Contract

Purpose

This component is used to represent sales-relevant business transactions using outline agreements in the system. Outline agreements are referred to as contracts in the system.

Sales of the following advertising services can be managed using contracts:

  • Ads

  • Ad inserts

  • Distributions

  • Commercials

  • Online advertising

  • Services

Integration

The Master Data , Basic Functions , Order and Billing components have close associations with the Contract component .

You require a business partner who is a media customer to create a contract.You require content components and booking units to describe the advertising services that are found in these contracts.

Prices for advertising services in media organizations are usually dependent on content components and booking units.If you have represented prices and discounts in your organization using condition records in the Pricing component, the system determines these prices and discounts automatically when it creates sales documents, contracts, billing and settlement documents.

The system can assign orders to contracts automatically during contract determination, if billing datasets for these orders are suitable for the contracts. When creating the final settlement, the system determines the discount conditions to be granted on the basis of the advertising services sold and calculates the respective credit and debit memo amounts.

The following differences exist between business transactions described in the Contract component and those in the Order component:

Component

Use

Order

Represent business transactions in the system, in which media customers sell an undefined number of advertising services on a spontaneous, non-regular basis.

You use sales documents to represent these business transactions.

Contract

Represent business transactions in the system in which media customers sell a predefined number of advertising services within a particular period. If you define the amount of advertising to be sold, you can grant media customers discount conditions that are not available for individual advertising sales. Since advertising sales are planned in advance, you can grant media customers advance discount conditions.

You use outline agreements to represent these business transactions.

Features

The following functions for creating, changing and monitoring contracts are available to you in the Contract component:

Function

Use

Create requirements

The validity of advertising services in contracts is to be defined for all sales areas to ensure that they are used consistently. Requirements are recorded as master records in the system.

The following requirement types exist in the system:

  • Contract requirement

    • Barter deal requirement

    • System contract requirement

  • Contract requirement

  • Rate requirement

    You create requirements to represent some of the general terms and conditions of business in the system. These are used to define discount conditions (discount, bonus, fixed quantity price) in contracts. Contract customers are to be granted discount conditions on all ads that are placed in the national edition of a daily newspaper.

    See also: Requirement

Create contracts

Media customers who regularly sell advertising services are to be granted discount conditions that are guaranteed in the general terms and conditions of business. Number contracts are used to reward major customer loyalty and quantity contracts are used for smaller customers. The following types of contract are available to you here:

  • Discount/bonus contracts: Discounts and bonuses are granted on a standard price. Price is usually dependent on a price scale where discount conditions increase proportionally to the target number to be sold. Discount can be granted as a frequency, quantity, sales volume, or combination discount or a discount with best conditions. Bonus can be granted as a sales volume bonus.

  • Fixed quantity price contracts : A fixed quantity price is a lower price than the standard price that is negotiated for each unit of measure.These prices are usually dependent on a price scale where prices increase proportionally to the target number to be sold.

The following variants and special types of standard contracts are also available to you:

  • Customer bonus contracts: Special contract in which discounts and bonuses are granted in addition to discount conditions that have already been granted from other contracts.

  • Media-mix contracts: Contract that links several contracts for a contract holder using a fulfillment rule. Various discount conditions can be granted on services that are described in the contract requirements. You can ensure that a media customer is only granted these discount conditions if the contract requirements are fulfilled according to the fulfillment rule. Discount conditions in media-mix contracts can be granted to media customers additionally or alternatively to those in other contracts (standard or customer bonus).

  • Scale base contracts: Contract in which ads placed in various booking units receive different discount but contribute to fulfillment of the target quantity collectively. The scale base contract is a contract category that can contain several discount scales. The condition technique in order pricing can be used to find different discount scales, whose scale bases contribute to achieving the contract target collectively, for different booking units that are defined in a contract agreement. One target quantity applies to scale base contracts. Any number of these discounts can appear in an order pricing procedure.

  • Group contracts: Variant of the standard contract. Used to manage the sale of advertising services in groups. Subsidiaries without an individual contract are to be granted discount conditions from contracts that are held by organizations at a higher level in the group hierarchy. Discount conditions are to be inherited in group hierarchies and advertising services sold by subsidiaries are to count towards contract fulfillment for organizations at higher levels in these hierarchies.

  • Barter deal contracts: Variant of the standard contract. Used to manage the mutual exchange of goods and services between organizations. Barter deals can be managed with and without financial transactions and barter deal contracts are used to monitor these mutual agreements.

  • System contracts: Variant of the standard contract. Created automatically by the system if an advertising service sold fulfills a system contract requirement and the media customer is a contract customer.Contract customers are to be granted discount conditions on advertising services sold even if no suitable contract exists for them.

See also: Contract

Define contract-relevant business partner roles

You can assign business partners to a contract in the roles that have been defined in the partner determination procedure for contracts. These usually include the following business partner roles:

  • Contract holder

  • Agency

  • Beneficiary

  • Agency responsible

  • Media sales agent

    Use a partner access sequence to define the business partners for which contract assignments can be created during contract determination.

    See also: Partner Access Sequence

Grant discount conditions

Contract customers are to be granted discount conditions automatically when the agreed advertising services are sold. The system determines discount conditions automatically when you perform the following functions:

  • Create and change contracts

  • Contract determination

    • Create and change sales documents

    • Bill sales documents

  • Create interim and final settlements

You use condition records to record the discount conditions that all media customers receive for an agreed minimum number of sales. You can enter scales for a condition record.

If you specify the target number to be sold when you create a contract, the system determines the discount conditions that are to apply. If a contract is over-fulfilled, you can adjust these discount conditions using the scales recorded in the system. You cannot adjust discount conditions if they have been negotiated on an individual basis.

If a contract is over-fulfilled, the media customer is granted discount conditions that apply to larger numbers of advertising sales. The point at which the media customer is granted more favorable discount conditions depends on the definition of discount/price adjustment in their contract. You can grant a media customer more favorable discount conditions during order creation or creation of an interim or final settlement.

If a standard, customer bonus and/or a media-mix contract has been created for a media customer, they are granted discount conditions from the media-mix contract or the other contracts during alternate discount assignment. The media customer is granted discount conditions from the media-mix contract and other contracts during multiple discount assignment.

See also:

Determination of Discount Conditions in Contracts

Determination of Discount Conditions in Media-Mix Contracts

Monitor contracts

A series of functions are available in contract monitoring that can be used to monitor and post-edit contracts. Contract monitoring functions include the following:

  • Display contract standing: You display the current standing of a contract to check whether a media customer has sold the agreed number of advertising services within the defined period.

  • Display contract assignments: You can display contract assignments that have been created during contract determination, You can display the billing datasets and rate indicators that have been assigned to the contract and the advertisers who placed the orders.

  • Determine billing datasets: You identify the billing datasets that could not be assigned to a contract in order to create these contract assignments manually.

See also:

Contract Monitoring

Display Contract Standing

Display Contract Assignments

Determination of Billing Datasets

Assign contract-relevant documents

You can use SAP Media Document Management to manage documents, such as texts, graphics and multi-media objects, and to structure these hierarchically.

See also:

SAP Media Document Management