4 Processing Agreements

Although each company's actual agreements are unique documents, Agreement Management provides a standardized format for creating and managing all of the item and scheduling information.

After you create an agreement, you can assign the number to the transactions that move product to fulfill the agreement's terms. You use the same applications for agreement transactions that you use to place sales orders, purchase orders, or bulk stock control transactions. Frequently, you do not know whether you should apply a product to an agreement until load confirmation. You can also assign an agreement number to an order at this time.

You can prepare balance statements to determine whether you and your partner are in compliance with the terms of the agreement. The statement includes the agreement information and identifies what you owe or what your partner owes to meet the terms.

As you manage agreements, you might note that the terms have not been met or that you must assign a transaction. You can correct the out-of-balance conditions with an adjustment or a sales order transaction.

4.2 Understanding Other Agreement Management Functions

This section describes other agreement management functions.

4.2.1 Revising an Agreement

After you have entered an agreement and assigned it to transactions, the system prohibits changes to some fields. For example:

4.2.2 Extending or Renewing an Agreement

You have several options for renewing or extending agreements. The option that you use depends on your company's operating procedures and policies. You can:

4.2.3 Closing an Agreement

An agreement is no longer active when the expiration date equals the current system date. To close an agreement earlier than the expiration date, change the status or enter a cancellation date and reason on the Agreement Master Revisions form.

You can also close an agreement while making agreement adjustments.

4.2.4 Attaching a Note to an Agreement

You can choose from these memo functions to attach an explanatory message to an agreement:

When you attach a note:

4.2.5 Multicurrency

The JD Edwards EnterpriseOne Agreement Management system can accommodate multicurrency agreements. If you establish a base currency for your depot, the base currency appears on each of the forms. Additionally, you can identify different currencies for different sources and destinations when you define the agreement values and locations.

4.2.6 Currency Amount or Item Quantity

You can create an agreement with a partner for a currency amount rather than item quantity. The forms display information as either amounts or quantities, depending on how you define the terms of the agreement.

4.3 Creating Agreements

This section provides an overview of agreement definition, lists prerequisites, and discusses how to:

4.3.1 Understanding Agreement Definition

The JD Edwards EnterpriseOne Agreement Management system provides methods to document and track the terms, products, quantities or currency amounts, and penalties on each of your agreements with business partners. Depending on the agreement terms and your company's procedures, you can choose some or all of the methods to define your agreements.

You must define the relationships for each agreement. This creates a master for each agreement that you can use to define the terms of the agreement, extend the agreement, or create additional agreements.

Each agreement has values that might differ from other agreements or from the system values. In addition to the product quantity values, you can specify unique prices and penalties if agreement terms are not met.

An agreement might have multiple sources and destinations. For example, you might want to specify one or more destinations that can receive a product to fulfill the agreement. You might want to identify only one or several locations that can provide a product.

Some agreements are based on moving specific product quantities during specific periods of time. If you define specific time frames, you can also monitor the actual maintenance of the agreement to the schedule.

Some agreements include terms to exchange products. Not all products have the same unit value. If your agreement includes unlike products or products with unequal values, you can define the ratios that make exchanges equal.

4.3.1.1 Agreement Relationships

Select Agreement Master to perform these functions:

4.3.1.2 Agreement Values

After you enter basic information for the agreement, you can define agreement values, including:

Each agreement is based on either you, or your partner, moving inventory. When you enter an item, you must indicate whether the item is due to your company (C) or due to your partner (P). For example:

Some agreements stipulate pricing that might differ from the amounts that you have set up for your direct customers. You can use this program to override the price when an agreement is assigned to a transaction. You also can define a cost rule that the system uses as a default value for a purchase order. The cost rule tells the system how to process costs that exceed the actual price of the item.

Use Agreement Quantities to define which of the following types of quantity checking you want the system to perform:

4.3.1.3 Product Sources

If the agreement states that your partner will ship the product to you (product due to company), your partner's address book or cost center number is the source. If the agreement states that you will ship the product to your partner (product due to partner), your company is the source. An agreement might enable you to move an item from multiple sources to the destination that is specified in the agreement detail line. You can list each address book or cost center source that the agreement allows.

If the agreement stipulates only one source, you do not need to define the product source. When you enter information on the Agreement Quantities form for agreements that stipulate only one source, the system automatically creates records in the Product Source/Destination Master table (F38012).

