Manage contracts
Use Apptio planning applications to help your organization accurately account for the financial impact of contracts on budgets.
Watch this video from Apptio Education Services: Editing the Contracts Plan.
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Apptio planning applications include the following contract planning features:
- Budget Process Owners can define contract types to align contracts with general ledger account codes. Contract type names can be set by Cost Center Owners to relate to the context of their budgets, while general ledger account codes come from your financial organization. You can define multiple contract types that all map to the same general ledger account code.
- Budget owners can record the contract details including amortization treatment and see the resulting charges in the OpEx budget.
- For contracts that might be extended in the current plan year, budget owners can see financial discretionary spend and how it impacts their budgets.
- A value-added tax (VAT), also known as a goods and services tax, can also be calculated for contracts. The VAT is based on the contract line-item Location value in reference data (see Manage VAT Rate reference data).
- Model the long-term budget impact of contracts (see Plan for multiple years).
- Budget owners can add or review contract details in their budget. When they do, they assign the Cost Object to a contract type, which allocates the contract to the correct general ledger account code as specified by the Budget Process Owner. See Manage Contract reference data.
Manage contracts
Enable the Contracts feature. See Edit the Company Profile.
Create a contract plan
- In the plan menus at the top right, select a plan, a Cost Object category, and a cost object or
cost object group.
Learn more about navigating in Planning
Note: Cost Center Owners can only edit their assigned Cost Centers. See Manage Cost Object Permissions reference data. - Navigate to Planning > Expenses.
- Select the Contracts tab.
- Enter or edit asset details as needed. Options include:
- Cost Object - The unique identifier per Cost Object, organized across columns that correspond to each Cost Object type (Departments, Services, or Projects). Cost Object reference data may be organized into parent and child hierarchical relationships between Departments, Services, and Projects.
- Contract Type - The unique agreement between your organization and an external party.
- Account - Specifies the general ledger account code to which you want to charge labor costs derived from this rule. The available options are provided by the Accounts reference data (see Manage Financial Dimensions reference data).
- Vendor - Specifies the vendor associated with the contract. Later you can review contracts per vendor.
- Location - Displays available options for this dimension (provided by the Location reference data).
- Description - Summarize the nature of the contract.
- Comment - Capture notes.
- Currency - Visible only if multiple currency support has been enabled (see Support for multiple currencies).
- Amount - Enter the full contract amount. Even if the contract duration started prior to or ended after the current plan year, enter the full amount. Note that contract amounts will change when you import actuals and update the contract amount. However, financials generated for forecast periods on the Summary page will not change (see Import and publish actuals).
- Start Date - Enter the first month the contract accrues expenses, even if the date precedes the current plan year. The contract expense is accrued to the full month, regardless of the start day.
- End Date - Enter the last month the contract accrues expenses, even if it is after the current plan year.
- Duration - The calculated span of time, in full months, between the contract start date and end dates. If you choose to amortize, the contract amount is amortized across this number of months.
- Extend - If the contract can extend beyond the end date of the current plan year, select this checkbox. You can then specify an extension adjustment percentage and see the financial impact of extending the contract per month. This allows you to model contract extensions and see the financial impact both by contract and across your budget. The Extension Total KPI at the top of the page sums the amounts of all extended contracts. Since this amount is not yet committed to your budget, it may be considered discretionary spend for contracts. To extend contract with compounding extension adjustment with flexibility to define different extension adjustment percentage, refer Variable Contract Extension Adjustment.
- Amortize - Select this checkbox if the contract expense should be amortized per month. Clear this checkbox if you want the full amount of the contract to accrue on the contract's start date (see Manage Contract reference data). You can display the amortization method column in the contract line items table (see Customize, save, and share table layouts).
- Extension Adjustment - If the contract may extend, enter a percentage adjustment for the cost of the extension. 5. Submit your changes. 6. Capture supplemental information about contracts by adding custom attributes to contract dimensions. See Add and manage custom attributes of reference data (dimensions and line-item tables). This allows you to enhance your analysis and reporting capabilities.
- Submit your changes.
- Capture supplemental information about contracts by adding custom attributes to contract dimensions. See Add and manage custom attributes of reference data (dimensions and line-item tables). This allows you to enhance your analysis and reporting capabilities.
View delegated project costs
If Project Financial Planning Project Financial Planningis enabled, Project Owners can delegate project costs to department and service owners. All of these owners can show or hide delegated costs from their financials. See Delegate project costs.