Tuesday, June 12, 2012

Sales Agreements in Oracle


Overview of Sales Agreements
----------------------------
A Sales Agreement is defined as an agreement for a customer that has specific
characteristics between a customer and a supplier. Sales Agreements are similar in
functionality to the Sales Agreement purchase order in Oracle Purchasing. These
characteristics may include the date range of the agreement, the items included, the
price of the items, the quantity of each item that the parties committed to as well as
other attributes, like freight or payment terms. Once a Sales Agreement is entered for a
customer, multiple releases (shipments) against the Sales Agreement can be processed
over a period of time within Order Management. The order is fulfilled and billed
according to the terms of the Sales Agreement. Tracking information will also be
accumulated for Sales Agreement such as quantity fulfilled, and dollar value fulfilled of
released lines. This information will be used to view status of orders executed against a
Sales Agreement.
Sales Agreements interface with Oracle Pricing to price Sales Agreement lines, default
pricing information, and provide special pricing for Sales Agreements. Oracle Release
Management discloses all releases against Sales Agreements to determine the current
picture of demand. Demand will only be looked at from the release lines.
The Sales Agreements functionality includes:
• Windows: Find Sales Agreements, Sales Agreements Summary, and Sales
Agreements windows
• Captures agreement information
• Enforce Sales Agreement terms: price list, shipping method, payment terms, ship to,
bill to, etc.
• Ability to track revisions to the Sales Agreements
• Ability to secure who can enter Sales Agreements
Create simple price lists during Sales Agreement creation
• Specify defaulting rules for Sales Agreement attributes
• Support Standard, ATO items, and Kits
• Support Item Categories and all items
• Ability to create releases by Order Import and Process Order API
• View releases of Sales Agreements
• Process the releases to the Sales Agreement
• Default information from the Sales Agreement to the release
• Aggregate information about the releases and access that consolidated information
from the Sales Agreement
• Integrations with Advanced Pricing and Release Management
• Effectivity dates of the agreement
Workflow enhancements:
• Negotiation and Fulfillment phases
• Internal Approvals
• Create Internal Approver List
Automatically attach Adobe Portable Document Format (PDF) of current Sales
Agreement for Approvers to reference easily
• Quality Assurance (QA) validation for contractual terms and conditions included in
Negotiation flow
• Introduction of new processes to manage the Sales Agreement life cycle:
• Draft
• Internal Approval
• Customer Acceptance
• Terminate
• Expire
Lost
• Close
• Direct access to Oracle Sales Contracts
• Automatic and Manual Versioning
• Customer Acceptance captured in a new tab
• Ability to create customer-specific Price List
• Ability to add customer items to a Price List


New Pricing tab offers:

• Price List and Modifier List created through Sales Agreement are only
updateable through that Sales Agreement and are therefore unique to that Sales
Agreement
• Inline Pricing directly on the Sales Agreement lines for line-level discount % or
discount amount
• Negotiate Range Breaks across release orders
• Sales Agreement will accumulate quantities and amounts ordered against it and
price accordingly
• Enhanced configuration support:
• Ability to define options and option classes on the Sales Agreement to hold
price for configurations on releases
• Ability to define service items on the Sales Agreement to hold price on releases
• Service items can be associated with a Standard item or can be used as part of a
configuration
• New document(s) with Print enhancements
• Security through Processing Constraints
• Copy
• Attachments

Sales Agreements Headers
------------------------

Sales Agreement headers include:

