¶ Introduction
Contract management, also known as Contract lifecycle management (CLM) is the management of contracts made with customers, vendors, partners, or employees. The staff involved in Contract Administration required to negotiate, support and manage effective contracts are expensive to train and retain. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing on any changes or amendments that may arise during its implementation or execution. It can be summarized as the process of systematically and efficiently managing contract creation, execution, and analysis for the purpose of maximizing financial and operational performance and minimizing risk.
CLM is the methodical management of a contract from initiation through award, compliance and renewal. Implementing CLM can lead to significant improvements in cost savings and efficiency and can limit liability and increase compliance with legal requirements.
Some key steps in the CLM process are:
- Capture: Step one for most people is to get all their existing paper contracts in a central visible place. If you have no clear idea what contracts you have, then you have no idea what your potential risk exposure is.
- Track: Once you know where all your contracts are, the next step is to track important data, so you don’t miss any milestones. This affects both existing and newly signed contracts.
- Create: Contract creation has two tracks. First, empowering business users with self-service, wizard-based creation using intelligent templates pre-approved by legal. Second, making life easier for legal when drafting complex deals on your own paper, or reviewing and “patching” contracts negotiated on other people’s paper.
- Approve: Companies need an approval workflow process to ensure that risky contracts are reviewed and approved by the right person. Some risks need to be approved by legal, some by management, some by special departments like credit, etc. Ideally, safe deals are pre-approved.
- Negotiate: The needs of the typical negotiator include: a checklist of issues for each type of deal; a way of marking up the paper to highlight how it’s different from the original or the last draft; and a way of capturing and flagging those differences (if possible).
¶ Navigation
¶ Specific setups
The following will be covered below:
- Parameters; contracts governance
- Document pack
- Meeting types
- Performance goals
- Risk configuration
- Journal names
- Purchase agreement classification
- Escalation types
GRC365 supports trade and non-trade contracts.
Sales and purchase agreements can be classified as Trade contracts. These are characterized by the selling and buying of items, or by executing or receiving a “Statement of work”.
Non-trade contracts are those contracts which are by definition not trade contracts and are usually found in your normal business and day-to-day life, e.g., lease agreement, employment contract etc.
If Workflow is used, Case category type security needs to be setup
- Go to: Organization administration > Setup > Cases > Case category type security
- In the Case category field, select Contract from the dropdown list
- Select the relevant Roles from the Available roles column and move them to the Selected roles column
¶ Step 1: Governance, risk and compliance parameter setups
¶ Step 1.1: Interfaces
Go to: GRC > Setup > GRC parameters
- Open the General tab
- Expand the Integration Fast tab
- Click on the Interfaces button
¶ Step 1.1.1: PDF signatures
- Expand the PDF signatures Fast tab
- Click on the Add button
- In the Name field, select the e-signature tool that you will be using, from the dropdown list
- Enter an Account ID. A unique identifier for your account specifies the account being accessed when making API calls. This ensures the integration targets the correct account for operations like sending or signing documents.
- Indicate whether this will be the Default e-signature tool used
- Enter the details of the Authorisation server
- Enter the Client ID. Also known as the Integration Key, it is a unique identifier for your integration application. It is essential for the authentication process and enables secure access to your account.
- Enter the User ID. Represents a specific user in your account. It ensures that API calls are correctly attributed and authorised on behalf of this user.
- Enter the Redirect URL
- Enter the Base path. The URL endpoint for API calls. It may vary depending on the environment (e.g., production or sandbox) being accessed, serving as the base URL for all API requests.
- Enter the Private key in the box provided. A secret key is used in the authentication process to securely validate API requests without exposing sensitive login credentials.
- Click on the OK button
¶ Step 1.2: Enable contract governance for SCM contracts (purchase/sales agreements)
Go to: GRC > Setup > GRC parameters
- Open the Governance tab
- Expand the Contracts governance Fast tab
- Enable contract governance for a specific area by selecting the relevant value in the Enable field
- Select the relevant SOW project budget model from the dropdown list
If Contracts governance has not been enabled for purchase/sales agreements, the items marked below will not be visible on the purchase/sales agreements
¶ Step 1.3: Setup contract governance for contract requests
Contract Requests are the triggers to initiate your company’s formal contract process, specifically to request the creation of a Contract in GRC 365. This is an internal process and at the begining excludes 3rd party involvement. Later down stream in the prosess external legal counsel can be called upon. A request must be approved in order for the contract to be created. For this process to be enabled users must fill in some default values and subsequently do some case setups.
Specify the default case process values for new contract requests and for contracts to be reviewed/vetted.
Go to: GRC > Setup > GRC parameters
- Open the Governance tab
- Expand the Contracts governance Fast tab
- In the New process field, select Request for new from the dropdown list
- In the Review process field, select Request for review from the dropdown list
¶ Step 2: Case configuration
As explained above, cases are used for contract requests. GRC 365 supports requests of type "new contracts" as well as request of type "reviewing of existing contracts".
¶ Step 2.1: Create Case category
Go to: GRC > Governance > Setup for governance > Case categories
- On the Action pane, click on the New button
- Enter the Case category and a brief Description
- Select the relevant Category type from the dropdown list
If it is required that documents must be attached before submitting a request for a new contract into workflow, select Yes under Force attachments.
A yellow warning line will appear at the top of the workflow submit dialog and the Attachments form will open.
¶ Step 2.2: Setup Case category type security
By selecting roles for the Case category type security, only users with these roles assigned to them, will have the privilege to create a New contract request or a request for contract review.
Go to: Organization administration > Setup > Cases > Case category type security
- Select the required Case category from the dropdown list
- Select the required role/s from the Available roles list
- Click on the right pointing arrow button to move the selected role/s to the Selected roles list
¶ Step 2.3: Create Case priorities
Go to: GRC > Governance > Setup for governance > Priority
- Enter a code or name for the Priority
- Enter a brief Description for the priority
- Indicate whether it is a Hot alert
- Select the relevant Colour
¶ Step 3: Setup Source type and Source ID
As part of the contract request approval process, users can and should print out a Motivation report. The Source type and Source ID are used when compiling the Motivation report. This information is selected under the Case log fast tab on the Case.
Go to: GRC > Governance > Setup for governance > Source types
- On the Action pane, click on the New button
- In the Source type field, enter the type of source (E.g. Financial value, Cost center)
- Enter a brief Description for the source
- Under Source type option, in the button strip, click on the Add button
- Enter a Name and brief Description for the source type option (These are the column names on the report)
¶ Step 4: Record legal panel vendors
A list of suppliers/vendors of legal services should be created and maintained inside GRC 365. These legal panel members are used when drafting contracts as well as giving advice when contract breaches and remedies are considered.
Go to: GRC > Governance > Contracts > Legal > Legal panel
- In the Action pane, click on the New button
- Select a Legal category from the dropdown list
- Enter a brief Description
- Select the relevant supplier/vendor from the dropdown list in the Panel member field
Legal panel members are also used when creating a contract request and on the contract (Preamble index tab).
¶ Step 5: Setup Contract classification
Contracts may be classified on the basis of their validity, formation or formance (that which is performed or accomplished; a thing done or carried through).
The Applied to dropdown list gives the user option to create the following types of contracts:
- Human resources
- Supply chain
- Projects
- Treasury
- Insurance
- Other
Go to: GRC > Governance > Setup for governance > Contract classification
- Enter a unique ID for the classification in the Classification ID field
- Enter a brief Description for the classification ID
- Select the Email template to be used for manual sending of emails, from the dropdown list
- Select the relevant PDF integration template from the dropdown list
- Select where this email template is Applied to, from the dropdown list
- In the Enforce for AP and Enforce for AR fields, tick the box to enforce the total contract value, and limit users to spend beyond the contract value
- Select the Signature type required for contract approval, from the dropdown list
- Select the Signature type required for printing the Sofa report, from the dropdown list
- In the Email batch template field, choose the template to use for automated batch alerts from the dropdown list
- Tick the Group contract box to enable the use of the Contract, via purchase agreements, in multiple legal entities
On the Contract detail form, Content Fast tab, Cover page Index tab, the Worker field will only be editable where Human resources is selected in the Applied to field on the Contract classification setup form
¶ Step 6: Setup Standard clauses
The easiest way to think about a contract clause is to first understand that it's a written portion that exists to do a legal-specific job. In other words, a clause in a contract is a unique section that addresses a specific need, privilege, right, deadline, or duty.
