When you renew a contract, you can use the information on the Revenue/Costs window to help determine how profitable the contract was so that you can increase or decrease the billing amount for the new contract accordingly. New billing and revenue recognition schedules are created, and maintenance tasks are reset. The frequency and schedule assigned to a task at contract renewal time are used to schedule the new task dates; if the newly calculated schedule date falls within the new contract period, the new task schedule is created from the last schedule date.

The contract task schedule dates are preserved for the new contract period if the contract that is being renewed has new dates that are the same month and day for both the start date and expiration dates.

Example: Contract 2020 with Start Date 01/01/2020 and Expiration Date of 12/31/2020 is being renewed. If the Start Date 01/01/2021 and Expiration Date of 12/31/2021 are entered for the new contract, then the contract task schedule dates remain the same in the new contract period.

When the dates differ from the contract being closed to the new contract date, you must verify your tasks and task schedule dates upon renewal as they cannot be preserved in all scenarios.

If you are renewing a contract that has a spending plan, and you are keeping the same estimate costs as the previous contract, the breakdown of the estimate costs on the spending plan is transferred to the new contract. For example, if you are renewing a contract that runs from 1/1/2020 through 12/31/2020 with labor estimates of $600 in April and October and $100 in May through September, the same estimate costs default into the same months of 2021.

You may want to wait to renew a contract until it has been completely billed and revenue has been recognized for each period. If you allow the renewal process to close the current contract, all billing schedule, revenue recognition, and contract information are moved to history based on the setup option.

However, if you need to renew a contract before it can be closed, you have the option of leaving the current contract open, to be closed later. For example, you need to renew a contract that runs from 1/1/2020 through 12/31/2020; however, you cannot close the old contract until costs are posted for the last appointment on 12/28. You can renew the contract and generate new tasks while holding the old contract open until all costs have been posted for the last service call. This ensures that costs will be posted to the correct contract period without having to reconcile.

You may have a contract that is open multiple times if it is left open during individual contract renewal, mass contract renewal, or master contract renewal. See Leaving a contract open for more information on contracts that are left open.

Individual contract renewal

If you renew a contract without skipping any period of time (between the end of the old contract and the beginning of the new contract) during which a task would have been scheduled, the task header is created using the last schedule date.