• All information that other order headers include (such as customer, ship to, bill to,
Version of the Sales Agreement)
• Effective dates of the Sales Agreement
• Terms between the customer and vendor such as payment and freight terms
• A Sales Agreement minimum and maximum value. This is represented by amaximum monetary value that the buyer can purchase over the life of the Sales
Agreement, and by a minimum monetary value that the buyer must purchase over
the life of the Sales Agreement, across all items on the Sales Agreement. In other
words, this minimum and maximum is independent of a particular item
• Control of Maximum Values: A Control flag can be used to control whether the user
can exceed the maximum (value)
• Pricing information: Standard Price List, Sales Agreement specific PL (New Price
List), Sales Agreement specific modifiers (New Modifier List)
Sales Agreement Information
A Sales Agreement is used to capture information about fulfillment rules and
conditions between a supplier and a customer including:
• A specified quantity
• A specified list of items
• A certain price
• A specified date range
Accumulation of Sales Agreement Information
A Sales Agreement is used to accumulate and display summary header and line
information about releases that have been processed related to that agreement.
Accumulation Summary on the Sales Agreement header Fulfillment tab displays:
• Unreleased and Released Amounts
• Unfulfilled and Fulfilled Amounts
• Amount in Process
• Returned Amount
Amount Based Sales Agreement
You can define a Sales Agreement that is not item based but based on an amount For
example Company A can have Sales Agreement for a $1,000,000 with Company B. This
Sales Agreement will cover all items. The way this can be implemented is to define a
Sales Agreement header with one Sales Agreement line of item identifier type 'ALL
ITEMS and Min/Max Amounts.'
Sales Agreement Numbers
The Sales Agreement numbers are assigned automatically by the system with numeric
characters only.

Sales Agreement Type
The Sales Agreement type is the field used to assign the transaction type. A list of
values can be invoked by the user to choose from a list of valid transaction types. If a
default transaction type has been assigned, it is displayed here.
Sales Agreement Name
User can define a name (alphanumeric) for a specific Sales Agreement. If the user does
not specify a name, Sales Agreement Number will be the default value. This value can
be overridden.
Sales Agreement Currency
You may negotiate your agreement in any currency. The amount of the Sales
Agreement will be represented in this currency. Sales Agreement currency can be any
currency, including currencies other than the functional currency of the negotiating
organization.
Note: You must specify the conversion type on the Sales Agreement if
release currencies are to be different from Sales Agreement currency.

Enforcing Terms on Sales Agreements
You can choose to set up terms and enforce them on the release:
• Ship to location
• Bill to location
• Freight Terms
• Shipping Method
• Payment Term
• Price List
• Accounting Rule
• Invoicing Rule
Note: The Enforce flag on the Sales Agreement will ensure the value on
the release matches with the value on the Sales Agreement line.
Pricing
The Price List on the header will only serve as a defaulting source and will always be
LOV validated.
Note: You cannot enter a new price list in this column.
To create a new price list, define the name in the New Price List field. Prices for this list
can be defined on the Sales Agreement lines.
To create a modifier for this Sales Agreement, define a modifier name in the New
Modifier List field and define the discount amount or discount % that will default to the
Sales Agreement lines.
Acceptance
The ability to capture a Customer and Supplier name and date as signatories for the
Sales Agreement has been created in the Sales Agreement Acceptance tab. The fields are
not mandatory to progress the Sales Agreement with the button, Customer Accepted.

Sales Agreements Lines
----------------------
The Sales Agreement lines include:
• Item categories - able to store the categories and ALL ITEMS to cover all items
• The fixed (min/max) quantity agreed between the customer and supplier
• The price including choice of Price List in addition to line level modifiers: Discount
% and Discount amount
• Grade
• Effective dates - Effective dates are optional. If there are no effective dates, the Sales
Agreement may be used at any time. If the effective dates on a line are blank, the
effective dates for the header will be used. You can not enter effective dates on the
lines that are outside the effective date range for the header.
• The Sales Agreement amount - Visible on the Sales Agreement line, and displays
the open balances on the Sales Agreement.
Note: When the Item Context is null, the Items list of values shows only
internal items by default if no Item Identifier Type is selected.
Multiple Sales Agreement Lines for Same Item
The same item can appear on the Sales Agreement multiple times, but the occurrences
cannot have overlapping date ranges. This will allow accumulation of quantities for
different time periods.

