Ariba Contract Compliance User Guide 9r2

Ariba Contract Compliance
User Guide
Release: 9r2
Document Version: 3
Release Date: February 2017
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Revision History
The following table provides a brief history of the updates to this guide. Ariba updates the technical
documentation for its On-Premise solutions if
• software changes delivered in service packs or hot fixes require a documentation update to correctly
reflect the new or changed functionality;
• the existing content is incorrect or user feedback indicated that important content is missing.
Ariba reserves the right to update its technical documentation without prior notification. Most
documentation updates will be made available in the same week as the software service packs are released,
but critical documentation updates may be released at any time.
Version Month/Year of Updated Chapter/Section Short Description of Change

Update
1 June 2014 n/a GA version
2 January 2015 Creating and Managing The section on configuring pricing for materials and
Contracts services for a non-catalog item under Working with
the Pricing Terms Page has been updated to correctly
reflect the UI.
3 February 2017 Contract Concepts The Contract Status table on page 17 has been
updated with a new row for the Inactive status.
Ariba Contract Compliance User Guide iii

Revision History
iv Ariba Contract Compliance User Guide

Table of Contents
Chapter 1 Contract Concepts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Ariba Contract Compliance and Ariba Contract Management Integration . . . . . . . . . . . . . . . . 9
Contract Types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Blanket Purchase Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Differences Between a BPO and non-BPO Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Contract Hierarchies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Contract Hierarchical Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Accumulation of Contract Spend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Compound Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Override Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Contract Request Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Contract Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Applying Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
No-Release-Order Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Accounting Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Effective and Expiration Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Overall Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Materials and Services Item Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Commodity Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Fixed and Recurring Fee Item Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Costs and Expenses Item Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Milestone Item Limits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Preload Amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Notification Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Forecasted Spend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Pricing Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Discount Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Advanced Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Tiered Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Term-Based Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Term-Based Grid Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Formula Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Access Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Global Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Edit Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Payment Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Accumulators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Overall Contract Accumulators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Pricing Term Accumulators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
When Invoiced and Received Amounts Are Applied. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Microsoft Excel Spreadsheet CRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Sample Microsoft Excel Spreadsheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Spreadsheet Import Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Contract-Invoice Exception Types. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Ariba Contract Compliance User Guide v

Table of Contents
Chapter 2 Creating and Managing Contracts. . . . . . . . . . . . . . . . . . . . . . 35

Creating a Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Working with the Definitions Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Working with the Limits Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Working with the Pricing Terms Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Working with the Milestones Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Working with the Access Control Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Working with the Payment Terms Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Working with the Appendixes Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Working with the Summary Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Uploading an Excel Version of a Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Exporting Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Managing Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Copying a Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Creating a Contract Workspace in Ariba Contract Management . . . . . . . . . . . . . . . . . . . . . . 73
Considerations When Using Contract Compliance with Ariba Contract Management . . 74
Chapter 3 Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
About Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Running Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
vi Ariba Contract Compliance User Guide

Chapter 1 Contract Concepts
A contract is an agreement between a buying organization and a supplier that identifies the terms for
purchasing goods and services repeatedly over time. A contract enables a buying organization to negotiate
discounts based on a volume or dollar amount of future purchases, and provides a supplier with a more
regular stream of sales, along with the ability to more accurately forecast demand for its products. For
example, a company that expects to steadily add staff over a period of two years might negotiate a contract
with a supplier to provide office furnishings as needed over that period. The company can negotiate a
discount based on its guarantee to purchase everything from that supplier, and the supplier can better manage
its inventory and forecast sales based on a known level of future business.
The terms of the contract are applied when you receive an invoice.
When you want to invoice according to a contract, you first create a contract request that defines the
properties of the contract, and that request must be approved in order for the contract to be created.
Ariba Contract Compliance User Guide 7

Chapter 1 Contract Concepts
The following diagram outlines the contract request process in Ariba Contract Compliance.
Invoice
Approved CC Invoice to AN Reconciling Reconciled
(AN-Enabled
Suppliers Only)
Invoice
Reconciliation
Rejecting Rejectetd
Document
Submitted Approved
(Reconciling) Awaiting External
Paying Paid
Reconciliation
(EIPP only)
Canceled
2
Hold
(Payments via AN
Only)
Payment
Approved Sending Scheduling Scheduled Paying
(Payments via AN
Only)
Paid Canceling Canceled
Payment Transaction/
Remittance 1
(pulled from ERP via Client
Tool)
Created Paying Paid Cleared Failed
Canceling
1. The status for a Payment Transaction pulled

from the ERP becomes Cleared when , for Canceled
example, payment is by check and the set time
for a check to clear has passed. At that point , the
Payment is considered Paid .
2. When all the payments have been made for an

Invoice, the status for the Invoice Reconciliation
Document becomes Paid.
This chapter covers the following topics:

• “Ariba Contract Compliance and Ariba Contract Management Integration” on page 9
• “Contract Types” on page 9
• “Blanket Purchase Orders” on page 10
• “Contract Hierarchies” on page 12
• “Contract Request Status” on page 16
• “Contract Status” on page 16
• “Applying Contracts” on page 17
8 Ariba Contract Compliance User Guide

Chapter 1 Contract Concepts Ariba Contract Compliance and Ariba Contract Management Integration
• “Accounting Information” on page 18

• “Effective and Expiration Dates” on page 19
• “Limits” on page 19
• “Pricing Terms” on page 22
• “Access Control” on page 30
• “Payment Terms” on page 31
• “Accumulators” on page 31
• “Microsoft Excel Spreadsheet CRs” on page 33
• “Contract-Invoice Exception Types” on page 34
Ariba Contract Compliance and Ariba Contract Management

Integration
Ariba Contract Compliance provides features and functionality that enable the modeling and management of
contract pricing and terms to help support both internal compliance as well as supplier invoice compliance.
Ariba Contract Management provides visibility and control over the contract authoring and management
process. These two solutions can be integrated to allow seamless contract management from authoring to
compliance enforcement.
If Ariba Contract Compliance is integrated with Ariba Contract Management in your system, then you must
start the creation of your contract within Ariba Contract Management.
If you have contracts that you have already created within Contract Compliance, and later purchase Ariba
Contract Management, you can still manage those contracts from the Contract Compliance interface, or you
can, from within those contracts, create a contract workspace in Ariba Contract Management and manage
those contracts from there.
For information about working with Ariba Contract Management, see the Ariba Contract Process
Management Guide at Help@Ariba.
Contract Types
There are three types of contracts:
• Supplier level, which covers all products from a supplier.
• Commodity level, which covers all products identified by specific commodity codes from a supplier.
• Item level, which covers specific items from a supplier.
An individual contract applies to a single supplier. However, you can aggregate multiple contracts into a
hierarchy in which a parent contract’s terms apply to its children, and each child contract applies to a
different supplier.

Blanket Purchase Orders Chapter 1 Contract Concepts
Blanket Purchase Orders

You create a blanket purchase order (BPO) as an attribute of a contract. A BPO is an agreement to spend a
specific amount with a supplier, but it does not specify the items or services you are going to purchase.
BPOs are identified in the system by a BPO prefix, for example BPO123.
If Ariba Invoice is installed on your system, Notes:
You can use a BPO to cover ongoing costs, like the delivery of services over the period of a year. For
example, you can create a single BPO for $12,000 and the supplier can invoice you for $1,000 a month for
the services provided. In this case, the services you purchase eventually equal the maximum amount of the
BPO.
• ABPO can be a master agreement. If you create a BPO as a subagreement, then its parent must also be a
BPO contract.
• Print, fax or email routing is not supported for BPOs. If a supplier’s preferred routing method is print, fax
or email, the BPO status is immediately set to Processed, and the history tab includes a record indicating
the reason. You have to either manually deliver a printout of the BPO to the supplier, or implement a
supported custom routing for the desired routing method.
• Suppliers can create invoices using PO-Flip® (purchase order to invoice flip) in Ariba SN for
No-Release-Order line item level BPOs. For No-Release-Order supplier, commodity, or catalog level
BPOs, if your site is enabled for collaborative invoicing and you allow collaborative invoicing for these
BPOs, suppliers can punch in to your site to create invoices against these contract types.

Chapter 1 Contract Concepts Blanket Purchase Orders
The following diagram outlines the BPO process.
Configure contract
Supplier-level;
request as blanket
no release
purchase order
required
(BPO)
Modify contract Submit contract Purchase-order-to-

request request invoice flip , and
punchin to
Procure-To-Pay or
Ariba Procurement
Content allowed at
this stage
no yes
BPO created on Purchase order
Approved
Ariba SN) routed to supplier
yes Available amount

on BPO tracked on
Ariba SN
BPO created
Update
accumulators
Supplier flips
purchase order to
Invoice reconciled
create invoice on
Ariba SN
Differences Between a BPO and non-BPO Contract

The following lists the differences between BPOs and non-BPO contract requests:
• BPOs are sent to suppliers on Ariba SN, where suppliers can view BPOs and their accumulators.
Non-BPO contract requests are not sent to suppliers on Ariba SN.
• Suppliers can invoice against No-Release-Order item level BPOs directly on Ariba SN using purchase
order to invoice flip.
• Collaborative invoicing is easier for commodity level, supplier level or catalog level BPOs than for
non-BPO contract requests. Suppliers can select the BPO in their Inbox on Ariba SN to punch in to your
site to create a standard invoice. For non-BPO contracts, suppliers first select the customer on a contract
search page, and then punch in to create their invoices.
• Maximum limits are required for BPOs.

Contract Hierarchies Chapter 1 Contract Concepts
Contract Hierarchies
A contract hierarchy is a set of related contracts that can share accumulated amounts and discounts. When
you create a contract, you specify whether or not it belongs to a hierarchy.
This section covers the following topics:

• “Contract Hierarchical Relationships” on page 12
• “Accumulation of Contract Spend” on page 13
• “Compound Pricing” on page 14
Contract Hierarchical Relationships

A contract has one of three hierarchical relationships:
• Standalone agreement, which is not part of a hierarchy. If you decide you want to use a standalone
agreement in a hierarchy, you must change it to either a master agreement or subagreement before the
contract request has been approved.
• Master agreement, which is the top-most contract in a hierarchy. A master agreement is used to group
subagreements together. You can associate subagreements with a master agreement whose status is
Processed or Open.
• Subagreement, which is a contract associated with a parent contract in a hierarchy. The parent of a
subagreement can be a master agreement or another subagreement. A subagreement can have only one
parent, but can have multiple children.
A parent contract must be of the same level or of a higher level than its child. For example, a supplier level
contract can be a parent to any other contract, but an item level contract can be a parent to only another item
level contract. The following table lists the possible parent-child relationships in a contract hierarchy:
This type of contract... Can have this type of child...

Supplier level Supplier level, commodity level, or item level
Commodity level Commodity level or item level
Item level Item level

Chapter 1 Contract Concepts Contract Hierarchies
The following diagram shows an example of a simple contract hierarchy.
Master Agreement
(supplier -level contract )
Subagreement Subagreement
(commodity-level
(item-level contract )
contract)
Subagreement
(item-level contract )
Accumulation of Contract Spend

Contract spend is accumulated from a subagreement to its parent agreement. You can configure a contract to
allow, limit, or prevent spend accumulation. To allow accumulation to a parent contract, you set the Include
Subagreement Accumulators option for the parent contract to Yes.

Contract Hierarchies Chapter 1 Contract Concepts
In a multi-level hierarchy, you can configure spend to accumulate throughout the hierarchy, or only from one
level to the next. You can choose the point in the hierarchy at which accumulation ends by setting the
accumulation parameters as outlined in the following diagram:
Spend accumulates to Spend accumulates to

Master Agreement Subagreement 1
Include Subagreement Master Agreement Master Agreement Include Subagreement

Accumulators = Yes Accumulators = No
(supplier -level contract ) (supplier -level contract )
Subagreement 1 Subagreement 1
Include Subagreement Include Subagreement
Accumulators = Yes (commodity-level (commodity-level Accumulators = Yes
contract) contract)
Subagreement 2 Subagreement 2
(item-level contract ) (item-level contract )
Compound Pricing
A subagreement can compound its price or percentage discount with the percentage discount of its parent
agreement. If compound pricing is enabled, the subagreement’s pricing terms are compounded with the
applicable parent agreement’s percentage discount. Compound pricing is available only if the parent
agreement uses a percentage discount.
To compound a subagreement’s pricing terms, choose a parent agreement that uses a percentage discount,
and set the Compound with applicable parent’s pricing terms? option in the subagreement to Yes.
The compound pricing calculation considers only the current subagreement and applicable contracts above it
in the contract hierarchy. These calculations never include contracts below the subagreement.

Chapter 1 Contract Concepts Contract Hierarchies
Compounded price discounts are serially calculated within each contract, beginning with the subagreement
attached to the release purchase order or selected for direct invoicing. For example, a supplier level master
agreement contract has a discount of 1% and its subagreement has a discount of 2%. If the subagreement
item price is $10.95, the compounded price discount is first calculated at the subagreement ($10.95 * 0.98 =
$10.731) and then this result is applied to the master agreement ($10.731 * 0.99 = $10.62369).
Master
Agreement
Supplier level $10.731
1% discount - 1% discount
Release Order = $10.62369
Final
Compounded
Price
Compound = Yes
Subagreement
Item level Unit price: $10.95

2% discount - 2% discount
Release Order = $10.731
Override Pricing
Override pricing requires the use of No-Release Order contracts within the hierarchy. In the following
example, a release purchase order against the subagreement has its price overridden by the applicable parent
agreement’s pricing of $9.99.
Master
Agreement
Item level
$9.99 discount
No Release
Subagreement
Item level Unit price: $10.99

$10.99 discount is overriden by
Release $9.99 price from
No Release Order
parent agreement

Contract Request Status Chapter 1 Contract Concepts
Contract Request Status

When you create a contract request, a document with the CR prefix (for example, CR21) is generated. Once
the contract request has been approved, a contract, identified by the prefix C (for example, C21), is created
from the contract request.
The following table describes each CR status.
Status Description
Composing A user, generally a purchasing agent, is composing the CR.
CRs that are imported from Microsoft Excel spreadsheet files are created in the Composing status.
A CR can return to the Composing status if the purchasing agent withdraws the request.
Submitted The purchasing agent has submitted the CR for approval.
Denied An approver has denied the CR.
Approved The CR has been fully approved.
Processing Contract creation from the contract request is in process. The CR remains in the Processing status
until its associated contract moves to the Processed status.
Processed A contract has been created from the CR.
Contract Status
Based upon your contract request, Contract Compliance creates a contract.
The following table describes each contract status.
Status Description
Created The contract has been created from the contract request.
Processing If the contract contains non-catalog items, Ariba Invoice and Payment is generating and
loading a subscription for those items.
If the contract contains catalog items only, and Processing is a transitory status and the contract appears
to move directly to the Processed status.
Processed Depending on your configuration, if a subscription was generated for non-catalog items in the contract,
the status changes to Processed:
• After the subscription has been successfully loaded, if your site is configured to change the contract
status after the subscription is fully loaded. If the subscription cannot be loaded, the status remains
Processing.
• Without waiting for the subscription to load, if your site is configured to immediately transition the
contract status to Processed.

