Support Contracts#
Overview#
Support contracts are used to bill customers for products and services periodically. The built-in license feature helps you assign a customer to a license before you add that license to a contract and use a support job to record revenues and expenses and send invoices.
For each contract, the effort spent on updates and help desk inquiries is calculated, reported, and invoiced separately.
Setup#
Support contract setup#
Before you can work with support contracts, you need to set up the functionality.
- Choose the Search icon, enter Support Contract Setup, and then choose the related link.
- Fill in the fields as described in the following table.
General#
| Field | Description |
|---|---|
| Use Support Contracts | Turn on this toggle if you want to use the functionality. With the toggle turned off, support contracts aren’t visible in the system. |
Numbering#
| Field | Description |
|---|---|
| Support Contract Nos. | Specify the series that you want to use to assign numbers to contracts. |
Contract Details#
| Field | Description |
|---|---|
| No Starting Date Restriction | Turn on this toggle if you want to set a date other than the first of a month. |
| Multi-Year Contract Term | Turn on this toggle if you want support contracts to run for more than a year. If the toggle is turned off, you must create a new contract version at the end of each year. |
| WP Item Sales Filter | To see changes to update-related job ledger entries, that is, to the calculation base for contracts of the update type, choose the work package you want to use to invoice items associated with the update process. These revenues will then be the basis for identifying update-related entries. |
| WP Services Filter | To see changes to update-related job ledger entries, that is, to the calculation base for contracts of the update type, choose the work package you want to use to invoice services associated with the update process. These revenues will then be the basis for identifying update-related entries. |
| Base Update Fees % | Shows the default update costs. This field can be changed on the support contract. |
| Contract Hours per Quarter | Shows the default value for new contracts. The value will change if you enter a support package in the contract. This field is used for informational purposes only. |
Support Contract Matrix#
Choose the Search icon, enter Support Contract Matrix, and then choose the related link.
This opens a page where you can specify the item, resource, or G/L account that you want to use to bill a specific support component.
Support packages#
Choose the Search icon, enter Support Packages, and then choose the related link. This opens a page where you can set up the support packages you want to offer to customers.
Note
The Hours per Quarter field on this page is used for informational purposes only.
Other services#
Other services might be, for example, additional hours of support.
To specify these kinds of services, choose the Search icon, enter Other Services, and then choose the related link.
License types#
You need this feature if a product is sold with more than one type of license.
- Choose the search icon, enter License Types, and then choose the related link.
- Fill in the fields as necessary.
Select the Default checkbox if you want to specify a standard license that is filled in automatically on new support contract lines. The other fields are used for informational purposes only and indicate how much information is available for a license type in the system, including information on related product types, products, versions, and service packs.
Product types#
Each license type can be linked to multiple product types. To set up a product type, choose Related > Product Types on the ribbon.
Example
You set up a license type called Industry Solution. You then use product types such as Project, Trade, and Factory to cover a variety of industries.
The main aim of the product type feature is to identify the purpose of a customer license. The Use field on each line specifies if you can use a type more than once within in a license—or if it determines the version of the license itself.
Note
In a Microsoft Dynamics 365 Business Central1 environment, the license version is, of course, determined by the app.
In the Contract Type field, you can then choose if you want to link the product type to your company’s (own) products, to products from third-party vendors, or to the base application.
Note
In a Microsoft Dynamics 365 Business Central1 environment, the base application is, of course, the standard Microsoft Dynamics 365 Business Central1 app.
Products#
To assign a product to a product type, choose Related > Products on the Product Types page.
Example
You specify an Apps product type. You then store two solutions—named Sanctions Check and Shipping & Handling—for this type.
The Update Fees % field on the Products page can be used to enter the yearly update fees as a percentage of the total license value.
Versions#
To specify what versions are available for a product, choose Related > Versions on the Products page.
Service packs#
To link service packs to individual product versions, choose Related > Service Packs on the Versions page.
This is the lowest level of the support contract structure.
