5 Replies Latest reply on Mar 31, 2011 10:45 AM by Russ Stebbins

    Reset accumulaters for release based contracts

    Srini Varadarajan Master

      We would like to setup a release based contract that resets rates based on quantity ordered each month. Is that possible?

        • Re: Reset accumulaters for release based contracts
          lpoudoulec Expert

          Hi Srini

           

          Assuming we are talking about P2P.

          In case you select Tiered Pricing, the system should automatically reduce the price when you reach targets (quantity or amount). It is not on a monthly basis but rather whenever the defined threshold is exceeded.

           

          Example:

          You have set the following Tiered Pricing per qty. (Tiered Pricing can be applied either by quantity or amount)

           

          Minimum Quantity PurchasedDiscount Percent
          0 units5%
          100 units6%
          200 units7%

           

          When a line item crosses tier boundaries, the lower price or greater percentage discount is applied to the entire line item.

           

          • If you order above 100 units, your price will be reduced by 6%
          • If you order above 200 units you get 7% discount.

           

          This is applied whenever you exceed the amount/qty.

           

          So if you submit 100 POs for 1 unit, the discount will be applied on PO101. The price on PO101 will be reduced by 6%.

          Same logic, if you order 1 PO (PO1) with qty 100 units, the discount will be applied on PO2. The price on PO2 will be reduced by 6%.

            • Re: Reset accumulaters for release based contracts
              Srini Varadarajan Master

              That will work assuming there's a PO for every order.

              How would it work if the vendor was to invoice directly against the tiered price and the tiers are effecitive based on the Qty invoiced.

               

              So in the example you mentioned below...

               

              • If the vendor invoices above 100 units, price will be reduced by 6%
              • If invoice is over 200 units you get 7% discount.

               

              Thanks

               

              Srini

                • Re: Reset accumulaters for release based contracts
                  Russ Stebbins Master

                  Srini,

                   

                  Each contract is either Release or non-Release (Invoice against contract).  The tiered pricing can either be by order (or invoice) or cumulative.

                   

                  I would think you could also have a Master/Sub relationship where the tiered pricing existed at the Master and the subs would use the master contract discounts.  That way you could have a Master with a Release sub and Non-Release sub.  I don't know if the 'by order' tiered discount would work in that case though, I have never had a business case to build one that way.

                    • Re: Reset accumulaters for release based contracts
                      Srini Varadarajan Master

                      Russ,

                       

                      For sake of discussion lets say we have a contract with vendor to handle calls. The rates are tiered based on how many calls they attend a month. The vendors invoice weekly. How woudl it be hanlded?

                       

                      I cannot do release based contract since the Qty is variable by week.

                       

                      Srini

                        • Re: Reset accumulaters for release based contracts
                          Russ Stebbins Master

                          Srini,

                           

                          I see your problem.  The UOM for the tiers (Monthly) is different than the UOM for invoicing (weekly).  In your example, the invoices would stand alone and start fresh every invoice.

                           

                          Some corrective actions would be to amend the contract to have weekly tiers instead of Monthly or to switch the invoicing cycle to Monthly.

                           

                          What you want to do is have the tiers as cumulative but resetting monthly instead of at the end of the contract term.  Not currently possible but being able to have the cumulative tiers reset on a certain time period would be good.  I have some multi-year contracts that don't change but the pricing resets on each contract anniversary. The value add of creating a new Contract Terms each year with a new Contract number is zero.