Contracts
Creating a new contract
Last Updated: November 5, 2024Here is a demo video how to create a contract: General information Contract name*: The name of the contract, for example “Contract for cleaning services”. Company name: Select from the list the other party to the contract – the company that the contract is (would be) made with. Or, you can create a new company, by clicking Add new. Status*: Select among the following statuses: Draft, Pending, Active, Terminated and Archived. By changing the status of a contract, you can manage the entire contract lifecycle in Contractpedia. Category: Select a category from the default list or create a new category by clicking Add new. You can edit and delete categories from Burger menu > Categories Contract number: Some contracts have a unique contract number or an internal reference number. You can enter it in this field. Connections Responsible person*: This is the person who is responsible to manage, review and take care of the contract. You can either select a responsible person from the list, or create a new one, by clicking Add new If you want Contractpedia to create automatic to-dos and notify the person when a contract is due to expire, then the Responsible person for the contract should be a user of Contractpedia. Make sure to connect the person’s record to their Contractpedia user account. You can learn how to do this from here. Location*: The Location in your company that the contract belongs to. For example, “London Office”, “24 High Street” or “Building A”. If you only have one location in the Company, you can simply create a Location called “Company HQ” of “Main Office”. Your can either select a Location from the list or create a new one, by clicking Add new Department: The Department that the contract belongs to. For example “Administration”, “Sales” or “Finance”. Linked assets: You can link assets to this contract. For example if you are saving a service agreement for a photocopier, you can create the asset in Contractpedia and connect it to this contract. You can also link multiple assets to the same contract. For example, a contract with a mobile network operator can have 20 SIM cards which you can create as individual assets and then connect them to one supplier contract. Dates & periods Start date*: Select when the contract starts, or in other words, comes into force. Expiration type*: “Fixed period” means that the contract has a set period, for example 1 year or 24 months. “No fixed period” means that the contract will run until it is terminated. This could be a contract that is billed month-to-month and the customer can terminate it by informing the supplier one or more months in advance. Contract period*: If you select “Fixed period”, here you have to enter the period of the contract. For example 1 year or 24 months. End date*: Instead of selecting the Contract period (for example “24 months”), you can select the End date of the contract. Automatic renewal: Many contracts have an automatic renewal clause. This means that if the contract is not terminated by a specific date, it would be automatically renewed and prolonged for a certain period of time. For example, if a supplier contract with an automatic renewal clause runs for 24 months and the customer does not notify the supplier on time that he wishes to discontinue the contract, it would be automatically renewed for a new period, for example for another 24 months. The automatic renewal period is the period of time that the contract would be prolonged for if no action is taken by a certain date to terminate it. In many cases the renewal period is the same as the original contract period – meaning that if a contract is originally running for 24 months, it would be automatically renewed for another 24 months. Termination notice: A termination notice is the formal notification of the end of the contract. For example, it can be 3 months. In many cases this means that if the customer does not notify the supplier in writing 3 months before the end date of the contract that he wishes to terminate it, the contract will be automatically renewed for a new period. Renewal limit: In some cases a contract can have a maximum number of renewals clause. This means that the contract cannot be renewed (prolonged) more than X times. For example, if you enter 0 the contract will not get renewed at all, if you enter 1, the contract will get renewed once and if you enter 2, the contract will get renewed twice. Denunciated: If the contract is about to be terminated, this information should be filled-in. Check the box next to Denunciated and select the Actual termination date (the date when the contract is terminated by sending a termination notice) and Actual expiration date (the date when the contract expires). Financial information Type*: Select if the contract is related to paying money (Expense), receiving money (Income) or neither of these two (Non-monetary). Usually a contract made with a supplier is Expense, and a contract made with a customer is Income. Some contracts don’t have a monetary value, such as Non-disclosure agreements and Data processing agreements. Fee name: Enter the name of the fee, for example “Main contract fee”, “Original fee”, “Start-up fee”, etc. Click + to add another fee. Amount: Select how much the fee is, for example enter 1000 if the payment is €1,000 paid every month. Period and period type: Select the recurrence of the payment. For example, if it is paid every month, write 1 and then choose “Month”. If it is a one-time payment, then simply choose “Once”. Billing start date: Optionally, you can specify the first billing date of the payment. Otherwise the default first billing date will be the contract’s start date. Billing end date: Optionally, you can select the last billing date of the payment. If your last payment is after the end of the contract period, then you should enter a Billing end date for the last payment. This way the payment will be included and calculated in Expenses (or Income) and Remaining obligation even though it is outside the contract period. Otherwise the payments will...
