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Author's profile photo Neil Xu

[Service Contract – Chapter 1] Service Contract Overview and Object Hierarchy

The Service Contract in S/4HANA Service is mainly focused on providing the Service Contract Management features including:

  • Create and change service contracts in SAP S/4HANA directly
  • Agree on price earlier with your customers to help them lower prices for services and service parts
  • Periodic billing plans to bill service contracts at regular intervals and automatic renewal
  • Utilize price adaptation for service contracts for flexible pricing

From business perspective, a service contract can be divided into three levels from top to bottom: header level, item level and billing request line level. One service contract header contains multiple service contract items based on the business requirements and one service contract item contain a set of billing request lines based on the billing plan rule.

· Header Level: Service contract header has the general information such as service contract ID, description, contract start date, contract end date. These information indicates the service contract’s life cycle and also include some cumulative values as statistics, e.g. pricing details. There’re some features at header level which can impact all the items in the Service Contract, such as service contract cancellation, service contract rejection and etc.. When adding new service contract items in the service contract, some of the header information are populated into items as default value, e.g. service contract start date, service contract end date, parties involved and etc.

· Item Level: The service contract has two types of service contract item: Standard Service Contract Item and Price Adaptation Item. The service contract item is the object with specific business values. A service contract item’s life cycle indicates whether the service contract item is valid or not. Each service contract item has its own item details, price details, billing plan, price agreement and etc..

· Billing Request Line Level: The billing request line of a service contract item is the basic object to integrate with Sales billing in SAP S/4HANA Cloud. Each billing request line has its billing date, billing value and other billing required information. A billing request line can generate the billing document request to SAP billing and then generate the invoice accordingly. The billing request line can be generated automatically based on the billing plan rules.

The integration for service contract is based on these three levels. For example, to integrate with solution order, the service contract item in solution order could generate a new service contract with service contract header and items together, the billing request lines are automatically generated for service contract items. To integrate with billing, the billing request line is the base unit to generate the billing document request.

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