Contract Compliance

PUBLIC
2022-02
Managing contract compliance

SAP Ariba Procurement solutions
© 2022 SAP SE or an SAP affiliate company. All rights reserved.
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Content
Managing contract compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Contract compliance in SAP Ariba Procurement solutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Topics about how contract terms are applied to orders and invoices. . . . . . . . . . . . . . . . . . . . . . . . 8
Ordering, receiving or invoicing against contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
No-release order contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Automatic creation of contract-based invoices for evaluated receipt settlement . . . . . . . . . . . . . . . . . . . 12
Contract-based invoices in SAP Ariba Commerce Automation with SAP Ariba Contract Invoicing. . . . . . . 13
Contract-based invoices in SAP Ariba Invoice Management or SAP Ariba Buying and Invoicing. . . . . . . . . 14
Release order contracts in SAP Ariba Catalog. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Release order contracts in SAP Ariba Buying and Invoicing or SAP Ariba Buying. . . . . . . . . . . . . . . . . . . 16
Topics about how contracts are selected during ordering or invoicing. . . . . . . . . . . . . . . . . . . . . . 18

What is autoselection of contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Autoselection Criteria for Catalog Items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Autoselection Criteria for Non-Catalog Items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Autoselection Reevaluation on Requisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Manual selection of contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Manual Selection Reevaluation on Requisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Manual Selection Reevaluation on Contract-based Invoices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Topics about blanket purchase orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

What are blanket purchase orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Release order BPO process flow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
No-release order BPO process flow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Restricting suppliers from viewing amount and unit price values in BPOs. . . . . . . . . . . . . . . . . . . . . . . . 24
Topics about contract hierarchies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

Contract relationships in contract hierarchies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Accumulation of contract spend in contract hierarchies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Compound and override pricing in contract hierarchies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Contract request and contract statuses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Purchasing unit filtering in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Effective and expiration dates in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Accounting information on contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

2 PUBLIC Content
Accounting information defaulting on contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
Accounting field defaulting on release orders against contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Accounting defaulting behavior on contract-based invoices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Topics about contract limits and limit enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Contract limits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Overall contract limits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Overall Line Item Limits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Minimum and maximum contract limit enforcement on release orders. . . . . . . . . . . . . . . . . . . . . . . . . 40
Notification limits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Topics about contract accumulators. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Contract accumulators. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Preload Amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Accumulator updates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Contract accumulators for service purchase orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Contract request import using Microsoft Excel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Sample Microsoft Excel spreadsheets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Spreadsheet Import Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Support for SAP ERP service specification hierarchies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Topics about creating and managing contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

How to create a contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
How to create a new contract using the contract wizard. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
How to copy a contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
How to upload an Excel version of a contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
How to define general contract information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
How to define contract limits, notification recipients, and forecasting. . . . . . . . . . . . . . . . . . . . . . . . . . .61
How to create a milestone for a contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
How to control edit and release access for contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Identifying Users Who Can Edit the Contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Restricting Which Users Can Release or Invoice Against the Contract. . . . . . . . . . . . . . . . . . . . . . . . 66
How to define payment terms in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
How to add attachments to contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
How to export contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Exporting a Submitted Contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Exporting a Contract During Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Auto release contracts for automatic generation of requisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
How to create a contract for automatic generation of material requisitions. . . . . . . . . . . . . . . . . . . . 71
How to create a contract for automatic generation of service requisitions. . . . . . . . . . . . . . . . . . . . . 72
Topics about managing contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Content PUBLIC 3
Considerations when closing or changing contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
How to change, close, or reopen a contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
How to change or cancel a contract release order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Topics about pricing terms in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Discount pricing in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Catalog Imports and Repricing for Discount Pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
Tiered pricing in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Tiered pricing types. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Term-based pricing in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Limitations to Term-Based Pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
Term-based Discount. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
Term-based Pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Defining Term Boundaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Term-based grid pricing in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Formula pricing in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Multiplier Pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Matrix Pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Specifying Currency Values in Formula Pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Repricing for tiered and term-based pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Repricing of cumulative tiered-priced items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Repricing of per-order tiered or term-priced items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Support for CLID fields. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
Price limits for supplier-entered service sheet and invoice items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
How to define pricing terms on contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
How to configure pricing terms for a supplier-level contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
How to configure pricing terms for a commodity-level contract request. . . . . . . . . . . . . . . . . . . . . . 93
How to configure pricing terms for item-level contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
How to define pricing tiers on contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
How to define term-based pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
How to define term-based grid pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
How to define formula pricing in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
How to define price limits in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113
Managing compliance contracts with SAP Ariba Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

4 PUBLIC Content
This guide is for SAP Ariba users who create and maintain contracts and manage contract compliance for
requisitions, orders, and invoices.
A contract is an agreement between a buying organization and a supplier that identifies the terms for purchasing
goods and services repeatedly over time.
This guide applies to:
● SAP Ariba Buying

● SAP Ariba Buying and Invoicing
● SAP Ariba Catalog
● SAP Ariba Invoice Management
● SAP Ariba Contract Invoicing
Related guides
Purchasing guide for procurement professionals
Creating and managing invoices
Invoicing and payment process guide
Managing payment documents
Contract Compliance API

Managing contract compliance PUBLIC 5
Contract compliance in SAP Ariba Procurement
solutions
A contract is an agreement between a buying organization and a supplier that identifies the terms for purchasing
goods and services repeatedly over time.
A contract enables a buying organization to negotiate discounts based on a volume or dollar amount of future
purchases, and provides a supplier with a more regular stream of sales, along with the ability to more accurately
forecast demand for its products.
 Example
A company that expects to steadily add staff over a period of two years might negotiate a contract with a
supplier to provide office furnishings as needed over that period. The company can negotiate a discount based
on its guarantee to purchase everything from that supplier, and the supplier can better manage its inventory
and forecast sales based on a known level of future business.
SAP Ariba Procurement solutions support four types of contracts:
● Supplier level, which covers all products from a supplier.

● Catalog level, which covers all products from a catalog.
If a catalog-level contract includes PunchOut items, the contract terms are applied to an item only if that item's
part number and auxiliary part ID returned from the external PunchOut site is part of your catalog subscription.
● Commodity level, which covers all products identified by specific commodity codes from a supplier.
● Item level, which covers specific items from a supplier.
Depending on the type of contract and your site’s configuration, the terms of the contract are applied when:
● Purchasing users or agents order items that have a contract associated with them. The contract terms are
automatically applied when they add the items to their order.
● Purchasing users or agents create a purchase order (or release order) against the contract.
● Supplier or buyer users create invoices against the contract.
To create a contract in your SAP Ariba solution, you first create a contract request that defines the properties of the
contract, and that request must be approved in order for the contract to be created. Depending on the solutions
enabled in your site, you either start the contract creation in your contract workspace [page 114] (if your site is
enabled for SAP Ariba Contracts) or by using the Create Contract Request option [page 54] from your
dashboard (if your site does not use SAP Ariba Contracts).
 Note
● In sites configured for SAP Ariba Catalog only, you cannot define contracts where the contract terms are
applied during invoicing.
● In sites configured for SAP Ariba Buying only, you can define contracts for invoicing for the purpose of
exporting the information to your external ERP. You cannot create contract-based invoices in SAP Ariba
Buying.
● In sites configured for SAP Ariba Invoice Management only, you cannot define contracts where the contract
terms are applied on the order.

6 PUBLIC Contract compliance in SAP Ariba Procurement solutions
The following diagram outlines the contract request process:

Contract compliance in SAP Ariba Procurement solutions PUBLIC 7
Topics about how contract terms are applied to
orders and invoices
Ordering, receiving or invoicing against contracts [page 8]
No-release order contracts [page 10]
Automatic creation of contract-based invoices for evaluated receipt settlement [page 12]
Contract-based invoices in SAP Ariba Commerce Automation with SAP Ariba Contract Invoicing [page 13]
Contract-based invoices in SAP Ariba Invoice Management or SAP Ariba Buying and Invoicing [page 14]
Release order contracts in SAP Ariba Catalog [page 15]
Release order contracts in SAP Ariba Buying and Invoicing or SAP Ariba Buying [page 16]
Ordering, receiving or invoicing against contracts

When you create a contract, you need to decide when the contract terms are applied. Contracts terms can be
applied when users create orders, invoices, or receipts. Certain options might not be available to you depending on
your site configuration and enabled features.
Contract terms for a release order contract (the Release Required option is Yes on the contract) are applied during
the order process when users add items associated with the contract to an order. Contract terms for a no-release
order contract are applied when users create invoices or receipts against the contract.
If you allow receiving and invoicing against a no-release order contract, your SAP Ariba invoicing solution uses
three-way matching (invoice-contract-receipt). See Contract-based Receipts [page 11] for more information on
receiving for no-release order contracts.
The following table shows the types of contracts that are available depending on your site’s enabled features and
provides a high-level overview on how the contract terms are applied.
Enabled features Contract release type Contract terms applied when ...
SAP Ariba Catalog Release order contract Users punch in to the catalog to add items to a shopping
cart.
SAP Ariba Buying Release order contract Users create an order.
SAP Ariba Buying and In Release order contract Users create an order.
voicing
No-release order contract ● Users create a contract-based invoice.
● Supplier users create a contract-based invoice on
Ariba Network.
● Users create a receipt against the contract.

8 PUBLIC Topics about how contract terms are applied to orders and invoices
Enabled features Contract release type Contract terms applied when ...
SAP Ariba Invoice Manage No-release order contract Users create a contract-based invoice.
ment
SAP Ariba Catalog and Release order contract ● Users create an order in SAP Ariba Buying and In
SAP Ariba Buying and In voicing.
voicing ● Users punch in to the catalog to add items to the
shopping cart.
 Note
Available contract compliance features for
shopping carts and orders differ. For example,
cumulative tiered pricing does not apply to
shopping carts. Depending on your specific con
tract compliance requirements, you might want
to limit access to contracts by user group or use
purchase unit filtering of catalog content.

Ariba Network.
SAP Ariba Catalog and Release order contract Users punch in to the catalog to add items to the shop
SAP Ariba Invoice Manage ping cart.
ment
Ariba Network.
SAP Ariba Buying and In Release order contract Users create an order.
voicing and SAP Ariba In
voice Management
Ariba Network.
SAP Ariba Contract Invoic No-release order contract Supplier users create a contract-based invoice on Ariba
ing Network. For more information, see Contract-based in
voices in SAP Ariba Commerce Automation with SAP
Ariba Contract Invoicing [page 13]
Date to start receiving and invoicing for contract milestone items
The following site configuration option determines when a contract milestone item is ready for receiving and
invoicing.
Application.Contract.StartValidPeriodOnMilestoneCompleteDate (enabled for self-service)
For contract milestone line items, determines when the valid period for receiving and
invoicing starts. Invoices and receipts created before the valid period starts result in errors.
● When this parameter is set to Yes, the period starts on the actual milestone completion
date.

Topics about how contract terms are applied to orders and invoices PUBLIC 9
● When set to No, the period starts on the date in the Completion Due Date field.
No-release order contracts

A no-release order contract provides additional pricing terms for fixed and recurring fee items and for costs and
expenses.
When you create a no-release order contract, contract terms are applied during invoicing when users create an
invoice against the contract and, depending on your enabled features, during receiving. Contract terms for a no-
release order contract cannot be applied to orders.
No-release order contracts are typically used to create contract-based invoices for:
● Services.
● Fixed or recurring fee items. Fixed fee items have one occurrence, recurring fee items have multiple
occurrences.
● Milestone payments.
● Cost or expense items.
● Evaluated receipt settlement (ERS) transactions.
No-release order contracts are also useful in the following cases:
● Approval has been established for a negotiated contractual agreement that requires no purchase orders to
release funds against the contract.
● The purchasing agent might not have the line item details to create a release order, such as with advertising
contracts.
You can also use a no-release order contract for bookkeeping purposes. In this case, you must set the contract’s
Release Required (if available in your site), Allow invoicing against contract, and Allow receiving against
contract flags (if available in your site) to No to prevent any receiving or invoicing against the contract. Additionally,
you must set the contract’s hierarchical type to Standalone Agreement. If you create a contract in this manner, it
can be used only to document contract terms for reference by other organizations.
Another use of no-release order contracts is to accumulate spend within contract hierarchies, or to apply explicit
contract price terms (through price overrides), or both.
The following graphic shows the no-release order contract flow:

Contract-based receipts
When receiving is enabled for a contract, users can receive against items on the contract in much the same way as
they receive against items on a purchase order.
Some or all of the items on your contract may be configured for autoreceiving. Autoreceive rules are only evaluated
if the contract is configured for receiving. See the Receiving chapter in the Purchasing guide for procurement
professionals for general information about the receiving process.
 Note
You cannot receive against cost or expense items as they do not have pricing details.
You cannot receive against fixed or recurring fee items.
 Note
● If your site is configured for SAP Ariba Buying without the receiving option, you can create no-release order
contract requests for the purpose of exporting them to your ERP or to an external contract management
system.
● If your site is configured for SAP Ariba Buying with the receiving option, you can create no-release order
contract request that allow receiving against the contract.
Approvables for contract receiving
The following approvable documents are created for contract receiving:
Approvable Description
Receipt Used to keep track of each receipt for a contract as it is submitted and approved. Contract re
ceipts do not contain milestone items.
Receipt approvable documents are also used to keep track of receipts for purchase orders.
Milestone tracker Used to keep track of each milestone item on a contract. A milestone tracker is similar to a
receipt, except that it used to verify a milestone item.
Every milestone item has its own milestone tracker, which is created when the contract is cre
ated. Milestone trackers are always created for milestone items, regardless of whether receiv
ing is enabled for the contract, or whether the contract has release orders.
Partial receipts
Because materials do not necessarily arrive from the supplier in a single shipment, and services are not generally
provided all at once, you can enter partial receipts against contracts. Your SAP Ariba solution handles partial
receipts by creating a new receipt approvable document with the remaining balance when the original receipt is
partially received.

Until the contract line-item limit or overall contract limit has been reached, contract receipts are partial receipts.
When you receive against a quantity-based or amount-based contract line item that does not have a limit, all
receipts are partial receipts.
Partial receipts are not generated for milestone items on contracts because you can only receive a milestone by
entering whether the milestone is completed. When a milestone is received, the percent completion on the
milestone tracker is set to 100 percent.
Receiving types for contract line items
When you add a line item to a contract, you specify whether the limit for the line item is amount or quantity based.
When you specify that receiving is required, the contract line item is received according to this limit including any
tolerances you have specified. For example, if the limit specified is quantity, then the item is received by quantity.
For more information on setting limits for contract line items, see How to define contract limits, notification
recipients, and forecasting [page 61].
Automatic creation of contract-based invoices for

evaluated receipt settlement
For supplier locations that are configured for evaluated receipt settlement (ERS) transactions, SAP Ariba Buying
and Invoicing automatically creates invoices based on the associated no-release order contracts when goods
receipts are fully approved. In addition, SAP Ariba Buying and Invoicing automatically creates invoices for items
configured for recurring and fixed fee payments based on the payment frequency and billing dates configured on
the contracts.
SAP Ariba Buying and Invoicing inherits information, such as prices and payment terms that are specified for line
items on the contract. All taxes for invoices are generated automatically from receipts that are based on taxes
specified on the associated contract.
The following are the prerequisites for ERS-based transactions:
● You must have a mutual agreement with a supplier to use ERS for purchasing transactions. When items on
contracts are flagged for ERS transactions, suppliers cannot create invoices in the Ariba Network against those
contracts.
● Ensure that a valid commodity code with receiving enabled is maintained for each material line item on the
contract request.
● The order price of the materials must not be an estimated price.
● You must be a member of the Contract Manager group to approve items in contract requests for ERS and
automatic invoicing transactions.
The following is a high-level workflow of an ERS-based transaction for a no-release order contract:
1. The buyer user creates a contract request for items that need to be procured from ERS-approved suppliers.
The buyer user configures the Fixed and Recurring Fees details to specify the date at which items are
delivered and the frequency at which services are rendered.
2. A user responsible for approving line items for ERS transactions performs the following actions:

○ Ensures that the appropriate commodity codes are used for each item on the contract request.
○ Edits the details for each item on the contract request to ensure that the ERS Allowed field is set to Yes,
and then approves the contract request.
○ Edits the details for fixed and recurring fee items to ensure that the Auto Invoice field is set to Yes.
A no-release order contract is created.
3. The supplier ships the items to the buyer.
4. (For material items) The buyer user receives the items and approves the receipt transactions. Depending on
the quantity of items received, SAP Ariba Buying and Invoicing generates invoices and credit memos with
reference to the receipt:
○ If items are fully received, SAP Ariba Buying and Invoicing automatically creates an invoice and the
transaction is passed for payment.
○ For items received in batches, SAP Ariba Buying and Invoicing automatically creates separate invoices for
each batch based on the accepted quantity of items, and the invoices are passed for payment.
○ For line items on a receipt with negative values for the amount accepted, SAP Ariba Buying and Invoicing
automatically creates a line-item credit memo.
5. (For fixed and recurring fee items) Depending on the frequency and billing date specified on the contract, SAP
Ariba Buying and Invoicing automatically creates an invoice for fixed and recurring fee items on the scheduled
date.
Contracts that consist a mix of ERS and non-ERS items
Your site might allow users to create manual invoices for non-ERS items and automatic invoices for ERS items for
contracts that consist a mix of ERS and non-ERS items. This capability is controlled by a feature toggle that SAP
Ariba sets.
Contract-based invoices in SAP Ariba Commerce

Automation with SAP Ariba Contract Invoicing
SAP Ariba Commerce Automation customers can add SAP Ariba Contract Invoicing to their SAP Ariba solution.
Contract invoicing for SAP Ariba Commerce Automation is delivered based on a reduced feature set of the SAP
Ariba Invoice Management solution and includes the following functionality and benefits:
● Catalog Management: Catalog managers can load and maintain supplier catalogs.
● Contract Definition: Contract agents create contracts including catalog and non-catalog items, recurring
items, cost and expense items and milestone items and to define the pricing terms for those items. Contract
can be based on item level, commodity level, catalog level or supplier level.
● Contract Management: Contract agents and contract managers can close, change, or reopen contracts.