Users can create a list of frequently used and generaly accepted clauses for approval.
Users must also flag these clauses in the Used in field to group clauses together for specific use in contract drafting or other type of document drafting.
Go to: GRC > Governance > Setup for governance > Standard clauses
- On the Action pane, click on the New button
- Enter a Standard clause ID
- Enter a brief Description
- Select the relevant Heading for the clause
(Heading 1 for a primary heading, Heading 2 for a secondary heading)
- If this is a secondary clause, select the relevant Parent clause form the dropdown list
- Select the relevant Status from the dropdown list
- Select the area that the caluse will be Used in from the dropdown list. (E.g. Contracts)
- Under the Overview Fast tab, enter the clause details
If the Status of the clause is Approved, the record will be locked
Only Approved clauses can be selected on the Contract
¶ Step 7: Setup Standard terms and conditions
Terms and conditions refer to the contractual rights and obligations of a party to any contract. They refer to the broader more generic guidelines (opposed to specific clauses) that parties must follow in an agreement.
Go to: GRC > Governance > Setup for governance > Standard terms and conditions
- On the Action pane, click on the New button
- Enter a Group ID for the standard terms and conditions
- Enter a brief Description
- In the Effective date field, enter the date from which the record is valid
- When the record has expired, move the Expired slider to Yes
- Under the Terms and conditions Fast tab, click on the Add button
- Enter the Term or condition ID
- Enter a Description of the term or condition
- Enter additional Notes in the box provided
¶ Step 8: Setup Signature type
Signature types are used when people (workers and outside contractors) need to sign on Contracts and bids.
Go to: GRC > Governance > Setup for governance > Signature type
- On the Action pane, click on the New button
- Under the Signature type Index tab:
- Enter a unique Signature type ID
- Enter a brief Description for the signature type
- Select the Signature type that you want to add workers to
- Open the Worker Index tab:
- In the Remaining workers column, select the Worker that you want to link to the Signature type
- Click on the < button to move the Worker across to the Selected workers column
- Select the Signature type that you want to add vendors to
- Open the Vendor Index tab:
- In the Button strip, click on the Add button
- Select the relevant Vendor account from the dropdown list
Only workers/vendors that have been linked to a Signature type can be selected under the Sign off Fast tab on the Contract
¶ Step 9: Define approval authority
Before launching the tender, the buyer should satisfy itself that all planning, budget analyses and exercises have come to a satisfactory conclusion. It is good practice to develop a check list and confirm/check that all relevant conditions of preparation and structuring are met. In addition an Approval authority matrix should be defined. This will be useful for Workflow.
Go to: GRC > Governance > Setup for governance > Approval authority
- On the Action pane, click New
- Enter the applicable Year
- Select the relevant approval Level from the dropdown list
- Enter the name of the Authority
- Enter the Maximum amount
- Select the relevant Currency from the dropdown list
- Enter a brief Description
- Select the relevant Approver authority role from the dropdown list
- Select a Responsable worker from the lookup
- Choose a Dimension and based on this value
- Select a Dimension value
¶ Step 10: Setup Reporting agency
In some geographies it is a legal requirement to "report" contracts to government agencies. GRC 365 supports this but require a list of these agencies to be created.
Go to: GRC > Governance > Setup for governance > Reporting agency
- On the Action pane, click on the New button
- Enter a Reporting agency name
- Enter a brief Description
- Select the Contact person for the Reporting agency
- Indicate whether this is a default Reporting agency
- Expand the Reporting categories Fast tab
- In the Button strip, click on the Add button
- Enter a Reporting category
- Enter a brief Description
¶ Step 11: Create Document pack
A Document pack is used to group multiple documents together. These documents normally support contracting activities. For example, when a set of templates are needed for a purchase, they can be referenced in the contract by using a Document pack. Additionally, a list of recipients can also be added to the pack. This is useful when a set of documents must be sent to a bid committee meeting.
Go to: GRC > Governance > Setup for governance > Document pack
- On the Action pane, click on the New button
- In the Document pack ID field, enter a name and enter a Description
- A SharePoint URL can be entered
- Indicate whether the record should be published to the portal
- Expand the Recipients Fast tab and click on the Add button
- Select the Workers that you want to send the Document pack to
- Expand the Related documents Fast tab to view the documents related to the selected Document pack
- Only Approved document packs can be selected on the Solicitation type and on the RFQ
- The link between the Document pack and the Related documents is created on the Contract detail form under the Content Fast tab
¶ Step 12: Setup Journal names
Go to: GRC > Setup > Journal names
- On the Action pane, click on the New button
- Enter a Journal name
- Enter a Description for the Journal name
- Expand the General Fast tab
- Under the GRC field group, move the Contractor pre-costing slider to Yes. (This indicates that the journal will be for contractor invoicing)
¶ Step 12.1: For use in AP accruals
Go to: Accounts payble/Purchase ledger > Invoices > Invoice journal
- Select the relevant journal (batch of journal entry line items)
- On the Action pane, click on the Lines button
- On the Vendor invoice journal, in the button strip, click on the Accrue button
- Complete the Accrue dialog
- Click OK
¶ Step 12.2: For use with Trade agreement
There are two “agreements” in Dynamics that on the surface appear to be similar: The purchase agreement and the trade agreement.
In Dynamics, a Trade agreement can be thought of as an “if this, then that” mechanism for applying discounts. Essentially, you can create a rule for pricing and apply it to a particular product, group of products, client, or group of clients. You can apply all kinds of limitations and exceptions to these rules, such as date ranges. For example, trade agreements in Dynamics 365 allow you to realize the following scenarios:
“If client X purchases more than 100 widgets, they will receive a 12% discount” “If any client purchases 10 widgets or more between 20 December and 24 December, they will receive $5000 off their order”
A purchase agreement is a contract that commits an organization to buy a specified quantity or amount by using multiple purchase orders over time. In exchange for this commitment, the buyer receives special prices and discounts.
Purchase agreements override trade agreements. They represent a commitment by a certain organization to purchase a certain amount. While it is possible to apply a trade agreement to a single client, trade agreements do not represent a commitment. You would want to implement a purchase agreement following a price negotiation, for example.
These two are the same in nature as they allow you to create price discounts based on purchase behavior, but there are two key differences between purchase agreements and trade agreements. Trade agreements are more flexible when applying discounts to a wide range of purchase situations, while a purchase agreement is specific to a vendor and is representative of a commitment to buy.
Go to: GRC > Governance > Setup for governance > Trade agreement journal names
- On the Action pane, click on the New button
- Enter a Journal name
- Enter a brief Description for the new journal name
- Select the relevant Relation from the dropdown list
¶ Step 13: Setup Integration template for PDF services
Future release will support PDF integration.
Go to: GRC > Governance > Setup for governance > Integration template for PDF services
- In the Action pane, click on the New button
- Under the Template Fast tab:
- Enter a Template ID
- Enter the Signing sequence
- Enter a brief Description of the template
- Under the Signatories Fast tab:
- Click on the Add button
- The system will assign a value in the Sorting column
- Enter a brief Description of the Signatory
- Enter the value of the Dependency of the Signatory (Sorting number)
- Select the Type of Signatory from the dropdown list
¶ Step 14: Setup Purchase agreement classification
The purchase agreement classification allows you to control the administrative information that is available on purchase agreements.
