Set up items for Contracts

You can edit items to set contract defaults or enable prorated pricing and use kit items for product bundles.

About items in contracts

Note the following expected behavior about items in contracts:

• Changes to an item's configuration will not affect contract lines or expenses that are In progress as the item configuration that exists at the time a contract line or expense is created is cached on the contract line or expense. Any changes you make to an item's configuration will only affect new contract lines or expenses going forward.
• Contracts does not support items with Item type = Inventory or Stockable kit.
• Use items with Item type = Non-Inventory (Purchase only) for expenses only (they will not appear in the Item list in a contract line).

Edit contract defaults for items

To speed data entry, you can set certain contract values to default when a user selects an item in a contract line or expense. The user can override the default values in the contract as applicable. You can edit items using the Item Information page or using import files.

Edit items using the Item Information page

The fields that display in the Contracts default section of the Item Information page are based on the selected Item type, your Contract revenue management subscription, and your Contracts configuration. See Contracts fields on items for more information.

Your field labels for the Revenue and Expense templates 1 and 2 will display the journal symbols selected in the Configure Contracts page for Revenue and Expense templates 1 and 2. If you are only tracking revenue or expenses in one journal, like for example you are only using Revenue journal 1, just select the revenue or expense template for that journal.

1. Go to Contracts > All > Items.
2. Find the item that you want to edit.
3. Select More actions > Edit at the end of the row.
4. In the Contract defaults section, edit the fields as applicable.
   • For items that you sell, select a default Billing template, Revenue template 1, and Revenue template 1.
   • For items that are considered expenses, select a default Expense template 1 and Expense template 2.
   • For items that will be included in MEAs and their fair value will be used to determine other items' fair value, select a Contract fair value category.
   • For items where revenue can't begin to be recognized until an event occurs, select a Default contract delivery status and a Default contract deferral status.
   • For items that will always be included in MEAs, select Default bundle.
5. Select Save.

1. Go to Contracts > All > Items.
2. Select Edit next to the desired item.
3. In the Contract defaults section, edit the fields as applicable.
   • For items that you sell, select a default Billing template, Revenue template 1, and Revenue template 1.
   • For items that are considered expenses, select a default Expense template 1 and Expense template 2.
   • For items that will be included in MEAs and their fair value will be used to determine other items' fair value, select a Contract fair value category.
   • For items where revenue can't begin to be recognized until an event occurs, select a Default contract delivery status and a Default contract deferral status.
   • For items that will always be included in MEAs, select Default bundle.
4. Select Save.

Edit items by importing a CSV file

Users with the appropriate permissions can update multiple items at once by importing the data using a CSV file. Learn more about importing items.

Add kit items for product bundles

SaaS companies often use product bundling, a marketing strategy that can potentially increase sales for you and save money for your customers by combining products in a package deal. You can use the Kit Item type to group two or more products or services on a single item SKU and invoice the kit as a single line item.

Note the following about kit items in contracts:

• To use the Kit Item type, Order Entry must be configured with Kits = true.
• The recommended limit for kit component items in a kit item is 50. You may see performance issues with kits containing more than 50 kit component items.
• Although you can enter a value for the Item GL group, Intacct uses the item GL groups defined on the kit component items for posting unbilled, billed, and paid balances.
• The fields in the Contract defaults section of the Item Information page are not applicable for kit items
• The following is the expected behavior for the kit component revenue Allocation percent:
  • The percent value will round to two decimal places. For example, if you enter 10.009, the percent used will be 10.01.
  • You can use 0.00 for a kit component item.
  • The total Allocation percent for all kit component items must = 100.00.
• Kit items are not supported in evergreen contracts.

Before adding a kit item

Create your kit component items. These are the individual products or services that could be sold alone or included in product bundles.

Items used as kit components must have the following defined:

• Item type = Non-Inventory or Non-Inventory (Sales only)
• A valid Item GL group
• At least one default revenue template. All kit component items in a particular kit must have a default revenue template for the same journal. For example, if you are using two journals, all kit component items must have a default revenue template defined either only for journal 1, only for journal 2, or for both.

Add a kit item for contracts

1. Go to Contracts > All and select Add (circle) next to Items.
2. Select Kit as the Item type.
3. Enter the Item ID, Name, and other fields according to your business process.

   The kit item will be listed on the invoice printed document. You can optionally enter an Item description with details that you'd like to include about the kit in the invoice printed document.

4. In the Kits components section, select Enable for Contracts.

   Intacct automatically sets Revenue posting to Component level and Print format to Kit. This means that revenue is tracked on the kit component items and invoicing is managed on the kit item. You cannot change these fields.

5. In the grid, select the Item ID of an item you want to include in the product bundle.
6. Enter an Allocation percent for the selected kit component item.
7. If your company is using event-based recognition, select a Default delivery status and Default deferral status for the kit component item.
8. Repeat steps 5 - 7 for each kit component item.
9. Save the kit item.

Set up prorated pricing for items

This section is only applicable for use in the following conditions:

• Termed contracts
• Contract lines where the Flat/fixed amount frequency = "One-time" or "Use billing template".

You can set up an item to have Intacct automatically suggest a prorated price for the item if the contract line or billing term is shorter than the item's default term. For example, say that a support item is defined with a 12-month term, but the contract line term is only 5 months. Learn more about contract line proration.

In order to enter item term information, you need to configure Order Entry to enable start and end dates.

