Overview
Business needs should be defined through a requisition. If the requisition needs to be converted into a contract, then it can either be created w.r.t the requisition or a quotation maintained for a particular vendor.
Here we will find how to create contract with reference to PR
Business Process Description Overview
A contract establishes a long-term agreement with a vendor to supply a material or service. Contracts may either be value contracts or quantity contracts. Value contracts have a ceiling that is a monetary amount that should not be exceeded. A quantity contact specifies a ceiling of goods or services that the vendor will provide to us.
This procedure outlines the steps involved in creating a standard quantity or value contract in R/3 for stock material. Contracts do not specify delivery dates; this is determined when “release orders” are issued against the contract.
Input - Required Fields Field Value / Comments
Purchase requisition Select from drop down list
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Output - Results Comments
Contract document Document Created.
Tips and Tricks
By providing as much input information as possible when creating contracts, the user can save time by minimizing the inputs at the time of the order release.
By selecting the PR all data will gate copied over to the screen.
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Procedural StepsAccess Create Contract by;
Via Menu (a) Logistics>Materials Management>Purchasing>Outline agreement>Contract >Create
Via Transaction Code ME31K
In the “Create Contract: Initial Screen”, Select the Reference to the PReq
Click on Reference to PReq
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Enter the Proper PReq number.Field Name Description R/O/C User Action and Values Comments
Vendor Vendor for which the contract is for
Specify what kind of outline agreement
R Please refer the attached annexure ZAED, ZANB, ZAPO, ZARC, ZASR.
Picked from Preq.
Agreement Date
Date of the contract R Defaults today‟s date into this field
Agreement Agreement number C Leave blank, if the system is configured to assign numbers internally or enter desired number
This number will be determined internally Purch. Organization for which the contract R Please refer the attached annexure Picked from
Enter the Proper PReq number
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Organization
is valid PReq
Press <Enter>
Enter the vendor
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On the “Create Contract: Header Data” screen, enter information as specified in the fields in the table below:
Field Name Description R/O/C User Action and Values Comments
Agreement date
Date the agreement was created
R Supplied from initial screen Grayed out Validity
start
Beginning date of contract period.
R Defaults today‟s date into the field. Change if necessary Validity
end
Date that the contract expires. R Enter the date until the contract will be valid
Payment terms
Terms stipulated by vendor O Defaults from vendor master.
Change if necessary
Target val Target value of the contract. R Required for value contracts Exch. rate Exchange rate of the currency O Change if necessary
Enter the validity end date
Enter target value
Enter BSNL APO number
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Ex. Rate fx. Fixing of exchange rate.Indicates the purchase order currency and the exchange rate cannot be changed during invoice verification.
O
Incoterms Freight terms stipulated by vendor
O Defaults from vendor master.
Change if necessary BSNL APO
number
BSNL Number R Required for value
Press <Enter>
On screen “Create Contract: Overview: Reference Document Items”, enter information in the fields as specified in the table below:
1. Enter the storage location 3. Click on Adopt
Details 2. Select the line item
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Field Name Description R/O/C User Action and Values Comments
Sloc Storage Location where material will
be delivered and stored if ordered
O Enter or select Storage Location from
table
Strictly optional.
Storage Location may be entered later at the time of P.O.
creation or Goods Receipt.
Select line items of reference document and click on the button to copy details to Contract. System will take you to the next screen – Create Contract: Item 000010
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On the “Create Contract: Item 00010” screen, enter information as specified in the fields in the table below:
1.Enter the Net order
price
2.Press OK button
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Field Name Description R/O/C User Action and Values Comments
A Account Assignment
Category. Key to determine who will be paying for the consumable material or service.
O Will default from original screen if information has been entered.
Short Text Description of the material or service to be procured
C Defaults from material master.
Enter a text for material not maintained in the material master (ex. Non stock materials)
Targ. qty. The quantity for which the contract is valid
O for
“WK”
R for
“MK”
Enter the number of pieces or amount of service for the contract.
Oun Order Unit C Defaults from material master.
Net Order Price
Basic price to be entered R Required when Preq is used as reference document
Tax code Tax Code O Will be defaulted from
reference document, if available
Can be entered fro
ED,CST,LST capture Tracking
No.
Will be defaulted from reference document
O Can be changed if required Press <Enter>
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Upon entering all of this information, the user have the option to use the radio buttons / icons on the menu bar to update or view more information that pertains to the contract.
1. Enter the continue 2. Click on vendor address icon
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On screen Create Contract: Additional data for Item; enter information in the fields as specified in the table below:
Field Name Description R/O/C User Action and Values Comments
Planned delivery time
Time in days in which delivery can be achieved unless entered differently in this screen
O Defaults from Material Master
GR processing time
Lag time in days in which goods receipt is expected after physical receipt
O Defaults from Material Master
Net Weight Net weight per order unit O Defaults from Material Master
Gross weight Gross weight of unit O Defaults from Material Master
Volume O Defaults from Material Master
1. Enter the vendor address here 2. Press save button
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Press <Save>icon , contract will be created and contract number will be displayed
APO number will be generated