | N |
| 01-01-2007 to 31-01-2007 | 2 | 01-01-2007 to 28-02-2007 | Y |
A single object/service line - Instead of invoicing an entire service contract you can opt to invoice a service line. In such cases you first need to generate a preview of the invoice lines before you can invoice it.
Invoicing multiple service contracts - If you choose this option a single invoice will be created for multiple service contracts. Service contracts can be grouped based on the site, contract type and customer. You can also specify the number of days ahead of which you want to generate invoices. The task can be done directly or scheduled as a background job to be executed automatically at predefined intervals.
Planned - A new service contract will always receive the Planned status. A planned service contract cannot be used to generate work orders.
Active - An active service contract is ready to be connected to a work order, PM action or to be invoiced.
Negotiated - The status of contract is set to Negotiated when you need to adjust an active contract.
Closed - A contract is closed when it is no longer in use.
Freezing a contract - This is not a status, rather it is an option to temporarily freeze a service contract due to reasons such as the customer failing to make a payment. It is not possible to connect a service line from a frozen service contract to a work order. However, a frozen service contract can be invoiced.