The value of a Contract is an important attribute of most financial agreements. Intelligentcontract provides features that allow you to accurately record the value of a Contract. Contract Values can be specified by typing the value of the Contract and having that value displayed as it has been entered. Advanced options can be used to calculate the value of a Contract based on a breakdown of a Contracts Value. Additional advanced options also give you more ways to display the Contract Value.
Simple Contract Value
For most Contracts, using the standard Contract Value will be sufficient. You are able to specify a value for the Contract and then whether that value is a "one-off" or a regular amount (i.e. monthly).
For example, for a Rolling Contract that has a value of £100 per month, you are able to specify exactly that charge. The screen below shows how this contract value can be specified.
Fig 1 - Contract Value
The "No Value" option allows you to specify that a contract has no financial value. This allows you to distinguish between a contract with a value of zero, and a contract that has no financial value.
Note: If your Contract Value is a single payment and it doesn't recur, then you are able to specify that the Contract Value has a frequency of "once"
Advanced Display Options
By clicking on "Show Advanced Options", you will see additional options that allow you to control how the contract value is displayed. You are presented with 6 display options to be selected, and you can choose one or more of these display options at once. So you are, for example, able to display an annual value along with the value "spent" on a Contract up to end of last month.
Note: the Advanced Display Option feature is only available if your Contract has a Term with dates. If your Contract is set to 'No Term' then this feature will not be accessible.
Fig 2 - Contract Value Advanced Display Options
|Display Summary Value||Displays the Annual value (and any one-off values) of the Contract. This is the default value if no other Display options are selected.|
The Summary value of a Contract is the average Annual value over the term of the contract. It will total any relevant Financials entered and average and pro-rata across the Term of the Contract giving you a Summary value per year.
For Recurring contracts the end date of the Term is assumed to be the day before the next renewal. This end date is used to calculate the summary value
For Rolling Contracts it is assumed that the next anniversary from the Start date is the 'End Date' on which to calculate the summary value
This summary will display any Once values separately.
If you have entered a Contract with no Term and then enter values with a frequency i.e. 'Monthly' then the field will display that a Term is required to provide the calculation.
|Display Lifetime Value prorated over the term||Displays assumed total value of the Contract, taking into account the start and end date of the Contract and Financials.|
|Display average <monthly> value over Contract Lifetime||This option displays the average value of the Contract over its lifetime. You can select whether you wish to see an average "Annually" or "Weekly" value, for example.|
The options are: <Daily>, <Weekly>, <Monthly>, <Quarterly>, <Bi-annually> (i.e.every 6 months) and <Annual>
|Display value relating to <this> <month>||This option displays the contract value that relates to a specific period such as the Last Quarter. The system will calculate, based upon the dates of the contract, the value for the specific period.|
The options are: <Last>, <This>, <Next> and then <Month>, <Quarter>, <Year> , <Financial Year>.
|Display value up to <end of> <this> <financial year>||This option displays the value of a Contract up to a specific period such as end of next year. The system will display the value up to that period taking into account the Contract start date.|
The options are: <Start of>, <End of> then <Last>, <This>, <Next> and then <Month>, <Quarter>, <Year> , <Financial Year>.
|This is an approximate value||Tick to indicate if the value is only an approximate amount|
When a value is displayed, an icon will be displayed next to the value to indicate the period to which that value is applicable. Figure 3 below shows examples of the icons: L indicates a Lifetime value, A indicates an Annual value, TM indicates a 'This Month' value and FY indicates a Financial year value.
If you hover over these icons, information will display detailing the specifics of the value. For example 'Contract value relating to this month 01-July-2018 - 31-July-2018'
Fig 3 - Contract Value Display options selected
Choosing the Value to display on the Summary Screen
Having used the tick boxes to decide which of the display options you would like to use, you can also decide which of these options will be displayed on the Contract Summary screen. Whilst the field is in edit mode you are able to click on the "star" next to the option to be used on the Contract Summary screen.
Fig 4 - Summary screen value
These can be different value options for each Contract. By default, the Summary value is selected. The hover information will also appear on the Summary screen.
Fig 5 - Value on the Summary screen
You may see the Contract Value specified as being approximate. This is indicated when the value is preceded by a "~" symbol. Approximate values are displayed when the display option chosen is of a different frequency to the specified value; For example, when a "Daily" value is requested but the value is specified as a "Monthly" value. Values are approximate due to the varying numbers of "days in a month" and "weeks in a month".
You may see that the Contract Value is an Estimated value - this is identified with an [E] icon. This icon will appear if one of your Financials does not fall completely within the Contract Term and the system can only provide an estimated amount.
Fig 5 - Estimated Icon
Calculate Contract Value from Financials
If a Contracts value is more complex and you need to capture more detail about the pricing, then you can use the "Use Financials to Calculate Value" option. When this has been checked, the system will use the records in the Financials tab in order to calculate the value of the Contract.
To create a Financial record, click on the Financials tab at the bottom of the contract record and press [New]. A Create Financial pop up screen will appear for you to complete. Any of the fields on the Financial form can be removed or added to if required. Complete the fields and [Save] the record.
Fig 6 - Financial Form
Exclude a Record from Value Calculation
You may wish to exclude one or more values in the Financials tab from the overall calculation of a Contracts Value. This may be when a "set up" fee or another type of one-off payment is recorded in the Financial tab, but you don't want this value to distort the monthly or annual values. It may also be that new pricing for a Contract comes into operation and you want to preserve the old pricing but not include it in the current Contract Value.
Tick the 'Exclude from Calc' tick box and the financial will not be included in the Contract Value.
Add a Discount
If the Contract value is discounted then this can be identified on the financial record concerned. You can enter either numeric or percentage values.
Start and End Dates
If the price of a Contract does vary over time (for example, the price may change from year to year) then you are able to specify the start and end dates for each Financial record. This will allow you to put an end date against the old price and a start date against the new price.
For example, if you had a 2-year Contract, where year 1 had a value of £100 and year 2 had a price of £200, then you could create two Financial records:
|Y1 Value: £100||Start: 1-Jan-2022||End: 31-Dec-2022|
|Y2 Value: £200||Start: 1-Jan-2023||End: 31-Dec-2023|
Providing Start and End Dates for the financials allows the system to calculate the correct value for the Contract based upon the the Financials Dates. The value for the above Contract in 2022 is £100, however, the value in 2023 is £200.
The system will calculate the value based upon these dates and the Contracts Term and display accordingly, As explained above there are several Contract Values you can select to be displayed if you wish, this Contracts value could be selected and displayed as below.
- The Annual Summary value is £150 (£300 / 2 year term = £150 per year)
- The Lifetime Contract value is £300 (2022 & 2023 totalled)
- The Monthly value is £12.50 (£300 / 24 months)
Fig 7 - Example Contract value using Financials
The above example is pretty straight forward as this is a Fixed Contract with a definite Start and End Date. For those Contracts that do not have a definite End Date.
The system assumes that for a Recurring Contract the 'End Date' is the day before Renewal and for a Rolling Contract the 'End Date' is the annual anniversary of the Start Date. These 'End Dates' are then used to calculate next years Annual Summary value.
You are able to add as many records as required to detail the price of a Contract. As each record is added to the financials tab, the Contract value will update accordingly.
Fig 8 - Financials Tab
Note: Where a Start Date for a Financial record is not specified (i.e. left blank) but has an End Date, the Financial value will be included in value calculations up to the End Date specified.
Where an End Date for a Financial record is not specified (i.e. left blank) but has a Start Date, the Financial will be value will be included in value calculations after that Start Date specified.
If there are no Financial Start or End dates specified, then the Financial value will be included in all value calculations.