Working with Finance > Contracts

Introduction

The Contracts page registers billing agreements between you and your clients. The selected contract type determines how billing is processed. There are five contract types.

  • Time and Material 
  • Recurring Services 
  • Fixed Price
  • Retainer by Amount 
  • Retainer by Hours 
  • A customer can have multiple contracts.
  • You can pick a default contract for service tickets for a client, thus eliminating the guesswork if something is covered or not.
  • You can link service level agreements (SLA) to a contract.
  • You can clone contracts to create a copy of an existing contract. 

Time and Materials

The customer is charged for all hours of work performed, any direct expenses incurred, and all materials purchased to support the resolution of tickets and the completion of projects. Time entered on tickets and tasks generates billable amounts for labor on invoices. The role assigned a labor time entry determines the rate charged for that labor. Default rates for roles can be adjusted on a per-contract basis.

Creating Time and Materials Contracts

  1. Select the Finance > Contracts page.
  2. Click New > Time and Materials.
  3. Enter the following in the Contract Information section.
    • Contract Name
    • Contract Description
    • Account
    • Start Date
    • End Date
    • SLA - A contract associated with an SLA overrides the Default SLA when the ticket is linked to the contract.
    • Issue Invoice on - Overrides the default value set for the 'Issue Invoice on' field, either Start of Billing Cycle or End of Billing Cycle. The default is set using the Admin > Company Settings > Invoice tab.
    • Reference Number
    • Default Contract for Service Desk - Yes or No
    • Contract Number - Only displays when editing a contract.
  4. Enter additional information in the Custom Fields section.
  5. Click Save.
  6. Add and Adjust rates for roles for this contract in the Billing Information tab. Roles are derived from Admin > Finance > Roles.
    • Maximum Hours - Limits the hours billable for this role.
    • Contract Billing Rate - Adjusts the default billing rate for this role.
  7. Optionally exclude roles and work types that can report hours to this contract using the Exclusions tab.
    • If hours are reported using an excluded role or work type, the hours are reported against the Default Fallback Contract you specify. 
    • If there is no fallback contract specified, the entries will be counted as Labor hours. 
  8. Upload files to the contract using the Attachments tab.
  9. Click Save.
  10. Activate the contract to begin using this to create billing entries.

Recurring Services

Services are billed on a contract length, weekly, monthly, quarterly, or yearly basis.

Creating Recurring Services Contracts

  1. Select the Finance > Contracts page.
  2. Click New > Recurring Services.
  3. Enter the following in the Contract Information section.
    • Contract Name
    • Contract Description
    • Account
    • Start Date
    • End Date
    • SLA - A contract associated with an SLA overrides the Default SLA when the ticket is linked to the contract.
    • Contract Number - Only displays when editing a contract.
    • Reference Number
    • Billing Cycle - Contract Length, Weekly, Monthly, Quarterly, Yearly
    • Issue Invoice on -
    • Default Contract for Service Desk - Yes or No
    • Billing Periods based on Calendar Year - Yes or No

      Note: Billing entries are not generated for hours reported on tickets and tasks linked to a recurring service contract. To prevent generating billing lines for labor hours independently of a contract, set the Default Contract option to Yes for that contract. When a new ticket or task is created, the default contract is linked to the ticket or task automatically.

  4. Enter additional information in the Custom Fields section.
  5. Click Save.
  6. Click Add to add services in the Billing Information tab. You can adjust the calculated extended cost and price for each service add to this contract.
    • Service
    • Effective Date
    • Unit Price
    • Extended Unit Price
    • Unit Cost
    • Extended Unit Cost
    • Units
    • Total Price
    • Total Cost
  7. Click Save.
  8. Review the Contract Billing Price. This is the total price for all the services added.
  9. Optionally exclude roles and work types that can report hours to this contract using the Exclusions tab.
    • If hours are reported using an excluded role or work type, the hours are reported against the Default Fallback Contract you specify.
  10. Upload files to the contract using the Attachments tab.
  11. Click Save.
  12. Optionally reopen the contract and click Activate to begin using this contract to create billing entries.
  13. When the contract changes, you can review those changes using the Contract History tab.

Tip!

A detailed guide on recurring service billing is available here

Fixed Price

A fixed priced contract is not subject to any adjustment on the basis of the provider’s cost experience in performing the contract. A fixed-price contract is typically tied to a single project, but some users also use them for support contracts. In many contracts, the fixed price is divided into smaller milestone payments.