Limitations / unsupported functionality in SAP Ariba Contract Invoicing
A number of contract compliance features that are available in SAP Ariba Invoice Management are not supported
or are not available in an SAP Ariba Contract Invoicing site:
● Spend against the contract is not accumulated on contract level and limits are not enforced, which means that
a contract is not automatically closed when it is fully invoiced. Contracts are only automatically closed when
the expiration date has been reached or when the contract agent manually closes the contract.
● Contracts of type blanket purchase order (BPO) are not available.
● Cumulative tiered pricing is not supported.
● Payment terms cannot be set on contract level.
● Milestone items cannot be defined.
● Buyer users cannot create invoices. However, supplier-entered contract-based invoices are submitted to SAP
Ariba Contract Invoicing for reconciliation.
Workflow overview for SAP Ariba Commerce Automation with SAP Ariba Invoice Management
Suppliers follow the same workflow as described in Contract-based invoices in SAP Ariba Invoice Management or
SAP Ariba Buying and Invoicing [page 14], except that the final invoice, after passing the validation rules and being
digitally signed (if required) in Ariba Network, is sent as a cXML invoice to the buyer’s ERP system for
reconciliation.
Contract-based invoices in SAP Ariba Invoice

Management or SAP Ariba Buying and Invoicing
When you allow invoicing against a no-release order contract, your site can be configured to allow suppliers to
create invoices against their contracts from their Ariba Network account. Depending on your site configuration,
there are two workflow options:
Option 1: Suppliers access your site from their Ariba Network account, but create the invoice entirely in your site.
They follow the same invoice data entry process as users in your company that create a contract-based invoice.
Option 2: Suppliers start and finish the invoicing process in their Ariba Network account using their familiar
invoicing process to create an Ariba Network-validated contract invoice. The invoice is created in their Ariba
Network account and submitted to your site for approval the same way as a standard invoice. Suppliers access
your site transparently to retrieve certain contract information and add or edit items from the contract on the
invoice.
The following describes the workflow to create an Ariba Network-validated contract invoice:
1. Suppliers initiate the contract-based invoice creation from Ariba Network by selecting the customer for which
they are creating the contract-based invoice.
2. Ariba Network automatically transfers the supplier user into your site, where the supplier user selects the
contract, enters the invoice number and invoice date, and the Sold To Email (email of person who requested
the goods or services). Depending on the contract specification, the Sold To Email address might be defaulted
from the contact person on the contract.

3. The supplier user is then returned to the Create Invoice page in Ariba Network where they can enter additional
invoice header information.
4. To add items to the invoice, the supplier user is again transferred into your site, where they select the items
from the catalog. If allowed, they can also add non-catalog items.
 Note
For No-Release Contracts and Blanket Purchase Orders, when you click the Add Item button, the catalog
item is added to a shopping cart in the catalog page. You can add multiple catalog items to your shopping
cart and review them in the Review Cart page. Click Done to return to the Create Invoice page in the Ariba
Network.
5. Depending on the contract configuration, the supplier user might enter accounting information.
6. After adding the line items, they are validated against the contract line items and the contract’s pricing terms
are applied. If any discrepancies are found, the supplier user receives an error message to correct the
information.
7. The supplier user is returned to Ariba Network.
8. To make changes to the items on the invoice, the supplier user is transferred back to your site. If allowed, the
supplier user may change the unit price on the invoice. This effectively overrides the pricing terms defined on
the contract for the item. For example, if a catalog level contract is defined with a 10% discount for all items,
and the supplier changes the unit price of an item on the invoice, that price will be the final price used on the
invoice.
9. In Ariba Network, the supplier user completes the invoice by adding other header fields as well as any
comments, attachments, tax, shipping or special handling line items either to the invoice header or on line item
level.
10. The supplier user can always return to your site to retrieve additional items, change a contract header fields
such as the Sold To Email, or edit or delete existing line items on the invoice. They can also change the
contract, which effectively deletes the current invoice and starts a new invoice.
11. When the supplier submits the invoice, Ariba Network does a final validation against your invoicing rules
defined for your Ariba Network account, digitally signs the invoice if your Ariba Network account has been
enabled for digital signature, and sends the invoice to your site for reconciliation and approval.
If the Invoice Compliance for Contract-based Invoices feature is enabled for your site, additional contract settings
allow you to control certain functionality available to suppliers when they create a contract-based invoice. See
Entering General Contract Definitions [page 56] for more information.
Release order contracts in SAP Ariba Catalog

If your site is configured for SAP Ariba Catalog, you allow purchasing users to punch in to your SAP Ariba site from
an external purchasing system to add items from the catalog to the shopping cart, which is then transmitted back
to the ERP for order approval and execution.
The following describes how contract terms are applied in SAP Ariba Catalog:
1. The users select items from the catalog.

2. If the users select a catalog or non-catalog item that is covered by a contract, and they have release access to
that contract or the contract has unrestricted release access, SAP Ariba Catalog automatically selects the
contract and applies it to the shopping cart line item.
For more information on autoselection, see About the Autoselection Feature [page 18].

3. If the users have release access to a contract, they can manually select items directly from that contract.
For more information on manually selecting a contract, see About the Manual Selection Feature [page 20].
When the users check out their shopping cart, the available amount of the contract is automatically reduced. For
more information, see Contract Accumulators [page 45], and Pricing Term Accumulators [page 46].
Release order contracts in SAP Ariba Buying and

Invoicing or SAP Ariba Buying
Release order contracts require a purchase order, or release order, to apply the contract pricing terms to the items
on the release order and approve purchases from the contract. For example, if you have a contract to spend
$10,000 with a supplier, you require a fully approved release order against that contract before the order is placed
with the supplier.
A release order contract has the following features:
● Release orders are used to consume funds from the contract. The available amount and other accumulators
are adjusted automatically for the contract based on the purchase requisition status.
● Release orders support standard procurement functionality, such as change orders and line item split
accounting.
● When you select a catalog or non-catalog item that is covered by a contract, the contract that is applied is
‘attached’ to the requisition line item. You can click on the contract link to review the contract details.
● You can restrict release access to certain users or user groups. Only users you granted release access can
select items directly from a contract when creating release orders.
● You can include pricing terms for materials, services, and commodities.
The following graphic shows the release order contract flow:

How Release Orders are Created
Purchasing users can create a release order by:
● Selecting a catalog or non-catalog item that is covered by a contract. SAP Ariba Buying solutions automatically
selects the contract and attaches it to the requisition line item. This feature is called autoselection.
● Manually selecting a contract, and then selecting items directly from the contract. This feature is called manual
selection. Note that if you do not create subscriptions for non-catalog items, those items will not be available
for review through the catalog view, and you have to enter the item information explicitly. See How to define
general contract information [page 56] for more information.
When purchasing users select items that are associated with a contract from the catalog, the contract price is
transparently applied to the items when they are added to the requisition. If not all items in the requisition are
associated with the same contract, or if some items are not associated with any contract, then SAP Ariba Buying
solutions creates multiple orders from the requisition. For all items associated with the same contract, a contract-
specific release order using a specific release order ID is created.
Release Order IDs
When SAP Ariba Buying solutions generates a release order, it uses the contract ID and the total number of release
orders issued against the contract to create the release order ID.
For example, suppose you create a requisition that results in a new release order for contract C10. The first release
order issued against C10 will be numbered C10-R1, the second release will be numbered C10-R2, and so on. If
release order C10-R1 is changed, the changed release order ID will be C10-R1-V2.
If the contract with which a release order is associated is changed, the contract version number is not changed in
the release order ID. For example, if the original release order ID was C10-V2-R2, and the contract changed to C10-
V3, the release order ID will remain C10-V2-R2.
Release Access Control
By default, when you create a release order contract, all users have release access. You have the option to restrict
that access to a specific set of users. If you do restrict access to a contract, neither the contract nor any items
governed by the contract are visible to users who are not allowed to release funds against the contract.

Topics about how contracts are selected during
ordering or invoicing
In the default configuration, applicable contracts get automatically selected during the purchasing process.
Members of certain groups can also manually select a contract and create release orders against them. Invoicing
against contracts always starts with the manual selection of the contract to invoice against.
What is autoselection of contracts [page 18]
Autoselection Criteria for Catalog Items [page 19]
Autoselection Criteria for Non-Catalog Items [page 19]
Autoselection Reevaluation on Requisitions [page 20]
Manual selection of contracts [page 20]
What is autoselection of contracts

Autoselection only applies to release order contracts.
When users select a catalog or non-catalog item that is covered by a contract, the autoselection feature is triggered
to select the contract and apply it to the item or items on the order or shopping cart. Autoselection is triggered also
when users change the supplier, commodity code, quantity, or part number fields for an item while creating or
editing a requisition or shopping cart.
If an item is governed by multiple commodity level contracts, the contract with the most specific commodity type is
selected. For example, if you have two commodity level contracts - Contract A which governs the Paper Materials
and Products category, and Contract B which governs the Printing and Writing Paper - Contract B is selected and
applied to the items for products within the Printing and Writing Paper category.
A contract that has unrestricted release access—that is, release access is not restricted to a subset of users—can
be autoselected for any user. A contract that has restricted release access can also be autoselected, but only for
users on the contract’s release access list.
The rest of this section describes when autoselection is triggered, and when it is reevaluated. It also describes the
criteria that are used to autoselect catalog and non-catalog items.
The autoselection feature is enabled by default.
If purchasing unit filtering is enabled, any local contract matching the requisition line item and also matching the
purchasing unit of the requisition or one of its parent purchasing units can get attached to the requisition.

18 PUBLIC Topics about how contracts are selected during ordering or invoicing
Autoselection Criteria for Catalog Items
For catalog items, the autoselection feature selects a contract based on the following business logic:
1. For the selected supplier, the autoselection feature finds all the open contracts for which the user has release
access.
2. From the list of contracts, the autoselection feature finds every contract line item—catalog or non-catalog—
that might be a potential match for the catalog item.
3. From the list of potential contract line items, the autoselection feature selects the contract that provides the
lowest price for the catalog item.
4. If multiple contracts provide the same price for the item, the autoselection feature selects a contract based on
the most specific agreement type. From most to least specific, the agreement types are:
○ Item level
○ Commodity level
○ Catalog level
○ Supplier level
For more information, see About Limits [page 39].
5. Finally, the autoselection feature attaches the contract to the line item, and applies the contract pricing.
 Note
The price applied to a line item that is governed by cumulative tiered pricing can change during the lifecycle of
the requisition. For more information, see Repricing of Cumulative Tiered-Priced Items [page 88].
Autoselection Criteria for Non-Catalog Items

For non-catalog items, the autoselection feature selects a contract based on the following business logic:
1. For the selected supplier, the autoselection feature finds all the open contracts for which the user has release
access.
2. From the list of contracts, the autoselection feature finds every contract line item—non-catalog or catalog—
that might be a potential match for the requisition line item.
3. From the list of potential contract line items, the autoselection feature selects the contract that provides the
lowest price for the item.
The pricing on a matching contract line item applies to a non-catalog item in the following cases:
○ The contract is an item level agreement, or
○ The contract is a supplier- or commodity level agreement, and the creator of the contract selects Yes for
the Apply discount terms to non-catalog items? or the Do non-catalog items accumulate against
contract? options when creating the contract.
If no contract line-item pricing applies to the item, the autoselection feature selects the most specific contract
line item according to the agreement type. From most to least specific, the agreement types are:
○ Item level
○ Commodity level
○ Supplier level

Topics about how contracts are selected during ordering or invoicing PUBLIC 19
4. If multiple contracts provide the same price for the item, the autoselection feature selects a contract based on
the most specific contract type from most to least specific, as described in step 3.
5. Finally, the autoselection feature attaches the contract to the line item, and applies the contract pricing.
 Note
The price applied to a line item that is governed by cumulative tiered pricing can change during the lifecycle of
the requisition. For more information, see Repricing of Cumulative Tiered-Priced Items [page 88].
Autoselection Reevaluation on Requisitions

Autoselection can also be triggered after a contract has been attached to a requisition. This feature is referred to as
autoselection reevaluation. The following table describes when autoselection is reevaluated.
Autoselection is reevaluated when... Considerations...
● The contract is changed before the requisition is submitted. If the new line item price is higher than the original
● The contract is closed before the requisition is submitted. price, a warning is displayed to alert the user to edit
the requisition.
● The contract is changed after the requisition is submitted. If the new line item price is higher than the original
● The contract is closed (manually, or because its expiration date has price, the Edit rules are also re-executed.
been reached) after the requisition is submitted.
● The contract is changed after the requisition is approved. The requisition must not yet be in the Ordering or Or
● The contract is closed (manually, because its expiration date has dered status.
been reached, or because its tolerance was exceeded) after the Regardless of the contract changes, the Edit rules are
requisition is approved.
re-executed and the approval flow of the requisition is
retriggered.
If you have enabled the Demand Aggregation feature on your site, when you submit a requisition, contracts get
detached from line items that are held for aggregation. If the price of a held line item increases as a result, a
warning message is displayed to inform the user about the reason for the same.
If you manually select a contract, the autoselection feature does not override your choice. For more information on
manual selection, see About the Manual Selection Feature [page 20].
Manual selection of contracts

The manual selection feature allows purchasing or invoicing users to select a contract when they are creating a
requisition, shopping cart, or a contract-based invoice, and then select items directly from that contract.
 Note
This functionality is available to purchasing users only if they are members of the Contract Release User
group, or are members of the following procurement groups: Procurement Agent, Procurement Manager,
Purchasing Agent, and Purchasing Manager.

20 PUBLIC Topics about how contracts are selected during ordering or invoicing
To manually select a contract for when creating a purchase requisition, on the Catalog Home page, click Contract
in the Shop By area and search for the contract.
To create a contract-based invoice, click Create > Contract-based Invoice on the dashboard.
Manual Selection Reevaluation on Requisitions

Manual selection can be reevaluated after a contract has been attached to a requisition. The following table
describes when a manually selected contract is reevaluated.
If a manually selected contract is... Your Ariba procurement solution...
● Changed before the requisition is submitted. Displays a validation error. You must modify
● Closed before the requisition is submitted. the requisition and delete the line item before
submitting the requisition.
● Changed after the requisition is submitted, and the new line item price is Automatically withdraws the requisition.
higher than the price at the time of submission.
● Closed after the requisition is submitted but before it reaches the Ordering
or Ordered status.
● Changed after the requisition is submitted, and the new line item price is Attaches the changed (newer) version of the
the same or lower than the price at the time of submission. contract to the requisition.
● Changed after the requisition is approved but before it reaches the Order
ing or Ordered status, and the new line item price is the same or lower
than the price at the time of submission.
If you have enabled the Demand Aggregation feature on your site, when you submit a requisition, contracts get
detached from line items that are held for aggregation. If the price of a held line item increases as a result, a
warning message is displayed to inform the user about the reason for the same.
Manual Selection Reevaluation on Contract-based Invoices

Contract-based invoices are always created by selecting a contract first, and then adding items from the contract
to the invoice. In the typical configuration, after an invoice has been submitted, the invoice is automatically
approved and an invoice reconciliation document is created to document any discrepancies, or invoice exceptions,
that result from evaluating the information on the invoice against the contract. Only if no invoice exceptions are
found, or all invoice exceptions are resolved, can the invoice then be fully approved for payment.
If the associated contract is changed or closed before the invoice is fully reconciled and approved for payment, all
invoices reconciliation documents associated with the contract are re-reconciled. Depending on the invoice
exceptions configured for your site, this might result in new invoice exceptions and new approvers added to the
approval flow for exception resolution and approval.

Topics about how contracts are selected during ordering or invoicing PUBLIC 21
Topics about blanket purchase orders
What are blanket purchase orders [page 22]
Release order BPO process flow [page 23]
No-release order BPO process flow [page 23]
Restricting suppliers from viewing amount and unit price values in BPOs [page 24]
What are blanket purchase orders
 Note
This feature is not available in sites configured for SAP Ariba Catalog or SAP Ariba Contract Invoicing only.
You create a blanket purchase order (BPO) as an attribute of a contract. BPOs can be release order or no-release
order type contracts.
Defining a contract as a BPO contract provides additional benefits compared to a non-BPO contract:
● BPOs are sent to suppliers on Ariba Network, where suppliers can view BPOs and their accumulators. Non-
BPO contracts are not sent to suppliers on Ariba Network.
● If you don’t allow collaborative invoicing, suppliers can invoice against no-release order item level BPOs directly
on Ariba Network using purchase order to invoice flip (PO-flip).
● If you allow collaborative invoicing, suppliers can select the BPO (item, commodity, catalog or supplier level
contract) in their Inbox on Ariba Network to punch in to your site to start creating the invoice. For non-BPO
contracts, suppliers first select the customer on a contract search page, and then punch in to create their
invoices.
● Maximum limits are required for BPOs. See About Limits [page 39] for more information.
BPOs are identified in the system by a BPO prefix, for example BPO123.
See About Ordering, Receiving or Invoicing Against Contracts [page 8] for more information about release order
and no-release order contracts.
 Note
● A BPO can be a master agreement. If you create a BPO as a subagreement, then its parent must also be a
BPO contract.
● If a supplier’s preferred routing method is manual, the BPO status is immediately set to Processed, and the
history tab includes a record indicating the reason. You have to either manually deliver a printout of the
BPO to the supplier, or implement a supported custom routing for the desired routing method.
● If you create a parent agreement BPO for a supplier configured for manual routing, and you then create a
subagreement BPO associated to the parent agreement after this supplier has been enabled on Ariba
Network, the subagreement BPO will not be sent to Ariba Network. You will need to deliver the contract to
the supplier manually.