1. Go to Contracts > All > Items.
2. Find the item that you want to edit.
3. Select More actions > Edit at the end of the row.
4. In the Item Information page, select the Contract term tab.
5. Select the Enable start and end dates checkbox.
6. Select the Periods measured in option and enter the Number of periods.
7. Select the Do not change the default checkbox.

1. Open the applicable item in Edit mode.
2. In the Item Information page, select the Contract term tab.
3. Select the Enable start and end dates checkbox.
4. Select the Periods measured in option and enter the Number of periods.
5. Select the Do not change the default checkbox.

Include items in MRR calculations

When you subscribe to the Software Digital Board Book, a checkbox appears on the Item information page to let you indicate if an item is eligible for tracking as monthly recurring revenue as part of the Software Digital Board Book. Select this checkbox for each item you want to include in MRR calculations.

1. Go to Order Entry > All > Items.

   Go to Contracts > All > Items.

2. Find the item that you want to update.

3. Select More actions > Edit at the end of the row.

4. Select MRR.

   The MRR field is located at the top of the page in the first field group.

5. Select Save.

   Repeat for each desired item.

1. Go to Order Entry > All > Items.

   Go to Contracts > All > Items.

2. In the Items list, locate the desired item and select Edit next to it.
3. In the Item Information page, select MRR and select Save. The MRR field is located at the top of the page in the first field group.
4. Repeat steps 2-3 for each desired item.

Learn more about the Software Digital Board Book.

Contracts fields on Items

See items for information on standard item fields.

Contracts default section

This section is not applicable to kit items.

Contracts default section field descriptions

Field	Description
MRR	Indicate whether to include the item in the Software Digital Board Book calculations of monthly recurring revenue. The MRR field is located at the top of the Item Information page in the first field group. Changing an item's MRR field only affects new transactions or contract lines going forward. It will not affect existing transactions or contract lines. The best practice is to not change an item's MRR setting once the item has been used in a transaction. If you need to change your item's MRR configuration after implementing Digital Board Book (DBB), contact your Sage Intacct account manager for more information. This field is only applicable if your company subscribes to the Software Digital Board Book.
Billing template	Use the Billing template selection list to select the billing template that would most often be associated with this item. If the item is usually sold with a Flat/Fixed amount frequency of Include with every invoice or One-time, you can leave this field blank.
Revenue template 1 and Revenue template 2	Your Contracts configuration may use one or two sets of revenue journals. Use the dropdown lists to select the applicable journals. Your field labels for the Revenue and Expense templates 1 and 2 will display the journal symbols selected in the Configure Contracts page for Revenue and Expense templates 1 and 2. If you are only tracking revenue or expenses in one journal, like for example you are only using Revenue journal 1, just select the revenue or expense template for that journal.
Expense template 1 and Expense template 2	Your Contracts configuration may use one or two sets of expense journals. Use the dropdown lists to select the applicable journals.
Contract fair value category	Intacct uses fair value categories to distinguish products or services included in an MEA that will be used in the algorithm that determines another item's estimated standalone selling price. If the item may be sold as part of a multiple-element arrangement, select the category that identifies the performance obligation. Learn more about fair value categories in contracts. This field is only applicable if your company is subscribed to Contract Advanced Revenue Recognition.
Default contract delivery status	Options are: Delivered: the contract line's recognition event has occurred Undelivered: the contract line's recognition event hasn’t occurred Learn more about setting up event-driven recognition.
Default contract deferral status	Options are: Defer revenue until item is delivered: the revenue schedule for this item will not start until this item has Delivery status = "Delivered". Defer revenue until all items are delivered: the revenue schedule for this item will not start until all contract lines in the contract have Delivery status = "Delivered".
Default bundle	Indicate whether this item should be included in the default bundle when an MEA allocation that includes this item is created. Users can choose to exclude the item when they create the MEA allocation. This field is only applicable if your company is subscribed to Contract Advanced Revenue Recognition.

Kit components section

Kit components section field descriptions

Field	Description
Enable for Contracts, Revenue posting, and Print format	Indicates the kit item can be used in the Contracts application. This field must be selected in order to use the kit item in Contracts. When this field is selected, Intacct automatically sets Revenue posting to Component level and Print format to Kit. This means that revenue is tracked on the kit component items and invoicing is managed on the kit item. You cannot change these fields.
Item ID	The kit component item ID.
Item description	The Item description defaults from the selected kit component item. Edit the kit component item to edit the item description. The kit component item description does not appear on invoices.
Allocation percent	The percentage of revenue to recognize for each kit component item. The following is the expected behavior for the Allocation percent value: The percent value will round to two decimal places. For example, if you enter 10.009, the percent used will be 10.01. You can use 0.00 for a kit component item. The total Allocation percent for all kit component items must = 100.00.
Number of units	The quantity of the kit component item to include in the kit item. Defaults to 1. This value cannot be updated on the contract line. This value is not common in kit items for contracts. This value has no impact on the price calculation for the kit item on a contract line.
Standard unit of measure	The unit of measure defined on the kit component item. This field is read-only on the kit item.
Default delivery status	Options are: Delivered: the contract line's recognition event has occurred Undelivered: the contract line's recognition event has not occurred
Default deferral status	Options are: Defer revenue until item is delivered: the revenue schedule for this item will not start until this item has Delivery status = "Delivered". Defer revenue until all items are delivered: the revenue schedule for this item will not start until all contract lines in the contract have Delivery status = "Delivered".