Creating Fixed Priced Contracts

  1. Select the Finance > Contracts page.
  2. Click New > Fixed Price.
  3. Enter the following in the Contract Information section.
    • Contract Name
    • Contract Description
    • Account
    • Start Date
    • End Date - Milestones due dates default to this date.
    • SLA - A contract associated with an SLA overrides the Default SLA when the ticket is linked to the contract.
    • Contract Number - Only displays when editing a contract.
    • Reference Number
    • Default Contract for Service Desk - Yes or No
    • Accumulating Contract - If Yes the total contract amount starts at zero (0) and increases each time you add a new milestone. If No, the total contract amount is set to that fixed amount. You can add milestones whenever you like, so long as the total contract amount does not exceed the fixed amount.
    • Alter From Project - If Yes, a project phase milestone is added to the project linked to this contract each time you add a new milestone to the contract.
  4. Enter additional information in the Custom Fields section.
  5. Click Save.
  6. Click Add to add milestone payments in the Billing Information tab.
    • Name
    • Type
    • Amount
    • Due Date - Defaults to the end date of the contract. For milestone payments, Billing Review lists billable amounts using this date. You may wish to adjust this date for earlier milestone payments to ensure they display sooner in Billing Review.
    • Description

    Note: The Billing Information tab displays Billed and Posted checkbox columns. Billing Review posts a line item. Generating an invoice using Billing bills that line item.

  7. Click Save.
  8. Review the following in the Billing Information tab
    • Contract Billing Price - The total of all milestone amounts.
    • Billed Amount
    • Remaining Amount
  9. Optionally exclude roles and work types that can report hours to this contract using the Exclusions tab.
    • If hours are reported using an excluded role or work type, the hours are reported against the Default Fallback Contract you specify.
  10. Upload files to the contract using the Attachments tab.
  11. Click Save.
  12. Optionally reopen the contract and click Activate to begin using this contract to create billing entries.

Retainer By Amount

The total price of the contract is prepaid. Clients schedule services when needed. Billings decrement the contract amount purchased. Billable labor time on tickets and tasks consume the amount. Charges and expenses do not consume the amount.

Creating Retainer by Amount Contracts

  1. Select the Finance > Contracts page.
  2. Click New > Retainer by Amount.
  3. Enter the following in the Contract Information section.
    • Contract Name
    • Contract Description
    • Account
    • Start Date
    • End Date
    • SLA - A contract associated with an SLA overrides the Default SLA when the ticket is linked to the contract.
    • Contract Number - Only displays when editing a contract.
    • Reference Number
    • Default Contract for Service Desk -Yes or No

      Note: To prevent generating billing lines for labor hours independently of a contract, set the Default Contract option to Yes for that contract. When a new ticket or task is created, the default contract is linked to the ticket or task automatically.

  4. Enter additional information in the Custom Fields section.
  5. Click Save.
  6. Adjust rates for roles for this contract in the Billing Information tab.
    • Contract Billing Rate - Adjusts the default billing rate for this role.
  7. Review the following in the Billing Information tab
    • Contract Billing Price - Enter the total amount that can be billed to this contract.
    • Consumed Amount - The total amount of billings applied to this contract.
  8. Optionally exclude roles and work types that can report hours to this contract using the Exclusions tab.
    • If hours are reported using an excluded role or work type, the hours are reported against the Default Fallback Contract you specify.
  9. Upload files to the contract using the Attachments tab.
  10. Click Save.
  11. Optionally reopen the contract and click Activate to begin using this contract to create billing entries.

Retainer By Hours

Hours of service are prepaid. Clients schedule services when needed. Labor time entries decrement the retainer hours purchased. The total price of the contract is calculated by multiplying the number of contract hours purchased by an average rate. Retainer by Hour contracts is billed by billing periods. The total hours specified by the contract are distributed evenly across all the billing periods contained by the contract's date range. When a billing period within the contract is closed, unconsumed retainer hours can be optionally carried forward to the next billing period.

Creating Retainer by Hours Contracts

  1. Select the Finance > Contracts page.
  2. Click New > Retainer by Hours.
  3. Enter the following in the Contract Information section.
    • Contract Name
    • Contract Description
    • Account
    • Start Date
    • End Date
    • SLA - A contract associated with an SLA overrides the Default SLA when the ticket is linked to the contract.
    • Contract Number - Only displays when editing a contract.
    • Reference Number
    • Billing Cycle - Contract Length, Weekly, Monthly, Quarterly, Yearly
    • Default Contract for Service Desk - Yes or No

      Note: To prevent generating billing lines for labor hours independently of a contract, set the Default Contract option to Yes for that contract. When a new ticket or task is created, the default contract is linked to the ticket or task automatically.

  4. Enter additional information in the Custom Fields section.
  5. Click Save.
  6. Click Add to add milestone payments in the Billing Information tab.
    • Average Rate
    • Contract Hours
    • Bill For - Actual Hours or Actual Hours + Overage
    • Carry Over Extra Hours to the Next Billing Cycle - If Yes, unconsumed retainer hours are carried forward to the next billing period when a billing period is closed using Billing Review > Retainer Hours page.
  7. Click Save.
  8. Review the following in the Billing Information tab
    • Contract Billing Price - The Average Rate times the Contracts Hours.
  9. Optionally exclude roles and work types that can report hours to this contract using the Exclusions tab.
    • If hours are reported using an excluded role or work type, the hours are reported against the Default Fallback Contract you specify.
  10. Upload files to the contract using the Attachments tab.
  11. Click Save.
  12. Optionally reopen the contract and click Activate to begin using this contract to create billing entries.
  13. When labor time entries are applied to this contract, you can review the hours consumed using the PrePaid Hours Summary tab.

     

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