Form of longer-term outline agreement against which materials or services are released (ordered, or called off) according to need over a certain timeframe.
A contract consists of items specifying the individual materials, material groups, or services, with prices and - in some cases - quantities.
An item of the procurement type "service" comprises a set of service specifications. The specifications are structured by means of outline levels and the quantity is set out in service lines.
Services can be released (ordered against the contract) at the level of the item or the service line.
The costs incurred as a result of the procurement can be apportioned among different Controlling objects through the account assignment.
Releases (release orders issued) against a contract are logged in the release order documentation.
The following types of contract exist:
A specific quantity of a material or service is released against an existing contract for delivery or performance on or by a certain date by means of a purchase order (which in this case is referred to as a release order).
Agreement between business partner and utility company that applies to a single division.
The contract contains control data for billing purposes, for creation of the budget billing plan, and for contract accounts receivable and payable accounting.
Contracts for services (for example, maintenance contracts) are managed by the Sales and Distribution (SD) application component.