Renewing an individual contract

1. Choose Cards > Service Management > Service Manager.
2. Select a customer, and choose the Contract indicator.
3. If you want to review estimate costs before renewing the contract, choose the Revenue / Cost button from the Maintenance Contract window. Use the expansion button next to any Estimate field to view the monthly breakdown of the estimate. If the new contract is the same length, and you enter the same total estimate cost, the monthly estimate costs that default for the new contract will be the same.
4. Choose OK and Save to return to the Maintenance Contract window.
5. If you do not intend to close the contract upon renewal, mark the Leave Contract Open check box. This allows you to bypass the warnings you would receive if you were closing the contract. See Leaving a contract open for more information.
6. Choose Renew.
7. Address all warnings.
8. You will receive a warning if you are using the percentage-of-completion revenue recognition method and there are no forecast costs assigned to the contract. You cannot proceed until forecast costs are entered.
9. You will receive a warning if there are open service calls associated with the contract. You can proceed if you intend to renew the contract without closing it; otherwise, renewing and closing the contract will transfer all open service calls and cost transactions to the renewed contract. You can also choose Service History button in the Maintenance Contract window to access the open calls.
10. You will receive warnings if you have not created an invoice and recognized revenue for each period of the contract. Continue past the warnings by choosing Yes. You have the option of leaving the contract open until all billing and revenue information is posted; it is also acceptable to renew and close the contract without recognizing revenue for the final period if, for example, you are using the percentage-of-completion revenue recognition method. Once a maintenance contract is renewed, the prior year costs and billing information cannot be changed.
11. Complete the following fields, as necessary:
    • Leave Open
      Mark this check box if you want to leave the contract open upon renewal. This option defaults if you marked the Leave Contract Open check box in the Maintenance Contract window.
    • Close Date
      If you marked the Leave Open check box, this field is cleared and disabled. If you marked the Maintain Contract History check box in the Maintenance Options window, a close date is required when renewing and closing a contract.
    • Start Date, Expiration Date
      Enter dates for the new contract.
    • Amount
      Enter the amount of the new contract.
    • Division
      Fills automatically from the maintenance contract.
    • Billing Frequency
      Fills automatically from the maintenance contract. Each period's billing amount is calculated based on the selected frequency. If you change the frequency, you must redistribute the billing amounts in the Billing window. Choose Custom if you plan to edit the billing amounts; the billing schedule is initially calculated monthly and can later be edited to reflect a non-conventional billing schedule on the Billing Schedule window.
    • Automatically Bill
      If you marked the Automatically Create Invoices check box during maintenance options setup, the Automatically Bill check box defaults as marked for the maintenance contract. Your option from the Maintenance Contract window - either unmarking the check box or leaving it as marked - defaults here. You may choose not to automatically bill the new contract if the invoice needs individual attention, such as a billing adjustment.
    • Invoice Billing Day
      Fills automatically from the Maintenance Contract. You can choose the exact day that customer invoices are created for each maintenance contract. The Invoice Billing Day field can contain a number between 1 and 28.
    • Service Call Day
      This field populates from the maintenance contract and contains a number between 1 and 28. This value is used to calculate the schedule for MCC calls. If a task has a frequency of Monthly or greater, and you are using the Relative Scheduling feature, the first MCC call is scheduled on the service call day, and subsequent MCC calls are scheduled based on the day and week of the first call. For example, if a contract created on the first day of January has a Service Call Day of 10, the first MCC call for a task with a frequency of Monthly is January 10. If January 10 is the second Monday of the month, MCC calls for that task will be scheduled on the second Monday of subsequent months. If a task has a frequency of Monthly or greater, and you are not using Relative Scheduling, the service call day is the day of the month that the MCC call for that task will be scheduled. If the task has a frequency of less than Monthly, the service call day is relative; for example, if a task has a frequency of 3 Weeks and a schedule of 1st Thursday After Service Call Day, the first MCC call would be on the first Thursday after the service call day; subsequent calls would be every three weeks on Thursday. The date that displays next to this field is the first available MCC call, calculated based on the contract start date and the service call day. This is not necessarily the first call, but the first possible date. The date of the first call is calculated based on the task schedules.
    • Bill at End of Month (EOM)
      Mark this check box if you want to bill the maintenance contract at the end of the month.
    • Estimated Costs
      The amounts you enter appear in the Estimate and Forecast columns of the new contract's Revenue/Costs window. Forecast costs are required for calculating revenue and closing contracts when using percentage-of-completion revenue recognition. The labor amount must be entered from the labor cost category in the new contract's Revenue/Costs window.
12. When you are ready to renew the contract for the new date range, choose Save. If you marked the Leave Open check box, you receive a message reminding you that the existing contract is flagged as "left open." The renewed contract will then display. Otherwise, the renewal process closes the current contract and, if the Maintain Contract History check box is marked in the Maintenance Options window, sends its information to history.
13. If you are using the percentage-of-completion revenue recognition method, you must run the post renewal process.

Mass contract renewal

The Mass Renewal feature allows you to renew numerous maintenance contracts at once. Use this feature if you have many contracts expiring at similar times and you do not wish to change the contract amounts. Mass renewal only works for contracts less than 365 days. With mass renewal, you can renew and close contracts that have open service calls or that have not been completely billed and recognized. Unlike using the Renew button in the Maintenance Contract window, mass renewal does not require a contract that uses percentage-of-completion revenue recognition to have forecast costs before it is closed and renewed.

When you renew a contract with the mass renewal feature, the start and end dates are advanced, a new billing and revenue recognition schedule are created, and the maintenance tasks are reset. Closing the contract moves billing schedule, revenue recognition, and contract information to history; however, you can also choose to leave a contract open during mass renewal.

When you commit multiple contracts for renewal, the system does the following:

• Creates a new task schedule from the last scheduled date, if the newly calculated schedule date is within the new contract period. If the new starting schedule date does not fall after the contract start date of the new period, the new schedule start date will be reset to the first available service call date in the new contract period. This allows all tasks to be scheduled properly across contract renewal periods.
• Uses the new task frequencies to create new task schedules for any piece of equipment that has a task or task list.