Customer licenses#
To see a list of all customer licenses, choose the Search icon, enter Customer Licenses, and then choose the related link.
The fields shown on a customer license card are described in the following table.
| Field | Description |
|---|---|
| License No. | Shows the number of the license. You can enter a number manually. |
| Customer No. | Specifies a customer for the license. A license is assumed to be the customer’s main license if no other has been assigned. |
| Customer Name | Uses the Customer No. field to show the name of the customer. |
| Licensee | Uses the Customer No. field to show the licensee. |
| Licensee 2 | Uses the Customer No. field to show the licensee’s additional name. |
| License Date | Specifies when the license was activated. |
| Expiration Date | Specifies when the license expires. |
| Main License | Module versions are later copied to support contracts based on this field. The toggle turns on automatically when you enter a license specified as a default license. However, this requires that no other default license has been entered for this customer beforehand. |
| Main Customer No. | This field is filled in together with the Main License field. The main customer can be changed manually (for example, to indicate a group of companies). |
| Main Customer Name | Uses the Main Customer No. field to show the name of the main customer. |
| License Type | Specifies the type of license. |
| Internal Description | If necessary, you can fill in this field with a description used in-house for the license. |
Configuration#
For each license, you can specify an application base and additional modules.
- Open a customer license card.
- On the ribbon, choose Related > Configuration.
- Select the modules you want from the product types and codes.
The Technical Build and Application Build checkboxes can be selected if you chose the Version option in the Use field on the related product type card.
Modules#
You can also link individual modules to item sales instead of a license configuration.
- Open a customer license card.
- On the ribbon, choose Related > Modules.
The No. of Update-Related Entries and Total Update-Related Entries fields show how many items of this type were sold during a certain period. More sales typically mean an increase in the total quantity relevant to licensing.
Example
One item is sold per user. In the beginning, a certain customer purchases 20 items for 20 users. In the following year, the same customer buys the item for another 5 users, leading to an entry in sales. By running a function that will be described later, this entry is then copied to the New Update-Related Entry table.
The entry, in turn, indicates recent sales, and these sales increase module quantity.
Jobs#
License jobs are used to specify the relationship between a license and various jobs. For example, you might want to use one and the same job to bill help desk inquiries and updates, another to invoice customizations, and a third to sell items that result in update-related entries.
To set all these up, open a customer license card and choose Related > Jobs on the ribbon.
Related support contracts#
To see active contracts or contract lines, open a customer license card and choose Support Contracts or Support Contract Lines on the ribbon.
Create a contract#
You set up a support contract per customer and license. Contracts can have multiple versions. To bill a contract, one of these needs to be active. Other versions might be in preparation. Completed versions are best archived.
Support contracts might last for a year—or longer if you turned on the relevant toggle in Support Contract Setup. Setting the contract term to less than a year is possible in any case.
Typically, support starts at the first of a month. You can move this date if you turn on the No Starting Date Restriction toggle in setup.
Note
Whether a contract starts on the first or in the middle of a month, it must always run for a full month because that is the basis for both calculation and billing (regardless of what invoice period you agreed on).
Examples
Valid:
01/01/2022 – 12/31/2022 (12 months)
01/15/2022 – 07/14/2023 (18 months)
Not valid:
01/01/2022 – 07/20/2023 (18 months + 6 days)
To create a new support contract:
- Choose the Search icon, enter Support Contracts, and then choose the related link.
- On the ribbon, choose the New action.
- Fill in the fields as described in the following table.
