Business Contracts Templates by zos95951

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									Draft To-Be Narrative                           State of Connecticut                                    Page 1 of 14
Contracts                                        Manage Contracts


Business Process Benefits:
   Contracts may be linked to project and activity rate templates which apply specified discounts, retainages, and
    limits to rate-based contract lines.
   Ability to recognize revenue either through Billing or Contracts based on the individual contract line.
   Contracts enables the functionality of billing from a project.
   Allows individual contract lines to be renewed without creating a new contract.
   Allows any contract changes to be tracked by using Amendment processing.

‘To-Be’ Process Narrative:
The Contracts module will allow the State of Connecticut to capture long term revenue generating contracts for
products and services. PeopleSoft Contracts main integration points are with the Projects, Billing and General
Ledger modules.

The Business Processes contained in this document will describe how Contracts will be managed in Core-CT. There
are several processes which must be followed in order to manage a contract:
 Contract Status Changes
 Amend Contract
 Renew Contract Lines
 Manage Billing
 Process Revenue
 Manage Revenue
 Prepay Offerings

Contract Status Changes
The Agency Contract Specialist may set the contract status to „Closed‟ if either the contract is terminated midstream,
or all the contractual obligations have been fulfilled and all entitlements have been received, thereby the contract has
been completed. Contracts that are set to „Closed‟ are removed from processing and views, but the historical data
will remain available for query. Once a contract is in „Closed‟ status, it can no longer be re-activated. Some
agencies have the need to close a contract, yet still be able to bill for late transactions that may come through. If this
is the case, the Agency Contract Specialist will not set the contract status to „Closed‟ but to „Pre-Close.‟ A contract
status set to „Pre-Close‟ will have a processing status of „Active‟ and will allow for further processing against the
contract.

Amend Contract
A Contract Amendment is any change made to an active contract that is altering the fundamental obligations and
entitlements of that contract. There might be times, during the course of the contract where the Agency Contract
Specialist will need to modify the terms and conditions of the contract, including additional contract lines,
cancellation of contract lines or changes to price in the contract. Once a contract is activated, that version of the
contract is frozen and cannot be modified or edited. The Amendment processing feature enables the Agency Contract
Specialist to create a new version of the original contract that can be edited and modified. This functionality
facilitates historical tracking of the life of a contract.

    Step #1 – Enter Amendment
    Once a contract is active, the Agency Contract Specialist will create a new amendment by clicking the
    Amendments icon on the active Contract General page. The Agency Contract Specialist will be transferred to
    the Amendments page where the high level details of the amendment can be defined, including the amendment
    type (for example, a contract activation, renegotiation, price change or a cancellation) and amendment reason.
    The Contract module will create a row in the Amendments grid for each amendment that is added to the
    contract.




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    Step #2 – Update Contract Lines Page
    After the amendment type and reason is specified, the Agency Contract Specialist will move to the Contract
    Lines page and click on the amend icon. The amendment reason selected will determine the action on this page,
    including activating pending contract lines, canceling active contract lines, and adding new contract lines. If a
    new contract line is being added, select the plus button and follow the usual procedures for adding offerings to a
    contract. (See the narrative and flow for Create Contracts.)

    Step #3 – Allocate Amendment Pricing
    The Agency Contract Specialist will have to allocate any price changes that have occurred due to Contract Line
    changes, such as a price extension or additional discounts, if any. Clicking on the Amendment Amount
    Allocation link on the Amendment Detail or General tab of the Contract Amendments page will bring you to the
    Amendment Amount Allocation page where the Agency Contract Specialist will allocate new amounts,
    including percent to allocate and negotiated amount, and mark the allocation complete.

    Step #4 – Set Amendment Status to Ready
    After all the Amendment data has been entered in, the Agency Contract Approver will set the status of the
    amendment to ready. This is done by accessing the Contract Amendments – General Tab and clicking the
    Details link. The Agency Contract Approver will come to the Amendment Detail page and select “Ready” from
    the Amend Status field.

    Step #5 – Process Amendment
    Before any of the changes can be seen on the Contract, amendments in “Ready” status must be processed. From
    the Amendment Detail page, the Agency Contract Approver can click the Process Amendment button to change
    the Amendment Status to “Complete” on the Contract Amendments – General Tab. This will update the Current
    Amount on the Contract General page and make any changes to the Contract Lines page if a contract line was
    added, activated or cancelled. This process will also be run as a batch process.

    Step #6 – Review Amendments
    At any time, amendment data may be viewed by selecting the Contracts Amendment page. The Statistics tab
    indicates the details of when the amendment was processed along with the User ID of the person who processed
    the changes. The Amended Amounts tab displays any pertinent Amendment Amounts. Additionally, any totals
    related to cancelled contract lines are reflected here and can be viewed by the Agency Contract Specialist. The
    Contract Amendments – Misc. tab enables the Agency Contract Specialist to add any additional change order or
    reference data to the amendments. Any data that is added to this field will be used for informational purposes
    only.