Mass renewing contracts

1. Choose Microsoft Dynamics GP > Tools > Routines > Service Management > Maintenance Contract > Mass Renewal.
2. Specify the following criteria:
   • Contract Expiration Date Range
     Enter a date range that includes the expiration dates of the maintenance contracts you wish to renew. For instance, you may want to renew contracts one month at a time.
   • Renew Contracts with Open Service Calls
     If you mark this check box, maintenance contracts with open service calls will appear in the scrolling window. If you do not mark this check box, processing may take longer.: 
   • Customer Range
     Enter a range if you wish to limit the contracts by customer.
3. Choose Preview to view the maintenance contracts that meet your criteria. On the list that appears in the scrolling window, you can zoom on the Contract No. to view the contract. You do not need to worry about renewing a contract twice; contracts that have already been renewed, even if they were left open, will not appear on the list. Use the show/hide detail button to view contract information:
   • Contracts that have the Automatic Renew check box marked will be renewed after you choose Commit.
   • Only contracts that are less than 365 days will be renewed.
   • If a customer is on hold or the contract is on hold or canceled, the contract will not be renewed.

   • If you do not wish for a contract to be closed automatically by the mass renewal process, mark the Leave Open check box. You can also Mark All or Unmark All. See Leaving a contract open for more information. 

     If you have two contracts expiring at the same time but only wish to renew one of them, you must mark the Hold check box of the one not to be renewed. After running the commit process, unmark the Hold check box.

4. Choose Print to print the Contract Mass Renewal report. The report indicates if each contract will be successfully renewed.
5. With the maintenance contracts that you wish to renew present in the scrolling window, choose Commit. The commit process advances the start and end dates of the contract, creates a new billing and revenue recognition schedule, and removes the existing service call IDs from the maintenance tasks covered by the contract. It also moves the billing schedule, revenue recognition, and contract information to history for any contract that will be closed by the renewal process.

Leaving a contract open

If you leave a contract open upon renewal, the result is having a contract that is open multiple times. You can generate tasks for the renewed contract while holding the old contract open until all costs have been posted. Meanwhile, both the contract that was left open and the renewed contract use the same contract number.

To ensure that you can easily distinguish between the two, all contract lookup windows display the contract start and end dates. The lookup button next to any Contract Number field allows you to open the lookup window, for example, when creating a service call, posting MC service call costs, or opening a contract for viewing.

The lookup window also opens automatically when you manually enter a Contract Number, and the contract is open multiple times. This allows you to view both open contracts and select the correct contract based on the start and end dates.
In addition, when a contract is open multiple times, the contract that is being held open is indicated with an "Expiring" marker. On the Maintenance Contract or Master Contract window, this marker is located next to the Expiration Date field. When viewing the expiring contract on the Maintenance Contract window, the Renew button is disabled.

When viewing the renewed contract on the Maintenance Contract window, the Close button is disabled if the old contract is still being held open. You cannot close a renewed contract until the previous contract is closed.

About closing a contract that is open multiple times

Run the contract close process when you are finished with a contract that was left open when it was renewed. The contract should be entirely billed and recognized. The contract close process determines if the contract is open for multiple date ranges; if so, the previous year amounts and total to date amounts are updated to keep the contract amounts accurate.

Posting maintenance contract renewals

If you are using percentage-of-completion revenue recognition, a final transaction is created when you renew or close a maintenance contract. Use the following procedure to post this transaction.

Posting renewals makes the appropriate general ledger accounting entry to transfer all current year costs to total-to-date costs and recognize revenue for the current fiscal year on the profit and loss statement. A POST RENEWALS batch is created in General Ledger.

1. Choose Microsoft Dynamics GP > Tools > Routines > Service Management > Maintenance Contract > Post Renewals. The Post Renewals window lists the number of maintenance contracts you have renewed or closed for a given period and year.
2. Choose Print Edit List.
3. Choose Post to post the renewals for the year.