Chapter 1 Contract Concepts Applying Contracts
Status Description
Open The contract status moves to Open when one of the following events occurs:
• The current date is between the contract’s effective and expiration dates, and the contract has a valid
available amount.
• The contract’s effective date has been reached.
• You open the contract manually with the Open command.
Closed The contract moves to a Closed status when one of the following events occurs:
• The contract’s expiration date has been reached.
• You close the contract manually with the Close command.
For contracts without release orders that can be invoiced or received against, the contract is closed and
contract subscriptions are deactivated when it is fully invoiced or fully received. If a contract expired or
is closed manually, contract subscriptions will not be deactivated until the contract is fully received or
fully invoiced.
Inactive This status applies to Ariba Contract Management (ACM)-Ariba Contract Compliance (ACC)
integrated sites only.
For contracts without release orders that can be invoiced or received against, if a contract is closed
because the corresponding contract workspace is closed in ACM, contract subscriptions will not be
deactivated until the contract is fully received or fully invoiced. In such cases, the contract moves to an
Inactive (or InitialClose) status.
Applying Contracts
When you select items from the catalog that are associated with a contract, or you select a contract to release
funds against, the contract price is transparently applied to the items you select when you add them to your
shopping cart, and the contract amounts are encumbered when the items associated with the contract are
checked out. Pricing terms can be set for materials, services and commodity codes.
No-Release-Order Contracts
When you create a contract in Contract Compliance , you create a No-Release-Order contract. You cannot
create purchase orders against a No-Release-Order contract, but you can , depending on your installed
features,invoice against that contract.
A No-Release-Order contract provides additional pricing terms for fixed and recurring fee items, and for
costs and expenses.
You can also use a No-Release-Order contract for bookkeeping purposes. In this case, you must set the
contract’s Allow invoicing against contract indicators to No to prevent any direct invoicing. Additionally, you
must set the contract’s hierarchical type to Standalone Agreement. If you create a contract in this manner, it
can be used only to document contract terms for reference by other organizations.

Accounting Information Chapter 1 Contract Concepts
Another use of No-Release Order contracts is within contract hierarchies to accumulate spend, or to apply
contract explicit price terms (through price overrides), or both.
The following graphic shows the No-Release-Order contract flow:
Reopen
Selected users
Contract Process Contract Contract open Contract
can change End
created for invoicing closed
Contract
Users create Invoices

invoices that cannot be
Invoice Process reference and issued while
use the Contract is
Contract closed
Direct Invoicing and Receiving

When you create a No-Release-Order contract, you must specify whether the contract will support direct
invoicing.
Note: Direct invoicing is only available, if Ariba Invoice is installed on your system.
To allow direct invoicing, set the Allow invoicing against contract? option to Yes.
When direct invoicing is enabled for a No-Release-Order contract, users and suppliers can create invoices
directly against the contract. In a typical configuration, suppliers and buying corporations use Ariba Supplier
Network (Ariba SN) as a commerce network hub for exchanging invoices.
Accounting Information
You enter accounting information on the pricing terms page for each contract line item you create. Contract
accounting information is optional for Release-Order contracts and No-Release-Order contracts that allow
direct invoicing, and can be overwritten when creating a requisition or invoice.
Accounting information is required when creating a No-Release-Order contract that allows direct receiving.
For these contracts, the accounting information is defaulted from the accounting information configured for
the commodity code first, and then the user profile if no accounting information exists for that commodity
code.
If you enter accounting information for Release-Order or No-Release-Order with direct invoicing only
contract line items, accounting values are inherited as follows:
• all values except Cost Center are inherited by the requisition line item. Cost Center is defaulted to the
value configured for the user who creates the requisition.
• all values including Cost Center are inherited by invoice line items.

Chapter 1 Contract Concepts Effective and Expiration Dates
Effective and Expiration Dates

When your create a contract, you must specify the effective date and the expiration date. An expiration date
is optional if you are creating an evergreen contract.
To create a contract that will not expire on a specific date, set the Evergreen option to Yes.
Contract Complianceautomatically opens a contract when it reaches its effective date, and closes a contract
when it reaches its expiration date (if it is not an evergreen contract). You can specify an expiration date for
an evergreen contract, but in this case, it represents a key date related to the contract, for example, when its
terms must be reviewed. This expiration date can be used in conjunction with a notification limit to produce
notification messages.
If Ariba Invoice is installed on your system: For contracts that allow direct invoicing, you can continue to
submit invoices past the contract’s expiration date, but you might be subject to invoice reconciliation
exception rules.
Contract Compliance generates a notification message when a contract is about to expire. When you create a
contract, you configure how many days before the contract’s expiration to send this notification message.
You can set up a similar notification message for an evergreen contract by specifying a date in the Expiration
Date field. For more information on these notification messages, see “Notification Limits” on page 22.
Limits
Users can define a contract by the following limits:
• “Overall Limits” on page 19
• “Materials and Services Item Limits” on page 20
• “Commodity Limits” on page 20
• “Fixed and Recurring Fee Item Limits” on page 21
• “Costs and Expenses Item Limits” on page 21
• “Milestone Item Limits” on page 21
• “Preload Amounts” on page 21
• “Notification Limits” on page 22
• “Forecasted Spend” on page 22
Overall Limits
Overall limits are limits that apply to the entire contract. The overall limits for a contract include the
following:
• Minimum commitment, which is the minimum amount you commit to invoice against the contract.
Contract Compliance does not enforce this limit.
• Maximum commitment, which is the maximum amount for the contract. This limit is used to determine
the total amount that can be invoiced against the contract. Contract Complianceenforces this limit. When
a contract hierarchy exists, you configure values per contract and Contract Compliance enforces this limit
per contract. The maximum commitment value for a single subagreement cannot exceed the maximum
commitment value for its master agreement, but if a master agreement has multiple subagreements, the
sum of the maximum commitment values for its subagreements can exceed the master agreement’s
maximum commitment value.

Limits Chapter 1 Contract Concepts
• Tolerance, which is the percent above the maximum commitment that can be against the contract. For
example, if the maximum commitment is $100,000 and the tolerance is 10 percent, you can invoices
against the contract until the amount released reaches $110,000. The tolerance percentage can be zero.
Contract Complianceenforces this limit.
Contract Compliancegenerates notification messages when a contract is approaching its maximum

commitment. When you create a contract, you can configure the percentage of the maximum commitment
that must be reached before sending this notification message. For more information, see “Notification
Limits” on page 22.
Contract Compliance maintains accumulators to keep track of the amounts invoiced against contracts.
Pre-loaded amounts are included in a contract’s accumulated amounts. For information on these
accumulators, see “Overall Contract Accumulators” on page 31.
Materials and Services Item Limits

Materials and services item limits define the limits that apply to specific catalog or non-catalog items
covered by an item level contract. Materials and services item limits can be either amount or quantity based.
Each item has the following limits:
• Minimum quantity or amount, which is the minimum quantity or amount the buying organization has
committed to receive in invoices from the supplier. This limit is not enforced.
• Maximum quantity or amount, which is the maximum quantity or amount for the line item. This limit is
used to determine the total amount that can be invoiced against the item. This limit is enforced.
• Tolerance, which is the percent above the maximum quantity or amount that can be invoiced against the
item. This limit is enforced.
Contract Compliance maintains accumulators to keep track of funds against specific items. For information
on these accumulators, see “Pricing Term Accumulators” on page 32.
Commodity Limits
Commodity limits define the limits that apply to specific commodities covered by a commodity level
contract. Commodity limits are always amount based. Each commodity has the following limits:
• Minimum amount, which is the minimum amount the buying organization has committed to receive in
invoices from the supplier. This limit is not enforced.
• Maximum amount, which is the maximum amount for the commodity. This limit is used to determine the
total amount that can be invoiced against the commodity. This limit is enforced.
• Tolerance, which is the percent above the maximum amount that can be invoiced against the commodity.
This limit is enforced.
Contract Compliance maintains accumulators to keep track of funds against specific commodities. For
information on these accumulators, see “Pricing Term Accumulators” on page 32.

Chapter 1 Contract Concepts Limits
Fixed and Recurring Fee Item Limits

Fixed and recurring fee item limits define the limits that apply to fixed and recurring fee items on an item
level contract .
• A fixed fee item is an item that can have only one occurrence.
• A recurring fee item is an item that can have multiple occurrences.
A fixed or recurring fee item can have an amount and a tolerance. The tolerance is the percent above the
specified amount (unit price) that can be invoiced against the item for each occurrence.
Costs and Expenses Item Limits

Costs and expenses item limits define the limits that apply to cost and expense items on an item level
contract . Each item has the following limits:
• Maximum amount, which is the maximum amount for the cost or expense item. This limit is used to
determine the total amount that can be invoiced against the item.
• Tolerance, which is the percent above the maximum amount that can beinvoiced against the item.
Milestone Item Limits

A milestone is a set of conditions or requirements that must be met by a supplier to achieve the terms of a
supplier-, commodity-, or item level contract. The successful completion of a milestone typically results in
partial financial payment to the supplier. A milestone-based agreement is a contract that is based on one or
more milestones or deliverables.
When you add a milestone to a contract , it is associated with certain limits. These milestone-item limits can
be set for item level contracts to define the limits that apply to the milestone item and include the following:
• Maximum amount, which is the maximum amount for the milestone item. This limit is used to determine
the total amount that can be invoiced against the item.
• Tolerance, which is the percent above the maximum amount that can be invoiced against the item.
Preload Amounts
Preload amounts allow you to enter amount values that were originally outside the applicable contract.
Preloaded amounts are accumulated as contract spend and can affect pricing terms. One use for preloading
an amount into a contract is to account for previous purchases.
A preload amount is tracked at the contract-header level, which prevents the preload amount from being
systematically allocated. For supplier level contracts, preload amounts affect the accumulation of any price
discounts because supplier level contracts have only one line item. However, item level and commodity level
contracts allocate the preloaded amount only to the contract-header level and not to the individual line items,
and so preload amounts for these contract types never affect their item pricing.
Preload amounts are included in calculating tier-based pricing only in supplier level contracts; otherwise,
preload amounts are not included in a contract’s accumulated amounts. A preload amount in a supplier level
subagreement within a contract hierarchy is accumulated to any parent agreements that are set to include
subagreement values.

Pricing Terms Chapter 1 Contract Concepts
Notification Limits
can be set to generate notification messages when a contract is approaching its maximum limit, when it is
about to expire, and if the expiration notice recurs. These notifications are emailed automatically to the
contract requester and to users with edit access to the contract. You can add additional users to the
notification list when creating the contract.
You can specify an available balance percentage (a percentage of the contract's maximum commitment) that
when reached will cause the Contract Approaching Limit notification message to be sent.
You can configure how many days before the contract’s expiration date to send the Contract Approaching
Expiration notification message. For an evergreen contract with an expiration date, use this field to specify
how many days before that date you want to send the Evergreen Contract Approaching Notification Date
notification message.
If either notification message is enabled, you can specify the interval (in days) at which you want the
message to recur. Use the Number of Days Before Next Notification field.
A notification message can also be generated when a milestone item is approaching its completion date. See
“Milestone Item Limits” on page 21.
Forecasted Spend
You can forecast the amount you expect to spend over the lifetime of a contract, and divide that amount by
the type of fiscal period you use. For example, if you expect to spend $100,000 over a one-year contract, you
can divide that amount by four quarters, forecasting $25,000 for each quarter. You can adjust each quarterly
amount to account for seasonal spending or other expected fluctuations. With the previous example, you can
increase the summer quarter forecast to $35,000, and decrease the winter quarter forecast to $15,000.
An expected savings amount can also be established with the forecasted spend amounts, to add another
dimension to the data analysis.
Pricing Terms
You specify pricing terms for items that you add to contracts. The items you add to the contract might be
controlled by a category definition, which defines terms and limits for certain item properties. For example,
an item controlled by the labor category might set a bill rate to not exceed $100.
Certain properties of category items can be configured to be contractible properties. This means that you can
set different values for these properties when defining the pricing terms of your contract. If you are
specifying a contract for a category item with contractible properties, then these fields will be displayed on
the pricing terms pages.
Note: If you associate multiple item level contracts with the same labor line item, you must have either Bill
Rate or Pay Rate defined in the pricing terms. Otherwise, the calculations to determine the best contract to
apply will not have an effective price to compare against, and the first contract created will be applied to the
requisition.
See the Ariba Category Procurement Implementation Guide for more information on contractible properties
and the interaction of contracts, category definitions and user-entered values.

Chapter 1 Contract Concepts Pricing Terms
This section discusses the following topics:

• “Discount Pricing” on page 23
• “Advanced Pricing” on page 23
Discount Pricing
You can specify discount pricing for a supplier, commodity, catalog, or non-catalog item. provides the
following types of discount pricing:
• Discounted Price (fixed price)
• Discount Percent (fixed percentage off pricing)
With discounted price or discount percent, you can specify a flat discounted price or a fixed percentage off
the regular price. A discounted price can be applied to catalog items only. A fixed percentage off can be
applied to catalog items, commodities, or all items offered by a supplier.
Note: You can enter negative discount percentages to allow for markup pricing for suppliers who want the
ability to provide a base price on their catalog items. Then the negotiated contract will include a markup
percentage on that base price.
Advanced Pricing
Contract Compliance provides the following types of advanced pricing terms:
• “Tiered Pricing” on page 23
• “Term-Based Pricing” on page 26
• “Term-Based Grid Pricing” on page 27
• “Formula Pricing” on page 28
Note: You can enter negative discount percentages to allow for markup pricing for suppliers who want the
ability to provide a base price on their catalog items. Then the negotiated contract will include a markup
percentage on that base price for the pricing tiers, pricing terms or pricing formulas you define.
Tiered Pricing
Tiered pricing allows you to specify different discounts based on the volume (either dollar or quantity)
purchased against the contract.
Contract Compliance provides the following types of tiered-pricing structures for contracts:
• “Amount-Based Volume Pricing” on page 24
• “Amount-Based Volume Discount” on page 24
• “Quantity-Based Volume Pricing” on page 24
• “Quantity-Based Volume Discount” on page 24

Amount-Based Volume Pricing

With amount-based volume pricing, you specify different prices based on the dollar amount purchased. For
example:
Minimum Dollar Amount of Purchase Price per Item

$0.00USD $5.00USD
$100.00USD $4.00USD
$200.00USD $3.00USD
Amount-Based Volume Discount

With amount-based volume discounting, you specify different discount percentages based on the dollar
amount purchased. For example:
Minimum Dollar Amount of Purchase Discount Percent

$0.00USD 5%
$100.00USD 6%
$200.00USD 7%
Quantity-Based Volume Pricing

With quantity-based volume pricing, you specify different prices for an item based on the number of units
purchased. For example:
Minimum Quantity Purchased Price per Item

0 units $5.00USD
100 units $4.00USD
200 units $3.00USD
Quantity-Based Volume Discount

With quantity-based volume discount pricing, you specify different discount percentages for an item based
on the number of units purchased. For example:
Minimum Quantity Purchased Discount Percent

0 units 5%
100 units 6%
200 units 7%

Applying Pricing Tiers

The applicable tiers are determined based on the total amount using the actual base price of the item.
When setting up pricing tiers for volume discounting, you can define if the pricing tiers are cumulative
(based on all orders), or if they are applied per order.
Per order pricing

When using per order pricing, the unit price that will be applied will be from the tier which provides the best
value, and that price is applied to all items on the order. For example, assuming the following pricing tiers
and a base price of $5.00 USD, any order with a quantity between 20 and 40 will result in applying a unit
price of $4.00 USD, and any order with a quantity of 41 or higher will result in applying a unit price of $3.00
USD to calculate the order amount.
Minimum Dollar Amount of Purchase Price per Item

$0.00USD $5.00USD
$100.00USD $4.00USD
$200.00USD $3.00USD
Cumulative pricing
When using cumulative pricing, if the total quantity for one or multiple orders spans two tiers then the unit
price is calculated as:
Unit Price = [(number of items accommodated in previous tier x price defined in previous tier )
+ (number of items in current tier x price in current tier)] / total number of items
Example using the pricing tiers above:
Release Order 1 (R1) is for a quantity of 17. Applying the base price of $5.00 USD, the total calculated
amount is $85.00 USD, and the tier 1 unit price of $5.00 USD is applied.
Release Order 2 (R2) is for a quantity of 15. The cumulative order amount is:
R1 total amount ($85.00 USD) + 15 x $5.00 USD (R2 calculated at base price) = $160.00 USD.
The cumulative order amount has passed the threshold to tier 2, so the unit price to apply to the second order
is calculated as follows:
3 (remaining number of items in tier 1 before passing the threshold to tier 2) x $5.00 USD + 12
(remaining number of items applied to tier 2 pricing) x $4.00 USD / 15 = $4.20 USD
If R2 is for a quantity of 30, the unit price for the order is calculated as follows:
3 (remaining number of items in tier 1 before passing the threshold to tier 2) x $5.00 USD + 25
(items available in tier 2 before passing the threshold to tier 3) x $4.00 USD + 2 (remaining
number of items applied to tier 3 pricing) x $3.00 USD / 30 = $4.03 USD

Term-Based Pricing
Term-based pricing allows you to specify different discounts based on specified time periods within the life
of the contract. Contract Compliance provides the following types of term-based pricing structures for
contracts:
• “Term-Based Discount” on page 26 (a percentage discount)
• “Term-Based Pricing” on page 26 (a fixed price discount)
Term-Based Discount
With term-based discount pricing, you specify different discount percentages for an item based on specified
time periods. For example:
Start Date Discount

07/01/2006 5%
10/01/2006 10%
01/01/2007 12%
04/01/07 8%
Term-based discount pricing is valid for catalog and non-catalog items (if the contract allows), commodities,
and suppliers.
Term-Based Pricing
With term-based pricing, you specify different prices for an item based on specified dates. For example:
Start Date Price

07/01/2006 500USD
10/01/2006 100USD
01/01/2007 120USD
04/01/2007 800USD
Term-based pricing is valid only for catalog and non-catalog items (without a previously defined discount
price).
Defining Term Boundaries

The term-based pricing time periods must be bounded by the life of the contract. For example, the first
pricing date (Start Date) must be equal to or after the contract’s effective date, and the final pricing date must
be equal to or before the contract’s end date.
When applying pricing terms, Ariba Invoice and Payment uses the invoice date (for direct invoicing) as the
pricing date.

For evergreen contracts, if the release order date is outside of the boundary dates specified in the contract’s
term-based pricing, Contract Compliance uses the price specified in the last time period. Take for example a
contract with the following pricing terms:
Start Date Discount

07/01/2005 5%
10/01/2005 10%
01/01/2006 12%
04/01/06 8%
If the release order date is 09/05/06, the contract pricing uses the discount price in the last term: 04/01/06
with an 8% discount.
Term-Based Grid Pricing

Term-based grid pricing allows you to specify the price for an item over time, based on attributes of that
item, and values for those attributes.
For example, an item may be Airport Terminal Rent. The attribute of that item would be location, for
example, San Francisco Airport. Location could have values like Aisle, Rest Room, and Ticket Counter. The
attribute values are further refined by Price, Max. Quantity, and Max. Amount.
Term-based grid pricing also includes terms, or date ranges, during which prices are in effect for an item. For
more information on terms, see “Term-Based Pricing” on page 26.
The following example shows term-based grid pricing for terminal rents at XYZ airport:
Location Tuesday, January 1, 2008 (term start Thursday, January1, 2009

date) (term start date)
Ticket Counter 1 • Price = $25.00 • Price = $25.50
• Max. Quantity = 100 • Max. Quantity = 100
• Max. Amount = $2500.00 • Max. Amount = $2550.00
Ticket Counter 2 • Price = $25.00 • Price = $25.50
• Max. Quantity = 100 • Max. Quantity = 100
• Max. Amount = $2500.00 • Max. Amount = $2550.00
In this example:
Beginning on January 1, 2008, each ticket counter will be rented at a rate of $25.00 per square foot per year;
the maximum number of square feet covered by the contract for that ticket counter is 100; the maximum
amount that can be charged for rent during that time period is $2,500.00.
Beginning on January 1, 2009, each ticket counter will be rented at a rate of $25.50 per square foot; the
maximum number of square feet covered by the contract for that ticket counter is 100; the maximum amount
that can be charged for rent during that time period is $2,550.00.
The values for Price, Max. Quantity, and Max. Amount are defined in each cell of the grid.

Term-based grid pricing is valid only for no-release, item level contracts, and for partial items whose
attributes have string values.
Notes:
• When you export a contract to Excel, the pricing grid is exported as part of the contract. Likewise, when
you import an Excel contract in which a pricing grid is defined, the grid is imported.
• In order to take advantage of term-based grid pricing, you need to have the necessary partial items and
attributes defined in your catalog.
• If you reach the cell limit for an item (for example, Max. Quantity), an exception is raised. You handle the
exception as you like (for example, you can accept it or dispute it).
• If you reach the limit for a line item (for example, the total amount that can be spent on a line item), then
that line item is no longer available.
• If you reach the limit for the contract, the contract is closed.
• The state of a contract (Open or Closed) cannot be tied to cell limits. For example, you cannot have a
contract close automatically when a cell limit is reached.
• Accounting at the cell level is not supported. Accounting at the line-item level is supported.
• If your catalog changes after you create a contract with term-based grid pricing and an attribute of one of
the items for which you have defined grid pricing is no longer available in the catalog, you cannot create a
new version of that contract based on the current catalog. If you need to create a new version of that
contract, you have to reload your catalog data, and include the item attributes that were left out of the new
catalog. With the correct catalog data in place, you can then create a new version of the contract.
Formula Pricing
Formula pricing allows you to specify a price based on a mathematical formula. Contract Compliance
supports different types of formula pricing, including Matrix and Multiplier pricing.
Formula pricing is available when a partial item is added to your contract request.
The following example shows formula pricing for a printing job where the price is calculated as follows:
For an 8-1/2 inch x 11 inch sheet of paper:

The initial setup cost (including two colors) $600.00
Additional colors $300.00 each
Price/1000 sheets of paper $50.00
Additional colors/1000 sheets of paper $40.00
In this example, the calculation of the pricing for the item can be represented by the following formula:
600 + Max(0,NumColors - 2) * 300.00 + 50.00 * (NumSheets/1000) + Max(0,NumColors - 2) * 40.00 *

(NumSheets/1000)
The preceding example shows a formula employing one-dimensional matrixes, where each variable (such as
NumSheets) changes independently of any other variables in the formula. Contract Compliance also supports
a two-dimensional matrix in formula pricing, in which one variable can change value in response to a second
variable’s value.

For example, consider a pricing formula for T-shirts in which the formula uses a base price of $20 plus a
two-dimensional matrix (size_color_matrix) that accounts for additional price markup required by the
combination of size and color of the shirt. The formula would be:
20 + size_color_matrix
The variable size_color_matrix is a two-dimensional matrix that can be represented by a table:
Green Blue White

Small 0 1 0
Medium 2 1 1
Large 2 3 2
Formula pricing is valid for partial items from the catalog with contractible factors. Only enumerated types
on a partial item can be used when defining the direct attributes used in formula pricing. Some contractible
factors (decimal or money values) can be added to the formula directly, whereas other factors (such as
boolean, string, or other field values for the category-based item) are considered enumerated values for the
factor and must be mapped to numerical values before being added to the formula.
Your Contract Compliance administrator can create custom formula functions.
Matrix Pricing
Matrix pricing allows you to specify a price based on different related factors. The following example shows
matrix pricing for temporary labor where one factor is the location and other factor is the job class:
Job Class Location

San Francisco Los Angeles New York
Accountant $40.00/hour $35.00/hour $50.00/hour
Admin Assistant $35.00/hour $30.00/hour $45.00/hour
HR Representative $30.00/hour $25.00/hour $40.00/hour
In this example, if an administrative assistant were hired in New York, the amount would be $45.00 per hour.
Matrix pricing is valid only for partial items from the catalog. Only enumerated types on a partial item can
be used when defining the n-dimensional grid used in matrix pricing.

Access Control Chapter 1 Contract Concepts
Multiplier Pricing
Multiplier pricing allows you to specify a price based on type information, where the item contains a base
price and each type contains a multiplier to be used against the base price. The following example shows
multiplier pricing for a pipe item that considers material, weld type, and the shift of the person making the
pipe:
Material Weld Type Shift

Copper 1.10 Intersect 1.20 58 1.00
Stainless Steel 1.20 Butt 1.30 5 10 1.10
Carbon Steel 1.30 Joint 1.40 6 10 1.20
Assuming the pipe has a base price of $5.00, if you select a stainless steel pipe with an intersect weld type
from shift 5 8, the price would be as follows:
$5.00 * 1.20 * 1.20 * 1.00 = $7.20
Notice that the different types are not related in any way. For example, the multiplier for the intersect weld
type is always 1.20, regardless of which material or shift you select.
Multiplier pricing is valid for partial items from the catalog with contractible factors. Only enumerated types
on a partial item can be used when defining the direct attributes used in multiplier pricing. Some contractible
factors (decimal or money values) can be added to the multiplier directly, whereas other factors (such as
Boolean, string, or other field values for the category-based item) are considered enumerated values for the
factor and must be mapped to numerical values before being added to the multiplier.
Access Control
When you create a contract, you can specify who has permission to edit the contract.
Global Contracts
A contract can be a global contract, which means you allow to release funds against the contract from any
partition. Or you can restrict release access of the contract to the current partition where you logged on to
create the contract.
If your contract is a global master agreement, then you can create separate subagreements for each partition,
or the subagreements themselves can also be global.
Edit Access
When you create a contact, you are automatically given edit access (permission to edit the contract). You can
also specify which other users you want to be able to edit the contract.

Chapter 1 Contract Concepts Payment Terms
Payment Terms
Payment terms specify when a supplier must be paid for an invoice against the contract or release, and define
any discounts that are available for early payment.
Some or all of the items on your contract may be configured for autoreceiving. Autoreceive rules are only
evaluated if the contract is configured for direct receiving. See the Receiving chapter in the Ariba Buyer
Procurement User Guide for more information.
Accumulators
Contract Compliancemaintains accumulators that track the quantities and amounts released and invoiced
against contracts. There are two types of accumulators:
• “Overall Contract Accumulators” on page 31
• “Pricing Term Accumulators” on page 32
Overall Contract Accumulators

Contract Compliancemaintains accumulators that apply to an entire contract (overall contract
accumulators).
If a contract belongs to a hierarchy, the overall contract accumulators include the rolled-up spend amounts
for the contract’s subagreements if those subagreements are configured to accumulate these amounts. For
more information, see “Accumulation of Contract Spend” on page 13.
The following table describes the overall contract accumulators.
Accumulator Description
Used Amount The monetary amount that represents the current total amount of all invoices applied
against the contract. For item level and commodity level contracts, the Used Amount
represents the collective total of all the pricing terms covered by the agreement.
Available Amount The monetary amount currently available for subsequent invoices. This value is
calculated by subtracting the current total amount of all invoices applied against the
contract (the Used Amount) from the contract’s maximum commitment amount.
For item level and commodity level contracts, the Available Amount represents the
collective total of all the pricing terms covered by the agreement.
When the contract is initially created, the Available Amount is set to the maximum
commitment amount.
Cumulative Pricing The monetary amount used to calculate cumulative tiered pricing discounts for invoices
Used Amount applied against the contract, based on the current total amount of all invoices applied
against the contract (the Used Amount).
Amount Invoiced The cumulative amount of goods or services invoiced for all line items on the contract.
Amount Reconciled The cumulative amount of goods or services reconciled for all line items on the contract.

Accumulators Chapter 1 Contract Concepts
Amount Limit Less This value is calculated by subtracting the current total amount of all invoices applied
Invoiced Amount against the contract from the contract’s maximum commitment amount.
Reconciled Amount against the contract that have been reconciled from the contract’s maximum commitment
amount.
Pricing Term Accumulators

Contract Compliancemaintains item level accumulators for each item level pricing term on an item level
contract. If a contract belongs to a contract hierarchy, the item level accumulators will include the rolled-up
spend from all subagreements that have compounded prices with this contract. For more information, see
“Compound Pricing” on page 14.
Similarly, Contract Compliance maintains commodity level accumulators for each commodity level pricing
term on a commodity level contract .
The following table describes the item level and commodity level accumulators.
Used Amount The cumulative monetary amount applied toward an individual pricing term. This
accumulator is used for commodity level pricing terms and item level pricing terms
with amount based limits.
Available Amount The difference between the Used Amount and the specified maximum amount for an
individual pricing term. This accumulator is used for commodity level pricing terms
and item level pricing terms with amount based limits.
Used Quantity The cumulative quantity applied toward an individual item level pricing term. This
accumulator is used only for item level pricing terms with quantity-based limits.
Available Quantity The difference between the Used Quantity and the specified maximum quantity for an
individual pricing term. This accumulator is used only for item level pricing terms with
quantity-based limits.
Cumulative Pricing The monetary amount used to calculate cumulative-tiered pricing discounts for an
Used Amount item, or commodity level pricing term with amount-based limits.
Cumulative Pricing The quantity used to calculate cumulative-tiered pricing discounts for an item level
Used Quantity pricing term with quantity-based limits.
Quantity Invoiced The cumulative quantity of goods or services invoiced against the line item. This
Quantity Reconciled The cumulative quantity of goods or services reconciled against the line item. This
Invoiced Amount against the line item from the line item amount limit. This accumulator is used for
commodity level pricing terms and item level pricing terms with amount-based limits.
Reconciled Amount against the line item that have been reconciled and the line item amount limit. This
accumulator is used for commodity level pricing terms and item level pricing terms
with amount-based limits.

Chapter 1 Contract Concepts Microsoft Excel Spreadsheet CRs
Quantity Limit Less This value is calculated by subtracting the current total quantity of all invoices applied
Invoiced Quantity against the line item from the line item quantity limit. This accumulator is used only
for item level pricing terms with quantity-based limits.
Quantity Limit Less This value is calculated by subtracting the current total quantity of all invoices applied
Reconciled Quantity against the line item that have reconciled from the line item quantity limit. This
Note: When the tolerance is exceeded for a non-catalog item on a contract, Contract Compliance reloads the
subscription for the item, and the item no longer appears when you search the catalog.
When Invoiced and Received Amounts Are Applied

In contracts for which invoicing is enabled, invoicing-related accumulators are updated when invoice
reconciliation documents are approved. This also applies to the Used Amount accumulator amounts in a
contract hierarchy that contains any contract that has invoicing enabled. An invoice amount is not rolled up
to a parent agreement until the invoice is fully reconciled, even if the parent is not using invoices.
In contracts for which receiving is enabled, receiving-related accumulators are updated when receipts are
processed.\
Microsoft Excel Spreadsheet CRs

Microsoft Excel spreadsheets are a common way of representing contracts and pricing information. The
Microsoft Excel spreadsheet contract request (CR) feature allows you to create or update contracts from data
in Microsoft Excel spreadsheet files (.xls).
The recommended method of creating a contract with an Excel spreadsheet is to:

1 Export an existing contract or a contract request that has been partially configured to reflect the basic
structure you want into an Excel file. See “Exporting Contracts” on page 71 for information on how to
export contract requests.
2 Change the Excel spreadsheet data.
3 Upload the finished Excel spreadsheet file into Contract Compliance. See “Uploading an Excel Version of
a Contract” on page 71 for information on how to import Excel based contract requests.
Note: Exporting and importing of contracts with two-dimensional matrix formula pricing is not supported.
This section also describes the general worksheet column and field name mappings in the default
configuration. It includes the following sections:
• “Sample Microsoft Excel Spreadsheets” on page 34
• “Spreadsheet Import Notes” on page 34

Contract-Invoice Exception Types Chapter 1 Contract Concepts
Sample Microsoft Excel Spreadsheets

Ariba Contract Compliance provides several sample Microsoft Excel spreadsheets as starting points for
creating new CRs. The sample worksheets are located along with the documentation on Help@Ariba. Each
sample spreadsheet defines one CR. (Help@Ariba is available by clicking the Help link in the Masthead.)
The following example shows a portion of a contract created as an Excel spreadsheet:
Each worksheet defines the contract data that can be imported or exported. In the default configuration, the
following data is defined, depending on the worksheet:
• Attachments
• Contract Header
• Contract Item Information
• Filters Formula Pricing
• Filters Formula Pricing Grids
• Header Attachments
• Header Attributes
• Item Attachments
• Item Attributes
• Item Pricing Filters
• Tiered Pricing
Spreadsheet Import Notes

Important notes to consider when importing Excel spreadsheets:
• You cannot import formula pricing terms for non-catalog items.
• You cannot import two-dimensional formula pricing definitions.
• If the imported spreadsheet does not contain a Buyer Contract ID (in the Contract Header worksheet), a
new CR is created. If the imported spreadsheet contains a Buyer Contract ID, the spreadsheet updates the
existing CR that matches the Contract ID, providing the CR is in the Composing state. Note that this
update completely replaces the existing CR data with the imported worksheet data.
Contract-Invoice Exception Types

Whenever there is a mismatch between a contract and an invoice created against that contract, exceptions are
generated. See Chapter 2, “Invoice Reconciliation” for details on how to reconcile invoice exceptions. See
“Invoice Exception Types” on page 55 for more information on exceptions type.

Chapter 2 Creating and Managing Contracts
• “Creating a Contract” on page 35

• “Uploading an Excel Version of a Contract” on page 71
• “Exporting Contracts” on page 71
• “Managing Contracts” on page 72
• “Copying a Contract” on page 73
• “Creating a Contract Workspace in Ariba Contract Management” on page 73
For conceptual information about contracts, see Chapter 1, “Contract Concepts.”
Creating a Contract
You can create a new contract from scratch using the contract wizard or upload an Excel version of a
contract. This section covers use of the wizard. For information about uploading contracts, see “Uploading
an Excel Version of a Contract” on page 71.
Note: The contract wizard fields change depending upon the type of contract you are creating, and the type
of ERP system you are using. Your organizational and accounting information depends on your integration
with your ERP system, and is not described in detail in this guide. Field labels may be different depending
on your ERP system, in the SAP variant, for example, suppliers are referred to as vendors. Where graphics
or descriptions include specific organizational or accounting fields, a CSV variant is used for illustrative
purposes.
 To start the contract wizard:

1 In the Common Actions area, click Create > Contract Request.
2 Under What would you like to create?, click Contract Request.

The contract wizard provides eight pages to help you create a new contract.
Note: Depending on your site configuration and the choices you make as you move through the wizard, you
might not encounter certain fields.

Creating a Contract Chapter 2 Creating and Managing Contracts
You can move among the pages as necessary while you are setting options (you are not required to
configure each page in sequence). The wizard page links are located to the left of the wizard pages. Click
a link to move to that page.
See the following sections for information about working with each page of the wizard:
• “Working with the Definitions Page” on page 36
• “Working with the Limits Page” on page 38
• “Working with the Pricing Terms Page” on page 41
• “Working with the Milestones Page” on page 67
• “Working with the Access Control Page” on page 68
• “Working with the Summary Page” on page 71
Working with the Definitions Page

Use the Definitions page to enter information such as a title and description, and to set options for the
contract like the effective and expiration dates, and whether to allow accumulation of spend.
 To enter general contract definitions:

1 Provide the following information:
For this option... Do this...

Title Enter a title for the contract.
Description Enter a description of the contract. For example, you might mention whether
the contract is used only as a parent to group other contracts; or you can
provide an overview of the type of goods covered by the agreement.

Chapter 2 Creating and Managing Contracts Creating a Contract

Physical Location Enter the physical location of the contract. For example, if you are creating
this contract based on an existing paper contract, enter the physical location of
the paper contract.
Related Contract ID If you have a related external contract (in your ERP system or other system),
enter that contract ID to create a cross reference.
Should the Related Contract ID be Specify whether to include the related contract ID as part of the
included as part of the system-generated ID for the contract.
system-generated Contract ID
Contact Select a contact name from the available choices, or click Search for more to
select a different name.
Contract Type Select the type of contract you want to create:
• Supplier level, which covers all products from a supplier.
• Commodity level, which covers all products identified by specific
commodity codes from a supplier.
• Item level, which covers specific items from a supplier.
Is Blanket Purchase Order Select Yes to create a blanket purchase order.
For more information about blanket purchase orders, see “Blanket Purchase
Orders” on page 10.
Hierarchical Type Select the hierarchical type for the contract:

• Standalone agreement, which is not part of a hierarchy.
• Master agreement, which is the top-most contract in a hierarchy.
• Subagreement, which is a contract associated with a parent contract in a
hierarchy.
Effective Date Select the date on which users can begin to issue release orders.
Expiration Date Select the final date on which release orders can be issued against the contract.
The expiration date is optional if you are creating an evergreen contract.
Evergreen Select Yes to create an evergreen contract (a contract that does not expire).
Select No to create a contract that does expire. If you select No, you need to set
the Expiration Date option above.
Supplier Select a supplier from the available choices, or click Search for more to select
a different supplier.
Supplier Location Click Select to choose a different location for the supplier you named.
Create subscription for For item-level contracts, specify whether you want to create a subscription for
non-catalog items non-catalog items.
Allow invoicing against contract Specify whether you want to be able to create invoices against the contract.
Only available if Ariba Invoice is installed on your system.
Apply pricing terms to non-catalog Specify whether you want to also apply the pricing terms to non-catalog items.
items (supplier- and
commodity-level contracts only)


Currency Select a currency from the available choices, or click Search for more to select
a different currency.
Include Subagreement Specify whether you want to allow accumulation to a parent contract.
Accumulators (master agreement
and subagreement hierarchical
types only)
2 When you have supplied all the necessary information, click Next to open to the Limits page.
Working with the Limits Page

Use the Limits page to enter information such as contract limits, notification parameters, the preload
amount, and forecasted spend.
 To specify the monetary limits, notification recipients, and any forecasting:


Minimum Commitment
Minimum Commitment Enter the minimum amount you are going to spend according to the contract.
Select a currency from the available choices, or click Other to select a different
currency.
If Amount Spent is Below Enter a percentage of the minimum commitment that you want to use as the
low threshold for sending notifications to your Contract Managers that the
minimum commitment has not yet been met.
Send Notification ___ days Enter the number of days prior to the contact’s expiration that you want to send
before contract expires notifications.


Maximum Limit
Maximum Limit Enter the maximum amount you are going to spend according to the contract.
currency.
Tolerance Enter a percentage of the maximum limit by which release orders can exceed
the contract limits.
Hard Maximum Limit Specify whether you want to enforce a hard maximum limit on the amount you
spend according to the contract. Enforcing a hard maximum limit means that
invoice exception tolerances are disregarded, and invoices that exceed the
contract limits are autorejected by default. This limit only applies to no-release
order contract if Ariba Invoice is installed.
Send notification when Amount Enter a percentage of the maximum limit that you want to use as a low
Available is at or below threshold for sending notifications to your Contract Managers.
Contract Compliance sends alerts that only the specified percentage of the
maximum commitment is available for release.
Item Limits
Item Limits Specify the quantity or amount for item limits.
Release Limits
Minimum Allowed per Enter the minimum amount allowed per release.
Release
currency.
Maximum Allowed per Release Enter the maximum amount allowed per release.
currency.
Release Limit Tolerance Enter a percentage by which each release can vary from the minimum and
maximum limits.
Scroll to see additional fields.

Additional Approvers List
Additional Approvers Select a user from the available choices, or click Search for more to select different
users.
Expiration Date Notification
Send notification ___ days Enter the number of days before the contract expires to send notifications.
before the contract expires
Re-notify every ___ days Enter the interval (in days) at which notifications are sent.
Notification List


Send notifications to Add additional users who will receive notifications about the contract (such as
contract open notifications, approaching contract limits, or unmet minimum
commitments). By default, the contract requester and all users with edit access to the
contract receive these notifications. Select a user from the available choices, or click
Search for more to select different users.
Preload Amount
Preload Amount Enter the amount by which you are preloading the contract.
currency.
Forecasted Spend
Total Amount Enter the total amount you anticipate to spend over the life of the contract.
currency.
Saving% Enter the percentage you expect to save by buying according to this contract.
Frequency Select the calendar increments of the contract by which you want to forecast. For
example, if this contract covers a year and you select “quarter” for this option, your
forecast is spread over 4 quarterly increments. Contract Compliance displays the
increments in the Items option.
Select a frequency from the available choices, or click Search for more to select a
different frequency.
Items View the Start and End dates for each calendar increment you selected under the
Frequency option, and view an equal division of the Total Amount over those
increments.
Use the calendar controls to change the date range for each increment.
Use the Amount column to enter a new amount for an increment. The total for all
increments must equal the total for the contract.
Select the check box for an increment, then click Delete to remove the increment.
Click Add to add an additional increment.
Click Balance to allocate an equal portion of the contract to each increment.
Click Validate to validate the total of the Amount column against the Total Amount of
the contract.
2 When you have supplied all the necessary information, click Next to open the Pricing Terms page.

Working with the Pricing Terms Page

Use the Pricing Terms page to define the pricing terms between your company and the supplier you specified
on the Definitions page. The options on this page vary depending upon the type of contract you are creating.
• “Supplier-Level Pricing Terms” on page 41
• “Commodity-Level Pricing Terms” on page 42
• “Item-Level Pricing Terms” on page 44
• “Defining Pricing Tiers” on page 49
• “Defining Term-Based Pricing” on page 52
• “Defining Term-Based Grid Pricing” on page 53
• “Defining Formula Pricing” on page 58
Supplier-Level Pricing Terms

If you are creating a supplier-level contract, the Pricing Terms page lists the name of the supplier and the
type of discount.
 To configure the Pricing Terms page for a supplier-level contract request:

1 Click the link in the Supplier column to see details about the supplier.
2 Click Edit to define the pricing terms.

Provide the following information:

Description
Full Description Enter a description of the pricing terms.
Additional Data View a read-only field that might or might not contain data.
Pricing and Discounts
None Select this option if there is no pricing discount according to this contract.
Discount Percent Select this option if there is a percent discount according to this contract, and
enter the percent discount (for example, 10%).
Tiered Pricing Select this option if you are specifying tiered pricing for this contract. For
more information, see “Tiered Pricing” on page 23.
Click Define Tiers to open the Tiered Pricing page. For information about
working with the Tiered Pricing page, see “Defining Pricing Tiers” on
page 49.
Term Based Pricing Select this option if you are specifying term-based pricing for this contract. For
more information, see “Term-Based Pricing” on page 26.
Click Define Terms to open the Term Based Pricing page. For information
about working with the Term Based Pricing page, see “Defining Term-Based
Pricing” on page 52.
Compound with applicable Specify whether you want to compound the child contract’s pricing terms with
parent’s pricing terms (child the parent’s.
agreements only)


Add Accumulators to Parent Specify whether you want to allow accumulation from a child contract.
Agreement (child agreements
only)
Accounting Accounting fields vary depending on your system’s integration and

configuration. Enter values for the fields available to you.
Item Category Select a category from the menu.
Account Assignment Select an account assignment from the menu.
Overall Limit (services only) Enter the maximum amount allowed for all services covered by this contract.
currency.
Expected Value (services only) Enter the maximum amount expected for all services covered by this contract.
currency.
Bill To Select a value from the available choices, or click Search for more, to select a
different value.
Different combinations of the Select a value from the available choices, or click Search for more, to select a
following options are displayed different value.
depending upon the value you set
for the Account Assignment
option above.
Asset Number
Cost Center
GL Account
Internal Order
Project/WBS
Split Accounting Click Split Accounting to spread the cost across multiple accounting groups.
Supply the necessary information for each group.
3 Click OK.
4 Click Next to open the Milestones page.
Commodity-Level Pricing Terms

If you are creating a commodity-level contract, the Pricing Terms page lets you add commodity codes.

 To configure the Pricing Terms page for a commodity-level contract request:

1 Click Add Items.

Description
Full Description Enter a description of the commodity.
Commodity Code Select a value from the available choices, or click Search for more, to select a
different value. Depending on your ERP integration, you may have to enter
additional fields, such as Material Group (SAP) or Partitioned Commodity
Code (PeopleSoft).
Limits
Minimum Amount Enter the minimum amount you are going to spend according to the contract.
currency.
Maximum Amount Enter the maximum amount you are going to spend according to the contract.
currency.
Tolerance Enter a percentage of the maximum limit by which release orders can exceed
the contract limits.
Receiving Required Specify whether receipts are required for items purchased according to this
(no-release-order contracts only) contract.
Discount Percent Select this option if there is a percent discount according to this contract.
Enter the percent discount (for example, 10%).
Click Define Tiers to open the Tiered Pricing page. For more information, see
“Defining Pricing Tiers” on page 49.
Click Define Terms to open the Term Based Pricing page. For more
information, see “Defining Term-Based Pricing” on page 52.
3 Click OK to return to the Pricing Terms page.

4 Click Edit for an item to edit the accounting information.
5 Click Next to open the Milestones page.

Item-Level Pricing Terms

If you are creating an item-level contract, the Pricing Terms page lets you add:
• Information about materials and services
• Information about fixed and recurring fees (no-release-contracts only)
• Information about costs and expenses (no-release-contracts only)
Note: If you are defining pricing terms for an item controlled by a category definition, you may see
additional fields on the pricing term pages that allow you to overwrite the values set by the category
definition. These new policy values are then used to validate the values you enter when placing a requisition.
 To configure pricing for materials and services from a catalog:

1 Under Materials and Services, click Add Items.
2 Search or browse your catalog to find the item for which you want to set pricing terms.
To add multiple items, click the check boxes for those items, then click Add Item at the top of the column.
• After you click Add Item, you remain on the same page of the catalog. Click Done to open the Pricing
Terms page and view the items you have added.
To add a single item, click Add Item for that item.
• After you click Add Item, the Add/Edit Item Level Pricing Terms page opens without the accounting
fields. Click Done to open the Pricing Terms page and view the items you have added.
3 On the Pricing Terms page, click Edit for an item to set its pricing terms.

Limits
Set Item Limits By Select Quantity or Amount to determine the method by which the next two
options are set.
Minimum Quantity/Amount For minimum quantity, enter the minimum number of items that must be
purchased according to the contract.
For minimum amount, enter the minimum amount you are going to spend
according to the contract.
currency.
Maximum Quantity/Amount For maximum quantity, enter the maximum number of items that can be
For maximum amount, enter the maximum amount that can be purchased
currency.
Tolerance Enter a percentage of the maximum quantity or amount by which you can
exceed the contract.
Receiving Required Specify whether receipts are required for items purchased according to this
(no-release-order contracts only) contract.


Discounted Price Select this option if there is a discount price according to this contract.
Enter the percent price.
currency.
Term Based Grid Pricing Select this option if you are specifying term-based grid pricing. For more
information, see “Term-Based Grid Pricing” on page 27.
Click Define Terms to open the Term Based Grid Pricing page. For more
information, see “Defining Term-Based Grid Pricing” on page 53.
Formula Pricing Select this option if you are specifying formula pricing. For more information,
see “Formula Pricing” on page 28.
Click Define Formula to open the Formula Pricing page. For more
information, see “Defining Formula Pricing” on page 58
Accounting Accounting fields vary depending on your system’s integration and

configuration. Enter values for the fields available to you.
Account Assignment Select an account assignment from the menu.
Account Type Select an account type from the menu.
Bill To Select a value from the available choices, or click Search for more, to select a
different value.


Different combinations of the Select a value from the available choices, or click Search for more, to select a
following options are displayed different value.
depending upon the value you set
for the Account Assignment
option above.
Asset Number
Cost Center
GL Account
Internal Order
Project/WBS
Split Accounting Click Split Accounting to spread the cost across multiple accounting groups.
Supply the necessary information for each group.
 To configure pricing for materials and services for a non-catalog item:

1 Click Create Item from the Catalog Home page.
If there is no catalog available for the supplier/vendor you specified on the Definitions page, click the
non-catalog link.

Full Description Enter a description of the item.
Commodity Code Select a commodity code from the available choices, or click Search for more
to select a different commodity code. Depending on your ERP integration, you
may have to enter additional fields, such as Material Group (SAP) or
Partitioned Commodity Code (PeopleSoft).
Supplier Click the link to see more information about the supplier.
Contact Click the link to see more information about the supplier contact.
Supplier Part Number Enter the Supplier Part Number for the item.
Supplier Auxiliary Part ID Enter the Supplier Auxiliary Part ID for the item.
Unit of Measure Select a unit of measure from the available choices, or click Search for more,
to select a different unit of measure.
Negotiated Price Enter the negotiated price for the item.
currency.
2 Click OK.

Provide the following information.

Description
The description options are the same ones you set in the previous step. You can edit them here if necessary.
Limits
Set Item Limits By Select Quantity or Amount to determine the method by which the next two
options are set.
Minimum Quantity/Amount For minimum quantity, enter the minimum number of items that must be
For minimum amount, enter the minimum amount you are going to spend
currency.
Maximum Quantity/Amount For maximum quantity, enter the maximum number of items that can be
For maximum amount, enter the maximum amount that can be purchased
currency.
Tolerance Enter a percentage of the maximum quantity or amount by which you can
exceed the contract.
Discounted Price Select this option if there is a discount price according to this contract.
Enter the percent price.
currency.


Term Based Grid Pricing Select this option if you are specifying term-based grid pricing. For more
information, see “Term-Based Grid Pricing” on page 27.
Click Define Terms to open the Term Based Grid Pricing page. For more
information, see “Defining Term-Based Grid Pricing” on page 53.
Formula Pricing Select this option if you are specifying formula pricing. For more information,
see “Formula Pricing” on page 28.
Click Define Formula to open the Formula Pricing page. For more
information, see “Defining Formula Pricing” on page 58
3 Click Add Additional Items to add more items. Repeat steps 2-3.
4 Click Done when you have finished adding items.
 To configure pricing for fixed and recurring fees:

1 Under Fixed and Recurring Fees, click Add Items.

Full Description Enter a description of the item or service.
Commodity Code Select a commodity code from the available choices, or click Search for more to
select a different commodity code. Depending on your ERP integration, you may
have to enter additional fields, such as Material Group (SAP) or Partitioned
Commodity Code (PeopleSoft).
Amount Enter the maximum amount that can be spent on the item or service over the life of
the contract.
Tolerance Enter a percentage of the amount by which you can exceed the contract.
Recurring Select Yes to create to create a contract for recurring fees.
Select No to create a contract for a one-time fee.
Frequency (recurring only) Select the frequency at which the item is delivered or the service rendered.
Billing Date Select the date on which the supplier can begin billing you for the item or service.
End Date (recurring only) Select the date after which you will no longer accept bills for the item or service
Maximum Recurrences View this read-only field. It is set according to the value of the Frequency option,
and the length of the contract. For example, if the frequency is monthly and the
contract is for one year, the value of this field is 12.
5 Click OK.

 To configure pricing for costs and expenses:

1 Under Costs and Expenses, click Add Items.

Description
Full Description Enter a description of the cost or expense.
Limits
Minimum Amount Enter the minimum amount you are going to spend according to the contract.
currency.
Maximum Amount Enter the maximum amount that can be purchased according to the contract.
currency.
Tolerance Enter a percentage of the maximum amount by which you can exceed the contract.
5 Click OK.
When you have finished configuring pricing, click Next to open the Milestones page.
Defining Pricing Tiers

Use the Tiered Pricing page to define tiered pricing for this contract. To access, click Define Tiers on the
Pricing Terms page. Tiered pricing allows you to specify different discounts based on the volume (either
amount or quantity) purchased against the contract.
For additional information, see “Tiered Pricing” on page 23.

The options available on this page change depending upon the type of contract you are creating. If the
contract permits only a single type of tiered pricing, the Type and Scope options do provide choices.
 To define pricing tiers:

1 Use the Type menu to select the type of tiered pricing you want to configure:
• Amount Based Volume Pricing provides a price discount based on the amount of money you spend.
• Amount Based Volume Discount provides a percentage discount based on the amount of money you spend.
• Quantity Based Volume Pricing provides a price discount based on the quantity you order.
• Quantity Based Volume Discount provides a percentage discount based on the quantity you order.
2 Use the Scope option to select the scope of the tiered pricing:
• Cumulative applies once you have met the minimum commitment of the contract.
Supplier-level and commodity-level contracts are always cumulative.

• Per Order applies to each release order.

3 Enter the appropriate information for each tier, based on the type of pricing you are using.
• For Amount Based Volume Pricing, enter the Minimum Amount spent, and the Amount per item at that
level of spending.
• For Amount Based Volume Discount, enter the Minimum Amount spent, and the Percent discount per
item at that level of spending.
• For Quantity Based Volume Pricing, enter the Minimum Quantity purchased, and the Amount per item at
that quantity.

• For Quantity Based Volume Discount pricing, enter the Minimum Quantity purchased, and the Percent
discount at that quantity.
4 Click Add to add additional tiers.

5 When you have configured all tiers, click OK.
6 Click OK again to return to the Pricing Terms page, then click Next to open the Milestones page.
Defining Term-Based Pricing

Use the Term Based Pricing page to define term-based pricing for this contract. To access, click Define Terms
on the Pricing Terms page. Term-based pricing allows you to specify different discounts based on specified
time periods within the life of the contract.
For additional information, see “Term-Based Pricing” on page 26.
The options available on this page change depending upon the type of contract you are creating. If the
contract permits only a single type of term-based pricing, the Type option does not provide choices.
 To define term-based pricing:

1 Use the Type menu to select the type of term pricing you want to configure:
• Term Based Discount provides a percentage discount based on the time periods you specify.
• Term Based Pricing provides a price discount based on the time periods you specify.
2 Enter the appropriate information for each period, based on the type of pricing you are using.
• For Term Based Discount, set the Start Date on which the discount begins (enter a date or click the
Calendar and select a date), and enter the Percent by which purchases are discounted.

• For Term Based Pricing, set the Start Date on which the price begins (enter a date or click the Calendar
and select a date), and enter the Amount per item for that period.
3 Click Add to add additional tiers.
4 Click Validate to ensure the terms are complete and valid to calculate the item's price.
5 When you have configured all terms, click OK.
6 Click OK again to return to the Pricing Terms page, then click Next to open the Milestones page.
Defining Term-Based Grid Pricing

Use the Term Based Grid Pricing page to define term-based grid pricing for this contract. Term-based grid
pricing allows you to specify the price for an item over time, based on attributes of that item, and values for
those attributes.
Term-based grid pricing is valid only for no-release, item-level contracts, and for partial items whose
attributes have string values.
For additional information, see “Term-Based Grid Pricing” on page 27.
The options on this page change according to the type of item for which you are defining pricing (for
example, IT Services vs. Airport Locations), but the paradigm is the same for all items
.

Working With Terms

Terms define the time periods for which pricing is in effect. A term begins at 00:00:00 AM (midnight) on its
start date, and ends at 11:59:59 PM on the day preceding the next term. For example, if you have terms
beginning on January 1 and April 1, the first term begins at 00:00:00 AM on January 1 and ends at 11:59:59
PM on March 31.
A contract has one default term starting on the effective date of the contract. Each term is identified by its
start date.
You can add new terms, delete existing terms, and make copies of existing terms. When you make a copy of
a term, all of the cell values (pricing for item attributes) for the term are copied to the new term. For more
information about cell values, see “Working with Cell Values” on page 55.
Note: Once a contract request has been fully approved, you can no longer delete terms from the resulting
contract. You can, however, export the contract to Excel, delete terms from the Excel version of the contract,
and then import that version of the contract. The danger of deleting terms in this fashion is that you lose all
the spend data associated with the deleted terms once the new version of the contract is in effect. It is not
recommended that you delete terms from a contract that has been approved. You cannot delete terms from a
contract that has been published.
 To add a term:
1 Click Add Term.
2 Click the calendar control to select a start date.
3 Click OK.
 To delete a term:
1 Click Delete Term.
2 Click the check box for each term you want to delete.
3 Click OK.
 To copy a term:
1 Click Copy Term.
Note: The Copy From field defaults to the latest term.
2 Click Select Term to set the value for the Copy From field.
3 Click the radio button for the term you want to copy, then click OK.
4 Set the value of the Copy To field. Use the calendar control to select the start date of the new term.