Renew Contract Lines
The Contracts module enables the Agency Contract Specialist to renew contract lines. A renewable contract line is
for a fixed-amount product or service where the offering exists for a set period of time (renewal cycle) and provides
the customer with the option of extending the contract period once the initial period expires. The State will use the
renewal feature when creating leases or rentals which may be renewed upon the end of the term of the agreement. If
Renewable Offerings are used on the contract, the Renewable checkbox for that offering is selected on the Contract
Lines page. Only offerings that are set up initially as renewable can be used in the renewal process, otherwise the
Agency Contract Specialist will have to delete the contract line, update the offering and then add the updated
offering back onto the contract. As mentioned in the Create Contracts business process, start and end dates must be
specified on the Renewals tab of the Contract Lines page. Contract lines can only be renewed once a contract has
been activated.

    Step #1 – Running the Renewal Management Report (Optional)
    The Agency Contract Specialist will use the Renewal Management Report page to specify the run parameters for
    the Renewal Management Report. The Agency Contract Specialist will be able to review and manage the
    renewable contract lines for those renewal schedules meeting the parameters that were specified on the Renewal
    Management Report page.


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    Step #2 - Create Renewal Schedule
    The initial step to renewing a contract line is creating a Renewal Schedule on the Renewal Schedule page. The
    Agency Contract Specialist can assign a contract line with a new or existing renewal schedule. From the
    Renewal Schedule page, the Agency Contract Specialist must enter data into the following fields:
         Description – a description of the Renewal Schedule
         Unit – Business Unit
         Target Contract – the Contract ID

    The Schedule Status is initially defaulted to Pending. Saving the page will create a renewal schedule ID that is
    auto-generated by the system. When assigning a contract line to a new renewal schedule, the system defaults
    information from the contract line to the renewal schedule and auto-generates the first renewal cycle based on
    the contract line parameters.

    Step #3 - Determine Renewal Cycles
    The Agency Contract Specialist will define the parameters for the renewal cycles on the Renewal Schedule page.
    Each cycle represents a period of time on the contract. By adding rows to the Renewal Cycle lines, the Agency
    Contract Specialist can define how many cycles will be present in the schedule and the pricing of each cycle.

    Filling in the % Increase field will allow the Agency Contract Specialist to raise the price of the offering by a
    percentage at the time of each renewal. The following are key fields that must be filled in for each cycle:
          Start Date - Start date for the cycle number. This becomes the start date on the contract line created
              from renewable offerings linked to this renewal schedule cycle. The start date should be at least one
              day after the end date of the renewable offering.
          End Date - End date for the cycle number.
          Offering ID – offering ID on the contract line created from the renewal schedule cycle.
          Gross Amount – contract gross amount specified for the renewal cycle.
          % increase (optional) - percent-based increase in gross amount over the previous cycle.
          Cycle Status – whether the cycle is Pending, Ready, or Done. It controls which updates can be made
              to, and what processing can occur against, a renewal cycle. The Status is initially set to „Pending.‟

    Step #4 - Assign Renewal Schedule to Contract Line
    Once a Renewal Schedule has been saved, the Agency Contract Specialist can assign the Schedule to the
    Renewable Lines on the contract. Click on the Assign Renewable Lines hyperlink, which brings you to the
    Renewal Assignment page. From this page, the Agency Contract Specialist will search for the renewable
    contract line from the Target Contract. Select the checkbox next to the renewable contract line and fill in the
    Renewal Schedule ID of the Renewal Schedule that was just created. Clicking on the Assign button will then
    assign the Renewal Schedule to the Contract Line.

    Step #5 - Define Renewal Terms
    The Agency Contract Specialist can associate renewal term codes with the renewal package for renewable
    offerings once a renewal schedule has been assigned to the contract line. This feature enables the Agency
    Contract Specialist to capture future renewable terms and is for informational purposes only.

    To enter a renewal term, select a renewal cycle from the Renewal Schedule page or from the Contract Lines –
    Renewals Tab. Click on the Renewal Terms pagelet. Select the checkbox for Renew Term. For each renewal
    cycle, the Agency Contract Specialist will be able to input the following optional information:
         Renewal Term – period of time for renewal of contract.
         Base Percentage/Base Amount – base percentage/amount to receive over the renewal term.

    Step #6 – Approve Renewal
    The Agency Contract Approver must then set the Cycle Status for the first Cycle on the Renewal Cycle page to
    Ready. This should be done some time before the end of the initial start and end dates entered on the contract


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    offering. To make changes to a renewal schedule cycle that is in „Ready‟ status, reset the status back to
    „Pending.‟ Once changes are complete, adjust the status back to „Ready‟ and save the page.

    The Agency Contract Approver will approve a renewal cycle on the Renewal Cycle page. The „Approve‟
    button will appear. Click the „Approve‟ button on the Renewal Cycle page to initiate the renewal process.