Go to: GRC > Governance > Setup for governance > Purchase agreement classification
- On the Action pane, click New
- Enter a Name that describes the purchase agreement classification. The classification will be available on the Purchase agreement page when you create new purchase agreements
- Enter a brief Description for the Purchase agreement classification
- Under the General Fast tab:
- Indicate whether Subcontractors may be used for this classification
- Under Certifications, select Yes to enable the entry of insurance policies and bonds on purchase agreements that use this classification
- Indicate whether this classification will Require direct invoicing
- Under Activities, select Yes to enable the entry of milestones and tasks on purchase agreements that use this classification
- Under Workflow, select Yes to indicate that the HSE (Health, Safety and Environmental) workflow is enabled for this classification
An organization negotiates and concludes a contract. The detail of this contract includes that users can and should release PO’s (most likely without approval since there is an approved contract) against this contract. But the rules of the organization states that the total of all PO’s being released cannot go beyond the negotiated contract value. Under this Fast tab, super users can choose to enforce the above rule.
- Under the Governance Fast tab:
- Select the relevant Performance goal category from the dropdown list
- Indicate whether the maximum value is to be enforced or not
- Indicate whether the contract value from the contract register should be locked or not
¶ Step 15: Risk configuration
It is prudent to assess the risks associated with Trading partners and related contracts. To support this, users can do a risk assessment via the Profile Fast tab on the Contracts detail form/page. Risk categories are needed for this.
Go to: GRC > Risk > Setup for risks > Risk configuration
- Open the Risk categories tab
- On the Action pane, click New
- Enter the unique risk Category ID
- Enter a brief Description of the risk category
- In the Class field, select the relevant risk classification from the dropdown list
- Click Save
Sub-categories can be setup for each Risk category
¶ Step 16: Setup Description lookups
A reason must be provided when a contract is renewed or terminated. These reasons can be setup as described below.
Go to: GRC > Setup > Description lookups
- Open the Contracts Index tab
- On the Action pane, click on the New button
- Enter an Identification for the description lookup/Reason code
- Enter a Search name for the description lookup/Reason code
- Enter a Description for the description lookup/Reason code
¶ Step 17: Setup Performance KPIs, goals and users
To measure supplier performance; users can link Key performance indicators (KPIs) and performance goals to a contract. The KPIs are linked directly against a supplier/vendor and customer on the Trading partner Fast tab.
¶ Step 17.1: Setup workers and users
In order to use the Performance management functionality, the user must be setup as follows:
Go to: Human resources > Workers > Workers
- On the Action pane, click New
- Complete the Hire new worker dialog with the relevant details
- Click on the Continue button
Go to: System administration > Users > Users
- Search for the user that you want to link to the newly created worker
- Click on the User ID to view the details of the user
- On the User details form, search for the worker in the Person field
- Click on the Select button
- Make sure that the user is Enabled
- Click Save
¶ Step 17.2: Create KPIs
Go to: GRC > Performance > Setup for performance > Key performance indicators list
Refer to the GRC Corporate performance management Wiki page for more detail
¶ Daily use: Contract requests
¶ Step 18: Contract requests
Contract request is the start of the entire contract lifecycle and defines the type of contract to be created and the related details. Contract request involves all the activities necessary to initiate a new contract in Dynamics 365 F&O. The process can be ad hoc, where users manually write down what type of contract they want and what should be inside it, or automated, where users choose from a contract baseline (template) and using workflows to route to the proper approval users. GRC 365 supports two types of contract request cases:
- Request for a new contract
- Request to review an existing contract
¶ Step 18.1: Create a request for new Contract
Go to: GRC > Governance > Contracts > All contract requests
- On the Action pane, click on the New button
- Select Case from the dropdown list
- On the New case dialog, click on the General Index tab
- Select the Source Name from the dropdown list
- In the Case category field, select New contract from the list (mandatory)
- Enter a brief Description for the new case
If Force attachments was selected on the selected Case category, the Attachments form will open, reminding the user to attach a document to the case
- Click on the Other Index tab
- Select the relevant Department from the dropdown list
- Select the Employee responsible from the dropdown list (mandatory)
- In the Case process field, select Request for new from the dropdown list
- Click on the Contracts Index tab
- The Party 1 field will be populated with the company details of the loggedin user. (This can be edited)
- In the Party 2 field, enter the name of the second party involved in the contract request
- Select the relevant Contract classification from the dropdown list
- Select the Baseline contract from the dropdown list
- Select the Procurement plan from the dropdown list (if applicable)
- Enter the Motivation for the new contract request
- Click on the Create button
¶ Step 18.1.1: Request a new contract from a Purchase requisition
Go to: GRC > Governance > Tender management > All purchase requisitions
- On the All purchase requisitions list page, select the relevant record
- On the Action pane, in the New group, click on the Contract request button
¶ Step 18.1.2: Request a new contract from RFQ
Go to: GRC > Governance > Tender management > All requests for quotations
- On the All Request for quotations list page, select the relevant record
- On the Action pane, in the Process group, click on the Contract request button
¶ Step 18.1.3: Contract request detail form
The information entered on the New case dialog will populate the relevant fields on the detail form.
Go to: GRC > Governance > Contracts > All contract requests
- On the All contract requests list page, select the relevant contract request
- Expand the General Fast tab
- Select the relevant Currency from the dropdown list
- Select the relevant Customer/Vendor account from the dropdown list
- Emails can be sent to the selected workers by clicking on the email icon next to the relevant name
- The selected worker must have a primary email address
- Expand the Case log Fast tab
- Click on the Add button
- Select the relevant date in the Date field (If a date is not selected, TODAY’s date will be used)
- Enter a Description for the Source type
- Select the relevant Source type from the dropdown list
- Select the relevant Source ID from the dropdown list
- Enter an Amount
- Enter additional Notes in the note box provided
- Expand the Document management Fast tab
- Under the Contract request Index tab:
- Parties involved in the contract request
- A Baseline contract can be selected
- Linked Purchase/Sales agreement will be displayed (If there is one)
- Under the Motivation Index tab:
- Enter the Motivation for the contract request (if it was not entered when the request was created)
- Enter the Background of the contract request
- Enter the Recommendation for the contract request
- Expand the RACI Fast tab
- Select the Employee responsible
- Select the Employee accountable
- Select the Employee consulted
- Select the Employee informed
- Emails can be sent to the selected workers by clicking on the email icon next to the relevant name
- The selected worker must have a primary email address
¶ Step 18.1.4: Print the Motivation report
The user who must approve the contract request has the ability to do the following:
Go to: GRC > Governance > Contracts > Release new contract requests
- Select the relevant contract request
- On the Action pane, under the Case tab, in the Governance group, click on the Motivation report button
On the Motivation report print dialog:
- Select the Financial value from the dropdown list
- Select the relevant Financial value report columns from the dropdown lists
- Select the Cost centre from the dropdown list
It is important to complete this form EXACTLY as in the example provided!
¶ Step 18.1.5: Approve the contract request
Workflow will make the Create contract button available
If workflow is not enabled, change the state of the Contract request to In progress
Go to: GRC > Governance > Contracts > Release new contract requests
- Select the relevant contract request
- On the Action pane, under the Case tab, in the Governance group, click on the Create contract button. The status of the contract request will now be Closed
A blue line will appear confirming that the contract has been created
¶ Step 18.1.6: The new created contract
Go to: GRC > Governance > Contracts > Contract register in legal entity
- On the Contract register in legal entity list page, select the relevant contract
- The Contract classification field and the Contract request field, will only be available if the Document type = Contract
- The Worker field will only be editable where Human resources is selected in the Applied to field on the Contract classification setup form
¶ Step 18.2: Reviewing/Vetting a contract
Contract review is a thinking process - a rational analysis. This process includes clarifying of contract related facts, measuring of the feasibility of contract, and forecasting of contract risks.
Contract vetting is to critically examine the details of a contract.
There are two ways of creating a review case for a contract.