5 Click OK.
The new term is displayed in the appropriate chronological position.
Working with Cell Values

A cell defines the pricing for an item attribute for a specific term. For example, an item like IT Help Desk
Services might have attributes like networking and security expert. The attributes represent rows on the grid,
while terms represent columns. Cells occur at the intersection of attributes and terms.
You edit the cell values to determine pricing.

 To edit cell values:

1 Click the link for the cell whose values you want to edit.

Price Enter the price for the item attribute for this term.
For example, this might be the price per hour for a particular type of temporary
labor or the rent per square foot for an airport location.
Click the link to select a currency.
Max. Quantity Enter the maximum number of units for which you will pay during this term.
For example, this might be the maximum number of hours of temp labor or the
maximum number of square feet of airport real estate.
Max. Amount Enter the maximum amount you will spend for this item attribute during this
term.
For example, the maximum amount you will spend for a security expert or for
rent for a ticket gate.
Amount Spent This field is read only, and indicates the amount spent so far.
Used Quantity This field is read only, and indicates the quantity used so far.
3 Click OK.
Note: If you plan to export to Excel a contract that contains term-based grid pricing, you must define
values for all the cells in the grid. If you export cells with no values, for example Price cells, the currency
information is not exported. If you then import an Excel version of that contract without currency
information, the system may assign a currency (for example, the default site currency) which may not be
what you expect.
Editing the Grid

You can edit the cell values for one or more item attributes and one or more terms by using the Edit Grid
command.
When you edit the grid, you specify the terms across which your changes are effective.
If you want to restrict your changes to smaller date ranges than are currently defined in the grid, you need to
add new terms.
If you select multiple item attributes, the same changes are applied to all of them.

 To use the Edit Grid command:

1 Click the check box for one or more item attributes, or click the check box for the attribute column head
to select all attributes.
2 Click Edit Grid.

From Term Click Select Term to select the first term in which you want your changes to
take effect.
To Term Click Select Term to select the last term in which you want your changes to
take effect.
Price Enter the price for all selected item attributes for the time range you have
specified.


Max. Quantity Enter the maximum number of units of all selected item attributes for the time
range you have specified.
Max. Amount Enter the maximum amount you will spend for all selected item attributes for
the time range you have specified.
When you are editing the grid by this method, you need to enter values for the Price, Max. Quantity, and
Max. Amount fields. If you enter a value for only one field, then the other two fields are set to a null value
for all affected attributes.
4 Click OK.
Paging Through the Grid

If your grid contains more terms than can be displayed at one time, you can use the view control to page
through the terms to see the ones you want.
 To page through the grid:

• Click Start to page to the first term in the grid.
• Click End to page to the last term in the grid.
• Click the single arrows to page one term at a time.
• Click the double arrows to page six terms at a time.
• Click the calendar control to select a date. The grid then displays a maximum of three terms prior to that
date and three terms after that date.
Defining Formula Pricing

Formula pricing is available when a partial item is added to your contract request.

Use the Formula Pricing page to define formula pricing for this contract.
Formula pricing allows you to specify a price based on a mathematical formula. Contract Compliance
supports different types of formula pricing, including Matrix and Multiplier pricing.
The Formula Pricing page has three areas that you can use in conjunction with one another to define the
pricing formula you want to use for an item:
• Create and Validate Pricing Formula, where you combine item attributes and arithmetic operators.
• Add Attributes to Formula, where you can edit and select the attributes you want to add to a formula.
• Define Values for Item Attributes, where you can define values for item attributes and create matrixes.
For additional information, see “Formula Pricing” on page 28.

The following examples use the catalog item Men’s TShirt:

• “Creating a Simple Formula” on page 60
• “Creating a Pricing Matrix” on page 61
• “Creating Multiplier Pricing” on page 65
Creating a Simple Formula

In this example, you create a simple formula of BasePrice * Quantity.
 To create a simple formula:

1 Under Add Attributes to Formula, click Add to formula for the first attribute.
2 In the Create and Validate Pricing Formula area, click the arithmetic operator you want to add to the
formula.

3 In the Add Attributes to Formula area, click Add to formula for the second attribute.
4 Click Validate to validate the formula.

If errors occur during validation, an error message displays. Correct the errors and validate the formula.
Creating a Pricing Matrix

In this example, you create a formula attribute that specifies a base price of $15.00 for a medium shirt, and a
price of $20.00 for a large shirt. That attribute is then incorporated into the formula, wherein the price of the
item is determined by quantity and size.
 To create a pricing matrix:

1 Under Define Values for Item Attributes, select two values (in this example, color and size).

2 Click Create Matrix.
For... Do this...
Formula Attribute Name Accept the default name, or enter a new name for the formula attribute.
The name must:
• Begin with an alphabetic character
• Contain only alphanumeric characters
• Use an underscore (_) to separate word pairs
Value fields Enter the values you want to use for the attributes.
In this example, 15 is used for values in the Medium column, and 20 is used for
values in the Large column.
4 Click OK.
The new attribute is added to the attributes list.

5 Click Add to formula for Quantity.
6 Click the multiplication operator (*)to add it to the formula.

7 Click Add to formula for the new attribute (in this example, color_size).
8 Click OK.
The new formula is displayed under Pricing and Discounts.

In this example, the price for the line item is calculated as follows:
quantity of shirts ordered x price per size
For example, a purchase order made under the terms of this contract for 100 medium shirts (100 x 15 =
$1500) and 100 large shirts (100 x 20 = $2000) would have an amount of $3500.
Creating Multiplier Pricing

In this example, you create a formula that specifies the multipliers you want to use against the base price:
BasePrice * 1 for medium shirts, and BasePrice * 1.5 for large shirts.
 To create multiplier pricing:

1 Under Define Values for Item Attributes, click Define values for an appropriate attribute (in this example,
size).
For... Do this...
Formula Attribute Name Accept the default name, or enter a new name for the formula attribute.
The name must:
• Begin with an alphabetic character
• Contain only alphanumeric characters
• Use an underscore (_) to separate word pairs
Value fields Enter the values you want to use for the attributes.
In this example, 1 is used for values in the Medium row, and 1.5 is used for values
in the Large row.
3 Click OK.

The new attribute is added to the attributes list.
4 Click Add to formula for Quantity.

Click the multiplication operator (*), then click the left parenthesis operator ( ( ).
Click Add to formula for BasePrice, then click Add to formula for size.
Click the right parenthesis operator ( ) ).

5 Click OK.
The new formula is displayed under Pricing and Discounts.

In this example, the price for the line item is calculated as follows:
quantity of shirts x (the base price x the price per size)
For example, a purchase order made under the terms of this contract for 100 medium shirts (100 x (15 x 1)
= 1500) and 100 large shirts (100 x (15 x 1.5) = $2250) would have an amount of $3750.
Working with the Milestones Page

Use the Milestones page to add milestones to your contract. A milestone is a set of conditions that must be
met by the supplier to satisfy the terms of the contract. The successful completion of a milestone typically
results in a partial payment to the supplier.
 To create a milestone:
1 Click Add Items.

Title Enter a title for the milestone.
Full Description Enter a description of the terms of the milestone.
Amount Enter the amount to be paid upon completion of the milestone.
Tolerance Enter a percentage by which the contract can exceed the amount specified above.
Completion Due Date Select the date on which you expect the milestone to be completed.


Supplier Contact Enter the name of your contact person in the supplier organization.
Verifier Select a person who is responsible for seeing that the terms of the milestone have
been met.
Select a name from the available options, or click Search for more to select a
different name.
Days Before Milestone Is Due Enter the number of days before the milestone completion due date when the
verifier should be notified.
3 Click OK.
4 When you have defined all the milestones for your contract, click Next to open the Access Control page.
Working with the Access Control Page

Use the Access Control page to identify the users who can edit the contract and create release orders against
the contract. You can also specify if a contract is a global contract with release access from all partitions, or
if funds can only be released against the contract from the partition where it was created.
By default, the person creating the contract has edit access.
By default, release access is not restricted.
 To identify users who can edit the contract:

1 Under Edit Access, click [select].
2 Click the check box for each user you want to add, then click Done.
3 To remove a user from the list, click [select] after the list of names.
4 Clear the check box for that user in the Currently Selected list, then click Done.
 To define a global contract:
Under Release Access, set Release Access from: to All Partitions (Global Contract).
 To restrict which users can create release orders against the contract:
Note: This option is available only for release-required contracts.
1 Click the check box for Restrict Release Access.

You can restrict release access by:
Criteria Who has release access

Name Each individual user you select has release access.
Group Each member of the group you select has release access.
Supervisor Each user who reports to the supervisor you select has release access.
GL Business Unit (PeopleSoft) Each user who belongs to the business unit you select has release access.

Criteria Who has release access

Project (PeopleSoft) Each user who belongs to the project you select has release access.
Project/WBS (SAP)
Ship To Address (PeopleSoft) Each user assigned to the Ship-To Address you select has release access.
Cost Center (Generic, SAP) Each user assigned to the cost center you select has release access.
A user who is identified by any of these criteria has release access.

The method of selection is the same for all criteria.
2 Click [select] after the criterion by which you want to restrict users.
3 Click the check box for each user (group, supervisor, or business unit) you want to add, then click Done.

4 To remove a user from the list, click [select] for that criterion.
5 Clear the check box for that user (group, supervisor, or business unit) in the Currently Selected list, then
click Done.
When you have identified the users who have edit and release access, click Next to open the Payment Terms
page.
Working with the Payment Terms Page

Use the Payment Terms page to specify when a supplier must be paid, and any discounts that apply.
 To configure payment terms:

1 To change the current payment terms, click Change Payment Terms.
2 Click Select for the payment term you want to use.

3 To remove all payment terms from the contract, click Remove Payment Terms.
When you have configured payment terms, click Next to open the Appendixes page.
Working with the Appendixes Page

Use the Appendixes page to include a separate file as part of the contract. An appendix can be useful to
amplify aspects of the contract that cannot be easily defined in the contract wizard.
You can link an appendix to specific line items within the contract (for example, the pricing terms).
 To add an appendix to the contract:

1 Click Add Appendix.
2 Click Browse to locate the appendix file on your computer.
3 For Appendix Description, enter a brief description of the appendix.
4 Under Referenced By, click the check box for each line item in the contract that references the appendix.

Chapter 2 Creating and Managing Contracts Uploading an Excel Version of a Contract
5 Click OK.
To delete an appendix, select its check box, then click Delete.
To edit an appendix, click its Edit button.
6 Click Next to open the Summary page.
Working with the Summary Page

The Summary page contains all the contract properties you configured on the previous seven pages.
You can scroll down the Summary tab to see additional properties, or click any of the other tabs to see those
properties. You can modify any property from the summary page.
When you are satisfied that you have properly configured the contract, click Submit.
Uploading an Excel Version of a Contract

If you have a contract defined in the format of an Excel spreadsheet, you can upload it to Contract
Compliance.
Note: Importing of contracts with two-dimensional matrix formula pricing is not supported.
 To upload an Excel version of a contract:

1 In the Common Actions area Panel, click Create > Contract Request.
2 Under What would you like to create?, click Upload Contract Request.
3 Click Browse to locate the file. Once you have identified the path to the file, click OK.
The imported contract is displayed on the Summary page of the contract wizard.
4 Make any necessary modifications using the contract wizard, then return to the Summary page.
5 Click Submit.
Exporting Contracts
Exporting a contract is a good method of creating an Excel template. When you import an Excel version of a
contract, it is necessary to have everything formatted properly, for example, you must have the correct
column names and have them in the correct order. When you export a contract that you have configured
within Contract Compliance, you are assured of proper formatting.
You can export a contract to an Excel spreadsheet after you have submitted the contract request, or, if you
are an approver, you can export a contract when approving the contract request.
Note: Exporting of contracts with two-dimensional matrix formula pricing is not supported.

Managing Contracts Chapter 2 Creating and Managing Contracts
 To export a submitted contract:

1 In your My Documents portlet, click ID link for the contract.
2 Click Excel Export.
3 Click Open to open an Excel version of the contract in your browser.

You can, if you wish, make changes to the Excel version of the contract, and then save the file. You have
to upload that saved version of the contract if you want to implement those changes. For more
information, see “Uploading an Excel Version of a Contract” on page 71.
Click Save to save an Excel version of the contract in its current form.
 To export a contract during approval:

1 n your To Do portlet, click the Approve link for a contract request.
2 Click Excel Export.
3 Click Open to open an Excel version of the contract in your browser.

You can, if you wish, make changes to the Excel version of the contract, and then save the file. You have
to upload that saved version of the contract if you want to implement those changes. For more
information, see “Uploading an Excel Version of a Contract” on page 71.
Click Save to save an Excel version of the contract in its current form.
Managing Contracts
From the Contract Compliance home page you can view all the contracts you have created, and all the
contracts you have permission to edit. You can view the details of those contracts, and make changes to the
contract properties, as well as change and cancel the purchase orders associated with those contracts.
 To manage contracts:
1 In the Common Actions area, click Manage > Contracts.
You are presented with a list of the contracts that you have created, and those that you are allowed to edit.
The arrow icon next to a contract indicates that it is the parent to other contracts. You can expand and
collapse a hierarchy of contracts at each parent level.
2 Click the contract ID to view details of the contract or make changes to the contract.
The Summary, Pricing Terms, Milestones, and Approval Flow tabs have the same information as the
corresponding pages in the contract wizard. The Orders tab lists the orders associated with the contract.
The History tab lists all actions taken against the contract. The Subagreements tab lists all child contracts
of the current contract.
3 To edit the contract, click Change.
The contract opens on the Summary page of the contract wizard. You can make any necessary changes,
and then resubmit the contract.
Note: If you modify the contract’s expiration to an evergreen contract, the original contract’s expiration
date is retained, and users may still get notifications based on that original expiration date. Ensure you
remove the expiration date to avoid unnecessary notifications.
4 To close the contract, click Close Contract.

Chapter 2 Creating and Managing Contracts Copying a Contract
5 Enter your comments, then click OK.
6 To edit an order associated with the contract, click the Orders tab.
7 Click the check box for an order, then:

• Click Change Order to make changes to the order.
• Click Cancel Order to cancel the order.
For more information about changing and canceling orders, see “About the Change and Cancel Order
Processes” on page 76.
Copying a Contract
You can copy an existing contract in order to take advantage of having the bulk of the contract already
configured.
 To copy a contract:
1 Locate the contract in your My Documents portlet.
2 Click the ID link for the contract.
3 Click Copy.
4 Make any necessary changes to the contract, then submit it for approval.
Note: If you change the supplier, the pricing terms for the contract are lost as they are supplier dependent. If
you change the supplier, you need to set new pricing terms.
Creating a Contract Workspace in Ariba Contract

Management
If you install Ariba Contract Management after you have created contracts in Contract Compliance, you
have two options for managing those existing contracts:
• Continue to manage those contracts within Contract Compliance
• Create a contract workspace in Ariba Contract Management for each contract and manage the contracts
thereafter in Contract Management
Note: You must create all new contracts in Ariba Contract Management after you have Contract
Management installed. (If Contract Compliance is not integrated with Ariba Contract Management, you can
still create new contracts using Contract Compliance.)
 To create an Ariba Contract Management workspace from an existing contract:

1 On the CR page of a CR in the Composing status, click Create Contract Workspace to create a new contract
workspace. Or, you can click Add to Contract Workspace to browse existing contract workspaces to which to
add contract terms. You can add contract terms to contract workspaces that are not published and do not
already have contract terms.
2 Create the contract workspace as directed in the Ariba Contract Process Management Guide. The
supplier, effective date, and expiration date are carried over from the CR to the contract workspace.

Creating a Contract Workspace in Ariba Contract Management Chapter 2 Creating and Managing Contracts
3 In the Documents tab of the contract workspace, you will see a Contract Terms document with this icon:
This document is actually a link to Ariba Contract Compliance. Click the icon and you will return to the
original CR in Ariba Contract Compliance.
When you work on the CR after it has an associated contract workspace, you will notice a Contract
Workspace button; click it to access the contract workspace in Ariba Contract Management.
Considerations When Using Contract Compliance with Ariba Contract

Management
• If Contract Compliance is integrated with Ariba Contract Management, you cannot create new contracts
using Contract Compliance. Instead, you must create new contracts by first creating a contract workspace
in Ariba Contract Management. In addition, you cannot import contracts using the Contract Compliance
ImportContracts data import task.
For more information about using Ariba Contract Management, see the Ariba Contract Process
Management Guide.
• After you create an Ariba Contract Management contract workspace for an existing contract, you must do
all future work on that contract in Ariba Contract Management.
• Contracts that have a contract workspace associated with them are listed in Contract Compliance with a
“CW” at the beginning of their identifier. For example, CW22211.
• Ariba Contract Management uses calendar dates in contracts. These dates are not time zone-specific.
Contract Compliance uses actual dates, which have a time zone associated with them. Note that due to
this time zone difference, dates in contracts can have different interpretations depending on in which
application the contract date is specified.
• When a contract workspace is closed in Ariba Contract Management, the corresponding contract is closed
in Contract Compliance.
• When a contract workspace is amended in Ariba Contract Management, a new version of the
corresponding contract is created in Contract Compliance with the status Open.
• An error can occur when you attempt to use Microsoft Excel export during the integration of Ariba
Contract Management and Contract Compliance and are using a locale that is not supported in Contract
Compliance. To correct the error and use Microsoft Excel export during the integration, change the user
locale in the Contract Management environment to a locale that is supported in the Contract Compliance
environment.

Chapter 3 Reporting
• “About Reports” on page 75

• “Running Reports” on page 75
About Reports
You can run reports to analyze contract usage and report on contract details. Before you run a report, you can
specify filters and display options to better focus the report results.
Report results can be displayed in Excel, HTML, or CSV format. Some reports allow you to display the
results as a bar graph or pie chart when you select to view your output in HTML. Whenever possible, values
are calculated using historical conversion rates; otherwise, current conversion rates are used. If your
company has also enabled euro-equivalent reporting, multiple columns of currency data appear.
Running Reports
 To run a report:
1 In the Common Actions panel, click Manage > Reports. If you have previously saved report queries, the
Saved Reports page displays a list of saved reports you can run from this page. Click New Report to create
a new report using the Report wizard, or Run to run a previously saved report.
If there are no saved reports available, the Report wizard is displayed immediately when you click the
Reports link in the Common Actions panel.
2 On the Reports page, select the Contracts report category.
3 Click Select Report in the Report wizard, or Next on the Report page to display the report selection page.

Running Reports Chapter 3 Reporting
4 Select the report you want to run and click Run Report in the Report wizard, or Next on the Report page:
5 Select the report output format from the Report Format drop down list. Some reports may provide an
option to also select a display chart when you select HTML as the report format.
6 On the Basic tab, enter your report filter values to limit the output, if required. If you don’t limit your
report selection, all records will be included in your report.
7 If you want to control the information that is displayed in your report, click on the Advanced tab to deselect
the default display values. For example, on the Contract Summary and Renewal report, you may only be
interested in the amount ordered and percent amount ordered left, and not the received or reconciled
amount.
8 Click:

Chapter 3 Reporting Running Reports
• Run to run your report and view the report results;

• Save to save your report query to your Saved Reports. The saved report now displays in your Saved
Reports page every time to click the Reports link in the Common Action panel.

Running Reports Chapter 3 Reporting

Glossary
active approver
The user who must currently take action on a request. Most requests require approval by one or more
approvers. There can be more than one active approver at a time.
approvable
Any document type that may require approval based on approval rules so that the request can be processed.
cannot resolve
Contract Compliance requires that you take an action on each exception before submitting an invoice
reconciliation document. By marking the exception with Cannot Resolve, you are taking an action by saying
you cannot resolve the exception. When you refer an item, the responsibility for reconciling that item is
transferred to the selected user.
catalog kit
Catalog items in the Contract Compliance product catalog that are bundled together into one unit. Catalog
kits contain associated or related items from the same or different suppliers. When ordering from the product
catalog, users order the catalog kits as one item, but can also view and delete non-required individual items
from a catalog kit before ordering. Each catalog kit is assigned its own ID, description, and supplier part #
because the kit itself is an individual item in the product catalog.
change order, cancel order

After an order has been placed, the user can make changes or revisions to that order. A correction to an
existing order creates a change order. Canceling an existing order creates a cancel order. A change or cancel
order is a new version of the requisition and the associated purchase orders that were impacted.
contract
A legal document that allows a buying organization to establish a commitment with a supplier to purchase
goods or services repeatedly over time. Contracts can be specific or open-ended.
contract request (CR)

A request to create a contract. The contract is created when the request is fully approved.
dynamic discounts
An early payment agreement between buying organizations and suppliers, in which the buyer accepts earlier
payment dates if the supplier offers discounts on their goods or services.

Glossary
Enterprise Resource Planning (ERP) systems

Enterprise Resource Planning (ERP) systems, such as PeopleSoft, are used to integrate finance and human
resources departments, and enable manufacturing groups to handle transactions such as order processing and
production scheduling. Ariba applications interface with these ERP systems, leverage the Internet and
corporate intranets, and empower companies to manage their operating resource-related spending. ERP
systems are often listed as partitions after you log in to your system.
groups
Group membership enables users to perform specific tasks in the end-user and Ariba Administrator
interfaces. For example, only users belonging to the Purchasing User group can create requisitions. Contract
Compliance also uses groups in the approval flow of approvable documents.
A group that is assigned to another group is called a child group. A child group inherits all the privileges of
its “parent” group.
header exception
The highest matching level on an invoice reconciliation document. When Contract Compliance first tries to
reconcile an invoice automatically, it does so by following a set of validation rules. The default configuration
of these rules tell Contract Compliance to check first for a matching purchase order in Contract Compliance.
If a matching purchase order cannot be found, Contract Compliance creates an invoice reconciliation
document and list an unmatched invoice exception at the header level.
header-level tax
A tax line item that applies to an entire invoice as a whole, instead of an individual invoice line item. An
invoice can contain more than one header level tax line if the tax details on a header level tax are from more
than one tax category. Each tax category in a header level tax results in a separate header level tax line on the
invoice.
invoice exception
A discrepancy between an invoice reconciliation document and its associated orders, contracts, or receipts.
Contract Compliance checks for certain information first, before it checks for other details. For example, if a
matching purchase order is not found, an Unmatched Invoice exception is listed. Once this exception is
resolved by matching a purchase order manually, Contract Compliance re-runs the validation check and
other exceptions can arise, such as Quantity Variance and Price Variance. Therefore, the exceptions listed on
an invoice reconciliation document might change as you resolve existing exceptions.
invoice reconciliation document

An approvable document created when an invoice is loaded into Contract Compliance. The invoice
reconciliation document is matched to purchase orders (or contracts) and receipts and is used to reconcile
and approve any exceptions.

Glossary
line item exception

If Contract Compliance finds a matching purchase order for an invoice, it tries to match each line item in the
invoice to a line item in the purchase order. If discrepancies are found, Contract Compliance creates an
invoice reconciliation document and lists the invoice exceptions at this level as line item exceptions.
manual match
When reconciling invoice exceptions, match an invoice line item to either a charge category or to a line item
on a purchase order. Once a line item is matched, the exception is considered reconciled unless another
exception is generated by the match. Contract Compliance also allows you to unmatch a line item from a
purchase order line item or charge category it was previously matched to.
mass edit
Edit multiple line items on a requisition, expense report, or invoice reconciliation document at one time.
Mass edit is useful when you need to make the same change (such as specifying a different billing address
on a requisition or changing the cost center on an expense report) to multiple line items.
on behalf of
Any user can submit a request on behalf of any other user. When a preparer submits a request on behalf of a
requester, Contract Compliance:
• Adds the requester to the approval flow as a watcher.
• Uses the requester’s personal profile to determine the delivery and accounting information for the request.
• Sends notifications about the request to the preparer, not the requester.
parametric data
Parametric data may be included in your company catalog for certain types of items. When you select the
search option called Type Name, when parametric types exist in the catalog, they are listed in the Type Name
pull-down menu. When you select a parametric type, the associated refinement fields appear and can be used
for additional searches.
partial item
A catalog item imported into Contract Compliance with some fields missing. You can search for and order
these items from the Contract Compliance product catalog. When you order a partial item (add the item to
the shopping cart), you are prompted to fill out the required missing fields, turning the partially-specified
item into a fully-specified catalog item. A catalog file can contain both fully-specified and partially-specified
items.

Glossary
payment method
A payment method defines how a customer should make a payment to a supplier. Typical payment methods
include paper check, purchasing cards (PCard), and electronic fund transfer (EFT), such as Automatic
Clearing House (ACH), SWIFT, or Wire. Each payment method has associated bank information; for
example, ACH requires an American Banking Association (ABA) routing number.
See also payment term.
payment model
A payment model defines where the payments are scheduled.If your site, supplier or the supplier location is
configured for payment through the Ariba SN payment model, payment scheduling is done in Contract
Compliance and payment settlement through Ariba SN. If your site, supplier or supplier location is
configured for payment through an external system, then the scheduling happens in your external system,
and the settlement can be either through Ariba SN or the external system.
payment request
An approvable document created when an invoice reconciliation document is created. If Contract
Compliance is enabled, the payment request includes a payment schedule based on the default payment
terms and payment methods for the supplier. Payment requests are used to track and process payments to
suppliers.
payment terms
A payment term is a standard pre-negotiated agreement between a customer and a supplier that specifies the
number of days within which the customer must pay the supplier’s invoice. Many suppliers also offer
discounts for early payment. Most payment terms are standardized across a company.
payment transaction (PMT)

A set of scheduled payment requests consolidated into one payment transaction (PMT) document, based on
supplier location and payment method, or other criteria as specified by your company. Payment transactions
are also used to capture remittance details.
preferred supplier
A supplier with whom your company has a contract. Preferred suppliers are based on contracts on the
supplier-level, the commodity-level, or the item-level. When you are choosing a supplier in Contract
Compliance, if your company has a contract with a supplier, the supplier is marked with:
• Contracted Supplier if the supplier has a supplier-level contract with your company.
• Contracted For This Commodity if the supplier has a commodity-level or item-level contract that includes the
current commodity.
• Contracted For Other Commodities if the supplier has a commodity-level or item-level contract that does not
include the current commodity. (The contracted items are outside of the current commodity.)

Glossary
preparer
A user who creates and submits a request. By default, the preparer is the user logged in to Contract
Compliance when the request is created. If you create a request on behalf of another user, you are the
preparer and the other user is the requester.
See also requester.
prorated header tax

When an invoice contains its taxes at the header level, the header level tax must be split among the invoice’s
line items. Contract Compliance prorates the header level tax amount, determining the tax amount for each
line item.
requester
The user for whom a request has been created and submitted by another user, who is known as the preparer.
The requester takes delivery of any items ordered and is charged for them.
See also preparer.
Supplier Invoice #
The identification number on an invoice entered into Contract Compliance. If employees from the buying
organization are entering invoices, they usually receive paper invoices from the supplier which contain an
invoice number—this is the number that should be entered into Contract Compliance when creating the
invoice. If employees from the supplying organization are entering invoices, they should enter their
company’s invoice number when creating an invoice in Contract Compliance.
validation errors
If a line item contains invalid information, a validation error occurs. The errors are listed on the invoice
reconciliation document along with any exceptions.
Only users authorized to edit the validation errors can see them on the invoice reconciliation document.
These users must resolve the errors by editing the line item information before the invoice reconciliation
document can be submitted. By default, Contract Compliance allows authorized users to edit validation
errors. Other reconcilers and approvers in the approval flow without the authorization do not see the
validation errors.
Value Added Tax (VAT)

A general consumption tax assessed on the value added to goods and services at each stage in the production
and distribution chain. In those countries that impose VAT, many business expenses include a VAT and
reclaiming this tax is a critical component of expense management. Travel and Expense can be configured to
capture VAT amounts on expense reports.

