New Contract Procedure

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New Contract Procedure:

1. Step 1 of Finance Account Management (FAM) begins with a new contract procedure using the add task form to identify each potential billing event.

2. A new contract may involve up-front sales invoicing tasks to the customer and/or supplier, plus a series of future proforma invoicing task.

3. The cash flow forecast is provided from the scheduled estimated amounts for each billing event.

How to schedule finance events:

1. Cash flow forecasts begin with a revenue forecast based on scheduled billing events with an estimated revenue.

2. When a new contract begins, then that contract has a set of payments that are expected from the customer or via the customers supplier as commissions.

3. An upfront payment may be scheduled for a billing event on the customer and/or supplier for a fixed amount that may be a percentage of the annual estimated commission.

4. A schedule of other payments by the month, quarter, bi-annually or annual may be created as contract tasks with a type as "billing event".

5. The contract will define when payments are to be billed. Billing events may begin with a proforma invoice request for actual consumption and actual commission amount for a duration.

6. When the actual consumption has been entered, then the sales invoice can be issued using BMS.

Open and Transparent:

1. An open and transparent relationship with each supplier will reduce costs and reduce errors by electronically sharing common information.

2. Each supplier will impose their own unique methods of working, but that does not prevent a more effective interactive method being used with shared data using encrypted communications.

3. What was good enough a decade ago may not be good enough in the future - the cyber war means that email with attachments is no longer fit-for-purpose.

4. To minimise costs and reduce delays, the supplier is offered the choice to simply enter the actual consumtion for the past duration or to enter the actual readings and dates.

5. Where the supplier chooses to provide a spreadsheet, the actual readings and dates are extracted and entered as a reading with calculated consumption and commission.

6. However the actual consumption is entered, the billing event sends a BMS sales invoice to tbe supplier for payment.

7. The bank accounts is monitored each day so the payment date can be entered for each sales invoice - VAT accruals and annual acount transactions are generated based on the payment date for cash accounting or the tax point date.

Contract Life Cycle:

1. A three year contract may be considered as three one-year contracts with reconciliation at the end of each year.

2. A variable rate contract may be considered as a series of short contracts for the duration of each fixed rate.

3. In both cases, readings and consumption data is recorded for specific dates.

Document Control.

1. Document Title: New Contract Procedure.

2. Description: Bespoke Application Service: New Contract Procedure.

3. Keywords: Bespoke Application Service, New Contract Procedure.

4. Privacy: Shared with approved people for the benefit of humanity.

5. Edition: 1.1.

6. Issued: 2 Jan 2018.