22 PUBLIC Topics about blanket purchase orders
● Suppliers can create invoices using PO-Flip® (purchase order to invoice flip) in Ariba Network for no-release
order item level BPOs if:
○ Collaborative invoicing is not enabled for your site, or
○ Collaborative invoicing is enabled for your site, but the contract does not allow collaborative invoicing.
● For all no-release order BPOs, if your site is enabled for collaborative invoicing and you allow collaborative
invoicing for these BPOs, suppliers punch in to your site to create invoices against these contracts.
Release order BPO process flow

The following describes the release order BPO process:
1. The contract agents creates a contract request for a contract of type BPO with the release required options set
to Yes.
2. After the contract request has been fully approved, the BPO is created and sent to the supplier on the Ariba
Network. This BPO is informational only to track the purchases against the BPO. Invoiced amounts are not
accumulated on release order BPOs and are not tracked on the BPO.
3. A purchasing user creates a requisition that includes line items that are associated with the BPO. After the
requisition is approved, a purchase order is sent to the supplier on Ariba Network. The order ID includes the
BPO ID as a prefix, and the order shows the original BPO as a related document.
4. Suppliers can create order confirmation, ship notices and invoices against the purchase order just as they do
with a standard purchase order.
No-release order BPO process flow

The following describes the no-release order BPO process:
1. The contract agents creates a contract request for a contract of type BPO with the release required options set
to No.
2. After the contract request has been fully approved, the BPO is created and sent to the supplier on the Ariba
Network.
3. If the option Allow invoicing against the contract is set to Yes, and you allow collaborative invoicing, then the
supplier can punch in to your SAP Ariba invoicing solution to create the invoice. The specific invoicing flow for
the supplier depends on your site configuration. See Contract-based invoices in SAP Ariba Invoice
Management or SAP Ariba Buying and Invoicing [page 14] for details.
If you allow invoicing against the contract but you do not allow collaborative invoicing, then on item level BPOs,
suppliers can use purchase order to invoice flip (PO-Flip) to create an invoice. For commodity level, catalog
level, or supplier level contracts that do not allow collaborative invoicing, suppliers can create a non-PO invoice
with the contract ID to submit the invoice.

Topics about blanket purchase orders PUBLIC 23
Restricting suppliers from viewing amount and unit
price values in BPOs
You can restrict suppliers from viewing the Amount, Unit Price, and Quantity field values in blanket purchase
orders (BPOs) on the Ariba Network. You can choose to hide these field values individually for each line item or at
the header-level (applicable to all line items). Selecting to hide the Amount or Unit Price automatically hides the
Quantity field values. The options to hide these fields (at both the header and line-item level) are also available
during contract import and export.
When suppliers view the BPO in the Inbox on the Ariba Network, the restricted field values are displayed as
Undisclosed. The restricted field values are set to zero when the supplier attempts to create an invoice associated
with the BPO. The supplier can then edit these values and submit the invoice on the Ariba Network.
The functionality provided by this feature is not applicable to scenarios where supplier users punch into SAP Ariba
Procurement solutions from Ariba Network to view the BPO details or to create invoices against BPOs. If you want
to restrict supplier users from punching into SAP Ariba Procurement solutions, contact your Designated Support
Contact and have them log a service request. An SAP Ariba Customer Support representative will follow up to
configure your site accordingly

24 PUBLIC Topics about blanket purchase orders
Topics about contract hierarchies
A contract hierarchy is a set of related contracts that can share accumulated amounts and discounts. When you
create a contract request, you specify whether or not it belongs to a hierarchy
Contract relationships in contract hierarchies [page 25]
Accumulation of contract spend in contract hierarchies [page 27]
Compound and override pricing in contract hierarchies [page 28]
Contract relationships in contract hierarchies

A contract has one of three hierarchical relationships:
● Standalone agreement, which is not part of a hierarchy. If you want to include a standalone agreement in a
hierarchy, you must change it to either a master agreement or subagreement before the contract request has
been approved.
● Master agreement, which is the top-most contract in a hierarchy. A master agreement is used to group
subagreements together. You can associate subagreements with master agreements that have a contract
status of Processed or Open.
● Subagreement, which is a contract associated with a parent contract in a hierarchy. The parent of a
subagreement can be a master agreement or another subagreement. A subagreement can have only one
parent, but it can have multiple children.
For non-BPO type contracts, you can aggregate multiple contracts into a hierarchy in which a parent contract’s
terms apply to its children, and each child contract applies to a different supplier. When you define a contract of
type blanket purchase order as a subagreement, the supplier on the subagreement must match the supplier on the
parent agreement.
A parent contract must be of the same level or of a higher level than its child. For example, a supplier level contract
can be a parent to any other contract, but an item level contract can be a parent to only another item level contract.
The following table lists the possible parent-child relationships in a contract hierarchy:
This type of contract... Can have this type of child...
Supplier level Supplier level, catalog level, commodity level, or item level
Commodity level Commodity level, catalog level, or item level
Catalog level Catalog level or item level
Item level Item level
The following diagram shows an example of a simple contract hierarchy.

Topics about contract hierarchies PUBLIC 25
26 PUBLIC Topics about contract hierarchies
Accumulation of contract spend in contract
hierarchies
Contract spend is accumulated from a subagreement to its parent agreement. You can configure a contract to
allow, limit, or prevent spend accumulation. To allow accumulation to a parent contract, you set the Include
Subagreement Accumulators option for the parent contract to Yes.
In a multi-level hierarchy, you can configure spend to accumulate throughout the hierarchy, or only from one level
to the next. You can choose the point in the hierarchy at which accumulation ends by setting the accumulation
parameters as outlined in the following diagram:

Compound and override pricing in contract
hierarchies
Compound pricing
A subagreement can compound its price or percentage discount with the percentage discount of its parent
agreement. If compound pricing is enabled, the subagreement’s pricing terms are compounded with the applicable
parent agreement’s percentage discount. Compound pricing is available only if the parent agreement uses a
percentage discount.
To compound a subagreement’s pricing terms, choose a parent agreement that uses a percentage discount, and
set the Compound with applicable parent’s pricing terms? option in the subagreement to Yes.
The compound pricing calculation considers only the current subagreement and applicable contracts above it in
the contract hierarchy. These calculations never include contracts below the subagreement.
Compounded price discounts are serially calculated within each contract, beginning with the subagreement
attached to the release order or selected for invoicing. For example, a supplier level master agreement contract has
a discount of 1% and its subagreement has a discount of 2%. If the subagreement item price is $10.95, the
compounded price discount is first calculated at the subagreement ($10.95 * 0.98 = $10.731) and then this result is
applied to the master agreement ($10.731 * 0.99 = $10.62369).
Override pricing
Override pricing requires the use of no-release order contracts within the hierarchy. In the following example, a
release order against the subagreement has its price overridden by the applicable parent agreement’s pricing of
$9.99.

28 PUBLIC Topics about contract hierarchies
Contract request and contract statuses
When you create a contract request, a document with the CR prefix (for example, CR21) is generated. Once the
contract request has been approved, a contract, identified by the prefix C (for example, C21), is created from the
contract request.
The following table describes each contract request status.
Status Description
Composing A user, generally a contract agent, is composing the CR.
CRs that are imported from Microsoft Excel spreadsheet files are created in the Composing status.
A CR can return to the Composing status if the purchasing agent withdraws the request.
Submitted The contract agent has submitted the CR for approval.
Denied An approver has denied the CR.
Approved The CR has been fully approved.
SourcingConfirming Integrated sites only. Contract creation is in process for a contract request associated with a contract
workspace.
Processing Contract creation from the contract request is in process. The CR remains in Processing until its associ
ated contract moves to Processed.
Processed A contract has been created from the CR.
After your contract request is fully approved, a contract is created.
The following table describes each contract status.
Status Description
Created The contract has been created from the contract request.
Processing A transitory state to indicate that the SAP Ariba solution is generating and loading subscriptions for non-cata
log items. Subscriptions are generated for all non-catalog items in no-release order contracts. For release or
der contracts, subscriptions are only generated if Create subscription for non-catalog items is set to Yes on
the contract.For more information on contract subscriptions, see How to define general contract information
[page 56].
Sending For BPOs only. Indicates that the BPO contract is sent to Ariba Network. When the BPO is fully processed on
Ariba Network, the status of the contract moves to Processed.
Processed Depending on your configuration, if a subscription was generated for non-catalog items in the contract, the
status changes to Processed:
● After the subscription has been successfully loaded, if your site is configured to change the contract sta
tus after the subscription is fully loaded. If the subscription cannot be loaded, the status remains Process
ing.
● Without waiting for the subscription to load, if your site is configured to immediately transition the con
tract status to Processed. For more information on contract subscriptions, see How to define general con
tract information [page 56].

30 PUBLIC Contract request and contract statuses
Status Description
Open The contract status moves to Open when:
● the current date is between the contract’s effective and expiration dates, and the contract has a valid
available amount.
● the contract’s effective date has been reached.
● as a contract manager, you open the contract manually with the Open command.
If you are using SAP Ariba Contractst, the contract is opened when the associated contract workspace is
published. Your SAP Ariba solution activates subscriptions, if applicable, for non-catalog items when a
contract is opened. For more information on contract subscriptions, see How to define general contract
information [page 56].
Received This status applies only to no-release order contracts that allow receiving against the contract.
The contract status moves to Received when the contract has been fully received (but not fully invoiced if in
voicing against the contract is allowed).
Invoiced This status applies only to no-release order contracts that allow invoicing against the contract.
The contract status moves to Invoiced when the contract has been fully invoiced. (but not fully received if re
ceiving against the contract is allowed).
Inactive This status applies only to no-release order contracts.
The contract status moves to Inactive when the contract expiration date has been reached, but the contract
maximum spend limit has not been reached. Users can continue to invoice or receive against the contract until
the maximum spend limit is reached and the contract is closed automatically, or the contract is closed man
ually.
Closed The contract moves to the Closed status when:
● a release order contract reaches its contract expiration date.

● a no-release order contract has been fully received and invoiced.
● you close the contract manually with the Close command.
For release order contracts, the contract is also closed when:
● the maximum commitment, including tolerance, has been reached. For more information, see Overall con
tract limits [page 40].
● the maximum quantity or amount, including tolerances, has been reached for all the contract’s individual
pricing terms. For more information, see Topics about contract limits and limit enforcement [page 39].
 Note
If you do not want the contract to be closed automatically when the maximum limits have been reached,
contact your Designated Support Contact and have them log a service request. An SAP Ariba Customer
Support representative will follow up to configure your site accordingly.
For no-release order contracts that can be invoiced or received against, the contract is closed and contract
subscriptions are deactivated when it is fully invoiced (invoices have been reconciled and the IRs have been
approved) and/or fully received or if it is closed manually. If a contract has expired, contract subscriptions will
not be deactivated until the contract is fully received and/or fully invoiced or closed manually.
For release order contracts, contract subscriptions are deactivated when the contract expires or is closed.

Contract request and contract statuses PUBLIC 31
Purchasing unit filtering in contracts
 Note
This feature is not applicable to sites configured for SAP Ariba Catalog only.
Your site can be enabled for enhanced purchasing unit filtering to support selection of the best contract terms
during requisitioning or invoicing within a business hierarchy and enhanced selection of parent agreements during
subagreement creation.
This feature allows you to create contracts at purchasing unit level that also apply to child purchasing units, which
means you can create contracts to reflect the specific requirements of the purchasing unit and the business
environment it operates in. For example, you can create a contract at country/region level (parent purchasing unit)
that applies to all plants (child purchasing units) in that county/region. But a plant might have negotiated another
contract with the same supplier for better terms, in which case that plant’s contract will be used.
When you create a subagreement, contracts matching the purchasing unit for which you are creating the
subagreement and all contracts of that unit’s parent purchasing units will be displayed.
 Note
You can only create contracts for purchasing units for which you are responsible.
Example:
Consider the following purchasing unit hierarchy, where the European subsidiary is organized by countries/regions
and plants. Contracts exist for Western Europe, Eastern Europe, UK and Plant1.

32 PUBLIC Purchasing unit filtering in contracts
In this example, the contracts are applied as follows:
● Plant 1 will have access to all three contracts: C1 (its own contract), and C2 and C3 (contracts specified for the
parent purchasing units which applies to all children).
● Plant 2 and UK will have access to contracts C2 and C3.
● Plant 3, Plant 4, France, Germany, and Western Europe will have access to contracts C3.
● Plant 5, Plant 6, Poland, Czech, and Eastern Europe will have access to contracts C4.
This feature is enabled by default for sites that are also enabled for Visibility Control. If you do not use Visibility
Control, then enhanced purchase unit filtering of contract requests is not available to you. If your site is configured
for Visibility Control, and you do not want to use enhanced purchase unit filtering of contracts, contact SAP Ariba
Customer Support to have it disabled.
See the Common Data Import and Administration Guide for more information about Visibility Control.

Purchasing unit filtering in contracts PUBLIC 33
Effective and expiration dates in contracts
When your create a contract, you must specify the effective date and the expiration date. An expiration date is
optional if you are creating an evergreen contract.
To create a contract that will not expire on a specific date, set the Evergreen option to Yes.
A contract is opened automatically when it reaches its effective date, and it is closed (release-order contracts) or
set to Inactive (no-release order contracts) when it reaches its expiration date (if it is not an evergreen contract).
You can specify an expiration date for an evergreen contract, but in this case, it represents a key date related to the
contract, for example, when its terms must be reviewed. This expiration date can be used in conjunction with a
notification limit to produce notification messages.
You site can also be configured such that contracts are not fully approved until the effective date. Contact SAP
Ariba Support to configure this feature for your site.
For no-release order contracts that allow receiving, users can continue to submit receipts against the contract as
long as the service date for the receipt is on or before the contract’s expiration date.
For no-release order contracts that allow invoicing, users can continue to submit invoices past the contract’s
expiration date, but the submissions might be subject to invoice reconciliation exception rules.
You will receive a notification message when a contract is about to expire. When you create a contract, you
configure how many days before the contract’s expiration to send this notification message. You can set up a
similar notification message for an evergreen contract by specifying a date in the Expiration Date field. For more
information on these notification messages, see Notification Limits [page 44].
In SAP Ariba Contracts, you can specify fixed, auto-renew and perpetual contract term types for your contract
workspace. If SAP Ariba Procurement solutions are integrated with SAP Ariba Contracts, a fixed contract term type
creates a contract request with a specified expiration date. A contract term type auto-renew in SAP Ariba
Contracts is treated as not evergreen . When the contract is renewed in SAP Ariba Contracts, the contract request’s
expiration date is automatically extended.
A contract term type of perpetual creates an evergreen contract request in SAP Ariba Procurement solutions. See
the Project attribute fields topic for more information on contract term types.

34 PUBLIC Effective and expiration dates in contracts
Accounting information on contracts
You can provide accounting information for each line item in a contract if you want to prefill certain accounting
values on the release order from the contract.
You enter accounting information on the pricing terms page for each contract line item you create. Contract
accounting information is optional for release order contracts and no-release order contracts that allow invoicing.
Accounting information is required for no-release order contracts that allow receiving.
 Note
When you create a release order or a contract-based invoice, the accounting information on the release order or
invoice line item is set to the accounting information from the contract line item. If required, you can override the
accounting information on the release order or invoice. All manual changes to the accounting details are retained
irrespective of any other changes made to the line items.
If you enter accounting information for a release order contract or no-release order contract with invoicing allowed,
accounting values are inherited as follows:
● All values except Cost Center are inherited by the release order line item. Cost Center is defaulted to the value
configured for the user who creates the release order.
● All values including Cost Center are inherited by the invoice line items.
Related Information
Accounting information defaulting on contracts [page 35]

Accounting field defaulting on release orders against contracts [page 36]
Accounting defaulting behavior on contract-based invoices [page 38]
Accounting information defaulting on contracts

During a contract request creation, the accounting details are blank by default. To fill in the accounting details, click
Fill Values.
When you click Fill Values, the following accounting fields are defaulted based on the accounting information
configuration set up for your site. If matching entries are not found, the values are defaulted from the requester’s
user profile.
Simple Generic PeopleSoft SAP (Splittable Fields)
Cost Center GL Business Unit Asset Number

Accounting information on contracts PUBLIC 35
Simple Generic PeopleSoft SAP (Splittable Fields)
Business Unit Location GL Account
Company Account Internal Order
Account Department Cost Center
Sub Account Statistics Code Project/WBS
Project Product Account Assignment (non-splittable)
Product (if available) Item Category (non-splittable)
Region (if available)
Accounting field defaulting on release orders against

contracts
When a release order is created against a contract, certain accounting fields are inherited from the contract, and
certain accounting fields values are defaulted from the accounting information configuration set up for your site or
the requester's user profile file.
The following splittable accounting fields are defaulted from the contract line to the requisition line:
Simple Generic PeopleSoft SAP
Business Unit Location Asset Number
Company Account GL Account
Account Statistics Code Internal Order
Sub Account Product Project/WBS
Project
The following accounting fields and shipping details are not defaulted from contract, but they are defaulted from
the accounting information configuration or the requester’s profile:
Simple Generic PeopleSoft SAP
Accounting Details
Cost Center (split line) Department (split line) Cost Center (split line)
Account Type Account Type Account Type
GL Business Unit (split line) Account Assignment
Item Category
Shipping Information
Ship To Ship To Plant
Deliver To Deliver To Deliver To

36 PUBLIC Accounting information on contracts
 Note
If you want the Cost Center (for Simple Generic and SAP ERPs) and Department (for PeopleSoft ERP) values
to be defaulted from the contract to release orders, contact your Designated Support Contact and have them
log a service request. An SAP Ariba Customer Support representative will follow up to configure your site
accordingly.
 Note
For all release orders on the PeopleSoft ERP, the GL Business Unit value is defaulted from the requisition’s
Business Unit (header field).
If the On Behalf Of field on the requisition is changed, or the Business Unit at the requisition header is changed
manually, your SAP Ariba Buying solutions automatically re-defaults the GL Business Unit that is associated with
the changed Business Unit to all existing requisition lines as well as any new lines that are added.
Defaulting Example
A release order contract line has been defined with the following accounting values:
Accounting Fields Default Values Overridden to... on contract request
Business Unit US005 BUY01
Company USOPS
Account Misc (Expenses) Blank Value
SubAccount Research and Development
Project SIMM
On the requisition line associated with this release order contract, the accounting details are inherited as follows:
Accounting Fields Inherited Values
Business Unit BUY01 (manual change is retained)
Company USOPS
Account The blank value is replaced with an appropriate entry from the accounting information configu-
ration set up for your site or the requester's user profile.
SubAccount Research and Development
Project SIMM
Accounting Defaulting When a Release Order is Edited
After the initial defaulting of accounting details, if the amount or quantity of the requisition line is changed, your
SAP Ariba Buying solutions re-defaults the Account Type only, based on the matching entry from the accounting
information configuration set up for your site.

