- Creating and managing contract terms
- Understanding the example calculation
- Setting up payment periods and cash discount deadlines
Project default contract terms
You can create individual terms for each contract or define project-wide contract terms (such as a general 3% cash discount) across all contracts.
Below, we describe the process within a contract. We create some contract-specific terms for this purpose. Similarly, default contract terms can be created for the entire project in the project settings. To do this, select the project in the master data under the submenu item "Projects", navigate to the "project settings", and click the "Project Default Contract Terms" tab. You need an Admin account role to add or modify the default contract terms.
Creating contract terms
To create contract-specific terms, first, select a contract from the "Contract Overview" under the "Cost" menu item. Once in the selected contract, navigate to the "Contract terms" tab. Here, you can create new contract terms or view and edit existing ones.
The contract terms consist of two sections. Section A (see image below) defines the contract terms as rules in blocks, which are then supplemented by the example calculation in section B. The content and order of the deductions are modelled after a test calculation, similar to what will be displayed during the invoice approval workflow.
Contract Terms (Section A)
The following contract term blocks are available:
a) Deduction: a rule for the entire contract
b) Retention: general and defects liability retentions
c) Cost allocations: any number of percentage and fixed allocation rules
d) Insurances: any number of tax-exempt percentage deductions (e.g., construction insurance)
The order of blocks a) to c) is determined by the order in which they were created. The insurance block has a fixed position, as last, that cannot be changed. Blocks can be deleted using the parent trash can icon and then added again to change the order.
In the cost allocations block, you can make percentage or flat deductions. Click "%" or "€" to change the input. All other deductions are percentage deductions.
For percentage deductions, you must choose from the different reference amount options.
Lastly, for blocks b) to d), you must choose the invoice types to which the deduction should be applied to. The following invoice types are available:
- ER = single invoice
- AR = installment
- T-SR = partial final invoice
- SR = final invoice
You can add individual rules within blocks using the "+" button and delete them later using the trash can icon at the end of a row.
The insurance block (see image below) plays a special role. In this block, you can include tax-exempt insurance services since insurance tax is not eligible for an input tax deduction and usually needs to be shown separately. Therefore, you can choose between net and gross subtotals of the different reference amounts.
Example Calculations (Section B)
The contract volume used for the example calculation corresponds to that of the underlying contract. The unaudited and audited invoice amounts are 90% and 80% of the contract volume, respectively, shown purely as an example. You can temporarily change these values using the pencil icon; however, they do not affect the invoice workflow or the contract. They are only used to accurately simulate a possible calculation.
You can switch between the different invoice types to illustrate the effects on, for example, a single invoice (ER). The example calculation would then display all rules defined for a single invoice.
Payment Period and Cash Discount Deadline
In the last section of the contract terms (Section A), you can view the amounts to be paid with and without the cash discount deduction. The cash discount is applied after deducting all other defined contract terms.
In the green-highlighted areas, you can set the payment period per invoice type as well as the cash discount period (see image below). Click on the setting symbol to define the deadlines. You can choose between calendar days, work days, and bank days, and enter the number of days for the corresponding invoice type.
Please note that you can also differentiate between individual invoice types when setting the cash discount period, allowing, for example, a longer deadline for the final invoice.
The information regarding payment periods will be displayed below the date fields in the first step of the invoice approval workflow after the contract and invoice type have been selected. They are intended to assist in accurately determining the payment and cash discount deadlines.
If you notice during the invoice approval workflow that the displayed contract terms are incorrect, you can also adjust them from within the workflow step. To do this, click on the pencil icon next to the condition you want to change, and you will be directly taken to the contract terms of the contract to make the necessary modifications.