Go to: GRC > Governance > Contracts > Contract register in legal entity
- On the Contract register in legal entity list page, select the relevant contract
- In the Action pane, click on the Change state button and select Review from the dropdown list
- Enter the details on the New case dialog as described below
OR
Go to: GRC > Governance > Contracts > Review contracts
- On the Review contracts list page, in the Action pane, click on the New button
- Select Case from the dropdown list
- On the New case dialog, open the General Index tab
- Select the Source Name from the dropdown list
- In the Case category field, select Contracts, then select the Review (Legal 2) option from the list
- Enter a brief Description for the new case
- Click on the Other Index tab
- Select the relevant Department from the dropdown list
- Select the Employee responsible from the dropdown list
- In the Case process field, select Request for review from the dropdown list
- Click on the Contracts Index tab
- Select the relevant Contract to be reviewed from the dropdown list
- Enter a motivation in the Motivation text box (mandatory)
- Click on the Create button
For the Contract to be reviewed to appear on the dropdown list:
- The contract must exist in the Contract register
- The state of the contract must be Approved
- There can be no existing Contract request (case) against the contract
¶ Step 18.2.2: Contract to be reviewed detail form
If workflow is enabled, the request for the contract to be reviewed will be on the Review contracts list page
Go to: GRC > Governance > Contracts > Review contracts
The information entered on the New case dialog will populate the relevant fields on the detail form.
Go to: GRC > Governance > Contracts > All contract requests
- On the All contract requests list page, select the relevant contract request
Additional information can be entered under the Fast tabs:
- Under the General Fast tab:
- Currency
- Customer/Vendor account
- Expand the Case log Fast tab
- Click on the Add button
- Select the relevant date in the Date field (If a date is not selected, TODAY’s date will be used)
- Enter a Description for the Source type
- Select the relevant Source type from the dropdown list
- Select the relevant Source ID from the dropdown list
- Enter an Amount
- Expand the Document management Fast tab
- Under the Contract request Index tab:
- Parties involved in the contract request
- Select a Baseline contract
- Linked Purchase/Sales agreement will be displayed
- Under the Motivation Index tab:
- Enter the Motivation for the contract request
- Enter the Background of the contract request
- Enter the Recommendation for the contract request
- Expand the RACI Fast tab
- Select the Employee responsible
- Select the Employee accountable
- Select the Employee consulted
- Select the Employee informed
Go to: GRC > Governance > Contracts > All contract requests
- Select the relevant contract request to be reviewed
- On the Action pane, in the maintain group, click on the Change status button
- Select In progress from the dropdown list
¶ Step 18.2.3: Print the Motivation report
The user who has reviewed/vetted the contract will do the following:
Go to: GRC > Governance > Contracts > Requests for contract reviewed
- Select the relevant contract request
- On the Action pane, under the Case tab, in the Governance group, click on the Motivation report button
On the Motivation report print dialog:
- Select the Financial value from the dropdown list
- Select the relevant Financial value report columns from the dropdown lists
- Select the Cost centre from the dropdown list
It is important to complete this form EXACTLY as in the example provided!
¶ Step 18.2.4: Approve the reviewed/vetted contract
Go to: GRC > Governance > Contracts > Review contracts
- Select the relevant record
- On the Action pane, under the Case tab, in the Governance group, click on the Contract reviewed/vetted button
A blue line will appear at the top of the screen confirming that the contract has been reviewed/vetted
Contracts that have been reviewed/vetted will dissappear from the Review contracts list page
¶ Daily use: Trade & Non-trade contracts
¶ Step 19: Baseline (template) contracts
GRC365 has a register for Baseline contracts (also known as templates). These are defined as a template with an outline of a contract and can be used for certain types of contracts, or for a combination of contracts. A baseline contract contains approved clauses, terms and conditions, milestones and more. The intent is to use a baseline contract to quickly and easily create new contracts.
¶ Step 19.1: Create a Baseline contract
Go to: GRC > Governance > Contracts > Contract register in legal entity
- On the Action pane, click on the New button, and click on Document
- On the New contract dialog:
- Enter a Name for the contract
- Select the relevant Contract (type) classification from the dropdown list
- Enter a Document number
- Select the relevant Currency from the dropdown list
- Enter the Start date for the contract
- Select the Employee responsible for the contract, from the dropdown list
- Click on the OK button
- On the Contract, under the Content Fast tab, add the relevant Preamble details, as well as the required Clauses (Step 20 below)
- Under the Content Fast tab, Cover page Index tab, move the Baseline slider to Yes
- A message will pop up to warn the user that the record will be locked and certain records will be cleared
The record will now be under GRC > Governance > Contracts > Baseline contracts
¶ Step 19.2: Create an Amendment baseline contract
Go to: GRC > Governance > Contracts > Baseline contracts
- Select the baseline contract that you want to use for amendments
- Under the Content Fast tab, move the Amendment slider to Yes
- Change the Stage of the Amendment baseline contract to Approved
The record will now be under GRC > Governance > Contracts > Amendment baseline contracts
¶ Step 20: Create contract
If a contract is not created via a request (as explained above), users can manually create a contract in the contracts sub module. The content (clauses and paragraphs) of contracts can be added, created, managed and stored under GRC, using the contracts register.
¶ Step 20.1: Cover page, clauses and references
Go to: GRC > Governance > Contracts > Contract register in legal entity
- On the Action pane, click on the New button, and click on Document
- On the New contract dialog:
- Enter a Name for the contract
- Select the relevant Baseline contract from the dropdown list (Optional)
- Select the relevant Contract (type) classification from the dropdown list
- Enter a Document number
- Enter the contract Value
- Select the relevant Currency from the dropdown list
- Enter the Start date for the contract
- Select the Employee responsible for the contract, from the dropdown list
- Click on the OK button
If a Baseline contract is selected:
- The clauses that you want to copy from the Baseline contract to the new contract, must have the Copy box ticked
- If a BOM exists on the baseline, the BOM lines will copied to the new contract
- Under the Content Fast tab:
- Open the Cover page Index tab
- Enter a link in the SharePoint URL field
- Enter a brief Description of the document
- If this contract has to be approved by a team, select the relevant Approval team from the dropdown list
- The AP enforce slider is a display of what was specified on the Contract classification that was selected
- The State of the document can be changed by clicking on the Change state button on the Action pane
- **If this is an employment contract, select the employee’s name from the Worker dropdown list
- Select the relevant Dates
- If this contract was requested, the Contract request ID will be displayed
- Indicate whether a Follow up has been done
- Select the relevant Document pack (if applicable)
To create a new version of the contract, click on the New button in the Action pane, and click on Version
All references to Purchase agreements on the original Contract will be deleted on the new version
Users can create a “Baseline” or “Template” and then use this Baseline contract's approved clauses to copy clauses into a new contract. This contract can then be linked to a Vendor or Customer account via the Trading partners Fast tab. Alternatively a Worker can be linked to the contract for HRM employment purposes.
- On a Baseline contract, under the Content Fast tab, open die Clause Index tab
- Tick the Copy tick box of all the clauses that you want to copy to the new contract
- In the Action pane, click on the Copy button
To get to the new (copied) contract, go to: GRC > Governance > Contracts > Contract register in legal entity
- A Parent can be selected for the contract by selecting the relevant contract from the Parent dropdown list
- Only Master contracts with a state of Draft can be selected as a Parent on another contract
- A contract can be marked as a Master by moving the slider to Yes
- The Sub documents of a Master record can be viewed in the Related information pane
Certain enterprises need to consolidate contracts. GRC allows users to link different contracts to a “Master” (parent) contract and calculate the consolidated contract value from the "child" contracts.
The Consolidate button:
- The Consolidate button in the Action pane, is only availible for Master contracts
- When this button is clicked, the values from the “children” contracts are added and displayed in the Value field under the Content Fast tab on the Master contract
- Only Master contracts with a state of Draft can be selected as a Parent on another contract
- The Currency on the Master must be the same on the “Child”
- Open the Preamble Index tab
- Enter the details of Party 1 and Party 2 in the note boxes provided
- Select the Legal panel service provider from the dropdown list. (Only legal panels with a status of Accepted will be on this dropdown list)
- The text entered in te Notes box, will be printed as the preamble on the contract
Contract clauses are added under the Clause Index tab. This is useful so that users can see for example, which performance clauses, penalty clauses or breach clauses are applicable.