For instance, to keep totals by month and if the Sales Agreement extends for a year, you
will have 12 occurrences of the items on the agreement and the effective dates for each
line will be 1 calendar month.
Sales Agreements Configuration Support
Models and configurations will be supported through extending the Sales Agreement to
define options and option classes. The ability to define a top model already exists. For
pre-configured models, the customer can define the model (ATO or kit) in BOM and
reference the top model on the Sales Agreement with a price for the model. For
customers that require more flexibility and will configure at the time of release, models,
option and option classes can be defined on the Sales Agreement and a price established
for each component. When the configured item is created on the release (Sales Order)
the total price will reflect the combination of the individual component prices.
Item Types and Categories
Sales Agreement orders may be for shippable items, such as office supplies and for
non-shippable items, such as consulting services and training. The Sales Agreement
order line may be represented by the customer item number, rather than the supplier's
item number. Item Types supported:
• Standard Items
• ATO standard Item
• KIT
• MODEL
• CLASS
• OPTION

Service Items
Sales Agreement lines are allowed for item categories, or specific items. When the sales
agreement release is created, the exact item is specified.
Minimum/Maximum Quantities for a Sales Agreement Line
The minimum and maximum quantity on a Sales Agreement can be used to designate a
minimum or maximum quantity for that item. The min/max quantity for a Sales
Agreement can be blank, which will allow the customer to buy an unlimited quantity
against the Sales Agreement. If there is an min/max quantity, this is the quantity of the
item that the customer has committed to buy and that the vendor has committed to sell.
So, you cannot purchase more than the max. quantity, at least the minimum quantity; if
both are set, the released lines must be within the range and if they are left blank, then it
is an open ended Sales Agreement.
For example, the minimum quantity on the Sales Agreement line can represent the
minimum that must be released for that line for the whole life of the agreement, over
the course of many releases. The minimum release quantity on the Sales Agreement line
indicates that an individual release line cannot be less than the minimum quantity.
Minimum/Maximum Amount for a Sales Agreement Line
You can specify a maximum amount limit for a Sales Agreement or an item on a sales
agreement. This would be optional, as the sales agreement header would default a
min/max value to the agreement lines.
For each Sales Agreement line, there should be:
• A maximum amount for the Sales Agreement line,
• A maximum amount for the order release line, and
• A maximum quantity for the Sales Agreement line,
• A maximum quantity for a release order line.
Releases
Holds
You can use Sales Agreement header and line number as the criteria for creating a hold
source. You can not create Sales Agreement releases against an agreement that is on
hold. You can create holds in the following combinations:
• Number - Item
• Sales Agreement Number - Ship To
• Sales Agreement Number - Bill To
• Sales Agreement Number – Warehouse
• Sales Agreement Number – Sales Agreement Line Number
Mass Change
The sales agreement number is enabled on Mass Change window. The sales agreement
number selected on the Mass Change window will be cascaded to all the selected
headers and lines.
If the mass change has a customer then the LOV for the Sales Agreement number will
be limited to only that customer.
You must be careful when performing a mass update of a sales agreement number since
the sales agreement number is associated to a specific customer and you must choose
headers/lines of that customer only.
Note: You must always select customer if you are updating the sales
agreement number.
If you have created releases into the future, based on an Sales Agreement with the
customer, and the Sales Agreement changes, you have the ability to mass change the
future, open release lines.
For example, if you were initially ordered to ship 100 every week for 52 weeks, and
built the release lines accordingly, and a few months after the Sales Agreement is
placed, the customer re-negotiated quantities with you. They now want only 80 per
week, so you can perform a mass update of the remaining open sales order lines to
update them to the ordered quantity of 80.
Note: Mass Change does not include the revision.
Returns of Configured Items
Returns can only handle standard items. Included items or component items of a
configuration are returned on individual lines as standard items. Returning a kit item
therefore may not update the sales agreement if it was a non-shippable item and cannot
be received in purchasing. As an alternative, you need to supply the sales agreement
number on the return lines for the shippable components / included items. If sales
agreement line referred to on ordered kit line was specific to a kit item, you may not be
able to return included items against the same sales agreement line. But you can return
against another sales agreement line that is specific to the included item or against an
item category/all item sales agreement line instead.