    Once the Agency Contract Approver approves the first cycle, the system sets the renewal schedule to „In
    Progress‟ and updates the renewal cycle status to „Done.‟ Clicking the „Approve‟ button indicates that the
    offerings specific to the renewal schedule cycle were accepted or approved by the customer for the renewal
    period. Upon completion of the cycle, the system sets the status of the original contract line to „Renewed‟ and
    generates a new, active line for the renewal period specified by the renewal cycle. The new contract line has its
    own accounting distributions and must be linked to a Revenue Recognition Plan and Billing Plan. If the
    "Contains Cotermination Lines" checkbox was selected on the Additional Information page, the new, active line
    for the renewal period would be created onto a new contract.

    Step #7 – Cancel or Expire Renewal
    The renewal can be cancelled if the Agency Contract Approver determines that the products or services
    associated with this renewal schedule will not be renewed in the future, or if the product or services are to be
    assigned to a different renewal schedule. The renewal expires when the end date of the renewal cycle is reached
    and the renewal cycle has not been updated for the renewable contract line(s).

    From the Renewal Schedule page, updating the Schedule Status to „Cancelled‟ will allow the Agency Contract
    Approver to manually close or reject the renewal, if necessary.

    Step #8 - Review Renewable Contract Lines
    The Agency Contract Specialist can view the details of a contract line that is associated with a renewal cycle.
    On the Contract Lines page, select the Renewals pagelet. Click the hyperlink of the cycle associated with the
    contract line you wish to view. This brings you to the Renewal Cycle page, where the Agency Contract
    Specialist can review renewal information for the current cycle.

Manage Billing – Generating Invoices
All State of Connecticut billing will either be done one of three ways: via one module passing information through
Contracts on to the Billing module, manually inputting the bill in the Billing module or uploading from an external
current billing system. By using Contracts to perform Billing, the Agency Contract Billing Specialist will be able to
control what, when and how these activities take place by creating Billing plans.

The Contracts module integrates with PeopleSoft Billing and, when using rate-based contract lines, PeopleSoft
Projects to generate invoices for the offerings on the Contract lines (products and services). The only processing
difference between using the different types of contract lines is that the flow of data for rate-based contract lines is
controlled by the Projects module, as well as any pricing. The Contracts module defines customer information, and
the billing plan details how and when billing will occur.

For more information on setting up Billing Plans, please see the Create Contracts Narrative.

    Step #1 – Verify Contract Status is Active
    The Agency Contract Specialist will verify that the Contract Status is set to an “Active” status on the Contracts
    General page.

    Step #2 – Set Billing Plan Status to Ready
    The Agency Contract Specialist will navigate to the Contract Lines – Billing tab and set the Billing Plan Status
    from “Pending” to “Ready.” The Agency Contract Approver can change the billing status from the Billing Plan
    General page. When the Agency Contract Approver changes the Status to „Ready‟ and saves the page for all the
    billing activities to begin, the system will perform edit checks to make sure that the required and prerequisite
    steps have been completed. System edit checks include mapping the contract status to an „Active‟ processing


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    status, checking that the fields on the billing plans have valid values, and ensuring that at least one contract line
    is attached to a billing plan.

    Step #3 - Set Billing Event Status to Ready to Bill (if using events)
    After the edit checks are complete, the Agency Contract Approver will set the Billing Event Status (if using
    events) on the Events page to “Ready to Bill”. A billing plan event must have an event status of Ready to Bill in
    order to be picked up by the Billing Interface process.

    Step #4 – Run Contracts/ Billing Interface Process

    The Contracts/ Billing Interface (CA_BI_INTFC) will be a batch process responsible for sending all “Ready”
    billing information determined in the Contract Bill Plan to the Billing module. For amount-based contracts, the
    Contracts/Billing Interface will pick up all billing events set to “Ready to Bill.” For rate-based contracts, the
    Contracts/Billing Interface will pick up any resource transactions that have accumulated against the project.
    After the data is determined, it will be loaded into the Billing Interface Tables.

    Step #5 – Review the Results of the Contracts/ Billing Interface (Optional)
    The Billing Interface tables (PS_INTFC_BI) act as a staging area for transactions sent from the Contracts
    module to Billing. The Billing Interface page can be accessed from the Interface Transaction link found under
    the Billing menu path. The Agency Contract Billing Specialist will select the “Review Pending Transaction” link
    to review the billing interface activity on the Billing Interface page. The link can be found under the Billing
    menu.

    Step #6 – Running the Billing Interface Process
    The scheduled Billing Interface batch process (BIIF0001) will generate contract bill lines from the billing
    activity loaded into the Billing interface tables from the Contracts and Projects modules and create a worksheet
    containing all bill information.

    Step #7 – Review & Approve the Billing Worksheet
    The Agency Billing Specialist will access the Billing Worksheet to make any modifications to transactions
    coming in from the Projects or Contracts Modules before creation of an actual bill. The Billing Worksheet is a
    temporary work area, in the form of a temporary bill, where the Agency Billing Specialist can review the bill
    lines, and write off or defer resource lines coming from Projects.

    The Billing Worksheet can be accessed from the Updated Billing Worksheet link found under the Billing
    Worksheet menu path. The Agency Billing Specialist can bypass the Billing Worksheet by checking the Pre-
    Approved check box on the Billing Plan page within the Contracts module.