Accounting information on contracts PUBLIC 37
All other accounting details (automatically defaulted as well as manually specified) on the requisition line are
retained.
Accounting defaulting behavior on contract-based

invoices
Accounting details are defaulted on contract-based invoices as follows:
● If the associated contract line items include accounting details, then the invoice line items inherit the
accounting information from the contract line item.
● If the associated contract line item does not include accounting details, then the accounting details on the
invoice line item is defaulted from the accounting information configuration set up for your site or the
requester's user profile information.
● If header-level charges (shipping, handling, or tax) are added to a contact-based invoice, the accounting details
are defaulted from the first line of the associated contract.
● If line-level charges are added, the accounting details are inherited from the associated invoice line.

38 PUBLIC Accounting information on contracts
Topics about contract limits and limit
enforcement
Contract limits [page 39]
Minimum and maximum contract limit enforcement on release orders [page 40]
Notification limits [page 44]
Contract limits
 Note
Limits are not supported in sites configured for SAP Ariba Contract Invoicing.
Contract limits allow you to enforce certain contractual commitments. Limits can be used to define a minimum
expected threshold for the contract or a maximum commitment that cannot be exceeded. You can set limits for the
overall contract or for line items. For release order contracts, you can also control limits per release order.
Limits for release order contracts are enforced during the ordering process. Depending on the type of limit and your
site’s enabled features, purchasing users who either select a catalog item associated with a contract or who
directly create a release order against the contract will experience the following:
● Users receive a warning message but are not prevented from ordering the item(s). In SAP Ariba Buying or SAP
Ariba Buying and Invoicing, additional approval nodes are added to the requisition.
● Users receive an error message and are prevented from adding their item to the order or shopping cart.
● SAP Ariba Buying and SAP Ariba Buying and Invoicing: Users don’t receive an error or warning message, but
additional approval nodes are added to the requisition.
For no-release order contracts, limits are enforced during invoice reconciliation as invoice exceptions. No
enforcement happens during invoicing.
See Release Limits [page 40] for detailed information on enforcement by limit level.
Limits can be hard limits or soft limits, and maximum limits can include tolerances. In SAP Ariba Buying and SAP
Ariba Buying and Invoicing, if the order value exceeds the limit but is still within the tolerance percentage, additional
approvers are added to the requisition as watchers.
Accumulators keep track of the amounts released from or invoiced against contracts. Pre-loaded amounts are
included in a contract’s accumulated amounts. Contracts that are closed for invoicing because the maximum limit
was reached are reopened automatically if a subsequent credit memo puts the amount invoiced below the
maximum limit. For information on these accumulators, see Contract Accumulators [page 45].
See the following sections for more information:
● Overall Contract Limit [page 40]

● Overall Line Item Limits [page 40]

Topics about contract limits and limit enforcement PUBLIC 39
● Release Limits [page 40]
● Notification Limits [page 44]
Overall contract limits

Overall limits are limits that apply to the entire contract. You can define overall line item limits for item level
contracts, catalog level contracts, commodity level, and supplier level contracts.
If an overall contract maximum limit has been reached, the contract is automatically closed for further releases or
invoices.
When a contract hierarchy exists, you configure values per contract and your SAP Ariba solution enforces this limit
per contract. The maximum commitment value for a single subagreement cannot exceed the maximum
commitment value for its master agreement, but if a master agreement has multiple subagreements, the sum of
the maximum commitment values for its subagreements can exceed the master agreement’s maximum
commitment value.
You will receive notification messages when a contract is approaching its maximum commitment. When you create
a contract, you can configure the percentage of the maximum commitment that must be reached before sending
this notification message. For more information, see Notification Limits [page 44].
You define overall contract limits on the Limits page.
Overall Line Item Limits

In addition to overall contract limits, you can set overall limits on line item level. For example, you might have an
overall contract limit of 500,000 USD for five items, but you only allow up to 100,000 USD for each item on the
contract. For material and services items, the limit can be amount or quantity based.
If an overall maximum line item limit has been reached, the line item is no longer available for further releases or
invoices. If the overall line item maximum limits have been reached for all line items on a contract, the contract is
closed.
You can define overall line item limits for item level contracts, catalog level contracts and commodity level
contracts. For item level contracts, overall line item limits apply to each specific item. For catalog level contracts,
overall line item limits apply to all items from each catalog subscription. For commodity level contracts, overall line
item limits apply to each commodity code.
You define overall line item limits on the Pricing Terms page.
Minimum and maximum contract limit enforcement

on release orders
Release limits only apply to release order contracts. They specify the minimum and maximum amounts or
quantities allowed with each order.

40 PUBLIC Topics about contract limits and limit enforcement
You can define release limits on contract level to control the overall minimum required or maximum allowed order
amount or quantity (for material and services items) of all contract items included in the order. For item level,
catalog level and commodity level contracts, you can also set release limits for each line item. For example, if you
want to enforce that users always purchase a minimum quantity for a particular item to ensure the best pricing, you
can configure the contract so that any requisition or shopping cart where the minimum item quantity is not met is
rejected.
You define contract release limits on the Limits page, and line level release limits on the Pricing Terms page.
Minimum limit enforcement
Minimum limits can be defined as either hard or soft limits depending on the level (overall contract, line item or
release level). Minimum limits are enforced for release order contracts only.
The following table shows detailed enforcement information for minimum limits:
Minimum limit set for ... Minimum limit is ...
Overall Contract Not enforced, but notifications can be sent if minimum commitments are not met and the con
tract expiration date is approaching.
Overall Line Item Not enforced, information only.
Contract per Release (Applies Enforced. Can be defined as hard or soft limit.
to Release Order Contracts
● Soft Minimum Limits
Only)
In SAP Ariba Buying and SAP Ariba Buying and Invoicing, when a soft minimum limit is not
Line Item per Release (Applies met, users receive a warning message and additional approvers based on the default ap
to Release Order Contracts prover list defined on the contract are added to the requisition as approvers. If the default
Only) approver list is empty, the Contract Manager and Purchasing Agent groups are added.
External users punching in to an SAP Ariba Catalog site receive a warning message, but are
not prevented from checking out the shopping cart.
● Hard Minimum Limits
If a hard minimum limit is not met, users are prevented to submit their requisition or shop
ping cart until they change the item quantity or amount to meet the hard minimum order
limit.
Maximum limit enforcement
Depending on where a maximum limit is defined, maximum limits can be defined as either hard or soft limits
including tolerances. See the following sections for details on how a maximum limit is enforced depending on the
release type of contract and the features enabled for your site:
● Maximum limit enforcement during ordering [page 42]

● Maximum limit enforcement in SAP Ariba Catalog [page 43]
● Maximum limit enforcement on contract-based invoices [page 43]

Maximum limit enforcement during ordering in SAP Ariba Buying and SAP Ariba Buying and
Invoicing
The following table describes how maximum limits are enforcement for users that place orders in SAP Ariba Buying
or SAP Ariba Buying and Invoicing:
Maximum limit set for ... Maximum limit is ...
Overall Contract Enforced. Can be defined as hard or soft limit and include a tolerance percentage for hard limit.
If the amount on the requisition exceeds the available funds for the contract, the limits are en
forced as follows:
For a hard limit, if the amount on the requisition exceeds the maximum limit (regardless of tol
erance configuration), additional approvers are added to the release order for approval.
For a hard limit, if the amount on the requisition exceeds the hard maximum limit plus toler
ance:
● If purchasing users have release access to a contract and they manually select only items
from that contract, the user cannot submit the requisition.
● If purchasing users have release access to a contract and they manually select items from
that contract and they also add additional items that are not covered by the contract, they
can submit the requisition, but will receive a warning message and additional approvers
are added to the approval flow.
● If purchasing users select items from the catalog with an associated contract, they can
submit the requisition, but will receive a warning message and additional approvers are
added to the approval flow.
For a hard limit, if the amount on the release order exceeds the hard maximum limit but is
within the tolerance range, additional approvers are added to the approval flow as approv
ers.
If you want to prevent users from submitting requisitions that exceed the configured hard
maximum limits, contact your Designated Support Contact and have them log a service
request. An SAP Ariba Customer Support representative will follow up to configure your
site accordingly.
Overall Line Item Enforced. Can include a tolerance percentage for maximum limit. If the amount or quantity on
the requisition exceed the available funds for the line item including the tolerance, additional
approvers are added to the requisition.
Contract per Release Enforced. Can be defined as hard or soft limit and include tolerance percentages. If the amount
or quantity on the requisition exceed a maximum hard limit including the tolerance percentage,
users cannot submit the requisition. If either a maximum soft limit including the tolerance per
centage or a hard limit excluding the tolerance has been exceeded, users receive a warning
message and additional approvers are added to the approval flow. If a soft limit excluding the
tolerance has been exceeded, additional watchers are added to the approval flow.
Line Item per Release Enforced. Can be defined as hard or soft limit and include tolerance percentages. If the amount
or quantity on the requisition exceed a maximum hard limit including the tolerance percentage,
users cannot submit the requisition. If either a maximum soft limit including the tolerance per
centage or a hard limit excluding the tolerance has been exceeded, users receive a warning
message and additional approvers are added to the approval flow. If a soft limit excluding the
tolerance has been exceeded, additional watchers are added to the approval flow.

Maximum limit enforcement in SAP Ariba Catalog
The following table describes how maximum limits are enforced for external users that punch in from an external
ERP purchasing system to SAP Ariba Catalog to order items from the catalog:
Maximum limit set for ... Maximum limit is ...
Overall Contract Enforced. Can be defined as hard or soft limit and include a tolerance percentage for hard limit,
but exceeding a soft limit or a hard limit that is within the tolerance percentage does not trigger
a warning message to users and users are not prevented from checking out the shopping cart.
If the amount exceeds the hard maximum limit plus tolerance:
● If purchasing users have release access to a contract and they manually selects only items
from that contract, the user cannot check out the shopping cart.
● If purchasing users have release access to a contract and they manually select items from
that contract and also adds additional items that are not covered by the contract, they can
check out the shopping cart, but will receive a warning message that the hard maximum
limit for the contract has been exceeded.
● If purchasing users select items from the catalog with an associated contract, they can
check out the shopping cart, but will receive a warning message that the hard maximum
limit for the contract has been exceeded.
Overall Line Item Not enforced. Only used to determine if an item is available for release or not.
Contract per Release Enforced. Can be defined as hard or soft limit and include tolerance percentages. If the amount
or quantity on the shopping cart exceeds a maximum hard limit including the tolerance per
centage, users cannot check out the shopping cart. If a soft limit including the tolerance has
been exceeded, users receive a warning message but are not prevented from checking out the
shopping cart. If the amount or quantity on the shopping cart exceeds the limit but is below the
limit plus tolerance, users can check out and no message is sent.
Line Item per Release Enforced. Can be defined as hard or soft limit and include tolerance percentages. If the amount
or quantity on the shopping cart exceeds a maximum hard limit including the tolerance per
centage, users cannot check out the shopping cart. If a soft limit including the tolerance has
been exceeded, users receive a warning message but are not prevented from checking out the
shopping cart. If the amount or quantity on the shopping cart exceeds the limit but is below the
limit plus tolerance, users can check out and no message is sent.
Maximum limit enforcement on contract-based invoices
For no-release order contracts, maximum limits are enforced during invoice reconciliation. The tolerance setting on
the contract determines if an invoice will trigger an exception or not.
Suppose a contract of USD 10,000.00 has a percentage tolerance of 2%. If the invoice line amount is for USD
10,150.00, the invoice is accepted because the amount is within the allowable contract tolerance limit.
If the contract line item variance invoice exception is configured for an absolute variance tolerance of 100, and the
contract tolerance limit is a soft limit, then only invoice line item amount values greater than 10,300 will trigger an
exception. In effect, the allowable tolerance values of the contract and the invoice exception are combined to
determine the maximum allowable amount that does not trigger an invoice exception.
If the contract limit is defined as a hard limit, the tolerance defined for the invoice exception is disregarded. In this
example, any invoice amount over USD 10,200.00 will trigger an invoice exception.

Notification limits
You can configure triggers to generate notification messages when a contract is approaching its maximum limit,
when a contract commitment minimum level has not been met, when it is about to expire, and if the expiration
notice recurs. These notifications are emailed automatically to the contract requester and to users with edit access
to the contract. You can add additional users to the notification list when creating the contract.
You can specify an available balance percentage (a percentage of the contract's maximum commitment) that when
reached will cause the Contract Approaching Limit notification message to be sent.
You can configure how many days before the contract’s expiration date the Contract Approaching Expiration
notification message is sent. For an evergreen contract with an expiration date, use this field to specify how many
days before that date you want to send the Evergreen Contract Approaching Notification Date notification
message.
If either notification message is enabled, you can specify the interval (in days) at which you want the message to
recur. Use the Number of Days Before Next Notification field.
A notification message can also be generated when a milestone item is approaching its completion date. See How
to create a milestone for a contract [page 64]for more information on milestones.

Topics about contract accumulators
Contract accumulators keep track of the amount and quantities ordered, received, or invoiced on a contract.
Accumulators are checked against defined contract limits to trigger certain actions such as automatically closing
contracts, adding approvers to release orders or invoices, or sending notifications for upcoming actions.
Contract accumulators [page 45]
Preload Amounts [page 47]
Accumulator updates [page 48]
Contract accumulators for service purchase orders [page 49]
Contract accumulators
SAP Ariba Procurement solutions maintain accumulators that track the quantities and amounts of the items users
ordered, received or invoiced against contracts. There are two types of accumulators:
● Overall Contract Accumulators [page 45]

● Pricing Term Accumulators [page 46]
 Note
The available accumulators depend on your enabled features. For example, in sites configured for SAP Ariba
Catalog only, there are no invoice or receiving related accumulators. In sites configured for SAP Ariba Contract
Invoicing, accumulation is not supported.
Overall Contract Accumulators
Overall contract accumulators apply to an entire contract.
If a contract belongs to a hierarchy, the overall contract accumulators include the rolled-up spend amounts for the
contract’s subagreements if those subagreements are configured to accumulate these amounts. For more
information, see Accumulation of Contract Spend [page 27].
The following table describes the overall contract accumulators.
Accumulator Description
Used Amount The monetary amount that represents the current total amount of all purchases, receipts or invoi
ces applied against the contract. For item level, catalog level and commodity level contracts, the
Used Amount represents the collective total of all the pricing terms covered by the agreement.

Topics about contract accumulators PUBLIC 45
Available Amount The monetary amount currently available for subsequent purchases, receipts or invoices. This
value is calculated by subtracting the current total amount of all purchases, receipts or invoices ap
plied against the contract (the Used Amount) from the contract’s maximum limit amount.
For item level, catalog level and commodity level contracts, the Available Amount represents the
collective total of all the pricing terms covered by the agreement.
When the contract is initially created, the Available Amount is set to the maximum limit amount
minus any preload amount, if specified.
Cumulative Pricing The monetary amount used to calculate cumulative tiered pricing discounts for orders or invoices
Used Amount applied against the contract, based on the current total amount of all orders or invoices applied
against the contract (the Used Amount).
Amount Received The cumulative amount of goods or services received for all line items on the contract.
Amount Invoiced The cumulative amount of goods or services invoiced and the cumuluative amount of goods or
services reconciled for all line items on the contract.
Amount Reconciled
 Note
By default, the total invoiced and reconciled amount accumulators includes taxes and charges.
If enabled for your site, you can specify whether the invoiced and reconciled available amount
and maximum limit amount include or exclude taxes and charges on the Limits page when
defining a no-release order contract. The feature to change the invoiced amount accumulation
on contracts is disabled by default and requires SAP Ariba to enable it.
Amount Limit Less This value is calculated by subtracting the current total amount of all invoices applied against the
Invoiced Amount contract from the contract’s maximum commitment amount.
Amount Limit Less Recon This value is calculated by subtracting the current total amount of all invoices applied against the
ciled Amount contract that have been reconciled from the contract’s maximum commitment amount.
Pricing Term Accumulators
Item level accumulators are maintained for each item level pricing term on an item level contract. If a contract
belongs to a contract hierarchy, the item level accumulators will include the rolled-up spend from all
subagreements that have compounded prices with this contract. For more information, see Compound Pricing
[page 28].
Similarly, commodity level accumulators are maintained for each commodity level pricing term on a commodity
level contract and catalog level accumulators are maintained for each catalog level pricing term on a catalog level
contract.
The following table describes the item level and commodity level accumulators.
Used Amount The cumulative monetary amount applied toward an individual pricing term. This accumulator
is used for catalog and commodity level pricing terms and item level pricing terms with amount
based limits.