Release Lines
-------------
Hierarchy and Precedence
You can set up a Sales Agreement for an item, item category, or ALL ITEMS within the
same date range. The hierarchy then would be item, Item Category, and ALL ITEMS. In
the price list set up you can define the precedence. The ability to define precedence is
much more flexible and complex in Oracle Pricing than in Sales Agreements.
Note: To make sure that the consumption is in line with the pricing
precedence, you must have the same precedence set for Sales
Agreement and pricing. If the pricing precedence is different from the
Sales Agreement precedence the price might be different in some cases.
Item Precedence and Quantity Consumption
A Sales Agreement can have multiple Sales Agreement lines with item, item category
and ALL ITEM within the same date range. When a release is created for an item that
can fit into any of three lines, the precedence logic determines the following order:Item
• Item Category
Within Item Category by Line Number.
• ALL Item
The consumption should be done accordingly. However you will be given a choice
to pick a unique line by choosing the Sales Agreement line number to indicate the
preference.
Link to Release Lines
When viewing the release lines, you can decide whether to display:
• Both open and closed release lines
• Only open release lines
• Closed release lines
You can determine the order that the lines should be displayed:
• Date or scheduled ship date
• Either ascending or descending order
Accumulation of Release Information
The Sales Agreement shows summary level information about the releases against the
Sales Agreement. Each line should include the fields:
• Released Quantity
• Fulfilled Quantity
• Remaining Unfulfilled Quantity
• Fulfilled Amount
• Remaining Unfulfilled Amount
• Returned Quantity
• Released Amount
• Returned Amount
The accumulation is triggered by activities in the workflow of the release lines. When
the release line is saved, the released quantity is updated at the header and line. When
the release line is fulfilled, the fulfilled quantity on the Sales Agreement line is
incremented. When a release line is returned and the item is received, the Returned
Quantity is incremented. The Remaining Unfulfilled Quantity may be stored or may be
calculated for display purposes. It should always equal the Sales Agreement ordered
Quantity; the Fulfilled Quantity + the Returned Quantity.
Sales Orders Window
You can access Sales Orders window from the Sales Agreement window and create a
release. The sales agreement number will be carried over to Sales Orders window and
corresponding information from the Sales Agreement will be defaulted based on the
rules defined.
Sales Orders Summary Window
You can view releases for a sales agreement header or a specific sales agreement line
from the Sales Agreement window or from the Sales Orders Summary window. You
can perform all the available actions on sales order such as mass change, cancellation,
scheduling, etc.
Return Material Authorization (RMA)
When a release is returned, the Sales Agreement information is defaulted to the return
release if referenced. The returned amount and returned quantity will be updated on
the Sales Agreement only at the time of return receipt. On a partial receipt the lines are
split and a partially received quantity is updated on the Sales Agreement as the
returned quantity. The return line will copy Sales Agreement information from the
shipment line if the reference is provided. For an un-referenced return you can return
against any open sales agreement line for that item. No validation is required. You can
return against a closed Sales Agreement.

Transaction Types
-----------------
You can assign the Sales Agreement workflows to the transaction type using the Define
Transaction Types window. Each transaction type can have one negotiation phase and
one fulfillment phase. The Transaction Type window will allow the users to define
which fulfillment phase the negotiation will transition to once the negotiation is
complete.
Enabling Workflow
Transaction type framework provides the ability for user to associate a workflow to a
Sales Agreement. Depending on the default phase defined on the transaction type, a
Sales Agreement can start with either the negotiation phase or the fulfilment phase.
There are two columns on the transaction type to support this.
• Negotiation Phase
• Fulfillment Phase
If an agreement starts with the negotiation it will first take the negotiation flow and
then starts the fulfillment phase once progressed beyond customer acceptance.
The Transaction Type setup includes an additional field to set a default phase for each
transaction type is on the Transaction Type window. As an example, you can define
transaction types that always start with the negotiation phase as the default.
The transaction phase can also be set as a profile and system uses following precedence
to obtain a starting phase for an agreement.
• Profile
• Transaction Type