4.3.1.4 Time Frames

You can schedule the dates and quantities that you anticipate for the duration of the agreement. The information that you enter is a forecast of the activity that will fulfill the agreement. When you complete this schedule, you can use the Online Statement program (P38300) to compare the actual activity with the forecast.

4.3.1.5 Exchange Ratios

If an agreement contains two or more different items (items with different values), you might need a method to balance them. You can define exchange ratios for quantity agreements if the agreements contain items of unequal value.

To define exchange ratios, designate an item as the balancing item, list the ratios for the unlike items, and specify effective and expiration dates for the ratio. The ratio must equal one unit of measure for the balancing item. You can have only one balancing item per agreement.

For example, suppose you have an exchange agreement with a partner to exchange unleaded gasoline for various additives or lubricants. Liter for liter, the items are not of equal value. According to the agreement, the exchange requires that you receive more liters of gasoline for every liter of additive and lubricant that you provide.

Product Product Multiplier Balance Multiplier
Unleaded gasoline (balancing item) 1 1
Additive 1 1.5

4.3.2 Prerequisites

Before creating agreements, set up your partner in the address book and branch/plant constants.

Before defining agreement values:

4.3.3 Forms Used to Create Agreements

Form Name FormID Navigation Usage
Agreement Master Revisions W38010A Daily Processing (G381), Agreement Master

Click Add on Work With Agreement Master.

Select an agreement on the Work With Agreement Master form, and select Agreement Quantity from the Row menu.

Define items and destinations. Define price overrides and cost rules.

Note: When you create a new agreement, the Agreement Quantities form appears after you click OK on Agreement Master Revisions.

Select an agreement on the Work With Agreement Master form, and select Agreement Quantity from the Row menu.

Select an item and destination on the Agreement Quantities form, and select Source/Destination from the Row menu.

Select an agreement on the Work With Agreement Master form, and then select Exchange Ratios from the Row menu.

4.3.4 Defining Agreement Relationships

Access the Agreement Master Revisions form.

Figure 4-1 Agreement Master Revisions form

Agreement Number/Supp (agreement number/supplement)

Enter the number that the company assigns to uniquely identify a particular agreement. Assign some significance to the agreement number (for example, an agreement type code, location, year, and so forth). An agreement might have multiple supplements to record changes, for example.

Enter a user-defined code that indicates the current status of the agreement.

Indicates whether amendments exist for this agreement.

(Optional) Enter a user-defined code that indicates the general type of the agreement.

Agreement Mgr/Admin (agreement manager/administration)

(Optional) Enter the Address Book number of the manager of this particular contract. The coding considerations for this number are the same as for data item AN8, and this item is verified in the Address Master File.

(Optional) Enter the agreement number that is assigned by your partner. Frequently, business partners maintain numbering systems that are different from yours. If your company requires both agreement numbers for tracking purposes, enter your partner's number in this field.

Update at Amb/Std/Wgt (A,S,W) (update at ambient/standard/weight)

(Optional) Enter the code that determines the method that the system uses to update the agreement. Values are:

A: Use the ambient volume.

S: Use the standard volume.

(Optional) Enter a value that indicates that the agreement uses commingled inventory. During load confirmation, if you load product from a commingled tank, you must enter an agreement number that is designated as commingled.

(Optional) Enter a user-defined code to group agreements that have similar attributes. Use reporting codes to link or group related agreement constants. The system uses this information in the Agreement Search and Online Balance Inquiry programs to determine the agreement information to display.

(Optional) Enter the number that is assigned by the company to uniquely identify a particular agreement.

Your company might base or associate the terms of a new or renewal agreement or supplement on an existing agreement. If so, enter the agreement number of that agreement here.

The system uses the agreement number in the Agreement Search, Online Statement, and Online Balance Inquiry programs to determine the data to display.

(Optional) Enter a number that identifies a parent agreement for the displayed agreement. Use the parent agreement and supplement numbers to define a relationship between two or more agreements. The system uses the parent agreement and supplement numbers in the Agreement Search, Online Statement, and Online Balance Inquiry programs to determine the data to display.

Created From Agreement

(Optional) Identifies that a previous agreement is related to this agreement and supplement. Enter the agreement number and supplement for the previous agreement. The system can use this field as a selection field during agreement search.