General#
| Field | Description |
|---|---|
| No. | Shows the number of the contract. This field is filled in automatically with a number from the series that you set up for this purpose. |
| Version | This field is incremented automatically with every new version that you create by using the New Version function. |
| Active | Indicates if the contract version is active. Only one version of a contract can be active and used for billing at any given time. |
| Customer No. | Specify the customer assigned to the license. This customer will then be billed later. |
| Customer Name | Uses the Customer No. field to show the name of the customer. |
| Customer City | Uses the Customer No. field to show the customer’s location. |
| Install Location | Uses the Customer No. field to show the installation site. |
| Install Location Name | Uses the Customer No. field to show the name of the installation site. |
| External Document No. | Fill in this field if you want to copy a document number to the External Document No. field on invoices created from the contract. The number serves as a unique identifier for the customer and will remain the same on all invoices. |
| License No. | Enter the number of a license. Only licenses set up for the customer can be entered in this field. |
| Contract Date | Enter the contract date. |
| Starting Date Ending Date |
Specify the time during which the contract will be billed. The dates must mark the beginning and end of a month. |
| Invoice Period | Specify the frequency at which you want to bill the customer. This might be once every year, half year, quarter, or month. |
| Hours per Quarter | This field is filled in automatically with the value from Support Contract Setup. The value will change if you enter a support package. |
| Payment Terms Code | This field shows the payment terms code stored in the Customer table but can be changed manually. The code in this field is used instead of the code from the Customer table when you create an invoice from the contract. |
| New Items (Total Price) | Shows the total price of new update-related entries and indicates if a contract must be adjusted because more items were billed for the job. |
| Calculation Date | Shows the date on which the Calculate Contract action was last used. |
| Next Invoice Starting Date Next Invoice Ending Date |
These fields are important if customers aren’t billed annually so that you can see the number of months covered by the next invoice. |
| Exclude from Invoice Batch | With the toggle turned on, the contract can be excluded from periodic billing (batch runs). You then need to run the Calculate Contract action manually to bill the amount. |
| Update Fees per Month Help Desk per Month | Show the field totals from the support contract lines after the Calculate Contract action has been run. The values in these fields are used to calculate invoice totals based on the number of months between the dates specified in the Next Invoice Starting and Ending Date fields. |
| Update Fees per Year Help Desk per Year |
Show the field totals from the support contract lines after the Calculate Contract action has been run. These fields might display a prorated yearly amount, that is, if the contract term is under a year, they will show a value proportional to the term. |
| Update Fees per Term Help Desk per Term |
Show the field totals from the support contract lines after the Calculate Contract action has been run. These fields indicate the total amount owed over the full contract term. |
| Update Fees on Invoice Help Desk on Invoice |
Show the result of multiplying the monthly amount with the number of months covered by the invoice period. These fields are filled in when you run the Calculate Contract function. The calculation of the amounts is based on the invoice period. However, the actual invoice amount of individual contract lines depends on the invoice starting and ending dates, that is, if a line has been or will still need to be invoiced. |
| Support Job | Shows the first job specified for the license. |
Contract lines#
The lines state the purpose of the contract. As they cannot be created automatically, you need to fill them in as described in the following table.
| Field | Description |
|---|---|
| Type Product Code |
Choose the services or products that are part of the contract. These fields also define what counts as an update and what is billed as a help desk service. |
| Update Fees % | Shows the yearly update fees in percent. This field is copied from the product but can be changed here. |
| Starting Date Ending Date |
These fields are filled in with the dates from the contract header but can still be changed if, for example, additional services were purchased later. Like on the header, the dates must mark the beginning and end of a month. |
| License No. | The value in this field is copied from the header but can still be changed, for example, if a product is now part of another customer license. |
| Relevant Base | Shows a product’s total price, which determines the update fees. No price calculations are performed in this field. The price is determined with the help of sales entries or contract documents. |
| Update Fees per Year | Uses the Relevant Base and Update Fees % fields to calculate the yearly update fees. |
| Help Desk per Year | Shows the annual help desk amount for support packages. The value in this field is copied from the support package. |
| Update Fees per Month | Shows the monthly amount for updates, that is, the Update Fees per Year divided by 12. The value in this field is used if a contract lasts for less than a year. The values of all Update Fees per Month fields on the lines are also added up on the header to show the total update-related amount per month. Note When you bill the amount, the value in this field will be multiplied by the number of relevant months (see Months to Bill). |
| Help Desk per Month | Shows the monthly amount for help desk services, that is, the Help Desk per Year divided by 12. The value in this field is used if a contract lasts for less than a year. The values of all Help Desk per Month fields on the lines are also added up on the header to show the total help desk amount per month. Note When you bill the amount, the value in this field will be multiplied by the number of relevant months (see Months to Bill). |
| Months | Shows how many months there are between the Starting Date and the Ending Date fields stored on this contract line. |
| Update Fees per Term | Shows the update fees billed over the duration of the contract. |
| Help Desk per Term | Shows the help desk amount billed over the duration of the contract. |
Months to bill#
As explained earlier, you can set up support contracts with varying durations but only based on a multiple of full months. If a contract runs for fewer than 12 months or for more than a year, the total support amount will be divided by 12 and multiplied by the actual number of months. The starting and ending dates entered on the contract lines are then used to invoice the customer.