    The Agency Contract Approver will then approve the bill lines on the Worksheet Search page. The Agency
    Contract Approver can set the Worksheet Action to „Apprv‟ so that a real bill line can be created and an invoice
    generated.

    Step #8 – Manage CA/PC Bills (Optional)
    After the Agency Contract Approver has approved the billing worksheet lines, the Agency Contract Billing
    Specialist can use the Manage Contract/Project Bills link to review the bills created by the system. The Agency
    Contract Billing Specialist will have the option of using the associated links to generate invoices or work with
    the newly created bill lines.

    Step #9 – Generate Invoices
    Once the Agency Contract Approver has approved the billing worksheet, the invoice is now ready for print.
    Generating Invoices is discussed in detail as part of the On Line Bill Entry and Generation business process.

    Step #10 – Run Project/Contracts Interface
    The Project/Contract Interface process runs in order to update the contract with billed information. The Projects/
    Contract scheduled batch process (BIPCC000) is typically configured to run on a regularly scheduled basis to


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    populate the Contracts/Billing Cross – Reference table with the billed information for the contract lines. The
    BIPCC000 process is run from the Billing Utilities menu.
    Step #11 – Run Billing/Projects Interface
    The Billing to Projects process (PC_BI_TO_PC) will run as a regularly scheduled batch process. This will
    ensure that all information in regards to Project tables will be updated with results from the Contracts and
    Billing modules. The Project tables are updated with results from the Contracts and Billing processes. This
    process can be found under the Projects menu under Collect Revenue.

    Step #12- View Cross Reference Tables
    The cross-reference table (CA_BP_XREF) enables the Contracts module to have visibility of all billing activity
    that is related to a Bill Plan on a contract. This includes any Projects-related data. From the Contract Lines
    page, the Agency Contract Billing Specialist can access the Billing Plan link. Click the History tab on the Billing
    Plan page to view the cross-reference table.

    Step #13 – Manage Contract Bills
     The Billing Management pages in the Contracts module will provide the agency users with an overview of the
    contract billing activity within the Contracts module. From the billing management pages, the Agency Contract
    Billing Specialist can review multiple contract billing plans together and drill down to individual billing plans to
    update information that controls the Contracts billing activity.

    Step #14 – Run the Billing Management Report (Optional)
    The Agency Contract Billing Specialist will use the Billing Management Report page to specify the run
    parameters for the Billing Management Report. The Agency Contract Billing Specialist will be able to review
    and manage the billing plans for those plans meeting the parameters that were specified on the Billing
    Management Report page.

Process Revenue
The Agency Contract Revenue Specialist will have the ability to use the Contracts module to capture revenue
information for both amount-based and rate-based contract lines. In most amount-based contracts, Billing will
manage revenue, so this step will be eliminated, however all rate-based contracts must process revenue for as
incurred transactions. The State can associate revenue information with a revenue recognition method
(apportionment, percent complete, or as-incurred), manage when the conditions for recognizing revenue have been
met, and generate journal entries to book revenue in the General Ledger.

The Contracts module will generate revenue accounting entries for rate-based contract lines by using Project Rate
Templates and Accounting Rules. The impact of rate-based revenue recognition will be discussed in the Projects
Billing session.

The following are the processes that are necessary to run in order for Contracts to recognize revenue:

    Step #1 – Verify Contract Status
    The Agency Contract Approver will set the Contract Status to an “Active” processing status. The Agency
    Contract Specialist will check the “Allocation is Complete” box on the Negotiated Amount Summary page.

    Step #2 – Set Rev. Rec. Plan Status to Ready
    The Agency Contract Approver will navigate to the Contract Lines – Rev Rec tab and set the Rev Rec Plan
    Status to “Ready” from “New.” When the Agency Contract Approver changes the Status to “Ready,” the system
    will perform edit checks to make sure that the required and prerequisite steps have been completed. The system
    edit checks include mapping the contract status to an „Active‟ processing status, checking that at least one
    contract line is attached to a revenue recognition plan, and for the Milestone method, a minimum of one event is
    defined and the sum of the events equals the plan amount.




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    Step #3 - Set Event Status (if using events) to Ready
    The Agency Contract Approver will set the Event Status (if using events) on the Rev Rec Plan page to “Ready to
    Book.” A revenue recognition plan event must have an event status of „Ready to book‟ in order to be picked up
    by any of the Revenue Recognition processing.

    Step #4 –Amount-based Revenue Process (RUN_CA_LOADGL)
    When the Amount-based Revenue process is run in batch, the system scans all revenue recognition plans with a
    status of Ready or In-Progress and picks up all revenue recognition plan events with an event status of Ready to
    Book. The system picks up all Ready to Book events in the current or prior accounting periods. Prior accounting
    periods are included because some revenue recognition plans or events may have been placed on hold in
    previous periods and are now ready to be processed.

    Step #5 –Rate-based Revenue Process (PSA_ACCTGGL)
    For rate-based revenue, the Accounting Rules Engine (PSA_ACCTGGL) writes revenue to
    CA_ACCTG_LN_PC for rate-based contract lines that are tied to as-incurred revenue recognition plans. The
    process picks up the undistributed PeopleSoft Projects PROJ_RESOURCE rows. This will be run as a batch
    process.