- Open the Clause Index tab
- In the Button strip, click on the Add button
- The Clause number will be generated by the system
- Select the Heading (Heading 1 for a primary heading, Heading 2 for a secondary heading)
- Enter a Description
- If required, select the worker responsible for doing the Action
- Select the date on which the action should take place
- Use the box provided to type the Clause definition
Or
- Click on the Add approved clauses button and select the relevant approved clause form the dropdown list
Activities can be created per clause
- Open the References Index tab
- In the Button strip, click on the Add button
- Enter a Reference ID
- Enter a brief Description
- Select the relevant Element relation type from the dropdown list
- Select the relevant Element relation from the dropdown list
- Enter the Element description
- Enter the Amount
- Select the relevant Currency from the dropdown list
- Select the relevant Frequency from the dropdown list
- Enter the Date recorded
- For contracts, users will be able to reference physical agreements (on the “Purchase and Sales agreement” forms) under the Trading partner Fast tab against vendors and customers. See the screenshot below.
- The Total value field, under the Content Fast tab, displays the sum of the Value field and the Approved CR’s field (Remaining contract value). This value can be given to one or more suppliers/vendors by selecting them under the Trading partners Fast tab.
- The Worker field will only be editable where Human resources is selected in the Applied to field on the Contract classification setup form
- The Approved CR’s field displays the sum of all linked CR’s with status = Approved
- The Total value field displays the sum of the Value field and the Approved CR’s field (Remaining contract value). This value can be given to one or more suppliers/vendors by selecting them under the Trading partners Fast tab.
- Open the Signatures Index tab
- In the Signature description note box, enter a detailed description of the signatures required
- Enter the relevant details under the INTERNAL field groups
- Enter the relevant details under the EXTERNAL field groups
¶ Step 20.2: Contract stages and workflow statuses
The following contract stages are supported to guide users through the contract lifecycle:
| Stage | Rules |
|
Created: |
|
|
Receive: |
|
|
Draft: |
|
|
Renew: |
|
|
Review: |
|
|
Approve: |
|
|
Revise: |
|
|
Terminate: |
|
|
Archive: |
|
When a user changes the state to Review, the record will be locked and the user's name displayed in the Locked by field. This user is now the only one who can edit the record.
A record of the stage change will be added under the History Index tab
In addition to the Contract stage, GRC also supports a workflow status. These are:
- Submitted
- Returned
- Escalated
- Rejected
- Approved
¶ Step 20.3: Printing contract content
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the record that you want to print the report/contract for
- On the Action pane, click on the Print button and select Print document
- On the dialog, select whether you want to print the cover page or not
¶ Step 20.4: Additional information
¶ Step 20.4.1: The payment schedule Fast tab
- Click on the Add button
- Enter the Number of the scheduled payment
- Enter the Date on which the payment is scheduled
- Enter a Description for the scheduled payment
- Enter the Amount that is scheduled to be paid
- Select the Voucher that the scheduled payment is for
- Enter additional Notes
¶ Step 20.4.2: The Review and follow up Fast tab
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
- Under the Content Fast tab, move the Follow up slider to Yes
- Expand the Review and follow up Fast tab
- Enter the Follow up notes in the box provided
- Select the worker’s name who did the review, from the dropdown list
- The Last review date field will be populated with today’s date (Can be edited)
- The Next review date field will be populated with the date calculated by the system (Calculated by using Last review date and Review frequency)
- Under the Content Fast tab, move the Follow up slider to No
- The notes entered in the Follow up note box will be moved to the Last review notes box, and the Last review date field will be populated
- Another follow up can be done now
A blue line will appear confirming that a Planned action has been created for the follow up
¶ Step 20.4.3: The Indemnities and liabilities Fast tab
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
- Expand the Indemnities and liabilities Fast tab
- In the button strip, click on the Add button
- Enter the Rule date
- Enter a brief Description
- Enter the Amount
- Select the relevant Currency from the dropdown list
- Select the relevant Type from the dropdown list
- Enter additional details in the Note box provided
¶ Step 20.4.4: Terms and conditions
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
- Expand the Terms and conditions Fast tab
- In the Button strip, click on the Add button
- Enter the Number of the term/condition
- Enter the Date on which the term/condition was added
- Enter a brief Description
- Enter additional information in the Note box provided
¶ Step 20.4.5: Renewal of a contract
In the Action pane, click on the Renewal button
- On the drop dialog, select the new Expiration date for the contract
- Enter a Reason code for renewing the contract
- Click on the OK button
- Expand the Renewal and termination Fast tab to view the record of the contract renawal
¶ Step 20.4.6: Termination of a contract
- In the Action pane, click on the Termination button
- On the drop dialog, select the Termination date for the contract
- Enter a Reason code for terminating the contract
- Click on the OK button
- Expand the Renewals and termination Fast tab to view the record of the contract termination
¶ Step 20.4.7: Penalties
- Under the Penalties Fast tab:
- Click on the Add button
- Enter a Description for the penalty
- Enter the penalty Value
- Enter the Date until when the penalty is valid
- Enter any additional Clauses in the box provided
¶ Step 20.4.8: Breach and remedies
A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. The breach could be anything from a late payment to a more serious violation, such as the failure to deliver a promised asset.
There are several remedies for breach of contract, such as award of damages, specific performance, cancellation, restoration.
- Under the Breach and remedies Fast tab:
- Click on the Add button
- Enter the Breach date
- Select the Breach type from the dropdown list
- Tick the Service level agreemnt box if the SLA was breached
- Select the Remedy type from the dropdown list
- Enter the Expected damage
- Enter the Consequencial damage
- Enter additional notes in the Breach and Remedies note boxes
¶ Step 20.4.9: Profile
If a Risk assessment was done on the contract, the details will be displayed here
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
- Expand the Profile Fast tab
- If you want to see the detaild on the risk register, click on the Go to risk register button
¶ Step 20.4.10: Sign off
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
- Expand the Sign off Fast tab
- In the button strip, click on the Add button
- Select either a Worker or Vendor, or enter a Contractor employee
- Enter the Date signed
- Select the relevant Signature type from the dropdown list
- Indicate which actions have been done by the Worker/Contractor employee
- Notified
- Legal counselled
- Risk assessed
- Approved
- Activities completed
¶ Step 20.4.11: Reportable
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
- Expand the Reportable Fast tab
- Enter the Date reported
- Add a Note
- In the button strip, click on the Add button
- Select the relevant Reporting agency from the dropdown list
- Indicate whether this is the Primary reporting agency
- To select the Reporting category, click on the Add button above the right hand side grid
- Select the relevant Reporting category from the dropdown list
When a contract has to be reported to Government or Local authorities
¶ Step 21: Create a contract from an RFQ
On "Acceptance" of a vendors bid response (on the RFQ); Dynamics normaly automatically creates a purchase agreement. In addition, a contract can be created from an RFQ (Purchase type = Purchase agreement) if the solicitation type includes a baseline contract, and the relevant clauses on the baseline contract are marked to be copied.
When the baseline contract is not specified on the solicitation type, D365 will warn the users when the manage replies button is clicked.
The trigger for the contract creation is on acceptance of a vendor from the RFQ form.