Closed To Agreement

(Optional) If this contract is created from an existing contract, enter the number in this field.

You can use this field as a selection field during contract search.

Enter the actual date that the contract or agreement was signed. This may or may not be the same as the effective date.

Enter the date that the agreement becomes effective.

Enter the date that the agreement ceases to be in effect. If you do not enter a date in this field, the system enters a date that you defined during system setup.

Enter a value that indicates whether the agreement is a loan/borrow type of agreement. Values are:

Y or 1: Yes, include accommodations.

N or 0: No, do not include accommodations.

If you include accommodations, the system uses alternate AAIs during purchase order, sales order, and general stock movement processing.

If you do not want the system to send transactions that are covered by the agreement to the standard inventory account in the general ledger, set the Write Accommodations indicator to include accommodations. For example, you might want the system to send transactions to a different account for agreements that involve a foreign depot.

Enter a value that indicates whether this is a new agreement or a renewal agreement. Values are:

Agreement Qty Type (agreement quantity type)

Enter a code that indicates whether this agreement is based on quantity by item or currency amount. Values are:

If you enter Q, you can enter quantity and unit of measure for the products that are covered by the agreement.

A: Currency amount

If you enter A, you can enter currency amounts that are covered by the agreement.

The system calculates currency amounts on the price for sales order transactions or the cost for purchase transactions.

4.3.5 Setting Processing Options for Agreement Master (P38010)

Processing options enable you to specify the default processing for programs and reports.

4.3.5.1 Defaults

Enter the default business unit that the system uses to specify the depot. For example, a business unit might be a warehouse location, job, project, work center, branch, or plant. You can assign a business unit to a document, entity, or person for purposes of responsibility reporting. For example, the system provides reports of open accounts payable and accounts receivable by business unit to track equipment by responsible department. Business unit security might prevent you from viewing information about business units for which you have no authority.

2. Quantity or Amount Flag for agreement balance updates

Specify the quantity or amount flag for agreement balance updates.

3. Agreement Type that identifies a reporting agreement

Specify the agreement type that identifies a reporting agreement.

4.3.5.2 Display

Enter a '1' to protect the price override and price schedule fields

Specify whether to protect the price override and price schedule fields. Values are:

1: Price override and price schedule fields are protected.

0 or Blank: Price override and price schedule fields are not protected.

4.3.5.3 Versions

1. Agreement Exchange Ratio (P38014),2. Online Statement (P38300), and 3. Online Balance Inquiry (P38375)

Specify the program version for the Agreement Exchange Ratio program, the Online Statement program, and the Online Balance Inquiry program.

4.3.6 Defining Items and Destinations

Access the Agreement Quantities form.

Figure 4-2 Agreement Quantities form

Ds Ty (destination type)

Enter a code that identifies the type of destination. Values are:

AB: Address Book number.

CC: Business unit.

Enter the gross quantity for the life of the contract. If you defined the agreement as a quantity type (Q) agreement, complete this field.

UM (unit of measure)

Enter a user-defined code (00/UM) that indicates the quantity in which to express an inventory item, for example, CS (case) or BX (box). If you defined the agreement as a quantity type (Q) agreement complete this field.

Enter an amount if you defined the agreement as a currency amount type (A).

Enter an appropriate code for amount agreements.

4.3.7 (Optional) Defining Price Overrides and Cost Rules

Access the Agreement Quantities form.

Effective Date and Expired Date

(Optional) Enter the date that the agreement becomes effective or ceases to be in effect. If you do not enter a date in the Expired Date field, the system enters a date that you defined during system setup.

(Optional) Enter the minimum transaction quantity that is allowed for any transaction to fulfill the agreement.

If you apply quantity control to the agreement, the system verifies that each transaction meets the minimum allowed. If a transaction is entered for less than this quantity, a penalty can be assessed.

(Optional) Enter the maximum transaction quantity that is allowed for any transaction that is assigned to this agreement. If you apply quantity control to the agreement and a transaction is entered for more than this quantity, a penalty can be assessed.

The list or base price to charge for one unit of this item. The unit price that you enter here overrides the current price whenever you assign this agreement to a transaction.