    Rate-based revenue accounting comes from the accounting distribution set up on the Accounting Rules page. If
    Accounting Rules for the Projects ChartFields and business unit combinations for the transactions being
    processed are not defined, the rate-based revenue process will not generate any accounting rows. (Refer to the
    Project Billing Flow and Narrative for more information on the Accounting Rules Engine).

    Step #6 – Run Journal Generator (RUN_CA_LOAD_UPD)
    After running the amount-based revenue and rate-based revenue (Accounting Rules Engine) processes, the
    Journal Generator process runs in batch scheduled on a nightly basis. The Journal Generator process picks up all
    account transactions in the CA_ACCTG_LINE and CA_ACCTG_LN_PC tables above with a PeopleSoft
    General Ledger distribution status of G (generated) and creates journals for them. The Journal Generator
    process marks all CA_ACCTG_LINE and CA_ACCTG_LN_PC lines for which it has successfully created a
    journal line with PeopleSoft General Ledger status of D (distributed).

    Step #7 – Run Journal Generator Update Process (RUN_CA_LOAD_UPD)
    The Journal Generator Update process updates in batch the status of the revenue recognition plan events to
    Booked and updates the GL_DISTRIB_STATUS of the applicable revenue transactions in PeopleSoft Projects
    PROJ_RESOURCE to D (distributed).

Manage Revenue
Managing revenue consists of managing the revenue recognition plan, managing the revenue recognition plan events,
and managing the contract line. Changes to any contract line are generally governed by amendment processing, with
the exception of changes to the accounting distributions for a contract line.

    Step #1 – Review Revenue (Optional)
    There are several revenue inquiry/management pages that enable the Agency Contract Revenue Specialist to
    query on and manage accounting for revenue recognition plans, revenue recognition plan events, and projects
    that are linked to revenue recognition plans.

    From the Manage Revenue Page, the Agency Contract Revenue Specialist can query across all contracts and
    review information, such as revenue recognition plan status, the total revenue amount for a revenue recognition
    plan, and the pending revenue amount for a revenue recognition plan. From this page, the following pages can
    be accessed for review:
          Percent Detail - inquire on revenue recognition plan events for revenue recognition plans with a
             percent-complete revenue recognition method.
          As Incurred Detail - inquire on the details for revenue recognition plans with an as-incurred revenue
             recognition method.
          Rev Rec Plan - inquire on the details of the revenue recognition plan.

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             Revenue History - review the revenue details divided into deferred revenue, revenue, and unbilled AR
              for PeopleSoft Contracts accounting activities that have been booked to the general ledger.
             Accounting Line Journal - inquire about the details of each fixed-fee journal entry.
             Rate Accounting Line Journal - inquire about rate-based accounting entries.

    Step #2 – Place Plan On Hold (Optional)
    The Revenue Management page enables the Agency Contract Revenue Specialist to perform a search for all
    revenue recognition plans and temporarily place them on hold from further processing, if desired. Place a
    revenue recognition plan on hold by selecting the Hold check box on the Revenue Recognition Plan page. Place
    a revenue recognition plan on hold anytime prior to the revenue recognition plan status being set to „Completed‟
    or „Cancelled.‟ The hold indicator is separate from the revenue recognition plan status. Placing a revenue
    recognition plan on hold does not disrupt viewing of the stage (status) of the revenue recognition plan, or require
    it to be manually reset when removing the revenue recognition plan from hold. Any revenue recognition activity
    associated with the plan is not picked up by any batch processes.

    Step #3 – Manage Plan Event Status (Optional)
    The system will not mark a revenue recognition plan as complete until all associated events are complete
    (booked). Revenue recognition events may be used with all revenue recognition plan types. The Agency
    Contract Approver can set all revenue recognition plan events to „Ready‟ upon creation of the events. The
    Agency Contract Approver can control the revenue recognition with the process's run control parameters or use
    the „Hold‟ feature on the plan itself. The event status for milestone revenue recognition plan events can be
    managed from the Appor/Milestone Detail page. To enable revenue recognition processing for these events, set
    the status of individual events to „Ready to Book.‟

    For % Complete revenue recognition plans, create a new event upon entering the total percent complete as of the
    review date.

    Step #4 – Reverse Revenue (Optional)
    The Agency Contract Approver can reverse revenue that has been generated, but not booked, by the amount and
    rate-based revenue processes. When revenue is reversed, the system generates reversing entries that back out
    each original entry. New accounting information does not need to be entered into the system. The revenue
    recognition plan or revenue recognition plan event status is set to „Reversed‟ to indicate the revenue has been
    reversed.

    There are two different forms of revenue reversal:
     Amount-based contract reversal - Reverse all accounting entries created for a specific amount-based (price
        type of amount or percent) contract.
     Revenue recognition plan reversal - Only reverse revenue previously recognized for a revenue recognition
        plan event when the status is „In Progress‟ or „Event Booked.‟ Revenue for an entire revenue recognition
        plan can be reversed if the revenue recognition plan status is „In Progress‟ or „Completed.‟ If the revenue
        recognition plan status is „In Progress,‟ the system generates reversal entries for only those events with a
        revenue recognition event status of „Event Booked.‟

    Step #5 – Redistribute Revenue (Optional)
    The Agency Contract Approver can modify a contract line's accounting distribution for future revenue
    recognition that is booked against the contract line. The accounting distribution of revenue is handled
    differently for amount-based (fixed fee) contract lines and rate-based (as-incurred) contract lines.
          Amount-based contract lines - From the Fixed Fee Redistribution page, the Agency Contract Approver
              can run the Amount-based Revenue process for any contract lines included in the process, which uses
              the current accounting distributions prior to the event accounting date being processed to create
              revenue entries. The page is effective-dated, and stores accounting distributions and unbilled AR
              accounting information for fixed-amount contract lines.
          Rate-based contract lines - Change the accounting distributions on the Accounting Rules page. The
              page is not effective-dated. Any changes made will impact the revenue and billing accounting entries
              for transactions without regard to the transaction date.

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    Step #6 – Change Revenue Recognition Plan Information (Optional)
    The Agency Contract Revenue Specialist can make Revenue Recognition plan changes on the Revenue
    Recognition Plan page. The changes that can be made depend on the status of the revenue recognition plan. No
    changes can be made when the plan has a status of either „Completed‟ or „Cancelled‟. For all other statuses
    (New, Ready, In Progress, Reversed), certain actions need to be taken before changes can be made.

    Step #7 – Reconcile Billing and Revenue (Optional)
    For contracts containing rate-based contract lines (with either value-based or as-incurred billing plans), the
    Agency Contract Approver can view both the revenue recognized and the total amounts billed-to-date for any of
    the following levels:
          Contract.
          Contract line.
          PeopleSoft Projects business unit.
          Project.
          Project/Activity.

    The level to which the Agency Contract Approver can reconcile depends on the parameters specified on the
    Contracts Reconciliation Definition page and the information entered on the billing plan. The Agency Contract
    Approver needs to specify the search level (contract, contract line, project, and project or activity) and how the
    data should be summarized. The summarization choices determine how the revenue transactions can be
    reviewed and reconciled.

    Revenue data is stored in the Projects/Contracts Accounting Line (CA_ACCTG_LINE_PC) table (where the
    accounting entries are stored) and billing data is stored in the Billing Accounting Entry (BI_ACCT_ENTRY)
    table. The data on the Reconcile Revenue and Billing page is shown in the general ledger currency, but the
    accounting information is also available. The CA_ACCTG_LINE_PC table provides the revenue transactions in
    the actual amount currency booked to the general ledger, and it provides the interunit entries to reflect if revenue
    was transferred to another General Ledger business unit (potentially in another currency).

    The reconciliation tool allows for the ability to initiate fee adjustments. From the Reconcile Revenue and Billing
    page, revenue can be redistributed from the ChartFields displayed on a row on the page to another revenue
    account (for example, another agency). This can also be done through the Manage Revenue page. The Unbilled
    AR Distribution section enables the ability to book the unbilled AR entry as the offset when revenue is
    decreased or increased.

    The Agency Contract Approver can reconcile only on the ChartFields that were selected on the Contracts
    Reconciliation Definition page. If the Agency Contract Approver did not break on those ChartFields, they do not
    appear.

    Step #8 – Run Revenue Management Report (CA_REV)
    The Agency Contract Revenue Specialist can also run the Revenue Management Report. This report displays all
    revenue recognition plans, including the status of the plans and any events associated with these plans. The
    report also displays the status of the events and the amount of future revenue that can be expected, if any.

Prepay Offerings
PeopleSoft Contracts allows customers to prepay for rate-based goods and services only. The prepaid amount can be
applied to one or more contract lines and can be used against all or a portion of the billing activity for the contract
line.

There are two different types of prepaid balance types: Inclusive and Non-inclusive. Inclusive balance type is a
prepaid amount that is included in the negotiated amount of other goods and services and is deducted on the
Negotiated Amount Allocation page. Non-inclusive types are prepaid amounts that are directly purchased by the
customer and are not reflected in the negotiated amounts of the rate-based contract offerings.


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Once the prepaid amount is established for a contract line and a billing plan is determined, a prepaid status needs to
be applied. There are 5 different types of prepaid statuses:
     Pending status, which is the default when the prepaid amount is created and all fields are editable.
     Active status is where a manual update to a prepaid is made after all the information has been captured.
     Complete status is the option when all the funds are depleted. Once the status is complete, the prepaid
         status cannot be updated.
     Inactive and Cancelled are the other two options.

