Creating a deal with auto contract extension
This guide will show you how to create a deal with auto contract extension. The impacts of this manifest as:
A negative deal termination profit adjustment to represent the profit lost from ending the old contract early
A positive profit adjustment to represent the additional profit gained from extending the new contract for this period.
An updated expiry date for when the service becomes an asset (the term itself will not change)
We will cover how each of these changes are made.
Service assets must first be linked to a new opportunity. Click here for information on how to do this.
A new quotation can then be created from the opportunity. This will allow you to link the quotation items to the selected assets.
Quote creation and placeholder deal termination
When you open your new quotation, you may notice that a deal termination adjustment has already been applied.
This is a placeholder value, as we have not yet entered an estimated connection date. The placeholder value assumes a connection date based on the quotation creation date. This will be updated later.
You can see a breakdown by clicking on Deal Termination.
If you have linked multiple assets to the quote, you will see a line for each one. The column under Value is the profit that would be lost from early termination.
Adding quotation items
You can add an item via the product browser (via New Service or New Category Item) as usual.
Selecting a classification that supports auto contract extension will enable the auto contract extension checkbox. Administrators can enable the feature for relevant classifications.
By default, it will be checked for supported classifications.
Users with the Override Auto Contract Extension role will be able to toggle this off, if required. They will also be able to change the setting later, so this does not need to be a final decision at this point.
Keep in mind that you do not need to make any adjustments to the term here, in order to account for contract extension.
Add your item(s) to the quote as required.
Accessing quotation Data Capture
Once you have at least one item on your new quotation, you'll be able to access the Data Capture button as shown below. You can also use the coin stack button in the top-right, after you have opened Data Capture once.
This will expand to show buttons for products and services for the product categories of the added item(s).
In this case, you will be working with services. Clicking on one of the buttons will take you to the relevant Data Capture screen.
As with sales order-level Data Capture, line items will be flattened i.e. a line with a quantity of three will show over three separate lines.
The fields that are shown can be determined by your administrators - click here to see how.
The Target Asset field allows you to select from any of the assets that were mapped to the opportunity.
Selecting an asset to link will pull through its user and MSISDN (or equivalent) data and populate it on the new line. If need be, this data can be entered or changed later.
You will also see the expiry of the original asset. This is important, as it is involved in the calculations for both deal termination and auto contract extension adjustments.
Both the line-specific deal termination value and the positive profit adjustments will be determined based on the asset expiry date and the estimated connection date, which will be set in Data Capture.
Deal termination value = linked asset daily profit * number of days between the asset expiry and the estimated connection date (negative)
Profit adjustment = linked asset daily profit * number of days between the asset expiry and the estimated connection date (positive)
This means that the values will be based on days, and not rounded to months. The daily profit can be roughly recreated with the following calculation:
daily profit = monthly profit * 12 / 365
Note that the estimated connection date is just that. It can be updated later at any point in the quotation stage.
Once the quotation is converted to sales order, the estimated connection date will become the connection date. This can also be changed in order to recalculate the adjustments.
Return to the quotation by clicking on the quotation reference.
The deal termination value will update to show the value based on the estimated connection date.
Click on Deal Profit to see the positive adjustment.
This is detailed along with any other adjustments.
Click on Total Adjustments for a breakdown.
It's possible to include details of the renewed item(s) in your quotation documents.
Conversion to sales order
After converting your quote to sales order, you'll be able to see all of the same fields in sales order Data Capture.
The estimated connection date will become the connection date. Any subsequent connection date changes should be made to this field.
Use the Profit Adjustments tab to see the profit adjustment details