46 PUBLIC Topics about contract accumulators
Available Amount The difference between the Used Amount and the specified maximum amount for an individual
pricing term. This accumulator is used for catalog and commodity level pricing terms and item
level pricing terms with amount based limits.
Used Quantity The cumulative quantity applied toward an individual item level pricing term. This accumulator
is used only for item level pricing terms with quantity-based limits.
Available Quantity The difference between the Used Quantity and the specified maximum quantity for an individ
ual pricing term. This accumulator is used only for item level pricing terms with quantity-based
limits.
Cumulative Pricing The monetary amount used to calculate cumulative-tiered pricing discounts for an item, cata
Used Amount log, or commodity level pricing term with amount-based limits.
Cumulative Pricing The quantity used to calculate cumulative-tiered pricing discounts for an item level pricing term
Used Quantity with quantity-based limits.
Quantity Invoiced The cumulative quantity of goods or services invoiced against the line item. This accumulator is
used only for item level pricing terms with quantity-based limits.
Quantity Reconciled The cumulative quantity of goods or services reconciled against the line item. This accumulator
is used only for item level pricing terms with quantity-based limits.
Amount Limit Less This value is calculated by subtracting the current total amount of all invoices applied against
Invoiced Amount the line item from the line item amount limit. This accumulator is used for catalog and com
modity level pricing terms and item level pricing terms with amount-based limits.
Amount Limit Less Reconciled This value is calculated by subtracting the current total amount of all invoices applied against
Amount the line item that have been reconciled and the line item amount limit. This accumulator is used
for catalog and commodity level pricing terms and item level pricing terms with amount-based
limits.
Quantity Limit Less This value is calculated by subtracting the current total quantity of all invoices applied against
Invoiced Quantity the line item from the line item quantity limit. This accumulator is used only for item level pric
ing terms with quantity-based limits.
Quantity Limit Less Reconciled This value is calculated by subtracting the current total quantity of all invoices applied against
Quantity the line item that have reconciled from the line item quantity limit. This accumulator is used
only for item level pricing terms with quantity-based limits.
 Note
When the tolerance is exceeded for a non-catalog item on a contract, the subscription for the item is reloaded,
and the item no longer appears when you search the catalog.
Preload Amounts
Preload amounts allow you to enter amount values that were originally outside the applicable contract. Preloaded
amounts are accumulated as contract spend and can affect pricing terms. One use for preloading an amount into a
contract is to account for previous purchases.
A preload amount is tracked at the contract-header level, which prevents the preload amount from being
systematically allocated. For supplier level contracts, preload amounts affect the accumulation of any price
discounts because supplier level contracts have only one line item. However, item level, commodity level, and

catalog level contracts allocate the preloaded amount only to the contract-header level and not to the individual
line items, and so preload amounts for these contract types never affect their item pricing.
Preload amounts are included in calculating tier-based pricing only in supplier level contracts; otherwise, preload
amounts are not included in a contract’s accumulated amounts. A preload amount in a supplier level subagreement
within a contract hierarchy is accumulated to any parent agreements that are set to include subagreement values.
Accumulator updates
On release order contracts in SAP Ariba Buying and SAP Ariba Buying and Invoicing
If a release order applied to a contract is subsequently canceled or changed, your SAP Ariba Buying solution
automatically adjusts the accumulators to reflect the remaining available amounts or quantities, even if the
contract status is Closed.
If a contract is changed after a release order is sent to the supplier, the accumulators are adjusted on both the
original contract and on the changed (newer) contract, thus ensuring that all versions of the contract are updated
at that same time.
On no-release order contracts
In contracts for which invoicing is enabled, invoicing-related accumulators are updated when invoice reconciliation
documents are approved. This also applies to the Used Amount accumulator amounts in a contract hierarchy that
contains any contract that has invoicing enabled. An invoice amount is not rolled up to a parent agreement until the
invoice is fully reconciled, even if the parent is not using invoices.
In contracts for which receiving is enabled, receiving-related accumulators are updated when receipts are
processed. By default, receipts are processed once daily starting at midnight.
On contracts in SAP Ariba Catalog
Contract accumulators are updated when the shopping cart is checked out and you return the shopping cart to
your external application. Since SAP Ariba Catalog has no knowledge if any of the purchases were denied in your
external system, the accumulated amounts and quantities on the contract may not reflect your actual amount
spend on the contract.

Contract accumulators for service purchase orders
You can configure how the contract accumulators track the quantities and amounts of the items in service
purchase orders based on your specific requirements.
Sites integrated with SAP ERP
For sites integrated with SAP ERP, the quantities and amounts for the parent and the child items are accumulated
against their respective contracts.
If an item does not have an associated contract, its quantity and amount is not accumulated. If your organization
wants to accumulate the quantities and amounts for the child items that do not have associated contracts, you can
enable the Rollup non-contract item quantity and amount to parent service item
(Application.Contract.RollupNonContractItemAmountToParentServiceItem) parameter. When the
parameter is enabled, the quantities and amounts for the child items that do not have associated contracts are
accumulated against the contract associated with the parent service item.
If your organization does not want to accumulate the quantity for the parent service item, you can enable the
Disable quantity accumulation of parent service item
(Application.Contract.DisableQuantityAccumulationofParentServiceItem) parameter. When the
parameter is enabled, the quantity of the parent service item is not accumulated against the associated contract
when the expected amount is entered as zero. If the expected amount is greater than zero, the quantity is
accumulated even if the parameter is enabled.
Sites that are not integrated with SAP ERP
For sites that are not integrated with SAP ERP, the quantities and amounts for the parent and the child items are
accumulated against their respective contracts. However, if you have enabled the Add child item amount to
parent service item (Application.Procure.AddChildItemAmountToParentServiceItem) parameter, the
quantities and amounts for the parent and the child items are accumulated against the contract for the parent
service item. Additionally, the quantities and amounts for the child items are accumulated against the respective
child item contracts. To avoid the duplicate accumulation of the quantities and amounts for the child items, contact
SAP Ariba Support to enable the SINV-5780 feature for your site.
When the SINV-5780 feature is enabled for your site, you can configure the following:
● If an item does not have an associated contract, its quantity and amount is not accumulated. If your
organization wants to accumulate the quantities and amounts for the child items that do not have associated
contracts, you can enable the Rollup non-contract item quantity and amount to parent service item
(Application.Contract.RollupNonContractItemAmountToParentServiceItem) parameter. When
the parameter is enabled, the quantities and amounts for the child items that do not have associated contracts
are accumulated against the contract associated with the parent service item.
● If your organization does not want to accumulate the quantity for the parent service item, you can enable the
(Application.Contract.DisableQuantityAccumulationofParentServiceItem) parameter. When

the parameter is enabled, the quantity of the parent service item is not accumulated against the associated
contract when the expected amount is entered as zero. If the expected amount is greater than zero, the
quantity is accumulated even if the parameter is enabled.
Related Information
Rollup non-contract item quantity and amount to parent service item

Add child item amount to parent service item
Intelligent Configuration Manager administration

Contract request import using Microsoft Excel
You can import data from Microsoft Excel spreadsheets, which are a common way of representing contracts and
pricing information, to create or update contract requests.
The recommended method of creating a contract with an Excel spreadsheet is to:
1. Export an existing contract or a contract request that has been partially configured to reflect the basic
structure you want into an Excel file. See How to export contracts [page 68] for information on how to export
contract requests.
2. Change the Excel spreadsheet data.
3. Upload the finished Excel spreadsheet file. See How to upload an Excel version of a contract [page 56] for
information on how to import Excel based contract requests.
 Note
Exporting and importing of contracts with two-dimensional matrix formula pricing is not supported.
This section also describes the general worksheet column and field name mappings in the default configuration.
For information about how to export and import Excel spreadsheets, see About Creating and Managing Contracts
[page 54]
Sample Microsoft Excel spreadsheets

Your SAP Ariba solution provides several sample Microsoft Excel spreadsheets as starting points for creating new
CRs. The sample worksheets are located along with the documentation in the help center. Each sample
spreadsheet defines one CR. (The help center is available by clicking the Help Center link on each page.)
Each worksheet defines the contract data that can be imported or exported. In the default configuration, the
following data is defined, depending on the worksheet:
● Attachments
● Contract Header
● Contract Item Information
● Accounting
● Filters Formula Pricing
● Filters Formula Pricing Grids
● Header Attachments
● Header Attributes
● Item Attachments
● Item Attributes
● Item Pricing Filters
● Tiered Pricing

Contract request import using Microsoft Excel PUBLIC 51
Spreadsheet Import Notes
Important notes to consider when importing Excel spreadsheets:
● You cannot import formula pricing terms for non-catalog items.

● You cannot import two-dimensional formula pricing definitions.
● If the imported spreadsheet does not contain a Buyer Contract ID (in the Contract Header worksheet), a new
CR is created.
● You can only import a spreadsheet to create new contracts or to modify existing contracts that are in
Composing state.
● The maximum number of line items you can import is 1,000.
● If the imported spreadsheet contains a Buyer Contract ID and no new version exists for the contract request,
the spreadsheet completely replaces the existing CR.
● If the original CR has been changed and a new version exists (in Composing state), a spreadsheet import does
not allow changes to the following fields:
○ On the Contract Header tab: Supplier, Contract Type, Release Required, Allow invoicing against contract,
Allow receiving against contract, Currency
○ On the Contract Item Information tab: Full Description, Supplier, Supplier Part Number, Supplier Auxiliary
Part ID, Unit of Measure, Unit Price (for catalog items)
● When creating contract line items from a catalog in the user interface, the visibility of catalog items can be
controlled based on purchasing unit filtering of suppliers or catalog view constraints. This prevents users from
adding items to a contract they are not allowed to add. However, when users import a contract request and the
contract Excel spreadsheet includes such items, that contract is processed successfully.
● When exporting a contract request, depending on the client’s time zone, the Effective Date and Expiration Date
in the export file might be set to a different date than is displayed in the client UI. During export, Effective Date
and Expiration Date are set to the start of the day (e.g. Aug 30 00:00) and then recalculated to the server’s
time zone, which is Pacific Standard Time. When the file is imported, the Effective Date and Expiration Date are
recalculated from the server’s time stamp to the client’s time zone.

52 PUBLIC Contract request import using Microsoft Excel
Support for SAP ERP service specification
hierarchies
SAP Ariba solutions support the display of the hierarchical structure of service specification sets (containing
service lines) in contracts imported from SAP ERP. The hierarchical structure is also supported in the generated
catalog items, associated service orders, and the corresponding service entry sheets that are submitted against
the orders.
Compliance contracts can be created in SAP Ariba solutions by importing contract requests from SAP ERP. When
service orders associated with such contracts are sent to Ariba Network and the buying solutions from SAP Ariba,
supplier users can submit service sheets against the order. To add items to service sheets, supplier users punch in
to the SAP Ariba solution and view the associated contract items. They can navigate within the hierarchy to identify
the correct contract line item to be added to service sheets.
 Note
Suppliers can submit a service sheet against an order associated with imported contracts only if the order is
available in Ariba Network and the buying solution from SAP Ariba.
 Note
The functionality provided by this feature is limited to contracts imported from SAP ERP via the Import
Contracts in ZIP File data import task that imports CSV files in a ZIP file.
For more information, see Data import tasks for bulk import of contract requests.
Prerequisites
Ensure that the following self-service parameters are enabled for your site:
● Support SAP ERP service specification hierarchies (Application.Procure.AllowServiceHierarchy)

● Support SAP ERP service specification hierarchies in
contracts(Application.Contract.AllowServiceHierarchy)
● Support SAP ERP service specification hierarchies in
catalogs(Application.Catalog.AllowServiceHierarchyInCatalogs)
Restrictions
This feature is not applicable to no-release order contracts.

Support for SAP ERP service specification hierarchies PUBLIC 53
Topics about creating and managing contracts
Define general contract information, contract limits, the type of contract and the release requirement, and how to
import or export contracts.
How to create a contract [page 54]
How to define general contract information [page 56]
How to define contract limits, notification recipients, and forecasting [page 61]
How to create a milestone for a contract [page 64]
How to control edit and release access for contracts [page 66]
How to define payment terms in contracts [page 67]
How to add attachments to contracts [page 68]
How to export contracts [page 68]
Auto release contracts for automatic generation of requisitions [page 70]
Topics about managing contracts [page 74]
How to create a contract

You can create a new contract from scratch using the contract wizard, copy an existing contract, or upload an Excel
version of a contract.
The contract wizard fields change depending upon the type of contract you are creating, and the type of ERP
system you are using. Your organizational and accounting information depends on your integration with your ERP
system, and is not described in detail in this guide. Field labels may be different depending on your ERP system, in
the SAP variant, for example, suppliers are referred to as vendors.
The contract wizard provides a structured workflow on how to set up your contract, however, you can fill in the
pages in any sequence. Keep in mind that certain pages require input from previous pages, so following the
contract wizard and entering values for all required fields in the suggested order ensures you don’t have to jump
back and forth between pages to fill in missing fields.
When you are finished setting up your contract, you you use the Summary page, which shows all the contract
properties you configured on the previous pages, to review your contract information before you submit it for
approval.
You can scroll down theSummary tab to see the properties, or click any of the other tabs to see those properties.
You can also modify any property from the Summary page.
You must be a member of the Contract Agent, Contract Manager, Procurement Agent, or Procurement Manager
group to create contracts.

54 PUBLIC Topics about creating and managing contracts
Related Information
How to create a new contract using the contract wizard [page 55]
How to copy a contract [page 55]
How to upload an Excel Version of a contract [page 56]
How to create a new contract using the contract wizard
Procedure
1. Log into your SAP Ariba solution.
2. On the dashboard, click Create Contract Request .

3. Under What would you like to create?, click Contract Request.
4. Start defining your contract header details, or click a link in the contract wizard to move to a different page.
 Note
Depending on your site configuration and the choices you make as you move through the wizard, you might
not encounter certain fields or certain pages. For example, in sites configured for SAP Ariba Catalog only,
you cannot enter any accounting fields and the Milestones and Payment Terms pages are not available.
How to copy a contract
Context
You can copy an existing contract in order to take advantage of having the bulk of the contract already configured.
If you make a copy of a contract and make any changes to the supplier, the pricing terms for the contract are lost
since they are supplier-depenedent. When you change supplier information you must provide new pricing terms for
the contract.
Procedure
1. In the My Documents content item, click the ID for the contract .

2. Click Copy.
3. Make any necessary changes to the contract, then submit it for approval.

Topics about creating and managing contracts PUBLIC 55
How to upload an Excel version of a contract
Context
If you have a contract defined in an Excel spreadsheet, you can upload it to create a new contract. SAP Ariba
recommends that you first create a contract template, export it, and use this as the template to build up your
contract details for import.
Users who are members of both the Customer Administrator group and the Contract Terms Bulk Import Admin
group can perform bulk import operations to import sets of contracts put together as Microsoft Excel workbooks in
a ZIP file format. See the Common data import and administration guide for SAP Ariba Procurement solutions for
more information.
Your site can be configured to prevent that imported accounting field values (including the Ship To and Bill To
values) are overridden by default accounting fields defined for your site by marking them as set by the user. After
the fields have been marked as set by the user during contract import, edits or changes to the imported contract
do not affect the imported accounting fields, and the originally imported values are retained even if the values
specified by the account defaulting behavior are different.
To configure this behavior, contact your Designated Support Contact and have them log a service request. An SAP
Ariba Customer Support representative will follow up to configure your site accordingly.
 Note
Importing of contracts with two-dimensional matrix formula pricing is not supported.
Procedure
1. On the dashboard, click Create Contract Request .

2. Under What would you like to create?, click Upload Contract Request.
3. Click Browse to locate the file. Once you have identified the path to the file, click OK.
The imported contract is displayed on the Summary page of the contract wizard.
4. Make any necessary modifications using the contract wizard, then return to the Summary page.
5. Click Submit.
How to define general contract information

Context
Use the contract Definitions page to enter information such as a title and description, and to set options for the
contract like the effective and expiration dates, and whether to allow accumulation of spend.

Procedure
1. Start the contract wizard [page 55].

2. On the Definitions page, enter the following information:
For this option... Do this...
Title Enter a title for the contract.
Description Enter a description of the contract. For example, you might mention whether the
contract is used only as a parent to group other contracts; or you can provide an
overview of the type of goods covered by the agreement.
Physical Location Enter the physical location of the contract. For example, if you are creating this con
tract based on an existing paper contract, enter the physical location of the paper
contract.
Related Contract ID If you have a related external contract (in your ERP system or other system), enter
that contract ID to create a cross reference.
Depending on your site configuration, a warning message may be displayed if the

related contract ID that you specify is already cross referenced to an existing con
tract. Contact SAP Ariba Customer Support to configure this functionality for your
site.
Should the Related Contract ID be Specify whether to include the related contract ID as part of the system-generated
included as part of the system- ID for the contract.
generated Contract ID
Contact Select a contact name from the available choices, or click Search for more to select
a different name.
Purchasing Unit If purchasing unit filtering is enabled on your site, and you are responsible to create
contract for multiple purchasing units, choose the purchasing unit for which you are
creating the contract.
Contract Type Select the type of contract you want to create:

○ Item level, which covers specific items from a supplier.
○ Commodity level, which covers all products identified by specific commodity
codes from a supplier.
○ Catalog level, which covers all products in a catalog
○ Supplier level, which covers all products from a supplier.
Is Blanket Purchase Order Select Yes to create a blanket purchase order.
For more information about blanket purchase orders, see About Blanket Purchase
Orders [page 22].
Hide Amount from Supplier(BPO Select the check box to restrict the supplier from viewing the Amount and Quantity
only) values for all the items in the BPO on the Ariba Network.
Hide Unit Price from Supplier(item- Select the check box to restrict the supplier from viewing the Unit Price and
level BPO only) Quantity values for all the items in the BPO on the Ariba Network.