¶ Step 22: Change requests on contracts
A primary trading partner has to be selected for the contract
All item lines and statement of work lines have to add up to the total contract value
A Purchase agreement has to exist against the contract (Step 27 below)
The Create CR button is only available when the contract is approved
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
- In the Action pane, click on the Create CR button
- On the Create change request dialog:
- Enter an identification for the Change request
- Enter a Title for the change request
- Select the relevant Priority of the change request from the dropdown list
- Select the relevant Category of the change request from the dropdown list
- Select the relevant Severity level of the change request from the dropdown list
- Click on the OK button
OR
Go to: GRC > Governance > Contracts > Change requests
- On the Action pane, click on the New button
- Under the General Fast tab:
- Enter a Title for the change request
- Select the Priority of the change request
- Select the relevant Site from the dropdown list
- Select the relevant Department from the dropdown list
- Under the General Fast tab:
- Select the Amendment template to be used for the clause change requests, from the dropdown list. (The clauses that you want to copy from the Amendment template must be ticked in the Copy column on the template)
- Under the Changes to Fast tab:
- The Contract register reference that the change request is for, can be seen under this Fast tab
- Under the Assumptions Fast tab:
- Enter Inclusions in the note box provided
- Enter Exclusions in the note box provided
- Expand the Scope of change (lines) Fast tab
To specify the existing clause that has to be changed:
- In the Button strip, click on the Add button
- In the Change type field, select Scope from the dropdown list
- In the State field, select Final from the dropdown list
- In the Element type field, select Clause from the dropdown list
- In the Element field, select the clause that is to be replaced, from the dropdown list
To enter the new/replacement clause:
- In the Button strip, click on the Add button
- In the Change type field, select Scope from the dropdown list
- In the State field, select New from the dropdown list
- In the Element type field, select Clause from the dropdown list
- Enter the text for the new clause in the Long description note box provided
- In the Button strip, click on the Approve the change button
- On the Action pane, in the Change status group, click on the Approve button
- Please note that a document has to be attached under the Information Fast tab before it can be approved
- Once a change request has been approved, the record will be locked
- On the Action pane, in the Functions group, click on the Create amendment button
- Enter a Name for the amendment that you are creating
- Click on OK
A record will be created under the Change planning Fast tab
The document with listed Amendments can be printed by clicking on the Print document button. Scroll to the last page to see the amendments.
View the Sub document created by the Change request:
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the contract that the change request was created from
- Expand the Related information pane
- Expand the Sub documents Fast tab
The Master slider will now be on Yes, indicating that this is the original contract
The document with listed Amendments can also be printed from the new Contract that was created, by clicking on the Print button in the Action pane and selecting Print document. Scroll to the last page to see the amendments.
¶ Step 23: Sending Emails
¶ Step 23.1: From header
Send email notification:
- On the Action pane, click on the Send email notification button
- Click OK
An email notification will be sent to the selected stakeholders
| Placeholder mappings | Field on form |
|---|---|
|
%ContractName% %ContractNumber% %Status% %ExpiryDate% %VendorName% %CustomerName% %Value% %Currency% |
Contract name Contract number Contract status Expiry date Vendor name Customer name Value Currency |
¶ Step 23.2: Using RACI workers
Emails can be sent to selected workers under the Responsibility matrix Fast tab. These workers must have a Primary email address
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
- Expand the Responsibility matrix Fast tab
- Click on the Email icon next to the worker that you want to send the email to
- Complete the Send email dialog
- Click on the Send button
The selected worker must have a primary email address
Please to refer to the Alerts Wiki page for sending Contract batch email alerts
¶ Step 24: View existing contracts
Contracts can be viewed from the following two menu items:
- Go to: GRC > Governance > Contracts > Contract register in legal entity
- Go to: GRC > Governance > Contracts > Group contract register (A list of all contracts accross all legal entities)
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Click on the View options button
- Select the filters of the relevant Contract stage that you want to view
- Select the filters under the Type of contract that you want to view
- Click on the Apply button
This will filter the contracts register list page accordingly.
OR
Go to: GRC > Governance > Tender management > All vendors
- Select the relevant vendor
- On the Action pane, in the Related information group, click on the Contracts button
A list page displaying all the existing, open contracts for the vendor will appear
OR
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
OR
**For Employment contracts:
If this is an employment contract, and a Worker is selected in the Worker dropdown list, the contract can be viewed from the Worker record.
Go to: HR > Workers > Workers
- Select the relevant worker
- In the Action pane, Work tab, in the Work details Button group, click on the Contracts button
- The Contract register list page will open, listing ONLY the selected worker’s employment contract
¶ Step 25: Projects from a contract
¶ Step 25.1: The Projects Fast tab
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the contract/record that you want to link to a project
- Expand the Projects Fast tab
- Under the Statement of work Index tab:
- Click on the Add button
- Indicate that this is a Header line
- Enter a Description
- Click on the Add button to add lines
- On the lines, select the Header as Parent for the line
- Select the relevant Frequency from the dropdown list
- Enter a Description
- Indicate that the lines are part of the Budget for the Project that is to be created
- Click on the Create a project with WBS button, and the normal Project create dialog will appear
- The new project's number will be displayed in the Project field at the end of the grid
The Create a project with WBS button: For SOW record where Header is selected a single project will be created and work breakdown structure lines for this project based on the SOW ID lines linked to the WBS parent
The Create a group of projects button: All SOW records in grid without a project link (at the end of the grid) will be created into a project Hierarchy. The statement of work ID flagged as "main" will be the top project
- There has to be a Header for each project that you want to create
- The combination in the Cost/Revenue field and the Project category field, has to be different for every line
- If the values in the Amount column have changed, click on the Update contract value button to update the amount in the Value field under the Content Fast tab
¶ Step 25.2: Project Rate card on a contract
A Rate card is a “tool” used to establish project billing rates by either resource type (e.g., labor) or role (e.g., project manager)
¶ Step 25.2.1: Cost price (hour)
- Under the Cost price (hour) Index tab, click on the Add button
- Enter the Effective date for the Rate card
- Select the relevant Resource from the dropdown list
- Indicate wheather this is an Effective labour rate
- Select the relevant Category from the dropdown list
- Select the relevant Project from the dropdown list
- Select the relevant Price group from the dropdown list
- Enter the Cost price
¶ Step 25.2.2: Sales price (hour)
- Under the Sales price (hour) Index tab, click on the Add button
- Enter the Effective date for the Rate card
- Select the relevant Category from the dropdown list
- Select the relevant Resource from the dropdown list
- Select the relevant Project ID from the dropdown list
- Select the relevant Price group from the dropdown list
- Select the relevant Sales currency from the dropdown list
- Select the relevant Sales price model from the dropdown list
- Enter the Pricing
¶ Step 25.3: Insurance for a contract
- Under the Insurance Index tab:
- Click on the Add button
- Enter the Start date for the Insurance policy
- Select the relevant Policy from the dropdown list
- Select the relevant Vendor from the dropdown list
- Enter the insurance Amount
¶ Step 25.4: Change requests on a contract
- Under the Project changes Index tab:
- Click on the Add button
- Select the relevant Change request from the dropdown list
- Enter the Date on which the request was added
- Enter a Description for the change request
- Select the worker who Requested the change
- Select the worker who has to Approve the change request
- Enter the Amount
OR
- Click on the Import change requests button
If a Change request exists on the Contract, the Project lines from the Change request will populate the grid
¶ Step 26: Accruals from a contract
Organizations must account for any expenses incurred in the past (and know about them) as these are costs that become due in the future. To wait or rely on suppliers/vendors to submit proof timeously is not prudent. Assuming a contract exists between an organisation and its suppliers/vendors that governs the relationship, this contract can allow users to accrue (also known as "pre-cost") the expenses/services into a Invoice journal.
¶ Step 26.1: Contract with statement of work
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
- Expand the Trading partners Fast tab
- Click on the Add button and select a Vendor account
- Tick the Prime tick box
- Expand the Projects Fast tab
- Click on the Add button and create one or more Statement of work lines
- The status of the contract must be Approved
- The Prime box must be ticket for a trading partner
- Under the Projects Fast tab, the Frequency must be set to Monthly
¶ Step 26.2: Invoice journal inside Accounts payable
Go to: Accounts payble/Purchase ledger > Invoices > Invoice journal
- Select the relevant journal (batch of journal entry line items)
- On the Action pane, click on the Lines button
- Click on the New button and create a record
- On the Vendor invoice journal, in the button strip, click on the Accrue button
- Complete the Accrue dialog
- Click OK
Select the Journal name that was created under Step 11
It is important to delete the record that does not have an Invoice number
¶ Step 27: Statement of final account
The final account is the conclusion of the contract sum (including all necessary approved change requests) and signifies the agreed amount that the party will pay to the contractor. It includes any work that is paid to the contractor through the main contract.