    Step #1 – Define Prepaid Amount
    On the General tab of any rate-based contract, there is a Prepaid Balances link. That link will bring the Agency
    Contract Specialist to the Prepaids page to modify any one of the following options:
         Status - Controls the status of the prepaid amount. Available values are: Pending, Active, Complete,
             Inactive, and Cancelled.
         Hold - Select this check box to place a prepaid amount on hold. When a prepaid amount is on hold, no
             utilization processing occurs against that amount.
         Purchased Amount - Enter the full amount of the prepaid that was purchased by the customer.
         Inclusive - Select this check box if the prepaid amount is included in the negotiated amount of a fixed-
             amount contract line. Leave this check box blank if the prepaid amount is a non-inclusive amount and
             the prepaid amount is not directly affiliated with a fixed-amount contract line.
         Expiration Date - Informational only
         Remaining Amount - The Purchased Amount less any utilized amounts that have been finalized in
             PeopleSoft Billing.
         Committed Amount - The amount that has been utilized, but the bills have not been finalized in
             PeopleSoft Billing. When a bill is finalized in PeopleSoft Billing, the amount for that bill is backed out
             of the Committed Amount field and is then reflected in the Remaining Amount field. The balance is
             available for more utilization.
         Depleted Amount – Automatically set to the system date when the remaining amount becomes zero.

     Step #2 - Associate Prepaid Amounts to Contract Lines
    The Utilization tab on the Prepaids page will allow the Agency Contract Specialist to add contract lines to
    connect with this prepaid balance and modify any of the following options:
         Use Sequence - If multiple prepaid amounts are associated with the same billable activity, the system
             uses this value to determine which prepaid amount is depleted first. The system processes the prepaids
             in order of lowest to highest.
         Use for All Lines in Contract - Select this check box if this prepaid amount should be applied against
             multiple rate-based lines on this contract.
         Contract Line Number - Select a contract line number to apply this prepaid amount against a specific
             rate-based contract line number.
         Utilization Description for Billing - The system generates the utilization description for billing by
             concatenating the prepaid use sequence number with the contract number. The Agency Contract
             Specialist can accept this description, or enter in a custom description. This is the description used on
             the utilization line that is included in the bill.
         Utilization Criteria - Click this link to access the Utilization Criteria component, where the Agency
             Contract Specialist can define the specific projects transactions against which this prepaid amount can
             be applied and view the utilization history for this prepaid amount.

    Step #3 - Set Up Initial Billing
    The Agency Contract Billing Specialist can use the Billing tab to set up billing for the prepaid and to modify the
    following options:
          Billing Plan - Select the plan that is to be used to bill for the prepaid amount.
          Create a new billing plan - Click this link to create a new billing plan with which to associate this
             prepaid amount. The billing method for the new billing plan defaults to Immediate.

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             Description - Click the link listed in this column to access the billing plan component where the billing
              plan can be managed.
             Purchase Order Reference - If this prepaid amount is associated with a purchase order, enter the
              purchase order reference information. This information will be included on the bill when utilization
              occurs.
             Prepaid Tax Timing - Select when to tax the prepaid. There are two options:
                  - Tax on Initial Bill: Tax prepaid at time of initial bill. The initial prepaid bill will be taxed and
                       when the row is utilized, the tax will be backed out of the UTL row.
                  - Tax on Utilization: Tax prepaid when utilization occurs. No tax information will be sent to
                       Billing on the initial bill. When the row is utilized, the BIL row will be taxed, but there will be
                       no backing out of taxes on the UTL row.
    A prepaid cannot be activated without first assigning a billing plan to it.

    Step #4 - Set Up Deferred Revenue Distribution
    The Agency Contract Revenue Specialist can use the Deferred Revenue Distribution tab to set up any deferred
    revenue for the prepaid amount and to modify any of the following options:
         Distribution Code - Represents a combination of PeopleSoft General Ledger ChartField values.
         Department - Used to indicate who is responsible for or affected by the transaction.
         Project - Captures additional information useful for project accounting.
         Statistics Code - Identifies non-monetary amounts.


    Step #5 - Activate Contract
    Once all of the initial setups of the prepaid amount have been defined, the Agency Contract Approver will need
    to set the Contract Status to Active and save the change in order for any prepayment processing to begin. This is
    done from the Contract General page. The Agency Contract Specialist will no longer be able to make changes
    to the prepayment plan without amending the contract.

    Step #6 - Run Contracts/Billing Interface Process
    The Contracts/Billing Interface views all of the to-be billed statuses of the prepaid, and selects and processes the
    billing activity. To load the Billing information from the Contracts module and Projects module to the Billing
    module, the Agency Specialist will use the Load Billing page. The scheduled batch process will use the
    Contracts/Billing interface (CA_BI_INTC) to send contract bill lines to Billing.

    After the Contracts/Billing Interface process selects and processes project billing activity, but prior to sending
    the activity to billing, the Prepaid Utilization Engine process is called. The Utilization Engine is automatically
    called from the CA_BI_INTC process. The Utilization Engine process considers all active prepaid balances and
    the utilization criteria defined. Then, of the active prepaids, the process selects only the prepaid balances that
    have had at least one event on the initial billing plan where the invoice has been finalized.

    Step #7 - Billing to Project/Contracts Process
    After the bill is finalized, the Billing to PC/CA process is run. During the billing to projects process, the prepaid
    update process is called automatically. This process updates the committed amount and the remaining amount
    on the prepaid table (CA_PREPAID_TBL) based on what is being sent back to Projects.

