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Service Contracts

  • December 3, 2022
  • 4 replies
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M
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Currently: We are working with managed service contracts where initial configuration of devices (serialized equipment) and any issues that will come up are billed against the agreement.

These contracts are typically for 1 year, paid upfront and recognize revenue monthly. There is no schedule to these contracts, because customers send these devices in randomly to get reworked and repaired.

So what would be needed is a contract that can be pre-paid for a certain amount of hours/or $ amount and then labor from appointments would be charge against these hours/$ amount.

Can we solve this through service contracts in Acumatica?

Create a master contract, add one contract for the annual billing and one for the schedule with just one appointment and then add more appointments as they come up?

So time could be captured through those appointments.

Would it be possible to create a report, where we can see, how much time billed through these appointments has accumulated against the pre-paid amount from the annual contract?

Best answer by Anacarina Calvo

@mstuber64 yes, you are in the right path. 
Here are some additional recommendations

  • If there will not be additional bills other than the one created at the beginning of the year i would recommend to use the Billing Type Beginning-Period Fixed. That way, the appointments will generate zero priced invoices. Another alternative is, on the Appointments  associated to the Service Contract, select a Service order type setup to Generate Billing Documents to None, that way the appointments will not generate invoices
  • After the Invoice is released, it will create the Deferral Schedule. By default it will divide the invoice amount evenly, between the 12 months but you can afterwards modify the amounts that will be recognized in each month. So monthly, you could update the amounts based on the GI of the actual cost from the appointments. 
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    4 replies

    Anacarina Calvo
    Pro I
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    Hi @mstuber64 
    If I understand correctly, you would like to bill upfront and then recognize monthly based on the labor for that given month, correct? will there be additional bills to the customer throughout the year? 

    M
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    • M
      mstuber64
    M
    Freshman I
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    • mstuber64
    • Author
    • Freshman I
    • 20 replies
    • December 8, 2022

    Good afternoon @Anacarina Calvo ,

    Thank you for responding.

    What I did was, I created a service contract with billing type “ Beginning-Period Plus “.

    For the schedule I chose annual.

    For the “services per period” I created an non stock item with “deferred revenue” 12 months. This is how I think I solved the issue with billing upfront (annually) and recognize the revenues monthly.

    To answer your question. Yes, their clients send in parts for repair, which would be entered as appointments (with reference to the service contract), so their staff can capture their time on these appointments. These appointments would be at $0.00, since the contract was billed and paid already (annually).

    To see a budget (contract) vs actual (appointments) we would create a generic inquiry.

    Is this how I could solve this?

    Thank you!

    Monika

     

     

     

    Anacarina Calvo
    Pro I
    Forum|alt.badge.img+4

    @mstuber64 yes, you are in the right path. 
    Here are some additional recommendations

    • If there will not be additional bills other than the one created at the beginning of the year i would recommend to use the Billing Type Beginning-Period Fixed. That way, the appointments will generate zero priced invoices. Another alternative is, on the Appointments  associated to the Service Contract, select a Service order type setup to Generate Billing Documents to None, that way the appointments will not generate invoices
    • After the Invoice is released, it will create the Deferral Schedule. By default it will divide the invoice amount evenly, between the 12 months but you can afterwards modify the amounts that will be recognized in each month. So monthly, you could update the amounts based on the GI of the actual cost from the appointments. 
    M
    Chris Hackett
    M
    3 people like this
    • M
      mstuber64
    • Chris Hackett
      Chris Hackett
    • M
      Mounishg
    M
    Freshman I
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    • mstuber64
    • Author
    • Freshman I
    • 20 replies
    • December 14, 2022

    @Anacarina Calvo 

    Thank you Anacarina for these answers. I tested them all and I can suggest them depending on the situation. I will demo this to the prospect and see, what they chose.

     

    Anacarina Calvo
    1 person likes this
    • Anacarina Calvo
      Anacarina Calvo

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