How to quickly copy (duplicate) a contract
Last Updated: October 29, 2024If you have created a contract and want to create another one with very similar or even the same details, there is a fast and easy way to do so, using the Copy button. Here is how to copy (duplicate) a contract. 1. Go to the contract that you wish to copy (duplicate). 2. Click on the Copy button at the top right of the screen 3. Your new contract is now saved. The new contract will be identical with the original one, just the Contract name will be different, you will notice that the word “Copy” is added. If you wish to rename the new contract or change any other details, click on the Edit button , make your changes and Save the contract.
Contract’s Information Box
Last Updated: November 1, 2024When you create a Fixed period contract, on the Contract’s details page you will be able to see a visualisation of the entire contract lifecycle. This is a dynamic timeline chart that provides a quick overview of your contract’s period(s). Here is an example: Each line here represents a new period. The first line is the original period and each of the next lines is a new period since the contract was automatically renewed. You don’t have to do anything to renew a contract. If you enter the information for Automatic renewal on the Contract page, Contractpedia will create the new period and prolong the contract accordingly.
Contract Liabilities
Last Updated: October 29, 2024Fixed period contracts have an ongoing commitment. This creates a certain liability (obligation). Let’s say you sign a 12-month contract with the following fees: Start-up fee € 1,000 Monthly contract fee € 500 Annual fee € 1,000 This would mean that at the start of the contract term you have a liability (remaining fees) of € 8,000. As the months go by and you pay the fees, the contract’s liability (remaining fees) decreases. In Contractpedia only Fixed period expense contracts create a liability. No fixed period contracts would usually be pay-as-you-go services with no long-term commitment. When you create a Fixed period contract, Contractpedia creates a Liabilities list found on the Contract details page. If you scroll all the way down, you will see a tab called “Liabilities”. Here is how it looks like: Date: This is the start date of the contract and then each following month during the contract’s lifecycle. Remaining fees: Contract’s remaining liabilities which are the remaining money that should be paid on this contract. Total fees: This is a total of all fees to be paid on the contract during a particular month. Fees hover: You can create more than one fee per contract. Then, if you hover your mouse over an amount in the “Total fees” column, you will see a pop-up window containing a broken-down list of the various fees on the contract.
Terminating a contract
Last Updated: October 29, 2024Step 1 Go to the Contract’s Details page and review the information below Dates & Periods. Take note of the following three areas: Termination noticeA termination notice is the formal notification of the end of the contract, for example 1 month. In many cases this means that if the customer does not notify the supplier in writing 1 months before the end date of the contract that he wishes to terminate it, the contract will be automatically renewed for a new period. Current end date The end date of the current contract period. If not terminated by…This information here is based on the data that you have entered when the contract was created. From here you can understand what is the final data when a termination notice should be sent. Step 2 Download the Word document Contract termination template.docx and fill out the correct details. Then, send the notification to the supplier. Step 3 On the Contract’s Details page, click on the Edit button and do the following: – Change the status of the contract to Terminated. In the future when the contract expires, you may change the status to Archived. – Scroll down to the Dates and Periods section and check the box Denunciated. – In the Actual termination date field, enter the date when you have terminated the contract. – In the Actual expiration date field, enter the date when the contract expires. – If there are any unfinished to-dos connected to the contract, make sure to also change their status to Finished. – Then, save the contract * You may use this guide at your own risk. Contractpedia is not responsible for any loss or damage of any type or kind, arising from your use of this guide.