Hierarchical Type Select the hierarchical type for the contract:

○ Standalone agreement, which is not part of a hierarchy.
○ Subagreement, which is a contract associated with a parent contract in a hier
archy.
○ Master agreement, which is the top-most contract in a hierarchy.
Effective Date Select the date on which users can begin to issue release orders.
Expiration Date Select the final date on which release orders can be issued against the contract.
The expiration date is optional if you are creating an evergreen contract.
Evergreen Select Yes to create an evergreen contract (a contract that does not expire).
Select No to create a contract that does expire. If you select No, you need to set the
Expiration Date option above.
Purch Org (SAP variants only) Select the purchase organization for which you are creating the contract. Only users
belonging to the specified purchase organization and company code have access to
the contract during requisitioning or invoicing.
If your site is configured to create contracts that are applicable to all company co
des, then you can create contracts that can be accessed by all users regardless of
their company code. To do this select a purchase organization that is not mapped to
any company code.
Company Code (SAP variants only) Select the company code for which you are creating the contract. Only users be
longing to the specified purchase organization and company code have access to
the contract during requisitioning or invoicing.
If you are creating a contract that can be accessed by all users regardless of their
company code, and have selected a purchase organization that is not mapped to
any company code, then you do not need to specify a company code . Even if you
specify a company code, the contract access is not restricted and can be accessed
by users belonging to any company code.
Supplier Select a supplier from the available choices, or click Search for more to select a
different supplier.
Supplier Location (Generic, People Click Select to choose a different location for the supplier you named.
Soft)

Create subscription for non-catalog For item-level contracts, specify whether you want to generate a subscription for
items (release order contracts only) non-catalog items to allows purchasing users to search the catalog for the item and
to automatically apply the contract terms to the item.
Subscriptions are always created for non-catalog items, fixed-fee items, cost and
expense items and milestone items in a no-release order contract.
If you do not generate a subscription for non-catalog contract items for release or
der contracts, then users must create a non-catalog item with the same supplier
name, part number, and (optional) auxiliary ID as the existing item on the contract
when they place an order for the item. If more than one contract applies to that
item, a contract is autoselected based on the contract autoselection criteria as de
scribed in About the Autoselection Feature [page 18]. In SAP Ariba Buying and SAP
Ariba Buying and Invoicing, users who belong to a group that can overwrite the au
toselected contract can select a different contract by editing the line item on the
Line Item Details page.
If purchasing unit filtering is enabled on your site, the purchasing users’ purchasing
unit or the parent purchasing units will be used to decide which generated subscrip
tion items are visible to them.
Note that non-catalog items are not immediately available in the catalog view un
less you manually rebuild the catalog index to publish the subscription. By default,
the index is automatically rebuild every two hours.
Release Required Select Yes to require purchase orders (release orders) to release funds governed by
the contract.
Select No to not require purchase orders (release orders) to release funds governed
by the contract.
If you select No, you must then specify whether to allow receiving and invoicing
against the contract.
 Note
○ If your site is configured for SAP Ariba Buying without the receiving option,
you can create no-release order contract requests for the purpose of ex
porting them to your ERP or to an external contract management system.
○ If your site is configured for SAP Ariba Buying with the receiving option,
you can create no-release order contract requests that allow receiving
against the contract.
Allow change orders against closed Select Yes to allow users to create change orders even if the contract is closed.
contract (release order contracts
only)
Allow receiving against contract Specify whether you want to be able to create receipts against the contract.
(no-release order contracts only)
 Note
In a merged SAP Ariba solutions environment, this option is not displayed.

Allow invoicing against contract Specify whether you want to be able to create invoices against the contract.
(no-release order contracts only)
 Note
Supplier users can view the contract's available amount if either of the Allow
receiving against contract or Allow invoicing against contract options are set
to true. They cannot view the available amount if both these options are set to
false.
Default invoice requester from Only available if the feature Invoice Compliance for Contract-based Invoices is ena
contract (no-release order contracts bled for your site:
only)
If set to Yes, the Sold To email address is defaulted to the contact person on the
contract. Suppliers can override this value when creating an invoice against the con
tract.
Allow supplier to add non-catalog Only available if the feature Invoice Compliance for Contract-based Invoices is ena
items to the invoice (no-release or bled for your site:
der contracts only)
If set to Yes, suppliers can add additional items for which no pricing terms have
been defined on the contract to the invoice.
 Note
If you allow suppliers to add non-catalog items to the invoice, they can use the
advance pricing details fields to define pricing information. If the invoicing rule
in your Ariba Network account does not allow suppliers to enter advanced pric
ing details at the line item level, the invoice will fail validation only when the sup
plier tries to submit it from their Ariba Network account.
Allow supplier to edit the invoice Only available if the feature Invoice Compliance for Contract-based Invoices is ena
unit price (no-release order con bled for your site:
tracts only)
If set to Yes, suppliers can modify the unit price on the invoice entry from the pric
ing terms set up the item on the contract. If the supplier overrides the unit price on
the invoice, that price it the final price. No discounting or pricing terms from the
contract are applied to the price provided by the supplier.
 Note
If you allow suppliers to edit the invoice unit price, they can use the advance
pricing details fields to edit pricing information. If the invoicing rule in your
Ariba Network account does not allow suppliers to enter advanced pricing de
tails at the line item level, the invoice will fail validation only when the supplier
tries to submit it from their Ariba Network account.
Allow supplier to enter invoice Only available if the feature Invoice Compliance for Contract-based Invoices is ena
accounting (no-release order con bled for your site:
tracts only)
If set to Yes, the accounting fields are displayed to suppliers, and suppliers can edit
the accounting information.
Apply discount terms to non- Specify whether you want to also apply the discount terms to non-catalog items.
catalog items (supplier- and com
modity-level contracts only)

Do non-catalog items accumulate Specify if non-catalog item purchases are included in calculation of contract limits.
against contract? (supplier- and
commodity-level contracts only)
Currency Select a currency from the available choices, or click Search for more to select a
different currency.
Include Subagreement Specify whether you want to allow accumulation to a parent contract.
Accumulators (master agreement
and subagreement hierarchical types
only)
3. When you have supplied all the necessary information, click Next to open to the Limits page.
How to define contract limits, notification recipients,

and forecasting
Use the Limits page to enter information such as contract limits, notification parameters, the preload amount, and
forecasted spend. Limits are not supported in SAP Ariba Contract Invoicing only sites.
Context
You can forecast the amount you expect to spend over the lifetime of a contract, and divide that amount by the type
of fiscal period you use.
 Example
If you expect to spend $100,000 over a one-year contract, you can divide that amount by four quarters,
forecasting $25,000 for each quarter. You can adjust each quarterly amount to account for seasonal spending
or other expected fluctuations. With the previous example, you can increase the summer quarter forecast to
$35,000, and decrease the winter quarter forecast to $15,000
An expected savings amount can also be established with the forecasted spend amounts to add another dimension
to the data analysis.
Procedure
1. Follow the instructions to create a new contract. [page 55] .

2. Enter general contract definitions [page 56].
3. On the Limits page, enter the following information:

Minimum Commitment
Minimum Commitment Enter the minimum amount you are going to spend according to the contract.
Select a currency from the available choices, or click Other to select a different cur
rency.
If Amount Spent is Below Enter a percentage of the minimum commitment that you want to use as the low
threshold for sending notifications to your Contract Agent that the minimum com
mitment has not yet been met.
Send Notification ___ days before Enter the number of days prior to the contact’s expiration that you want to send noti
contract expires fications.
Maximum Limit
Maximum Limit Enter the maximum amount you are going to spend according to the contract.
rency.
Excludes taxes For release order contracts:
Excludes charges Check the Excludes taxes and Excludes charges check boxes if you want taxes and
charges to be excluded from used amount accumulation.
You cannot edit these check boxes when you modify a contract.
This feature is disabled by default. To enable it, have your site's customer administra
tor set the Exclude taxes and charges from used amount accumulation in release
order contracts
(Application.Contract.ExcludeTaxesAndChargesForReleaseCon
tract) self-service parameter to Yes.
For no-release order contracts:
Check the Excludes taxes and Excludes charges check boxes if your maximum limit
amount does not include taxes and charges and you want to accumulate the recon
ciled amounts net of taxes and charges. Leave the check boxes blank (default) if your
maximum limit amount includes taxes and charges and you want to accumulate the
reconciled available amount including taxes and charges.
You cannot modify the value for Excludes taxes and Excludes charges when you
change a contract. This means that if you have contracts for which you want to
change the way the accumulation of the reconciled available amount is calculated af
ter the contract is opened, you need to close the current contract and set up a new
contract.
 Note
The feature to change the invoiced amount accumulation on contracts is disa
bled and requires SAP Ariba to enable it. By default, the total invoiced and total
reconciled amount accumulator, which is used to calculate the remaining
amount on the contract, includes taxes and charges.

Tolerance Enter a percentage of the maximum limit by which release orders can exceed the
contract limits.
Is Hard Maximum Limit Specify whether you want to enforce a hard maximum limit on the amount you
spend. For no-release order contracts, enforcing a hard maximum limit means that
invoice exception tolerances are disregarded and invoices that exceed the contract
limit are autorejected by default. Applies to SAP Ariba Buying and Invoicing and SAP
Ariba Invoice Management only.
Send notification when Amount Enter a percentage of the maximum limit that you want to use as a low threshold for
Available is at or below sending notifications to your contract agent. The notification includes information
about the remaining amount available for release.
Item Limits
Item Limits Specify the quantity or amount for item limits.
Release Limits
Minimum Allowed per Order (re Enter the minimum amount required per release.
lease order contracts only)
rency.
Is Hard Minimum Limit Specify whether you want to enforce a hard minimum limit on the amount you spend
per release order. If set to Yes, users cannot submit a requisition if the minimum
amount of all items associated with the contract is less than the minimum limit de
fined per release order. If set to No, additional approval nodes (by default the
Contract Manager group) are added, but users are not prevented from submitting
the requisition.
Maximum Allowed per Order (re Enter the maximum amount allowed per release.
lease order contracts only)
rency.
Is Hard Maximum Limit Specify whether you want to enforce a hard maximum limit on the amount you spend
per release order. If set to Yes, users cannot submit a requisition if the amount of all
items associated with the contract is more than the maximum limit defined per re
lease order including the release limit tolerance. If set to No, additional approval no
des (by default the Contract Manager group) are added, but users are not prevented
from submitting the requisition.
Maximum Limit Tolerance (release Enter a percentage by which each release can vary from the maximum limits.
order contracts only)
Scroll to see additional fields.
Additional Approvers List
Additional Approvers Select a user from the available choices, or click Search for more to select different users.
Expiration Date Notification
Send notification ___ days Enter the number of days before the contract expires to send notifications.
before the contract expires
Re-notify every ___ days Enter the interval (in days) at which notifications are sent.

Notification List
Send notifications to Add additional users who will receive notifications about the contract (such as contract
open notification, approaching contract limits, or unmet minimum commitments). By de
fault, the contract requester and all users with edit access to the contract receive these
notifications. Select a user from the available choices, or click Search for more to select
different users.
Preload Amount Enter the amount by which you are preloading the contract.
Select a currency from the available choices, or click Other to select a different currency.
Forecasted Spend
Total Amount Enter the total amount you anticipate to spend over the life of the contract.
Saving % Enter the percentage you expect to save by buying according to this contract.
Frequency Select the calendar increments of the contract by which you want to forecast. For exam
ple, if this contract covers a year and you select “quarter” for this option, your forecast is
spread over 4 quarterly increments. The increments are displayed in the Items option.
Select a frequency from the available choices, or click Search for more to select a differ-
ent frequency.
Forecast View the Start and End dates for each calendar increment you selected under the
Frequency option, and view an equal division of the Total Amount over those increments.
Use the calendar controls to change the date range for each increment.
Use the Amount column to enter a new amount for an increment. The total for all incre
ments must equal the total for the contract.
Select the check box for an increment, then click Delete to remove the increment.
Click Add to add an additional increment.
Click Balance to allocate an equal portion of the contract to each increment.
4. When you have supplied all the necessary information, click Next to open the Pricing Terms page.
How to create a milestone for a contract

A milestone is a set of conditions or requirements that must be met by a supplier to achieve the terms of a
supplier-, commodity-, or item-level contract.
Context
 Note

The successful completion of a milestone typically results in partial financial payment to the supplier. A milestone-
based agreement is a contract that is based on one or more milestones or deliverables.
When you add a milestone item to a release order contract, the milestone is an internal milestone and is used for
bookkeeping or notification purposes only. There are no limits associated with internal milestones. However, you
can configure how many days before the milestone completion date to send the notification message to the
contract requester and to users listed in the edit list. See Notification Limits [page 44].
When you add a milestone to a contract without release orders, it is associated with certain limits. These milestone-
item limits can be set for item level contracts to define the limits that apply to the milestone item and include the
following:
● Maximum amount, which is the maximum amount for the milestone item. This limit is used to determine the
total amount that can be invoiced against the item.
● Tolerance, which is the percent above the maximum amount that can be invoiced against the item.
Procedure
1. Click Add Items.

2. Provide the following information:
Title Enter a title for the milestone.
Full Description Enter a description of the terms of the milestone.
Commodity Code Select a commodity code from the available choices, or click Search for more to select a
different commodity code. Depending on your ERP integration, you may have to enter
additional fields, such as Material Group (SAP) or Partitioned Commodity Code (Peo
pleSoft).
Amount Enter the amount to be paid upon completion of the milestone.
Tolerance Enter a percentage by which the contract can exceed the amount specified above.
Completion Due Date Select the date on which you expect the milestone to be completed.
Supplier Contact Enter the name of your contact person in the supplier organization.
Verifier Select a person who is responsible for seeing that the terms of the milestone have been
met.
Select a name from the available options, or click Search for more to select a different
name.
Days Before Milestone Is Due Enter the number of days before the milestone completion due date when the verifier
should be notified.
3. Click OK.
4. When you have defined all the milestones for your contract, click Next to open the Access Control page.

How to control edit and release access for contracts
Use the Access Control page to identify the users who can edit the contract and who can order or invoice against
the contract (release access).
When you create a contact, you are automatically given edit access (permission to edit the contract). Other users
who are given edit access are:
● Members who belong to the Contract Manager or Contract Agent groups. Members of these groups can edit
a submitted contract request without altering the approval flow.
● Members of the Edit Approvable group, if added to the approval flow of contracts.
● Other users that you add who are able to edit the contract.
By default, all users have release access. You have the option to restrict that access to a specific set of users. If you
do restrict access to a contract, neither the contract nor any items governed by the contract are visible to users
who are not allowed to release funds against the contract.
Related Information
Identifying users who can edit the contract [page 66]

Restricting which users can release or invoice against the contract [page 66]
Identifying Users Who Can Edit the Contract
Procedure
1. Under Edit Access, click [select].

2. Click the check box for each user you want to add, then click Done.
3. To remove a user from the list, click [select] after the list of names.
4. Clear the check box for that user in the Currently Selected list, then click Done.
Restricting Which Users Can Release or Invoice Against the

Contract
Procedure
1. Click the check box for Restrict Release Access.

Select the users who will be allowed to release or invoice against the contract by:
Criteria Who has release access
Name Each individual user you select has release access.
Group Each member of the group you select has release access.
Supervisor Each user who reports to the supervisor you select has release access.
GL Business Unit (PeopleSoft) Each user who belongs to the business unit you select has release access.
Project (PeopleSoft) Each user who belongs to the project you select has release access.
Project/WBS (SAP)
Ship To Address (PeopleSoft) Each user assigned to the Ship-To Address you select has release access.
Cost Center (Generic, SAP) Each user assigned to the cost center you select has release access.
2. Click [select] after the criterion by which you control user release access.
3. Click the check box for each user (group, supervisor, or business unit) you want to add, then click Done.
4. To remove a user from the list, click [select] for that criterion.
5. Clear the check box for that user (group, supervisor, or business unit) in the Currently Selected list, then click
Done.
Results
When you have identified the users who have edit and release access, click Next to open the Payment Terms page.
When you have identified the users who have edit and release access, click Next to open the Appendixes page.
How to define payment terms in contracts

Use the Payment Terms page to specify when a supplier must be paid, and any early payment discounts that apply.
Procedure
1. To change the current payment terms, click Change Payment Terms.

2. Click Select for the payment term you want to use.
3. To remove all payment terms from the contract, click Remove Payment Terms.

Results
When you have configured payment terms, click Next to open the Appendixes page.
How to add attachments to contracts

Use the Appendixes page to include attachments to the contract. An appendix can be useful to amplify aspects of
the contract that cannot be easily defined in the contract wizard. You can link an appendix to specific line items
within the contract (for example, the pricing terms).
Procedure
1. Click Add Appendix.

2. Click Browse to locate the file to attach on your computer.
3. For Appendix Description, enter a brief description of the appendix.
4. If you are creating a blanket purchase order, check Visible to Supplier if you want the attachment sent to Ariba
Network with the blanket purchase order. See About Blanket Purchase Orders [page 22] for more information.
5. If you create an item level or commodity level contract, you can link an attachment to a specific line item.
Under Referenced By, click the check box for each line item in the contract that references the appendix.
6. Click OK.
To delete an appendix, select its check box, then click Delete.
To edit an appendix, click its Edit button.

7. Click Next to open the Summary page.
How to export contracts

Exporting a contract is a good method of creating an Excel template that assures the spreadsheet is correctly
formatted if you want to make changes to existing contract requests or create new contract requests through Excel
import. You can export a contract to an Excel spreadsheet after you have submitted the contract request, or, if you
are an approver, you can export a contract when approving the contract request.
See How to upload an Excel version of a contract [page 56] for import instructions, and Spreadsheet Import Notes
[page 52] for important information you need to know before importing Excel contracts.
The following contract fields cannot be exported to Excel:

Contract Page / Section Field Name
Limits / Notification List Send notifications to
Limits / Additional Approvers List Additional Approvers
Access Control / Edit Access Editing Users
Access Control / Release Access Restrict Release Access
● Users by Name
● Users by Group
● Users by Supervisor
● Users by Cost Center
 Note
● Exporting of contracts with two-dimensional matrix formula pricing is not supported.

● If you are importing Pricing Terms for your line items, make sure the Item Number field type in your Pricing
Terms worksheet matches the Item Number field type in the Contract Item Information worksheet. For
example, if you first export a contract, Item Number is exported as a field of type ‘String’. If you then change
the Item Number field, Excel stores the Item Number as a numeric value. If there’s a type discrepancy on
the two sheets, Excel will not import the Pricing Terms sheet.
● When exporting a contract request, depending on the client’s time zone, the Effective Date and Expiration
Date in the export file might be set to a different date than is displayed in the client UI. During export,
Effective Date and Expiration Date are set to the start of the day (e.g. Aug 30 00:00) and then recalculated
to the server’s time zone, which is Pacific Standard Time. When the file is imported, the Effective Date and
Expiration Date are recalculated from the server’s time stamp to the client’s time zone.
Related Information
Exporting a Submitted Contract [page 69]

Exporting a Contract During Approval [page 70]
Exporting a Submitted Contract
Procedure
1. In the My Documents content item, click the ID for the contract .

