Minimum Version Required: 25.04
Pre-Conditions
Setting 553 = True
Setting 3254 = True
Steps
Consolidating contract management gives greater visibility and control over the procurement processes, ensuring that supply aligns seamlessly with production needs.
Contracts are added on the Purchase Contracts table: How to add a new Purchase Contract
System Setting 3254 - Enable Purchase Contracts:
1. When Setting = True, this enables the new Purchase Contracts workflow including:
Tables: PurchaseContractTrans, PurchaseContractCosts, PurchaseContractPeriods
Dashboards: Purchase Contract Add, Purchase Contract Edit, Purchase Contract View, Purchase Contract Close
System enforcements around contracted products
2. When Setting = False, this continues with current Contracts workflow
Purchase Contract Trans:
1. The Product level detail of contracted agreement with Vendor
2. Only one “Active” Purchase Contract Trans per ProductID is allowed
Active is a term used to describe a Purchase Contract Trans Record with a matching ProductID + ContractPeriod
This means we only allow contracting with oneVendorperProductID - similar products purchased or contracted require new ProductIDs
3. Purchase Contract Trans create Product Cost Plans
This enforces the current structure to set default Inventory costing
4. Purchase Contract Trans record the FOB as Unit Price
Associated costs should be added as Contract Costs or accounted for separately
Purchase Contract Costs:
1. The Vendor invoice level detail of additional costs specifically designated in the contract
2. Designated through the Contract Add, Contract Edit, or Rebalance workflows
3. Freight and Other Cost are supported
4. Total entered will be disbursed across the total contracted units
Normal Vendor Cost Type disbursal method will be used on PO receipt
5. Multiple Cost Types can be associated with the same Contract
Multiple contracts cannot be associated with the same ContractCost
Purchase Contract Periods:
1. The Contract level detail of a specifically designated time period for purchasing
This can be referred to/used as a Harvest Year
2. Designated through the Contract Add and Contract Edit workflows
3. Start and End Dates are both supported and required
4. Multiple Contract Periods can exist within the same Contract
5. Contract Periods can not be associated with multiple Contracts
The same date range can be referenced in multiple Contract Periods to accommodate multiple contracts
Fields And Definitions
ContractNum: The contract number
This can be an alphanumeric entry and will be unique per contract
Contract: The contract name
This may be an official name or an internally created reference name
Vendor: The Vendor the contract is signed with/agreed to
This will be the only Vendor that the contracted Product(s) can be purchased from
Contract Year: Open text field designed to be the actual year the contract was officially signed/agreed to
This may be updated as additional Purchase Contract Periods are added
Start Date: The actual date of the beginning of the contract
This field should not be updated once entered
End Date: The planned date of the end of the contract
This may be manually updated as additional Purchase Contract Periods are added
Best Practices
Purchase Contracts enables a signed-to-shelf workflow to record, fulfill, and update contracts with Suppliers/Vendors
Products can only be contracted to a single vendor
Purchase Contracts for similar products sourced from multiple vendors require multiple ProductIDs
Product Cost Plans will be created for all contracted Products under active contracts
Active Purchase Contracts are defined as Contracts.Status = Approved, In Progress
Purchase Contracts prevent manual updating of costing, specifically FOB