Glossary
watcher
A user included in the approval flow for a request, and who can receive notification messages related to the
request, but who is not required to approve or deny the request. For example, an IS administrator might be
included as a watcher on all requests for new computers, to help plan in advance the workload required to
install the computers.
webinfo
When viewing catalog items, the webinfo? (icon) appears beside the catalog item price to indicate that more
information is available from the manufacturer’s web site. Click to display information from the web site.
wildcard
No special wildcard characters are necessary. Wildcard searching happens automatically in the following
ways:
• For text search fields (such as keyword, exact phrase, and exclude word), automatic wildcard searching
happens at the end of the word. When you enter a minimum of three consecutive characters, the search
retrieves items that begin with the characters in the order entered. For example:
• Enter batter to retrieve battery and batteries.
• Enter manag to retrieve management, manager, and managing.
• Automatic wildcard searching does not happen at the beginning of a text field. That is, if you enter
attery you will not retrieve battery.
• For other fields (such as supplier part number and manufacturer part number), automatic wildcard
searching happens at the beginning and end of the string. When you enter a minimum of three consecutive
alphanumeric characters, the search retrieves all part numbers that contain the alphanumeric characters in
the order entered. For example:
• Enter 343555 to retrieve 343555, 3343555, 3435556, and an infinite number of items containing
343555.
• This will not retrieve 343, 355, or 555 because only part numbers containing the entire sequence of
search numbers will match.
• You cannot search for numbers such as 35 because a minimum of three consecutive alphanumeric
characters are required.
Notes:
• By default, you must enter a minimum of three consecutive characters, but your company can set a
different minimum. See your system administrator for more information.
• To find a single part number, enter the part number in quotes. For example: “123-456”.
• A trailing “s” is omitted from wildcard text searches that contain at least 4 characters. For example: a
search for pencils would retrieve number 5 pencil.
• Punctuation marks such as dashes, quotes, percent signs, asterisks, and parentheses are disregarded unless
they are part of a search string that you enter in quotation marks.

Index
A pricing for materials and services for a non-catalog

access control item 46
in contracts 30 pricing for materials and services from a catalog 44
to edit contracts 30 the pricing terms page for a supplier level contract
Access Control page 68–70 request 41
accounting information, defaults configuring pricing for fixed and recurring fees 48
validating accounting information 18 contract spend, accumulation 13
accumulation of contract spend 13 contract workspace in Ariba Contract Management,
accumulators creating 73
about 31 contract-invoice exception types 34
item and commodity pricing term 32 contracts
overall contract 31 access control 30
when invoiced and received amounts are applied 33 Access Control page 68–70
active approver 79 accumulators, overall 31
adding advanced pricing 23–30
appendixes to the contract 70 amount-based volume pricing 24
terms 54 amount-based volume-discount pricing 24
advanced pricing 23–30 Appendixes page 70
amount-based volume pricing 24 autoreceive rules 31
amount-based volume-discount pricing 24 commodity level 9
appendix to the contract 70 commodity limits 20
Appendixes page 70 commodity-level pricing terms 42
approvers compound pricing 14
active 79 contract wizard, pages overview 35
Ariba Contract Management, contract workspace copying 73
creation 73 cost and expenses limits 21
autoreceive rules on contracts 31 creating 35–71
Definitions Page 36
direct invoicing 18
B direct receiving 18
discount pricing 23
blanket purchase orders
edit access 30
about 10
editing 72
effective dates 19
C evergreen 19
expiration dates 19
category items, pricing terms 44 expiration notification 20
cell values exporting to Excel 71
editing 56 fixed and recurring fee limits 21
working with 55–58 forecasting spend limits 22
commodity and item pricing term accumulators. See formula pricing 28
item and commodity pricing term accumulators formula pricing, defining 58–67
commodity limits in contracts 20 formula pricing, simple formula 60
commodity-level contracts 9 hierarchical relationships 12
commodity-level pricing terms 42 hierarchies 12
compound pricing 14 invoice exceptions types 34
configuring item level 9
payment terms 70 item-level pricing terms 44–49
pricing for costs and expenses 49 limits 19–22

Index
Limits Page 38 copying

managing 72 terms 54
Master Agreement 12 copying contracts 73
materials and services limits 20 costs and expenses
matrix pricing 29 item limits in contracts 21
maximum amount 21 pricing for, configuring 49
maximum commitment 19 creating
milestone item limits 21 multiplier pricing 65–67
milestones pricing matrix 61–65
creating 67 creating contract workspace in Ariba Contract
Milestones Page 67 Management 73
milestones, creating 67 creating contracts 35–71
minimum commitment 19 creating milestones 67
multiplier pricing 30, 65–67
no release order 17
notification limits 22 D
overall limits 19 dates, effective and expiration in contracts 19
parent-child relationships 12 defining
payment terms 31 pricing tiers 49–52
Payment Terms Page 70 term-based grid pricing 53–58
preload amounts limits 21 term-based pricing 52
pricing for costs and expenses 49 defining access, contract 68–70
pricing for fixed and recurring fees 48 defining formula pricing 58–67
pricing for materials and services for a non-catalog Definitions Page, contracts 36
item 46 direct invoicing against contracts 18
pricing for materials and services from a catalog 44 direct receiving against contracts 18
pricing matrix 61–65 discount
Pricing Terms Page 41–67 term-based in contracts 26
pricing tiers, defining 49–52 discount pricing in contracts 23
quantity-based volume pricing 24
quantity-based volume-discount pricing 24
release access 68 E
release order 17 edit access for contracts 30
request status 16 editing
requests status 16 cell values 56
sample Excel spreadsheets 34 contracts 72
spend accumulation 13 grids 56–58
spreadsheets import notes 34 effective dates in contracts 19
Standalone Agreement 12 entering general contract definitions 36
Subagreement 12 evergreen contracts 19
Summary Page 71 Excel spreadsheets 33, 71
supplier level 9 exceptions
supplier-level pricing terms 41 contract-invoice 34
term boundaries 26 expiration dates in contracts 19
term-based discount 26 exporting, contracts to Excel 71
term-based grid pricing 27
term-based grid pricing, defining 53–58
term-based pricing 26 F
term-based pricing, defining 52 fixed and recurring fee
the pricing terms page for a supplier level contract item limits in contracts 21
request, configuring 41 fixed and recurring fees
tolerance 21 pricing, configuring 48
tolerance limit 20 fixed fee item 21
tolerance, milestones 21 forecasted spend limits in contracts 22
types 9 formula pricing
uploading an Excel version 71 creating simple formula 60
user access 30 defining 28, 58–67
wizard 35

Index
pricing matrix 61–65 item and commodity pricing term accumulators

item level contracts 9
item-level pricing terms in contracts 44–49
G pricing for costs and expenses, configuring 49
general contract definitions, entering 36 pricing for fixed and recurring fees, configuring 48
grid pricing for materials and services for a non-catalog
editing 56–58 item, configuring 46
paging through 58 pricing for materials and services from a catalog 44
pricing, term-based 27
L
H limits
hierarchical relationships, contracts 12 commodity in contracts 20
How-to contracts 19–22
add an appendix to a contract 70 costs and expenses item in contracts 21
configure contract payment terms 70 fixed and recurring fee item in contracts 21
configure material and service pricing in contracts 44 forecasted spend in contracts 22
configure pricing for costs and expenses in contracts materials and services limits in contracts 20
49 milestone item in contracts 21
configure pricing for fixed and recurring fees in notification in contracts 22
contracts 48 overall in contracts 19
configure pricing terms for commodity-level preload amounts in contracts 21
contracts 43 Limits Page, contracts 38
configure pricing terms for supplier-level contracts
41
copy a contracts 73 M
create a contract management workspace 73 managing
create a contract milestone 67 contracts 72
create a pricing matrix 61 material and services
create a simple pricing formula 60 item limits to contracts 20
create multiplier pricing 65 materials and services
define contract access controls 68 pricing for a non-catalog item, configuring 46
define pricing tiers 50 pricing from a catalog, configuring 44
define term-based pricing 52 matrix pricing 61–65
edit cell values, term-based grid pricing 56 matrix pricing in contracts 29
edit multiple cell values, term-based grid pricing 57 maximum amount in contracts 21
enter general contract definitions 36 maximum commitment in contracts 19
export a contract 72 Microsoft Excel spreadsheets. See Excel spreadsheets
manage contracts 72 milestone 21
page through a grid 58 milestones
run a report 75 item limits in contracts 21
specify contract notification recipients 38 Milestones Page 67
specify forecasting in contracts 38 milestones, creating in contracts 67
specify monetary limits in contracts 38 minimum commitment in contracts 19
start the contract wizard 35 monetary limits, specifying 38
upload an Excel version of a contract 71 multiplier pricing 30, 65–67
work with pricing terms in contracts 54
N
I no-release-order contracts 17
identifying users who can edit contracts 68 notification
invoiced and received amounts are applied accumulators messages, contract expiration 22
33 notification limits in contracts 22
invoices notification messages, for contract expiration 19, 20
exceptions 34 notification recipients, specifying 38
invoicing and receiving
direct in contracts 18

Index
O autoreceive on contracts 31
overall recurring and fixed item limits. See fixed and recurring
contract accumulators 31 item limits
overall limits in contracts 19 recurring fee item 21
override pricing. See compound pricing release-order contracts 17
reports
about 75
P create a report 75
display values 76
paging through the grid 58
filtering 76
parent-child relationships, contracts 12
output formats 75
payment
saving report queries 77
terms page 70
requests
payment terms in contracts 31
status, contracts 16
preload amounts limit in contracts 21
pricing 24
advanced in contracts 23–30 S
amount-based volume discount 24
amount-based, volume 24 sample Microsoft Excel spreadsheets 34
compound 14 saved reports
discount 23 running 75
for costs and expenses, configuring 49 simple formula, creating 60
for materials and services for a non-catalog item 46 specifying the monetary limits, notification recipients,
for materials and services from a catalog, configuring forecasting 38
44 spend accumulation in contracts 13
formula 28, 58–67 spreadsheets import notes 34
item-level terms 44–49 spreadsheets. See Excel spreadsheets
matrix 29, 61–65 starting the contract wizard 35
multiplier 30, 65–67 status
quantity-based volume 24 contract requests 16
quantity-based volume discount 24 contracts 16
term-based 26, 52 Subagreement
term-based, grid 27, 53–58 about 12
terms 22–30 accumulators option 13
terms, commodity-level 42 subscriptions for non-catalog items
terms, supplier-level 41 deactivating 17
tiers 49–52 loading 16
pricing for fixed and recurring fees, configuring 48 Summary Page in contracts 71
pricing matrix 61–65 supplier level
pricing terms contracts 9
supplier level 41 pricing terms 41
pricing terms for categoy items 44 supplier-level pricing terms 41
Pricing Terms Page, contracts 41–67
pricing terms, item level 44–49
T
pricing tiers, defining 49–52
term boundaries 26
term-based
Q grid pricing 27, 53–58
quantity based volume pricing 24 pricing 26, 52
quantity-based volume pricing 24 term-based discount 26
quantity-based volume-discount pricing 24 term-based grid pricing 27
defining 53–58
term-based pricing 26
R defining 52
in contracts 26
received and invoiced amounts are applied accumulators.
terms
See invoiced and received amounts are applied,
adding 54
accumulators
copying 54
receiving

Index
payment 31, 70
tiered pricing 49–52
overview 23
tolerance limit in contracts 20
tolerances
for fixed and recurring fee items 21
U
uploading and Excel version of a contract
users
contract editing 68
restricting to create release orders against the
contract 68
V
volume
amount-based discount pricing. See amount-based
volume discount pricing
amount-based pricing. See amount-based volume
pricing
quantity-based discount pricing. See quantity-based
volume discount pricing
W
wizard, contract 35
working with
Access Control page 68–70
Appendixes page 70
cell values 55–58
definition page 36
limits page 38
Milestones Page 67
payment terms page 70
pricing terms page 41–67
Summary Page 71

Index

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Ariba Contract Compliance

Version Month/Year of Updated Chapter/Section Short Description of Change

Ariba Contract Compliance User Guide iii

iv Ariba Contract Compliance User Guide

Chapter 1 Contract Concepts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Ariba Contract Compliance User Guide v

Chapter 2 Creating and Managing Contracts. . . . . . . . . . . . . . . . . . . . . . 35

vi Ariba Contract Compliance User Guide

Ariba Contract Compliance User Guide 7

Paid Canceling Canceled

1. The status for a Payment Transaction pulled

2. When all the payments have been made for an

This chapter covers the following topics:

8 Ariba Contract Compliance User Guide

• “Accounting Information” on page 18

Ariba Contract Compliance and Ariba Contract Management

Ariba Contract Compliance User Guide 9

Blanket Purchase Orders

If Ariba Invoice is installed on your system, Notes:

10 Ariba Contract Compliance User Guide

The following diagram outlines the BPO process.

Modify contract Submit contract Purchase-order-to-

yes Available amount

Differences Between a BPO and non-BPO Contract

Ariba Contract Compliance User Guide 11

This section covers the following topics:

Contract Hierarchical Relationships

This type of contract... Can have this type of child...

Commodity level Commodity level or item level

Item level Item level

12 Ariba Contract Compliance User Guide

The following diagram shows an example of a simple contract hierarchy.

(supplier -level contract )

Accumulation of Contract Spend

Ariba Contract Compliance User Guide 13

Spend accumulates to Spend accumulates to

Include Subagreement Master Agreement Master Agreement Include Subagreement

(item-level contract ) (item-level contract )

14 Ariba Contract Compliance User Guide

Item level Unit price: $10.95

Item level Unit price: $10.99

Ariba Contract Compliance User Guide 15

Contract Request Status

The following table describes each CR status.

Submitted The purchasing agent has submitted the CR for approval.

Denied An approver has denied the CR.

Approved The CR has been fully approved.

Processed A contract has been created from the CR.

The following table describes each contract status.

16 Ariba Contract Compliance User Guide

Ariba Contract Compliance User Guide 17

The following graphic shows the No-Release-Order contract flow:

Users create Invoices

Direct Invoicing and Receiving

18 Ariba Contract Compliance User Guide

Effective and Expiration Dates

Ariba Contract Compliance User Guide 19

Contract Compliancegenerates notification messages when a contract is approaching its maximum

Materials and Services Item Limits

20 Ariba Contract Compliance User Guide