Saturday, 25 June 2016

Service and Management Contracts

Service contracts to record the details of the service package that you have agreed to provide a service recipient with over a specified period of time. For example, you specify:
  • The routine service tasks which are to be performed on a piece of machinery you have sold or rented to a customer
  • The prices which are to apply for these routine tasks
  • The prices which are to apply for additional service tasks and for any spare parts required
  • The terms under which the contract can be cancelled

 During the validity period of the service contract, you use the service contract as follows:
  • To initiate automatic billing of the routine service tasks at regular intervals
  • To determine whether a service request from the customer is covered by the service contract
  • To determine which price agreements apply for service tasks not covered by the service contract
  • To determine whether a cancellation request from the customer is valid
  • To initiate follow-up actions before the service contract becomes invalid
After you have negotiated the terms of a service package with the service recipient, you create a service contract in the system to record this information.
You can create a service contract in the following ways:
  • From scratch, without reference to another document
  • With reference to a preceding inquiry or quotation
  • With reference to an existing contract
When you create a service contract with reference to another document such as another service contract or a quotation, the system copies the relevant data (for example, validity period and cancellation data) into the new contract.
To ensure consistency of data in all service contracts for a particular customer, you can link each service contract to a master contract that contains the general terms and conditions, which you have agreed with the customer

 Service Contract type:

Standard SAP contract type for service is SC.

Service contract types are defined in Customizing for Sales and Distribution. You can create service contract types that meet the requirements of your organization by copying the existing service contract types and adapting them as required.
In addition to defining the usual control data for sales document types, you also specify contract-specific data in the service contract type such as:
·         Pricing procedure for determining prices for service tasks and service products
·         Service contract profile containing default data for service contract processing
·         Billing request type for resource-related billing

Service Contract profile:

Control element for service contract processing which contains default contract data-

When you create a service contract, the system determines whether a contract profile has been assigned to the service contract type you have chosen. If so, it copies the data defined in the contract profile into the service contract

Service Contract item:

Element of the service contract in which you define the services or products you are providing the customer with under the terms of the service contract. A service contract item can be any of the following:
·         Service (for example, a particular task)
·         Material (for example, a spare part)
·         Time (for example, an hourly rate for a technician’s time on the job)
·         Response time (how soon you are obligated to respond to a problem call)
·         Warranty (the agreed duration and coverage)
The items in a service contract are controlled by item category. It is possible for a service contract to include items with different item categories. For example, some items may be rented, others sold.