2. Click Excel Export.
3. Click Open to open an Excel version of the contract in your browser.
Click Save to save an Excel version of the contract in its current form.

Exporting a Contract During Approval
Procedure
1. In the To Do content item, click the Approve link for the contract request.
2. Click Excel Export.
3. Click Open to open an Excel version of the contract in your browser.
Click Save to save an Excel version of the contract in its current form.
Auto release contracts for automatic generation of

requisitions
An auto release contract is a type of release order contract that can be used for autogeneration of requisitions
A scheduled task, set to run daily, will autogenerate requisitions from these auto release contracts based on the
configured schedule. If the schedule is satisfied, for every auto release contract, separate requisitions will be
generated for recurring items and non-recurring (fixed-fee) items. The autogenerated requisitions will have titles
that include the reporting time zone configured in the site profile for the customer site. If the autogenerated
requisition has valid values, purchase orders will also be generated. If there are any validation errors, the requisition
remains in the composing state, and an email notification is sent to the preparer of the requisition. Autogeneration
of requisitions is supported only for fixed or recurring fee items, on release order contracts of the Item Level type. In
addition, the only hierarchical type supported is Standalone Agreement. Blanket Purchase Orders are also not
supported.
Autogenerated requisitions for recurring and fixed-fee items are automatically created for dates in the past,
according to the contract schedule. For example, if a contract is created in February with recurring fee items for a
calendar year, the requisition for January will be automatically created when the contract request is approved and
the contract is created. When your buying solution from SAP Ariba creates a requisition for a date in the past, it
also creates one for the current date. This is done to ensure that a requisition is created in case the contract is
created after the daily scheduled task run, where one would not have been created otherwise. The need by date for
auto release contracts is set as two days after the current date (current date + 2 days). When a contract is closed
and reopened again, the autogenerated requisitions will not be created for the period during which the contract
remained closed. Similarly, when a contract is edited and the start date is changed to an earlier date, the
autogenerated requisitions will not be created for the period between the new start date and the original start date.
In both these cases, requisitions will be autogenerated from the current date onward (the date the contract is
reopened or edited).
Auto release contracts for automatic generation of service requisitions in SAP integrated sites
You can configure SAP integrated sites to enable the creation of auto release contracts that can include service
items and automatically generate service requisitions. While creating the contract, you can specify values such as
service start date, service end date, maximum amount, and expected amount that are required to create the
service requisitions.

 Note
This feature is applicable only to customer sites that are integrated with ERP systems from SAP.
Prerequisites
● The following parameters must be enabled for your site. SAP Ariba sets these parameters for you. Have your
designated support contact file a service request (SR) to enable the parameters.
○ Application.Procure.EnableItemCategoryOnRequisitionLine that enables the display of the
item category option on the requisition summary page for sites integrated with SAP.
○ Application.Contract.MasterAgreement.AutoReleaseContractForPRAutoGeneration that
enables the creation of auto release contracts.
● Your administrator must enable the Enable auto release contracts for service line items
(Application.Contract.MasterAgreement.AutoReleaseContractForServiceItems) parameter for
this feature. For more information about the parameter, see Enable auto release contracts for service line
items.
Restrictions
You cannot change the service start date, service end date, maximum amount, and expected amount in the service
requisitions that are automatically generated based on auto release contracts.
 Note
If this feature is enabled, the Item Category field is available when you add material items.
How to create a contract for automatic generation of

material requisitions
You can create auto release contracts that automatically generate material requisitions based on a configured
schedule.
Procedure
1. Create a new release-order contract request by choosing the Contract type as Item Level.
This displays the Auto Release radio button.

2. Choose Yes for the Release Required radio button.

3. Choose Yes for the Auto Release radio button.
This displays the Auto Release Preparer field.

4. Specify a value for the Auto Release Preparer field, and then specify values for all other necessary fields.
5. In the pricing terms screen, add recurring and non-recurring items with the respective details, along with the
Release Quantity field. For example, create two non-recurring items and two recurring items with different
frequencies.
If you have an SAP integrated site and you have enabled the creation of auto release contracts for automatic
generation of service requisitions, the Item Category field is displayed. For material items, set it to material.
6. Submit the contract request for approval.
Results
When the contract request is approved the corresponding contract is generated. This contract is picked up by the
scheduled task during its next run and two requisitions will be autogenerated by the system, one for the recurring
items, and another for the non-recurring items.
Related Information
How to create a contract for automatic generation of

service requisitions
You can create auto release contracts that automatically generate service requisitions based on a configured
schedule.
Context
The auto release contract that you create for service items can contain only service items, or a mix of service and
material items. For service items, you have to specify values that are required to create a service requisition. These
values include the service start date, service end date, maximum amount, and expected amount.
The following points apply to auto release contracts that contain service items:
● For service items, service start date, service end date, maximum amount, and expected amount are mandatory
fields.
● By default, when you add a nonrecurring service item, the service start date is set as the contract effective date
and the service end date is set as the contract expiration date. You can change these dates but the dates must
be within the validity period of the contract.

 Note
If you update the contract dates after adding the service items, you must ensure that the service start and
end dates for all the service items are within the new validity period of the contract.
● For recurring service items, you specify only the start date and the end date for generating the requisitions. The
service start date and the service end date is automatically calculated based on the frequency.
For example, you select the start date as 1 Apr 2020 and the end date as 30 Nov 2020, and you select the
frequency as monthly. For the first requisition, the service start date is set as 1 Apr 2020 and the service end
date is set as 30 Apr 2020. For the next one, the service start date is 1 May 2020 and the service end date is 31
May 2020, and so on.
● The expected amount cannot be greater than the maximum amount.
● If you have specified a maximum limit for the contract, the sum of the amounts for all the items in the contract
cannot exceed the maximum limit. For service items in the contract, the Expected Amount value is considered
for the calculation, and for material items, the Amount value is considered.
For recurring items, the sum of the amounts across all recurrences cannot exceed the maximum limit of the
contract.
● For service items, the Release Quantity is set as 1 by default. You cannot change this value.
Procedure
1. Create a new contract request.

2. In the Definitions page, choose Yes for Auto Release.
The Contract Type is set as Item Level.

3. Specify the values for all the necessary fields and click Next.
4. Specify the values for all the necessary fields in the Limits page and click Next.
5. In the Pricing Terms page, click Add items.
6. Select the Commodity Code for the required service.
The Item Category is set as Service.

7. Enter the Max Amount and the Expected Amount.
8. If the item is a nonrecurring item, enter the Service Start Date and the Service End Date.
9. If the item is a recurring item,
a. Select Yes for Recurring.
b. Select the Frequency for automatically generating the requisition.
c. Select the Start Date and the End Date during which the requisitions are to be generated.
10. Specify the values for all the necessary fields in the subsequent pages and submit the contract request for
approval.
 Note
For more information, see the topics about creating and managing contracts under the Managing contract
compliance topics.

Related Information
Topics about managing contracts

Considerations when closing or changing contracts [page 74]
How to change, close, or reopen a contract [page 75]
How to change or cancel a contract release order [page 77]
Considerations when closing or changing contracts
Depending on your site configuration, you can make additional changes to contracts such as deleting or
deactivating items, changing the unit of measure of non-catalog items, and changing the receiving and invoicing
options.
When changing a contract (based on site configuration)
You site may be configured to enable you to perform the following additional changes to contracts that have been
created after a certain date:
● Delete contract line items

You can only delete those line items that do not have any transactions associated with them. When you
attempt to delete line items that have associated transactions, the items get deactivated and will not be
available for future transactions. You cannot deactivate all the line items in a contract. You can also reactivate
deactivated line items.
● Edit the unit of measure of a non-catalog item
You cannot edit the unit of measure of a non-catalog item if it has any associated transactions.
● Edit the Allow invoicing against contract, and Allow receiving against contract flags for no-release order
contract
The Allow receiving against contract flag can be changed only from No to Yes.
To enable this functionality, contact your Designated Support Contact and have them log a service request. An
Ariba Customer Support representative will follow up to configure your site accordingly.
These changes can be performed both from the user interface as well as by importing updated contract request
files.

When closing a release-order contract
When a release-order contract is closed manually while there are pending submitted requisitions associated with it
for which a contract was manually selected, those requisitions are automatically withdrawn from the Submitted
status.
Requisitions that are automatically withdrawn must be manually edited and then manually resubmitted; the
attached contract is not automatically detached. This allows the user who explicitly selected this contract to
reevaluate the impact and select another contract or make other adjustments to the purchase.
Automatic withdrawal does not occur in the following circumstances:
● The contract’s available amount reaches zero because of release orders applied against the contract’s available
amount balance.
● You change the original CR and the available amount reaches zero because the contract’s maximum
commitment is set below the used amount. In this case, the contract closes automatically.
● The contract was autoselected for the requisition. In this case, the requisition remains in Submitted status, but
the contract is automatically detached from the requisition, the price is recomputed to the original catalog
price and the approval process is reevaluated. Similarly, if a requisition is in the Composing status, the contract
is automatically detached from the requisition.
If a contract is reopened, withdrawn requisitions are not automatically resubmitted.
When closing a no-release order contract
When a no-release order contract that has not been fully invoiced is closed, all associated invoices in Reconciling
state will be re-reconciled with the “Contract not Invoicing” exception. Invoice agents can then either accept or
reject the invoice unless autorejection is configured for this invoice exception.
When you close a no-release order contract which is not a blanket purchase order type contract, the supplier will no
longer be able to create any invoices for the closed contract. If a supplier submits an invoice for a closed contract
via EDI or cXML, the invoice is reconciled with the “Contract not Invoicing” exception.
When you close a no-release order contract with is a blanket purchase order for which collaborative invoicing is
allowed, the supplier can continue to create invoices on Ariba Network when punching in to SAP Ariba Invoice
Management or SAP Ariba Buying and Invoicing from the Purchase Order page or by flipping an item-level blanket
purchase order into an invoice until the contract’s maximum limit has been reached. The invoices will be reconciled
with the “Contract not Invoicing” exception.
How to change, close, or reopen a contract
Context
From the Home page in your SAP Ariba solution, you can view all the contracts you have created and all the
contracts you have permission to edit. You can view the details of those contracts, and make changes to the
contract properties, as well as change and cancel the purchase orders associated with those contracts.

When you change a contract, you create a new version of the contract.
You can change existing contracts by importing updated contract requests in the following formats:
● Microsoft Excel workbooks

● CSV files in a ZIP file
● cXML (Blanket Purchase Orders from the Ariba Network)
For more information on importing contracts, see the Common Data Import and Administration Guide for SAP
Procurement solutions.
See Considerations when closing or changing contracts [page 74] before you close a contract.
Procedure
1. On the dashboard, click Manage Contracts .
You are presented with a list of the contracts that you have created, and those that you are allowed to edit. The
arrow icon next to a contract indicates that it is the parent to other contracts. You can expand and collapse a
hierarchy of contracts at each parent level.
2. Click the contract ID to view details of the contract or make changes to the contract.
The Summary, Pricing Terms, Milestones, and Approval Flow tabs have the same information as the
corresponding pages in the contract wizard. The Orders tab lists the orders associated with the contract. The
History tab lists all actions taken against the contract. The Subagreements tab lists all child contracts of the
current contract.
3. To edit the contract, click Change.
The contract opens on the Summary page of the contract wizard. Certain fields cannot be changed after the
contract request has been approved and the contract has been created. Edit the fields you want to modify, and
then resubmit the contract.
○ Depending on your site configuration, you may be able to make additional changes to contracts [page 74]
such as deleting or deactivating items, changing the unit of measure of non-catalog items, and changing
the receiving and invoicing options.
○ If you modify the contract’s expiration to an evergreen contract, the original contract’s expiration date is
retained, and users may still get notifications based on that original expiration date. Ensure you remove the
expiration date to avoid unnecessary notifications.
○ If you change a manually closed contract, the new contract is automatically closed, but you can then
reopen it.
○ All contract accumulators are carried over from the original to the new version of the contract.
○ When a new version of a contract is approved, the catalog subscriptions are validated. Catalog
subscriptions are only created for items that have any available amount/quantity left. This also applies to
recurring fee items - regardless of the billing and end date for the recurring fee item, if the number of
recurrences has reached the maximum number of recurrences, the item is not added to the catalog
subscriptions. In that case, if you want to create a new subscription for the recurring fee item, you must
add a new item to the contract.
4. To manually close the contract, click Close Contract.
○ You can reopen manually closed contracts, but you cannot reopen automatically closed contracts
(contracts that have reached their maximum spend limit).

5. To reopen a manually closed contract, click Open or Unclose. The Unclose button is displayed for closed
contracts with an effective date greater than today’s date.
If a contract is reopened, its state will be set as follows:
○ Set to Processed if the effective date is greater than today’s date.

○ Set to Open if the effective date has been reached and the contract’s maximum spend limit has not been
reached.
○ Set to Received if the contract has been fully received, but not fully invoiced.
○ Set to Invoiced if the contract has been fully invoiced, but not fully received.
○ Set to Inactive if the contract expiration date is in the past.
How to change or cancel a contract release order
Context
If you need to change or close a contract early, you might have to cancel or change associated release orders. You
can find assoicated orders from the Contracts pages.
Procedure
1. On the dashboard, click Manage Contracts .

2. Click the contract ID for which you want to change or cancel a release order.
3. Click the Orders tab.
4. In the Orders section, click the Order ID link to display the details of the release order. In the Line Items
section, click the ReqID link.
5. You are now viewing the Requisition Review page. Click the Orders tab.
6. Click the check box for the release order, then:
○ Click Change Order to make changes to the order.

○ Click Cancel Order to cancel the order.
For more information about changing and canceling orders, see the Purchasing user guide for procurement
professionals.

Topics about pricing terms in contracts
Pricing terms specify the specific pricing information, such as discount for volume orders, that are applied to your
orders or invoices.
Discount pricing in contracts [page 78]
Tiered pricing in contracts [page 79]
Tiered pricing types [page 80]
Term-based pricing in contracts [page 82]
Term-based grid pricing in contracts [page 84]
Formula pricing in contracts [page 85]
Repricing for tiered and term-based pricing [page 88]
Price limits for supplier-entered service sheet and invoice items [page 89]
How to define pricing terms on contracts [page 90]
Discount pricing in contracts

You can specify discount pricing for a supplier, commodity, catalog, or non-catalog item. Discount pricing can
either be of type Discounted Price (fixed price) or Discount Percent (fixed percentage off pricing).
With discounted price or discount percent, you can specify a flat discounted price or a fixed percentage off the
regular price. A discounted price can be applied to catalog items only. A fixed percentage off can be applied to
catalog items, commodities, or all items offered by a supplier.
 Note
You can enter negative discount percentages to allow for markup pricing for suppliers who want the ability to
provide a base price on their catalog items. Then the negotiated contract will include a markup percentage on
that base price.
Catalog Imports and Repricing for Discount Pricing

If a catalog import modifies the price of a catalog item that is referenced on an item level contract, the new price is
not displayed in the contract. Similarly, if a catalog import modifies the description of a catalog item, the modified
description is not displayed in the contract. This situation occurs because item level contracts retain a copy of the
catalog item price and description for display purposes at the time the contract was created.
If the item level pricing term specifies a discount percentage off the regular price for a catalog item, the new (re-
imported) price is used to calculate the discounted price for the item.

78 PUBLIC Topics about pricing terms in contracts
If the item level pricing term does not specify a discount percentage off the regular price (for example, if the item is
governed by a fixed discounted price), then the pricing for the item is determined by the original price for the item
(that is, the price of the item at the time the contract was created).
This situation does not occur for supplier level, catalog level and commodity level contracts because prices are not
specified for individual line items on these types of contracts.
Tiered pricing in contracts

Tiered pricing allows you to specify different discounts based on the volume (either dollar or quantity) purchased or
invoiced against the contract.
● Tiered pricing is not supported in supplier level and commodity level contracts for services procurement items.
● Cumulative tiered pricing is not available in sites configured for SAP Ariba Catalog or SAP Ariba Contract
Invoicing only.
 Note
● You can enter negative discount percentages to allow for markup pricing for suppliers who want the ability
to provide a base price on their catalog items. Then the negotiated contract will include a markup
percentage on that base price for the pricing tiers, pricing terms or pricing formulas you define.
Applying Pricing Tiers
The applicable tiers are determined based on the total amount using the actual base price of the item.
When setting up pricing tiers for volume discounting, you can define if the pricing tiers are cumulative (based on all
orders or invoices), or if they are applied per order.
Per Order Pricing
When using per order pricing, the unit price that will be applied will be from the tier which provides the best value,
and that price is applied to all items on the order. For example, assuming the following pricing tiers and a base price
of $5.00 USD, any order with a quantity between 20 and 40 will result in applying a unit price of $4.00 USD, and
any order with a quantity of 41 or higher will result in applying a unit price of $3.00 USD to calculate the order
amount.
Minimum Dollar Amount of Purchase Price per Item
$0.00USD $5.00USD
$100.00USD $4.00USD
$200.00USD $3.00USD

Topics about pricing terms in contracts PUBLIC 79
Cumulative Pricing
When using cumulative pricing, if the total quantity for one or multiple orders spans two tiers then the unit price is
calculated as:
Unit Price = [(number of items accommodated in previous tier x price defined in

previous tier ) + (number of items in current tier x price in current tier)] / total
number of items
Example using the pricing tiers above:
Release Order 1 (R1) is for a quantity of 17. Applying the base price of $5.00 USD, the total calculated amount is
$85.00 USD, and the tier 1 unit price of $5.00 USD is applied.
Release Order 2 (R2) is for a quantity of 15. R1 total amount ($85.00 USD) + 15 x $5.00 USD (R2 calculated at base
price) = $160.00 USD. The cumulative order amount has passed the threshold to tier 2, so the unit price to apply to
the second order is calculated as follows:
3 (remaining number of items in tier 1 before passing the threshold to tier 2) x $5.00
USD + 12 (number of items applied to tier 2 pricing) x $4.00 USD / 15 = $4.20 USD
If R2 is for a quantity of 30, the unit price for the order is calculated as follows:
3 (remaining number of items in tier 1 before passing the threshold to tier 2) x $5.00
USD + 25 (items available in tier 2 before passing the threshold to tier 3) x $4.00 USD
+ 2 (remaining number of items applied to tier 3 pricing) x $3.00 USD / 30 = $4.03 USD
Tiered pricing types

Your SAP Ariba solution provides the following types of tiered-pricing structures for contracts:
● Amount-based Volume Pricing [page 80]

● Amount-based Volume Discount [page 81]
● Quantity-based Volume Pricing [page 81]
● Quantity-based Volume Discount [page 81]
 Note
Depending on the type of contract (item, catalog, commodity or supplier level), the pricing can be cumulative
or apply to individual orders or invoices. In SAP Ariba Catalog only sites, tiered pricing applies to individual
shopping carts only.
Amount-based Volume Pricing
Available on item level contracts only. Sets different prices based on the dollar amount purchased. This pricing
structure can be cumulative (based on all orders or invoices) or apply only to individual orders or invoices.