Adj. Schedule (adjustment schedule)

For agreement penalty schedules, set up a schedule for each of the penalties:

Minimum Quantity (for example, TRANSMIN)

Maximum Quantity (for example, TRANSMAX)

Under Commitment (for example, UNDCOMIT)

Over Commitment (for example, OVRCOMIT)

4.3.8 Defining Product Sources

Access the Agreement Source/Destination form.

Figure 4-3 Agreement Source/Destination form

Transaction Source

Enter a value that identifies the location that supplies the item to fulfill the agreement. The value must match these source type codes:

If the source type is AB, the transaction source must be an address book number in the Address Book Master table (F0101).

If the source type is CC, the transaction source must be a business unit in the Business Unit Master table (F0006).

If the source type *A, the transaction source must be *ANY.

Enter a code that specifies the type of source that is entered in the Transaction Source field:

If the transaction source is an address book number in the Address Book Master table (F0101), the source type must be AB.

If the transaction source is a business unit in the Business Unit Master table (F0006), the source type must be CC.

If the transaction source is *ANY, the source type must be *A.

(Optional) Enter the minimum transaction quantity that is allowed for any transaction to fulfill the agreement.

If you apply quantity control to the agreement, the system verifies that each transaction meets the minimum that is allowed. If a transaction is entered for less than this quantity, a penalty can be assessed.

(Optional) Enter the maximum transaction quantity that is allowed for any transaction that is assigned to this agreement. If you apply quantity control to the agreement and a transaction is entered for more than this quantity, a penalty can be assessed.

4.3.9 Defining Time Frames

Access the Agreement Quantities Schedule form.

Figure 4-4 Agreement Quantities Schedule form

4.3.10 Defining Exchange Ratios

Access the Agreement Exchange Ratios form.

Figure 4-5 Agreement Exchange Ratios form

Complete the fields for each balancing item starting on the first open line of the detail area.

4.3.11 Setting Processing Options for Agreement Exchange Ratios (P38014)

Processing options enable you to specify the default processing for programs and reports.

4.3.11.1 Versions

1. Agreement Master (P38010),2. Agreement Quantities (P38011),3. Online Statement (P38300), and 4. Online Balance Inquiry (P38300)

Specify the program version for the Agreement Master program, the Agreement Quantities program, the Online Statement program, and the Online Balance Inquiry program.

4.4 Assigning Agreements

This section provides an overview of agreement assignment, lists prerequisites, and discusses how to:

4.4.1 Understanding Agreement Assignment

You enter transactions to move the inventory that fulfills an agreement. When you assign an agreement, you include the agreement number and supplement number, if necessary, on a transaction. The system uses these numbers to match the transaction to the correct agreement and monitor the activity.

You can perform these functions:

Your company's operating procedures determine which method you should use.

You can assign an agreement number as you enter transactions for most types of agreements. If the transaction is a sale to your customer and the source branch/plant in the transaction detail is your partner's depot, you must also assign borrow agreements during ship or load confirmation. When you borrow from your partner to ship directly to your customer, your partner's branch/plant is referred to as a foreign depot.

The processing option for agreement selection enables you to choose one of three methods for assigning the agreement number:

  1. The system assigns an agreement if only one agreement is in the system. If multiple matching agreement exists, the system displays a check mark in the row header column and in the Agreement Exists column. Use the selection from the Row menu to review the list of agreements and select the agreement to assign.
  2. The system searches all available agreements and displays a check mark in the row header column and in the Agreement Exists column. Use the selection from the Row menu to review the list of agreements and select the agreement to assign.
  3. The system searches on all available agreements and automatically assigns the agreement with the earliest expiration date.

Note: Setting this processing option to specify one of the choices activates Agreement Management processing in the order entry programs. If you leave this processing option blank in the order entry programs, you cannot assign agreements to transactions during order entry. When you leave the processing option blank in the shipment and load confirmation programs, and the branch/plant is a foreign depot, the system assigns the agreement with the earliest expiration date.

4.4.1.1 Types of Transactions

You use different types of transactions, depending on the terms of the agreement. For example:

4.4.1.2 Agreement Number Assignment

You can set the Agreement processing option, on the Process tab, so that you can select an agreement to assign whenever you enter transactions that could fulfill the agreement. Alternatively, if you know the agreement number, you can enter the agreement number and, if necessary, the supplement number manually.

You can assign an agreement number to: