Most contracts involve a “Term”. The Term is the length of time a contract is valid. When a Term has been set for a contract, the information is shown in the Term field. Various information will be displayed such as the 'next renewal', 'initial period' and 'cancel by date'. This display will be dependent on the information that you have entered.
The dates shown can be used in Reports or placed on the contract summary screen. You can also use the dates to create Alerts. For example, you can send an alert to the contract manager on the cancellation date.
Fig 1 - Term Display
There are 4 types of contract terms that the Term field supports. When you create a contract, you can choose a specific Term type:
None: used where no term is required
Fixed Term: the term has a specific start and end date
Recurring Term: the term has a start date and a renewal period
Rolling Term: the term has only a start date. The end date is open ended
None - No Term
You should choose this option if the contract you are creating does not have a Term.
A fixed-term contract can be used to record a Term when there is a definitive Start and End date. You can specify the start date, duration and end date. Once any two of these fields are completed, the system will calculate the third. Once saved, the system will display the start date, end date and how long is left for the term.
Fig 2 Fixed Term
Note: If you set a contract with a start date of 1st Jan 2022 for a 12-month term, the end date for the contract will be calculated as of 31st Dec 2022.
The Recurring Term allows contracts that auto-renew to be recorded. You can specify the start date and the recurring period. You can also specify a notice period so that an alert can be set to ensure the cancel date is not missed.
Fig 3 - Recurring Term Fields
The use of each field is explained below:
Field / Checkbox
This is the date the term started. This can be in the past or in the future.
Specifies the period after which the contract term is renewed.
|Initial Period is different?||[Optional] Tick box to open the Initial Period fields|
[Optional] The initial period may be different to the subsequent renewal period.
For example, you may have a contract which has an initial period of 36 months and then renews each 12-month period thereafter.
You can specify when or if the term stops renewing. Choose Forever if you want the term to keep renewing until its cancelled manually (see “Setting a Cancellation date” below).
If there are a specific number of times that the term should renew, then enter the number of Cycles.
If there is a specific date, after which the date should not renew, then this can be set in the Until option.
The default value is 'Forever'.
[Optional] You can record the period before the next renewal that a term has to be cancelled.
This date will be and you are able to associated an alerts to the date
Note: Recurring contracts have both a renewal date and an end date. These dates can be used to associate alerts, displayed on the summary page, and as part of reports. The end date is set to the day before the renewal date. The renewal date is the same day of the month as the contract start date (subject to the days in the month rule, discussed below)
Renewal on the 28th, 29th, 30th and 31st of the month
Where a recurring term is specified with a start date that is the 28th, 29th, 30th or 31st of the month, then it may be that the calculated renewal date falls on a day of the month that doesn’t exist. Where this happens, the system will calculate the renewal date to be the highest day of the month that is allowed for that month. For example, if a recurring term is set for 30th January with a 1-month renewal period, the next renewal date will be 28th February (assuming the year is not a leap year) and the one following will be 30th March and so on.
Set a Rolling term where there is no fixed end date or renewal for a contract. You must specify a start date, but the other fields are optional. The use of each field is as above.
Fig 4 - Rolling Term
Note: Rolling term is the default name in the system for contracts that have no fixed end date. You can change this default name from “Rolling” to whichever term you use by adjusting the value in Configuration => Manage Account Configuration => Contract => 'Label for Contracts without an End Date'.
There is also the option to enter an Initial Period, a Notice Period, and a Cancellation Date for a Rolling Contract that will or has come to an end.
End Date Calculation
Note: A recurring term has both an end date and renewal date. For example, if a recurring term is set to start on the 1st Jan 2020 with a 1 month renewal period, the renewal date will be 1st Feb 2020, but the end date will be 31st Jan 2020
Note that when the term duration is specified in months or years, then the system calculates the end date and renewal date on a “calendar” basis. If weeks or days are used, then the specified number of days or weeks is added to the start date. This calculation difference can result in a different end date for example, for 1 year and 52 weeks.
Setting a Cancellation Date
You may wish to cancel the arrangement with the Party but still wish to retain the original Recurring or Rolling information.
On the Term options, once the record has been saved, there is a [Cancel Term] button - here you can enter the date at which the Contract was or is due to be cancelled.
The Term display will update to reflect the new information. Once the cancellation Date has been reached, the Contract status will update to 'Expired'.
If you wish to change or remove the cancellation, then edit the field again and click the [Uncancel Term] button.
Fig 5 Cancellation Term
Any contracts that have a term where the start date is after today are considered “Future Contracts”. If a term is set to be in the future, this is considered. The system will indicate that the contract has yet to start by indicating the period before which the term begins. The contract status will also be marked as “Future” (if the status field is set to auto). Any recurring term that is specified will the fact the contract is future dated.
Fig 6 - Future Contract Term Display
Note: Cancelling a Recurring term contract on does not notify the vendor or customer for which the term relates. Cancelling alters the term field values for information purposes only.
Term Date Fields
There are a number of Date fields that are specifically in relation to the Term field. These fields can be pulled into an existing or new View, and can be selected on a Report. Each of these specific fields are identified with a prefix of [Term] to help you identify them.
Fig 7 - Term field for View selection
Fig 8 - Term Fields in Reporting
The fields are also identified this way when creating a relative Alert. An Alert can be pinned to any of these specific date fields.
Fig 9 - Term Dates in Alerts
Note: If the relative date field you have selected contains no value i.e trying to pin to a renewal date for a Rolling contract where there is no renewal date, when you try to save the Alert the system will display an error informing you of the missing details.