Billing might get complicated if amounts aren’t billed once a year but every half year, three months, or one month—and even more so if the lines include different contract terms.
Example
The amounts per invoice period show the maximum total value if all amounts were due in the same period. What you can invoice depends on the billing period and the invoice period specified on a line.
Amounts that are due on the next invoice are shown in the Update Fees on Invoice, Help Desk on Invoice, and Invoice Total fields on a support contract header.
Services rendered#
You can print a note about the services rendered together with a signature block. To enter texts for later printouts, open a support contract and choose Related > Contract > Contract Text on the ribbon.
Invoice#
To invoice services for the period between the Next Invoice Starting and Ending Date fields, choose the Create Invoice action on the ribbon. Running this function creates an unposted sales invoice, which you can open immediately.
Although contract headers already include invoice-related update fees and help desk amounts, the entries relevant to billing are found on the support contract lines. Their starting and ending dates determine if a line is invoiced within a certain period.
Partial invoices might be due as well. For example, the quarterly invoice period might run from 04/01 to 06/30, but a specific contract line might only be valid starting on 05/01. This line would then be billed based on a prorated two-month amount.
Information about unposted and posted invoices and credit notes remains available even after the lines have been billed. To view that information, go to the Invoices tab and select one of the figures highlighted in blue.
Invoice batch#
You can also create invoices for multiple contracts at once.
- Choose the Search icon, enter Support Contracts, and then choose the related link.
- On the ribbon, choose Actions > Invoice > Create Invoice Batch.
- Set filters, for example, to include only certain customers for billing.
This action considers active support contracts for which the Excl. from Invoice Batch checkbox wasn’t selected. It can be opened on the list of support contracts but isn’t available on individual contract cards.
Unposted invoices#
When you open an unposted invoice for a support contract, you can see the number of the relevant contract and the invoice period on the Support Contract tab.
This information can also be found on the invoice lines.
Posted invoices#
When you post an invoice, information about the invoice is copied to the Invoice tab of the relevant support contract. On this tab, you can select a number highlighted in blue to view a posted document. The Last Invoice Starting and Ending Date fields—and the Posted Invoices field—on the tab are updated each time you post an invoice, as are the Next Invoice Starting and Ending Date fields.
Credit memos#
Credit memos cannot be created from a support contract. Instead, choose the Copy Document action when you create a credit memo for a contract-related invoice. The support contract fields on the credit memo are then filled in like on a posted invoice.
The invoice period is reset when you post the memo.
Versions and archive#
You can archive contract versions that have been fully billed after a year. To continue using the underlying contract, you need to create another version. Contracts can have multiple versions, although only one of them can be active. Other versions are either being set up or have already been invoiced (and archived).
Create a new contract version#
- Choose the Search icon, enter Support Contracts, and then choose the related link.
- Open the relevant service contract.
- On the ribbon, choose Actions > Contract > New Version.
Note
You must edit the date fields for the new version. If you want to create a follow-on to an existing version, move the starting and ending dates one year into the future.
Active version#
Only one version of a support contract can be active. To activate a new version, you must either turn off or archive the current version when it is completed, that is, when it has been invoiced in full.