Effectivity Dates (Sales Agreements Requirement)
The Sales Agreement has an effectivity date, that consists of a start date and the end
date. The releases against the Sales Agreement can only be created during these dates.
All the Sales Agreements has an Active date, however, the Sales Agreement may not
have a end date. If the Sales Agreement does not have a end date, the Sales Agreement
may never expire. You can, however, enter the end date to the Sales Agreement at any
point when its active. The following are the date fields that will be used to track the
effectivity date.
Effective_start_date
Effective_end_date
Versioning
You can define when the version should start, and control whether quotes submitted for
approval can be updated. You can define whether the following behavior is allowed or
not:
• Restrict modification during the approval process but take the flow from Approval
process to Draft, allowing modifications to be made in Draft status.
• Allow changes while the quote is in the approval process.
• Don't allow any changes while the quote is going through the approval process.
• Setup versioning at any point possible.
A seeded system constraint locks the transaction throughout the approval process. The
restriction is to prevent scenarios such as the following:
• The first approver could approve shipment of an item on credit hold because the
gross margin is good, or the volume is large. But by the time the order line gets to
the second approver, the gross margin or quantity could be less, and so the second
approver (perhaps a supervisor) criticizes the first approver's lack of judgment.
The second approver may automatically approve the line just because someone
he/she trusts approved it, and a line item could ship when it should not.
Retain Status Change Details (Versioning)
History is retained of status changes, capturing date, time, user, and user comments for
tracking purposes.
NOTE: The existing product functionality captures and displays the following status
related dates:
• Date Approved
• Date Signed
• Date Renewed
• Date Canceled
• Date Terminated
Assigning and using the Quote Flows
You can assign the quote workflows to the transaction type using the Define
Transaction Type window. Each transaction type can have one quote flow and one
order flow. The Define Transaction Type window enables you to define which order
flow the quote flow is transitioned to after the quote is converted to the order.
Line Flows
The lines in the quote will not have a separate flow. They will be part of the header
flow.
Item Attributes
The following are the seeded item attributes.
OENH: OE Negotiation Header
• User ID
• Application ID
• Responsibility ID
• Org ID
• Sales Document Type
• Negotiation Short Descriptor
• Pre expire Time Percentage
OEBH: OE Blanket Header
• User ID
• Application ID
• Responsibility ID
• Org ID
• Sales Agreement Short Descriptor
• Pre expire Time Percentage
Process Activity Attributes
A pre-expire notification is sent before the Negotiation or the Sales Agreement expires.
A percentage value is used to determine when the notification goes out. If the value is
set to 10, that means a notification is sent after 90% of time has elapsed. E.g. If the Sales
Agreement is valid for 1 year, a pre-expire notification is sent 36(365 * 10/100= 35.6 = 36
days) days before it expires. You can modify this value by copying this flow and the
changing the values of the process activity attribute Pre expire Time Percentage.
OENH: OE Negotiation Header
• Pre expire Time Percentage
OEBH: OE Blanket Header
• Pre expire Time Percentage
Note: A notification is sent only for a specific status, i.e. when the
Sales Agreement is about to expire and when it is Terminated.
View Comments of Multiple Rejections (Sales Agreements)
You can view all the comments of the approval notification that was rejected. You can
view all the rejection comments in case the quote was rejected multiple times. You can
accomplish this through the workflow monitor.
Notify Sender of Timeout
Notify Sender of Rejection (Last Approver Timeout)
Notify Sender of Final Approval
Flow 1:Quote/Sales Agreement flow without approval
You can append lines from quotes that are either Inactive or Ordered to existing quotes.
This functionality is provided by the HTML version of quoting. This can be done using
the Copy Quote functionality. You can either copy a closed quote or copy an inactivated
quote to a new quote.
Expiration Date
There may be an expiration date associated with the quote. The date is populated
through defaults and you can over-write it. For more information see Expiration Date
Overview, page 2-67
Expiration of Sales Agreements
The following Sales Agreement will expire in <___> day(s).
The following Sales Agreement has expired.
Sales Agreement Pre-Expiration Notification
Sales Agreement expired

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