    Step #8 – Process Revenue
    See the Process Revenue section of this document for prepay revenue processing.


Assumptions/Issues:
        For rate-based contract lines, Accounting Rules have already been set up.


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        Accounting Distributions for Contracts currently allow for multiple revenue lines to be created, but only one
         Unbilled AR line to be created.
        If using Revenue Recognition plans, a Revenue Reversal application may need to be developed for
         Contracts, similar to the one developed for AR, to handle the State‟s revenue needs.
        Most amount-based contracts will not use the Process Revenue or Manage Revenue features because the
         Billing module will manage revenue.
        All rate-based contracts will use the As Incurred method for Revenue Recognition.
        Billing for As Incurred Bill plans can be determined by setting up event dates, producing Bills for
         transactions as they occur or by specifying run control parameters by Billing cycle.

Process Impact Summary:

Organizational/People Impacts:
   Agency Contract Specialist
   Agency Contract Billing Specialist
   Agency Contract Revenue Specialist
   Agency Contract Approver
   PeopleSoft Contracts integrates with PeopleSoft Projects to enable the Agency users to associate PeopleSoft
    Contracts contract lines for offerings with projects and activities in PeopleSoft Projects. Agency users will need
    to understand the integration of PeopleSoft Contracts with the PeopleSoft Projects Module.
   Since PeopleSoft Contract integrates with PeopleSoft Billing to generate invoices for all the contract lines,
    Agency users will need to be trained/ have an understanding of the PeopleSoft Billing module.
   PeopleSoft Contract integrates with the PeopleSoft General Ledger module to enable Agency users to book to
    the general ledger system revenue for the contracts that are set up in PeopleSoft Contracts. Agency users will
    need to have an understanding of the GL module in Core-CT.

Security/Audit Considerations:
    N/A

Potential Modifications:

    Software Modifications
        Currently the system will not allow contract lines with limits to produce bills that are pre-approved. Code
         can be applied to allow the „Pre-Approve‟ and „Direct Invoice‟ checkboxes to become available.


    Interface Modifications (Inbound/Outbound) – Identify Realtime or Batch, Frequency, and volume of data
        N/A

    Policy Modifications
        N/A

    Procedure Modifications
        N/A

    Statutory Modifications
        N/A

    Labor Contract Modifications
        N/A

    Training/ Web Learning Assistant Materials Modifications

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Contracts                                        Manage Contracts

        No vanilla training material exists for the Contracts module.

Technical Considerations:
    N/A

Conversion Impacts:
   The State needs to determine which agencies will be using the contracts module.
   The State needs to determine the volume of contracts currently entered into legacy systems.
   The State needs to determine what legacy systems are currently used to capture contract information.
   The State needs to determine how much historical contract data must be captured.

Configuration Impacts:
   Define and Configure Contract Status
   Define and Configure Contract Type
   Define Offerings Categories
   Define Offerings
   Define and Configure Distribution Codes
   Define and Configure Legal Entities
   Define Special Payment Options
   Define Early Out Option Code
   Define and Configure Support Teams
   Define and Configure Support Team Member
   Business Units need to be defined
   Define Projects Rate templates for rate-based offerings
   Define Bill Source and Type
   Define Amendment Type
   Define Amendment Reason

Define Discounts Potential Self Service/ eApplication Functionality:
    No known self service functionality at this time


Major Input Documents:

Description                   Purpose                                        Status   Attached?   Changes Needed?
N/A


Major Output Documents:

Description                   Purpose                                        Status   Attached?   Changes Needed?
Billing Management            This crystal report (CA_BILL) displays         Existing No
Report                        details of the billing plans, including the
                              events associated with those plans, if any;
                              the status of the events; and the amount of
                              future billings that can be expected, if any
Prepaid Balances Report       This crystal report (CA_PP) displays           Existing No
                              details on prepaid balances, including the
                              status of these balances, the date that they
                              are expected to expire and the amount
                              remaining on these balances.
Revenue Management            The (CA_REV) crystal report displays           Existing No

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Report                        revenue recognition plans, including the
                              status of these plans, and the events
                              associated with these plans if any. It also
                              displays the status of these events and the
                              amount of the future revenue that can be
                              expected if any.
Renewal Management            The (CA_RNWL) crystal report displays           Existing No
Report                        details of renewable contract lines,
                              including weather or not they have been
                              assigned to a renewal schedule, what status
                              they are in, and the amount of future
                              revenue that can be expected from them.
Limit Amount Report           The (CA_LMT) crystal report displays            Existing No
                              details of the contract‟s limit and the
                              amount of the limit remaining.

Input Provided By:

Name                                                              Title, Department
Mo Aidrus                                                         Financials Change Management CA Lead, Accenture
Whitney Wolfe                                                     Financials CA Team Lead, Accenture
Melissa Yeung                                                     Financials CA Team Member, Accenture


Modification History
Version #    Description                Author                    Date
1.0          Draft                      Mo Aidrus                 11/06/03
1.0          Update                     Melissa Yeung             12/18/03




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