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
- Expand the Content Fast tab
- Open the Statement of termination Index tab
- In the Action pane, click on the Termination button
- On the Termination/Sofa of contract dialog:
- Select the relevant Worker from the dropdown list
- Enter the Termination/Sofa date
- Select the relevant Reason code for the termination, from the dropdown list
- Enter the Agreed final account
- Click on the OK button
A record will be added under the Renewals and termination Fast tab
- Under the Content Fast tab, open the Statement of termination Index tab
- Select the relevant Sofa status from the dropdown list
- Enter details/reasons for the termination in the note box provided
- Click on the Print the statement of final account button
A record will be added under the Sign off Fast tab with the Sofa box ticked.
¶ Daily use: Trade contracts
¶ Step 28: Contract items
When a BOM is selected on the contract under the Content Fast tab, Cover page Index tab, the user is given the option to create item lines for the BOM
Item lines can also be added manually under the Item lines Fast tab by clicking on the Add button
¶ Step 29: Add Trading partners to the contract
On the creation of a contract, the Value of the contract is entered under the Content Fast tab, Cover page Index tab.
It is common for enterprises to award a contract to one primary vendor with more than one secondary vendor (trading partner). The Trading partners (and the related Purchase agreements) are selected under the Trading partners Fast tab:
- In the Button strip, click on the Add button
- Select the relevant Vendor/Supplier account from the dropdown list
- Select the relevant Purchase agreement from the dropdown list
- Enter the Purchase agreement amount
A validation is done to make sure that the sum of the Purchase agreement amounts does not exceed the contract value
The primary vendor/customer can be indicated by ticking the Prime box
- Click on Save
- The user now has the option to create/update the contract value (or the portion allocated) as a line in the Statement of work on the purchase agreement
If contract value is enforced on the selected Purchase agreement classification, the Contract value enforced Field group becomes visible under the Contract commercials Fast tab.
RACI
- Open the RACI Index tab
- Select the Employee responsible from the dropdown list
- Select the Employee accountable from the dropdown list
- Select the Employee consulted from the dropdown list
- Select the Employee informed from the dropdown list
- The Employee accountable field is used when sending out manual notifications when clicking on the Send email notification in the Action pane
- To send an email to Line management, click on the email icon next to the relevant name
- The selected worker must have a primary email address
¶ Step 30: Purchase agreement from the contract
Purchase agreements refer to those agreements that commit an organization to buy a specified quantity or amount by using multiple purchase orders over time. In exchange for this commitment, the buyer receives special discounts etc. Contracts are the starting point. One contract could have many purchase agreements linked to it.
¶ Step 30.1: Create Purchase agreement
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant contract
- Expand the Trading partners Fast tab
- In the Button strip, click on the Create agreement button and select Purchase agreement from the dropdown list
The Create agreement button will only be available when the contract is approved
- On the Create purchase agreement dialog:
- Select the relevant Vendor account from the dropdown list
The selected Vendor account will be marked as the Prime vendor on the contract under the Trading partners Fast tab
The currncy of the Prime vendor will populate the Currency field of the contract under the Content Fast tab
- Select the relevant Purchase agreement classification from the dropdown list
- Select the relevant Contract from the dropdown list
- Click on the OK button
The following filters are applied to the dropdown list in the Contract field:
- Only records without a Vendor assigned to it will be on the list
- Insurance contracts (policies) are excluded from the list
- Only records where the Document type = Contract, will be on the list
- All Baseline contracts are excluded from the list
¶ Step 30.1.1: General Fast tab
Go to Purchase agreements
- Open the Header view
- Expand the General Fast tab to view the details entered on the dialog
- Select the relevant Contact from the dropdown list
- Enter the Effective date
- Enter the Expiration date
- The contract is referenced under the CONTRACT field group
¶ Step 30.1.2: Contract administration
Contracting officers should set up, maintain and keep record on every aspect of a contract, both to provide a list of actions taken and to protect the organization’s interests under the contract (also to ensure compliance). This will provide an organizational memory of contract events.
Commercial summary
All of the “Governance tracking” entities could have a financial impact. Thus, Dynamics 365 will give a summary view of these under the Contract administration Fast tab.
The Line value which is the sum amount of the Net amount on the Purchase agreement lines, is displayed in the Line value field on the Purchase agreement Header.
If lines were added to the Purchase agreement, click on the Recalculate button to update the total in the Line value field.
- Open the Commercials Index tab
To view the details of the Contract value enforce:
- Open the Related information pane
- Expand the Contract value enforce Fast tab
Back to back with sales
- Expand the Contract administration Fast tab
- Reference sales agreements under the Sales agreements Index tab
Checklist
An organization can create a formal checklist (steps to guide the buyers) to aid in the procurement process
- Open the Checklist Index tab
- Select the relevant Job plan from the dropdown list
- Click on the Create checklist button (a checklist will be created from the job plan)
Checklists need to be closed and applicable feedback given
¶ Step 30.2: Update Purchase agreement
- On the Contract, in the Action pane, click on the Create CR button and enter the relevant detail on the dialog
- In the Related information pane, click on the link to go to the Change request
Refer to the Daily use section in the Management of change Wiki page on how to enter the relevant detail on the Change request form
- On the Change request, in the Action pane, click on the Approve button
- A message will pop up asking the user if a new Purchase agreement must be created for this change request. Click on the No button.
The additional lines that were created via the Change request, will now be on the Contract under the Item lines Fast tab.
- On the Contract, expand the Item lines Fast tab
- In the Button strip, click on the Update existing purchase agreement button
- On the Update existing purchase agreement dialog, select the relevant Purchase agreement from the dropdown list
- Select the lines that you want to update the purchase agreement with
- Click on the Update button
The Purchase agreement will now be referenced on the newly added Item lines on the Contract
On the Purchase agreement under the Purchase agreement lines Fast tab:
- If an Item existed on the Purchase agreement and the quantity of the item was changed, the quantity will be updated on the relevant Item line
- If an Item did not exist on the Purchase agreement and was added as described above, the Item will be added under the Purchase agreement lines
¶ Step 31: Creating a Purchase agreement
Go to: GRC > Governance > Contracts > Purchase agreements
- On the Action pane, click on the New button
- On the Create purchase agreement dialog, enter the following:
- Select the relevant Vendor/Supplier account from the dropdown list
- Select the relevant Purchase agreement classification from the dropdown list
If a Purchase agreement classification is selected where Max value is enforced, the Max value enforced slider will be set to Yes, and the Default commitment field will be non-editable.
On every release (creation) of a Purchase order on a Purchase agreement (linked back to the contract) a check is done to show users and to stop them from releasing the next PO if the value of the next PO is going to exceed the contract value.
The Contract name and Contract value are referenced on the Purchase order Header
Related Purchase orders and Sales orders can be viewed:
- On the Contract detail form, under the Trading partners Fast tab, select the Vendor account/Customer account that you want to see the related PO’s or SO’s of
- Click on the View related orders button and select either Purchase orders or Sales orders
- The relevant list page will open displaying only records related to the selected Vendor account/Customer account
The primary vendor/customer can be indicated by ticking the Prime box
¶ Step 32: Performance management
The management of a contract involves many activities to ensure fulfilment of that contract. Events can sometimes alter or disrupt the performance of a contract. For example, a contractor may default on contractual obligations, disputes may arise about contract conditions, or there may be a need to make amendments to the contract after it has been awarded.
Whenever the fulfilment of a contract is in question, contracting officers should take the necessary steps to serve and protect the interests of the organization. Contracting depratment should keep complete and up to date files to provide a record of actions taken. Key to have complete files are to record the contractor/vendor/supplier performance.
