Create Databases -> Inventory->Custom->Contracts for Individual Accounts

Creating Contracts for Individual Accounts

When you load an item file update, you'll get sales flyers and contracts from your wholesalers. Sales flyers apply to all customers automatically. Other contracts can be assigned to individual customers.

Some large customers may require a custom contract, containing special pricing that you have agreed to provide them on items they commonly purchase. On this page, we'll show you how to create a custom contract, and assign it to a customer.

These instructions assume that you're using the default settings for the contract parameters. If you have customized these parameters, you may see prompts not covered here. For more information on parameter field definitions, see the online help topic Parameters.

Creating a Contract

To create a contract, you use one of the text-based screens, the (ET) Inventory Contract Price screen.

You need a basic understanding of contracts before creating one. If you have not already done so, please read the Contract discussion on the Creating a Pricing Strategy page.

Follow these steps:

1. Open the Inventory window, and click . The (ET) screen opens. Contract screens are text-based, not graphical. Press the Caps Lock key. You always use capital letters in text-based screens.
2. Select the [A] Add action code by typing A.
3. At the Enter Update Password prompt, type DDMS
   
   We're assuming that you have not changed the default passwords. If DDMS does not work, check the "ET" Passwords Update field in the (LE1) screen. This field determines the update password.
4. At the Fixed or Flexible prompt, press Enter to accept the default, which is fixed.
   
   We'll describe a very basic contract here, but your system provides tremendous flexibility when creating contracts. To learn about all the options available, see the online help topic About Contracts.
5. At the Cost to Use prompt, specify the cost you want the system to use when calculating contract prices. Do this by specifying the appropriate code. For example, you might type W for the replacement cost from the primary wholesaler or M for the replacement cost from the primary direct buy vendor or manufacturer. In this example, we select the replacement cost from the wholesaler:

6. In the Contract # field, specify a two-character number for this contract. You can choose any number except for 95-99, because these numbers are reserved for sales flyers.
   
   We're building a fixed price contract in this example. DDMS recommends that you assign fixed contracts a number below the numbers used for sales flyers. This means you can use contract numbers from 0 through 94.
7. At the Contract Does Not Exist --- Create New Contract prompt, type Y
   
   Later, if you want to add items to a contract, follow the steps above, specifying the contract number you want to add to. You will not see the Contract Does Not Exist prompt. Instead, the system will retrieve the contract so you can add to it.
8. In the Gross % field, you determine how you want to calculate the prices on your contract. You have three choices:

• Gross profit percentage: You can specify a gross profit percentage. The system will use the cost you specified earlier and this gross profit percentage to calculate a default contract price for each item. (You can change these default prices.)
  

  If you want to specify a gross profit percentage, enter it in the Gross % field. You can include a decimal point, with up to two characters after it. To do so, type the decimal point, and then type the fraction. If you want ten and a half percent, for example, type 10.5 When the cursor moves to the Disc % field, press Tab.

• Discount percentage: The system calculates the default contract prices by subtracting the discount percentage you specify from the list price. Again, if you select this method, you can change contract prices for individual items whenever necessary.

  To specify a discount, press Tab to move the cursor to the Disc % field, and enter the discount percentage. You can include a decimal point, with up to two characters after it. To do so, type the decimal point, and then type the fraction. If you want twelve and a half percent, for example, type 12.5 If you do not fill the field, press Tab to move to the Dates field.

• Manual pricing: Instead of letting the system calculate a default contract price, you can specify each item's contract price. You may want to choose this option when recreating an existing customer contract.

  To specify a contract price for each item, tab past the Gross % and Disc % fields.

9. In the Dates fields, indicate when your contract will begin, and when it will expire.
   
   If you want the contract to begin immediately, and do not want to set an expiration date, leave the Dates fields blank.
   
   If you want to set a beginning date, but no expiration date, specify 99/99/99 in the To field, as shown below.

Notice also that we set a discount of 12.5 percent. Later in this procedure, we'll show you how to manually set a contract price; remember that you can do this for some items, even if you specify a gross profit or discount for the contract as a whole.

10. In the Description field, you can enter a description for the contract. If this contract is for the ABC Company, for example, you might specify ABC. If your description does not fill the entire field, press Enter.
11. At the Set Cost in Contract prompt, you have the option of manually setting costs for contract items; you would use these costs in order entry or purchasing. For this example, type N
12. At the Figure Contract Price to 3 Decimal Places prompt, press Enter.
13. In Item Number, you enter the first item for this contract. To do this, follow these steps:

• Type part or all of the item number, and press Enter.

You can also use item descriptions to retrieve items, but to do so you must first build an inventory description index. Once you build the index, tab to the Description field, enter part or all of the description, and press Enter.

• At the Is This the Item Record prompt, select one of the following responses:
  
  

  Y	Yes, this is the correct item, add it to the contract.
  N	No, this is not the correct item. The system displays the next item in the database (in item number order).
  I	Displays more information about the item to help you determine if it's the right one. After looking at this information, press Enter to return to the Is This the Correct Record prompt.
  V	Displays vendor contracts that include the item. (To learn about vendor contracts, see the online help topic About Vendor Contracts.)
  ESC	Pressing the Esc key returns the cursor to the Item Number field, so you can specify a different item number.

14. After you place the item on the contract, the system calculates the gross profit, discount, and contract price, based on the figure type.
    
    To accept the displayed contract price, press Enter until you get to the Qty field, and go to Step 15.
    
    To change the displayed contract price, change either the gross profit, discount, or contract price. (You can move to the D% and Contract fields by pressing Tab.)
    
    Suppose the displayed price is $12.50, but you want it to be $12.45: tab to the Contract field, and type 12.45.
    
    As soon as you change any of these fields, G %, D%, or Contract, the system recalculates the other two.
    
    If you change the G % or D % fields, they become the figure type for this item.
    
    However, if you change the contract price, the system displays the Set Figure Type Gross, Discount, Contract Price or Add On Price prompt.
    
    Specify which field you want to use as the figure type by typing the corresponding code:
    
    

    G	Gross profit percentage
    D	Discount percentage
    $	Contract price
    +	Add on price, for use with contract quantity breaks (To learn about vendor contracts, see the online help topic About Vendor Contracts.)

    
    In the figure below, the first two items use the discount as the figure type, and the third item uses the contract prices as the figure type.

15. In the Qty field, you can specify a minimum quantity. If you do, the customer must purchase this quantity to obtain the contract price. You can enter several lines for the same item on a contract, specifying a different quantity for each.
    
    In the figure below, we show a price of $1.42 for one box of pencil erasers, but if the customer buys six boxes they're $1.38 each, or $1.25 each for 12 boxes.

16. After you complete a line item, the cursor returns to the Item Number field so you can add the next item. Continue to add as many items as you need.
    
    After adding the last item, press Esc while the cursor is in the Item Number field. Continue to press Esc until the system displays the Master Menu. You can then close the window.

Assigning the Contract to a Customer

To assign your new contract to a customer, follow these steps:

Open the Customer window. (For instructions, click here.)

1. Retrieve the customer you want to change. You can do this in several ways; see the online help topic Selecting a Customer.
2. Click the Order Entry tab.
3. You assign contracts to customers through the four Contracts boxes. The position you choose determines when this contract will be used.
   
   Fixed contracts like the one we created above usually get placed one of the first positions, because once the system finds a price on a fixed contract, the price search stops. Here we place the contract we made earlier in the second position:

For details about how the order of your contracts affects the search for a suggested selling price in order entry, read the Contract discussion on the Creating a Pricing Strategy page.

4. When you finish, click the button to save your changes.