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Account Contracts

Last Updated: Jan 05, 2021

Contract Commitments are configured in Account / Profile / Contracts

Overview

Account contracts allow you to set commitments on usage, services, packages and/or an invoiced amount per account for a specified term. Account contracts can auto-renew, auto-terminate or renew to a different account contract if desired. Contract termination penalties can also be setup to apply charges for early termination at a flat rate fee or a percentage of the contract commitments.

Account contracts do not place specific account-packages under a contract, they simply set commitments that need to be met for the specified account. If you want to place individual account-packages under contracts you can do so on the Account / Profile / Packages screen. Account contracts are fully compatible with package contracts and both types can be used on an account simultaneously if desired.

Account contract commitments are evaluated when billing an account. The bill run that is executed when billing the account must have the 'Run Contract Commitments' setting enabled in order to evaluate contract commitments.

Account Contracts Panel

The Account Contracts panel towards the left of this screen allows you to select existing account contracts to view and edit on the Edit Account Contract panel. Actions are also available in this panel which are shown as icons above the Filter text box. The available actions are described below.

Actions

Icon

Description

Terminates the selected account contract as of a specific date

Creates a copy of the selected account contract

Deletes the selected account contract if not in use

Adds a new account contract

Edit Account Contract Panel

The information in this panel reflects the currently selected account contract. From here you can change contract details (fields will display a red left border if a value is required and purple text if the field is read-only and cannot be modified).

Account Contract Fields and Options:

  • Name: a descriptive name for the contract

  • Status: the contract status. This field will show statuses you have setup that are configured as 'Active' (e.g. Pre-Active/Pending, Active)

Terms Tab

  • Term & Unit: allows you to set the contract term length, e.g. 1 year

  • Extend End Date on Activations: if this option is selected the end date of the contract will be extended when a package or service under commitment is added to the account. The time extended will be equal to the full contract length. For instance if a service under commitment is added to an account which is under an annual account contract then the contract term will be extended a full year from the point of the new service's activation. E.g. a service activated on July 5th will extend the annual term contract to July 5th the following year. If a service/package is added to the account and that service/package is not specified on the Commitments tab then the contract end date will not be extended

  • Start Date: when the contract term begins. This can be a past, present or future date. Past dates cannot go further back in time than the last invoiced period

  • End Date: a read-only value that is automatically calculated. This value will equal the contract start date plus the contract term length

  • Renew Type: specifies how the contract should renew or terminate at the end of its term

    • Expires at End of Term: if set the account contract will expire at the end of the contract term

    • New Contract: if set a different contract of your choosing will take effect when the account contract term expires. The new contract can have entirely different terms and commitments. E.g. if you want to switch to a monthly contract term after the initial contract expires you would use this setting. When New Contract is selected a 'Renewal Contract' field will appear allowing you to specify the contract that will take effect once the current contract expires. If the required terms and configuration of the renewal contract remain constant you can configure the new contract to Auto Renew, eliminating the need to specify further renewal contracts to use. Before you can specify the renewal contract you will need to create it, see the adding account contracts guide for contract creation instructions

    • Auto Renew: sets the contract to renew with the same term length and configuration. For instance if the contract has a commitment of a minimum invoice charge of $2000 per invoice then this commitment will also apply with the new contract. If your initial contract has ramp up commitments (e.g. minimum count of 50 of Package X's for the first 6 months, then a minimum count of 75 Package X's for the next 6 months) you will want to use the 'New Contract' setting above to ensure that when the contract is renewed the commitments don't reset back to a lower commitment level. When Auto Renew is selected a 'Renewal Status' field will appear, this field allows you to set the status the renewed contract will start in (active, pre-active, etc.)

  • Termination Status: sets the contract termination status. E.g. if you have a termination status called 'Renewed' you could set that status when the contract is configured to auto renew. This field is used to indicate how the account contract ended (did it expire and not renew, did it renew, etc.). The termination statuses you see here are custom and dependent on how the system has been configured to suit your tracking and reporting needs

Commitments Tab

This tab will show any contract commitments that are configured. Commitments can be setup for usage charges, service charges, package charges and on the total amount invoiced. Commitments can be defined at a broad or a granular level, for instance, a commitment could apply to all active services on an account or, alternatively, a commitment could be specific to a particular service in a particular package with a particular price frequency.

The minimum commitment can be setup based on a count condition (e.g. you must have at least five units of service X active on the account), a charge condition (e.g. you must purchase at least $300 worth of charges a month for service Y) or a usage condition (e.g. all active data services on the account must consume 2 GB of usage per month). How to configure commitments is described in the guides under this page.

Termination Tab

On this tab you can define termination penalties that will apply should the account contract be terminated early. Multiple termination penalties can be setup to apply different penalties based on when the contract is canceled. For example, a termination penalty can be setup to charge for 75% of commitments owed if the contract is canceled in the first three months of the contract term, another penalty can be setup which will charge 50% if the contract is canceled between the fourth and sixth month of the term and a final penalty can be setup that charges only 25% of the commitments owed if cancelation occurs after seven months into the term.

The fields present on the Termination tab are shown below, additional details on how to add termination penalties are explained in the adding account contracts guide.

  • Transaction Service (for Flat Fees): allows you to type in the service that will be associated with the transaction when flat fee termination charges are applied. Typically you would have a 'Contract Termination Fee' or similar service in your product catalog to enter here

  • Transaction Description: a brief summary of what the transaction charge is. This will be shown when reviewing transactions on the Account / Billing / Transactions tab