¶ Step 32.1: Link KPIs
Go to: GRC > Governance > Contracts > Contract register in legal entity
- Select the relevant record
- Expand the Trading partners Fast tab
- Select the vendor account that you want to add the KPIs to
- In the Button strip, click on the KPI list button
- On the KPI list dialog, click on the Add button
- Select the relevant KPI name from the dropdown list
- Click on the OK button
¶ Step 32.2: Create Balanced scorecard perspectives
¶ Step 32.2.1: Create Balanced scorecard perspectives
The Balanced Scorecard concept is a management and measurement system which enables organizations to clarify their vision and strategy and translate them into action. The goal of the balanced scorecard is to tie business performance to organizational strategy by measuring results.
Go to: GRC > Performance > Balanced scorecard > Balanced scorecard perspectives
- On the Action pane, click New
- Enter a unique ID for the balanced scorecard perspective
- Enter a brief Description for the balanced scorecard perspective
- Indicate whether the balanced scorecard perspective is Active or not
- Select the relevant Perspective type from the dropdown list
¶ Step 32.2.2: Create Goal categories
Use goal categories to categorize goals. For example, if you set quarterly goals, the goal heading for a goal might be the quarter in which the trading partner (Suppliers and customers) is to achieve the goal.
Go to: GRC > Performance > Setup > Goal category
- On the Action pane, click on the New button
- Enter a name for the new Goal category
- Enter a brief Description for the new Goal category
- In the Active field, select the option to allow employees and managers to assign goals to the heading
- Click Save
¶ Step 32.2.3: Create Goals
Before you can measure the performance of your trading partners (Suppliers and customers), you must first create goals. This is done by first setting a goal and then having specific (measurements) that will track performance against each goal.
Go to: GRC > Performance > KRI & Goals
- On the Action pane, click New
- In the Name field, enter an identification for the goal
- Under the General Fast tab, in the Name field, enter a brief description of the goal
- In the Worker field, select the worker that will be responsible for achieving the goal
- Move the GRC only slider to Yes. If the slider stays on No, the goal will not be on the GRC KRI & goals list page, but can be found under HR > Performance > Goals.
- Select the relevant Goal category from the dropdown list
- Select the Balance scorecard perspective from the drop down lists
After linking Goals to the purchase or sales agreement (contracts), the reference will display in the General tab of the Goal.
- Expand the Measurements Fast tab
- In the Button strip, click on the Add measurement button
- On the Add measurement dialog, select the relevant Measurement from the dropdown list
- Complete the dialog with the relevant information
- Click OK
¶ Step 32.2.4: Create Goal category link to agreement classification
A specific goal category can also be linked to an agreement classification.
Go to: GRC > Setup for governance > Purchase agreement classifications
- Click on the Governance Fast tab
- Click on the Performance goal category dropdown box and select the relevant performance goal category
- Click on the Save button in the Action pane
¶ Step 32.2.5: Performance management of Purchase agreements
Go to: GRC > Governance > Contracts > Purchase agreements
- Select the relevant purchase agreement from the list
- Open the Header view
- Expand the Performance Fast tab
- In the button strip, click on the Add button and select the relevant Goals to be linked to this contract
The goal “transactions” are displayed to the right of the selected goal
There are two filters on the Goal field:
- The Performance goal category on the Purchase agreement classification, and the Goal category on the KRI & goals, have to be the same
- The GRC only tick on the KRI & goals has to be Yes
¶ Step 32.3: View risk assessment details on Vendor/Supplier profile
Go to: Procurement and sourcing > Vendors > All vendors
- Expand the Vendor profile Fast tab
- The values under the Enterprise risk Field group are updated when the “lock” button is clicked on the Enterprise risk register Lines, under the Assessment calculations and controls Fast tab, Details Index tab.
- The Vendor/Supplier is associated to the Risk register under the Associations Fast tab
¶ Step 32.4: View Vendor/Supplier contract performance
Go to: GRC > Governance > Reports and inquiries > Vendor contract performance
¶ Step 33: Purchase agreement workflow
¶ Step 33.1: Submit Purchase agreement workflow
The user that has been setup to request the purchase agreement workflow of contracts will do the following:
Go to: GRC > Governance > Contracts > Purchase agreements
- Select the relevant purchase agreement
- In the Action pane, click on the Workflow button, then click on Submit
- Enter a Comment on the Purchase agreement approval workflow – Submit dialog
- Click on the Submit button
The Purchase agreement workflow status will change to Submitted
The user that has been setup to approve the purchase agreement workflow of contracts will then do the following:
- On the Action pane, click on the Workflow button
- Select Approve from the dropdown list
- Enter a Comment on the Purchase agreement approval workflow – Approve dialog
- Click on the Approve button
- On the Action pane, in the Generate group, click on the Confirmation button
- On the Confirm purchase agreement dialog, select Yes to Mark the agreement as effective
¶ Step 33.2: Purchase agreements (Manual process)
¶ Step 33.2.1: Process stages
The manual submission process for Purchase agreements are managed by selecting the various statuses of the purchase agreement set out under the Governance group. The stages can be selected in the Purchase agreement Action pane under thePurchase agreement tab, Governance group
| Stages | Rules |
| Submitted: |
|
|
Released: Negotiate: |
|
| Award: |
|
| Cancelled: |
|
| Archived: |
|
¶ Step 34: Trade agreements
Trade agreements are the primary means by which pricing and discounts are set up and applied in Dynamics 365 FO. Trade agreements are commonly confused with sales and purchase agreements.
¶ Step 34.1: Trade agreement created from Purchase agreement
Go to: GRC > Governance > Contracts > Purchase agreements
- Select the relevant purchase agreement
- On the Action pane, open the Governance tab
- On the Action pane, in the Other group, click on the Create trade agreement button
- On the Create trade agreement dialog, select the relevant Journal name from the dropdown list
- Click OK
For the Governance tab to be available, the purchase agreement status must be Effective
If the purchase agreement is in a stage of either Cancelled or Archived, the Governance tab will be greyed out
The Trade agreement number will be populated in the Trade agreement field under the Contract administration Fast tab
¶ Step 35: Trade restrictions
The government agencies of a country, group of countries, or international organizations as representatives of the United Nations sometimes impose sanctions and bans on trading with specific countries. This in conjunction with REACH and RoHS compliance bans, shipping specific products to specific countries, for business or political reasons, known as Geo blocking (or also embargos). You must comply with these in your import and export processes.
The Trade restrictions form in the Governance, Risk & Compliance (GRC) module lets you check your business transactions for critical business partners automatically. In the process, the system checks all trading partners who are subject to an embargo situation as a result of their company's location. If an embargo situation exists, D365 warns the user on contract creation. Future functionality will allow for complete blocking and log tracing of blocked transactions and allow for release as necessary.
Go to: GRC > Governance > Setup > Trade restrictions and sanctions
- On the Action pane, click on the New button
- Select the Sanctioned country/region from the dropdown list
- Under the Sanction Fast tab, in the Task bar, click on the New button
- Select the Sanctioning country/region from the dropdown list
- Select the relevant Effective and Expiration dates
- Enter a Description
- In the Notes box, enter the specifications of the specific sanction
¶ Step 35.1: Trade restriction validation
Go to: GRC > Governance > Contracts > Purchase agreements
- On the Action pane, click on the New button
- In the Vendor field, select the relevant vendor from the dropdown list
The same warning will come up when a Vendor account from a restricted country is selected under the Trading partners Fast tab on the Contract
A warning will pop up if the selected Vendor’s address is in a restricted country
¶ Reports and Inquiries
¶ Step 36: Contracts register report
Go to: GRC > Governance > Reports and Inquiries > Contracts register report
- Select the relevant paramenters on the Contracts register report dialog
- Click on the OK button
If the Stage filter is left blank, the Show closed slider will have an effect
If a value is selected in the Stage filter, the Show closed slider will not have an effect
¶ Step 37: Statement of final account report
Go to: GRC > Governance > Reports and Inquiries > Contracts sofa register report
- Select the relevant paramenters on the Contracts sofa register report dialog
- Click on the OK button
¶ Step 38: Enterprise legal and contracts workspace
Go to: GRC > Workspaces > Legal, Contracts and Tender management
- Open the Enterprise legal and contracts Index tab
