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Creating Contracts with Vendors

A vendor contract stores the agreement and settlement settings used with a supplier. Whether it is required in a purchase document depends on that document's purchase terms.

Before you start​

Prepare the supplier and its legal counterparty, contract description and number, dates, settlement currency and company account. Use the agreed settlement rules rather than assuming the preselected values fit every contract.

Create the contract​

  1. Open Purchasing > Contracts with vendors and choose Create.
  2. Check that the scope is Purchasing.
  3. Enter the description, contract number and date. Set the validity start date and any applicable end date; use Valid when the contract is ready to use.
  4. Select Vendor and check the inherited legal Counterparty.
  5. Review the company account and its currency. If a supplier account is specified, use the supplier's verified bank details.
  6. Open AR/AP settings and review the debt/advance detail, settlement currency and offset settings. For example, Contract for debt and prepayment tracks debt and advances by contract; choose it only when that is the agreed method.
  7. Review the other displayed settings, including how the contract refers to order/invoice tax settings and any unbilled-goods receipt settings that apply to your process.
  8. Choose Save and close. Successful creation displays Added.

Check the result​

Find the saved contract and reopen it. Check the scope, supplier, legal counterparty, company account, currency, dates, status and settlement detail.

Before using it in a purchase, review whether the selected purchase terms use contracts. A saved vendor contract does not change terms that specify purchases without contracts.

If the contract is not used​

Check the purchase terms' contract setting, selected supplier and legal counterparty, and the contract's validity and status. If a payment requires a recipient account, complete verified bank details in the payment; saving the contract alone does not verify those details.

See also purchase terms, commercial conditions and vendor payments.