For example:
Minimum Dollar Amount of Purchase Price per Item
$0.00USD $5.00USD
$100.00USD $4.00USD
$200.00USD $3.00USD
Amount-based Volume Discount
Available for all contract types. Applies different discount percentages based on the dollar amount purchased. On
item level and catalog level contracts, this pricing structure can be cumulative (based on all orders or invoices) or
apply only to individual orders or invoices. For commodity and supplier level contracts, this pricing structure is
always cumulative.
For example:
Minimum Dollar Amount of Purchase Discount Percent
$0.00USD 5%
$100.00USD 6%
$200.00USD 7%
Quantity-based Volume Pricing
Available on item level contracts only. Sets different prices for an item based on the number of units purchased.
Can be cumulative (based on all orders or invoices), or apply only to individual orders.
For example:
Minimum Quantity Purchased Price per Item
0 units $5.00USD
100 units $4.00USD
200 units $3.00USD
Quantity-based Volume Discount
Available on item level contracts only. Applies different discount percentages for an item based on the number of
units purchased. Can be cumulative (based on all orders or invoices), or apply only to individual orders.

For example:
Minimum Quantity Purchased Discount Percent
0 units 5%
100 units 6%
200 units 7%
Term-based pricing in contracts

Term-based pricing allows you to specify different discounts based on specified time periods within the life of the
contract. Your Ariba solution provides the following types of term-based pricing structures for contracts:
● Term-based Discount (a percentage discount)

● Term-based Pricing (a fixed price discount)
 Note
● You can enter negative discount percentages to allow for markup pricing for suppliers who want the ability
to provide a base price on their catalog items. Then the negotiated contract will include a markup
percentage on that base price for the pricing tiers, pricing terms or pricing formulas you define.
● In site enabled for SAP Ariba Catalog only, term-based pricing and term-based grid pricing are not
available.
Limitations to Term-Based Pricing
● Term-based pricing is not supported in supplier level and commodity level contracts for services procurement
items.
● Term-based pricing is not available in sites configured for SAP Ariba Catalog only.
Term-based Discount
With term-based discount pricing, you specify different discount percentages for an item based on specified time
periods. For example:
Start Date Price
07/01/2012 5%
10/01/2012 10%
01/01/2013 12%
04/01/2013 8%

Term-based discount pricing is valid for catalog and non-catalog items (if the contract allows), commodities, and
suppliers.
Term-based Pricing
With term-based pricing, you specify different prices for an item based on specified dates. For example:
Start Date Price
07/01/2012 500USD
10/01/2012 100USD
01/01/2013 120USD
04/01/2013 800USD
Term-based pricing is valid only for catalog and non-catalog items (without a previously defined discount price).
Defining Term Boundaries

The term-based pricing time periods must be bounded by the life of the contract. For example, the first pricing date
(Start Date) must be equal to or after the contract’s effective date, and the final pricing date must be equal to or
before the contract’s end date.
For release order contracts, the requisition’s Delay Purchase Until date determines the pricing date. If there is no
Delay Purchase Until date, the requisition’s Submitted date is used. For no-release order contracts, the invoice date
or the receipt date is used as the pricing date.
For evergreen contracts, if the release order date is outside of the boundary dates specified in the contract’s term-
based pricing, the price specified in the last time period is used. Take for example a contract with the following
pricing terms:
Start Date Discount
07/01/2005 5%
10/01/2005 10%
01/01/2006 12%
04/01/06 8%
If the release order date is 09/05/06, the contract pricing uses the discount price in the last term: 04/01/06 with
an 8% discount.

Term-based grid pricing in contracts
Term-based grid pricing allows you to specify the price for an item over time, based on attributes of that item, and
values for those attributes.
Term-based grid pricing also includes terms, or date ranges, during which prices are in effect for an item. For more
information on terms, see Term-based Pricing [page 83].
 Note
Term-based grid pricing is not available in sites configured for SAP Ariba Catalog only.
For example, an item may be Airport Terminal Rent. The attribute of that item would be location, for example, San
Francisco Airport. Location could have values like Aisle, Rest Room, and Ticket Counter. The attribute values are
further refined by Price, Max. Quantity, and Max. Amount.
The following example shows term-based grid pricing for terminal rents at XYZ airport:
Thursday, January1, 2018

Location Tuesday, January 1, 2017 (term start date) (term start date)
Ticket Counter 1 ● Price = $25.00 ● Price = $25.50

● Max. Quantity = 100 ● Max. Quantity = 100
● Max. Amount = $2500.00 ● Max. Amount = $2550.00
Ticket Counter 2 ● Price = $25.00 ● Price = $25.50

● Max. Quantity = 100 ● Max. Quantity = 100
● Max. Amount = $2500.00 ● Max. Amount = $2550.00
In this example:
Beginning on January 1, 2017, each ticket counter will be rented at a rate of $25.00 per square foot per year; the
maximum number of square feet covered by the contract for that ticket counter is 100; the maximum amount that
can be charged for rent during that time period is $2,500.00.
Beginning on January 1, 2018, each ticket counter will be rented at a rate of $25.50 per square foot; the maximum
number of square feet covered by the contract for that ticket counter is 100; the maximum amount that can be
charged for rent during that time period is $2,550.00.
The values for Price, Max. Quantity, and Max. Amount are defined in each cell of the grid.
Term-based grid pricing is valid only for no-release, item level contracts, and for partial items whose attributes have
string values.
 Note
● When you export a contract to Excel, the pricing grid is exported as part of the contract. Likewise, when you
import an Excel contract in which a pricing grid is defined, the grid is imported.
● In order to take advantage of term-based grid pricing, you need to have the necessary partial items and
attributes defined in your catalog.
● If you reach the cell limit for an item (for example, Max. Quantity), an exception is raised. You handle the
exception as you like (for example, you can accept it or dispute it).
● If you reach the limit for a line item (for example, the total amount that can be spent on a line item), then
that line item is no longer available.

● If you reach the limit for the contract, the contract is closed.
● The state of a contract (Open or Closed) cannot be tied to cell limits. For example, you cannot have a
contract close automatically when a cell limit is reached.
● Accounting at the cell level is not supported. Accounting at the line-item level is supported.
● If your catalog changes after you create a contract with term-based grid pricing and an attribute of one of
the items for which you have defined grid pricing is no longer available in the catalog, you cannot create a
new version of that contract based on the current catalog. If you need to create a new version of that
contract, you have to reload your catalog data, and include the item attributes that were left out of the new
catalog. With the correct catalog data in place, you can then create a new version of the contract.
Formula pricing in contracts

Formula pricing allows you to specify a price based on a mathematical formula. Your SAP Ariba solution supports
different types of formula pricing, including Matrix and Multiplier pricing.
Formula pricing is available when a partial item is added to your contract request.
The following example shows formula pricing for a printing job where the price is calculated as follows:
For an 8-1/2 inch x 11 inch sheet of paper:
The initial setup cost (including two colors) $600.00
Additional colors $300.00 each
Price/1000 sheets of paper $50.00
Additional colors/1000 sheets of paper $40.00
In this example, the calculation of the pricing for the item can be represented by the following formula:
600 + Max(0,NumColors - 2) * 300.00 + 50.00 * (NumSheets/1000) + Max(0,NumColors -

2) * 40.00 * (NumSheets/1000)
The preceding example shows a formula employing one-dimensional matrixes, where each variable (such as
NumSheets) changes independently of any other variables in the formula. Your SAP Ariba solution also supports a
two-dimensional matrix in formula pricing, in which one variable can change value in response to a second
variable’s value.
For example, consider a pricing formula for T-shirts in which the formula uses a base price of $20 plus a two-
dimensional matrix (size_color_matrix) that accounts for additional price markup required by the combination
of size and color of the shirt. The formula would be:
20 + size_color_matrix
The variable size_color_matrix is a two-dimensional matrix that can be represented by a table:
Green Blue White
Small 0 1 0
Medium 2 1 1

Large 2 3 2
Formula pricing is valid for partial items from the catalog with contractible factors. Only enumerated types on a
partial item can be used when defining the direct attributes used in formula pricing. Some contractible factors
(decimal or money values) can be added to the formula directly, whereas other factors (such as boolean, string, or
other field values for the category-based item) are considered enumerated values for the factor and must be
mapped to numerical values before being added to the formula.
Contact Customer Support for more information on creating custom formula functions.
Multiplier Pricing
Multiplier pricing allows you to specify a price based on type information, where the item contains a base price and
each type contains a multiplier to be used against the base price. The following example shows multiplier pricing for
a pipe item that considers material, weld type, and the shift of the person making the pipe:
Material Weld Type Shift
Copper 1.10 Intersect 1.20 58 1.00
Stainless Steel 1.20 Butt 1.30 5 10 1.10
Carbon Steel 1.30 Joint 1.40 6 10 1.20
Assuming the pipe has a base price of $5.00, if you select a stainless steel pipe with an intersect weld type from
shift 5 8, the price would be as follows:
$5.00 * 1.20 * 1.20 * 1.00 = $7.20
Notice that the different types are not related in any way. For example, the multiplier for the intersect weld type is
always 1.20, regardless of which material or shift you select.
Multiplier pricing is valid for partial items from the catalog with contractible factors. Only enumerated types on a
partial item can be used when defining the direct attributes used in multiplier pricing. Some contractible factors
(decimal or money values) can be added to the multiplier directly, whereas other factors (such as Boolean, string,
or other field values for the category-based item) are considered enumerated values for the factor and must be
mapped to numerical values before being added to the multiplier.
Matrix Pricing
Matrix pricing allows you to specify a price based on different related factors. The following example shows matrix
pricing for temporary labor where one factor is the location and other factor is the job class:
Job Class Location
San Francisco Los Angeles New York
Accountant $40.00/hour $35.00/hour $50.00/hour

Job Class Location
Admin Assistant $35.00/hour $30.00/hour $45.00/hour
HR Representative $30.00/hour $25.00/hour $40.00/hour
In this example, if an administrative assistant were hired in New York, the amount would be $45.00 per hour.
Matrix pricing is valid only for partial items from the catalog. Only enumerated types on a partial item can be used
when defining the n-dimensional grid used in matrix pricing.
Specifying Currency Values in Formula Pricing
The values used in evaluating a formula are based on the amount in the site's default currency to ensure that the
result of the formula evaluation is always interpreted consistently in one currency independent of a user's preferred
currency. The resulting value is then converted to the currency defined for the contract during ordering or
invoicing.
Example
Assuming the site default currency is USD, the contract currency is EUR, and the formula pricing for a Rate field
based on Location has a grid value of 11 for a Domestic Carrier item.
The conversion rates are as follows:
● USD:EUR = 0.8851
● GBP:USD = 1.3,
● EUR:GBP = 0.6827
Requisitions created by users in different countries/regions for a Domestic Carrier item will have the following
values:
● A requisition created by a user in Germany with preferred currency EUR: line amount is 9.74 EUR for Domestic
Carrier; the requisition total cost is 9.74 EUR.
● A requisition created by a user in Great Britain with preferred currency GBP: line amount is 9.74 EUR for
Domestic Carrier; the requisition total cost is 6.65 GBP.
● A requisition created by a user in the United States with preferred currency USD: line amount is 9.74 EUR for
Domestic Carrier; the requisition total cost is 11.00 USD.
This behavior can be overridden by applying a currency function. This allows contract agents to explicitly assign a
currency to the value used in the formula expression.
Using the previous example, where the grid values for Domestic Carrier or International Allowed are evaluated in
USD (the site's default currency), if the formula is set up to associate the formula values as values in EUR, the
results are:
● For the user in Germany: line amount is 11.00 EUR for Domestic Carrier; the requisition total cost is 11.00 EUR.
● For the user in Great Britain: line amount is 11.00 EUR for Domestic Carrier, the requisition total cost is 7.50
GBP.

● For the user in the United States: line amount is 11.00 EUR for Domestic Carrier; the requisition total cost is
12.45 USD.
In this example, the calculation of the pricing for the item can be represented by the following formula:
curr(Location,”EUR”)
Repricing for tiered and term-based pricing

To ensure that the most current price is applied, your solution reapplies prices to, or reprices, line items in
requisitions or shopping carts that are governed by tiered or term-based pricing.
 Note
Do not confuse repricing with autoselection; your solution does not reevaluate autoselection when repricing a
line item. For information on autoselection, see About the Autoselection Feature [page 18].
Repricing of cumulative tiered-priced items
Because cumulative tiered pricing is based on a changing running total, the price applied to a line item can change
during the lifecycle of a requisition. For example, the price of an item can change between the time the item is
added to a requisition and the time the requisition is submitted for approval.
By default, repricing for cumulative tiered pricing happens when the release order reaches the Ordered state.
However, your site can be configured to trigger repricing of line items when the requisition is submitted for
approval, or fully approved.
Once a requisition is in the Ordered status, repricing is no longer performed.
Repricing of per-order tiered or term-priced items
A line item that is governed by per-order tiered or term-based pricing is repriced when users change the quantity of
the line item on the requisition or in the shopping cart. Repricing can also occur if a contract agent changes the
pricing terms for the item on the associated contract.
If you have enabled the Demand Aggregation feature on your site, the unit price of the line items on your requisition
might increase when you submit the requisition. This typically happens when some line items in a requisition are
held for aggregation. The contract associated with the held line items is detached, leading to an increase in the unit
price of the held line items. Also, as repricing for other items on the requisition now happens based on a lower order
amount, the unit price of other items might also increase.

Support for CLID fields
Certain contract line items document (CLID) fields from SAP Ariba Contracts can be consumed by SAP Ariba
Procurement solutions and displayed in the catalog search results, purchase requisitions, and all related
documents.
In sites where SAP Ariba Procurement solutions are integrated with SAP Ariba Contracts, the contract creation
process starts in the contract workspace in the SAP Ariba Contracts solution. A contract terms link document is
created in the contract workspace which creates an associated compliance contract request in the SAP Ariba
procurement or invoicing solution. You then specify pricing terms in the contract compliance request. If the
contract line items documents (CLIDs) feature in your SAP Ariba Contracts solution is enabled, and if your
workspace has contract line item documents, then the contents are automatically copied to the compliance
contract when you create a contract terms link document.
A contract line items document (CLID), or line items document, specifies terms of the contract, or the goods or
services acquired by the contract. Each line item includes pricing information and terms, such as price and
quantity.
The following CLID fields can be consumed by SAP Ariba Procurement solutions and displayed in the catalog
search results, purchase requisitions, and all related documents:
● Manufacturer Part Number

● Supplier Part Number
● Material Number
● URL
 Note
You must contact SAP Ariba Customer Support to create the required extensible catalog field and to configure
your site accordingly to consume the Material Number CLID field data.
To enable this feature, have your Designated Support Contact (DSC) submit a Service Request (SR). An SAP Ariba
Customer Support representative will follow up to complete the request.
Price limits for supplier-entered service sheet and

invoice items
You can configure price limits to validate the prices of items that suppliers add to service sheets and invoices. You
can define different price limits for different time periods.Suppliers are prevented from adding items to service
sheets and invoices if the price that they define for an item is not within the price limits defined for the specified
reference date.
When defining the limits, you define both the minimum price and maximum price as values. Or, you can define the
minimum price as a value and specify a scale factor as a percentage to derive the maximum price.
This feature is applicable only to contract items that supplier users add to service sheets and contract-based
invoices when they punchin to the SAP Ariba solution from Ariba Network.
This feature is not enabled by default. To enable this feature for your site, configure the Define price limits for
contracted items

(Application.Pricing.MasterAgreement.SpecifyPriceLimitsForContractedItems) self-service site
configuration parameter.
For information on defining price limits, see How to define price limits in contracts [page 113].
Related Information
Intelligent Configuration Manager administration
How to define pricing terms on contracts

Use the Pricing Terms page to define the pricing terms between your company and the supplier you specified on
the Definitions page. The options on this page vary depending upon the type of contract you are creating.
How to configure pricing terms for a supplier-level contract [page 90]
How to configure pricing terms for a commodity-level contract request [page 93]
How to configure pricing terms for item-level contracts [page 95]
How to define pricing tiers on contracts [page 104]
How to define term-based pricing [page 105]
How to define term-based grid pricing [page 106]
How to define formula pricing in contracts [page 109]
How to define price limits in contracts [page 113]
How to configure pricing terms for a supplier-level contract
Context
If you are creating a supplier-level contract, the Pricing Terms page lists the name of the supplier and the type of
discount.
Procedure

3. Enter contract limits, notification parameters, the preload amount, and forecasted spend [page 61].
4. Click the link in the Supplier column to see details about the supplier.

5. Click Edit to define the pricing terms.
Provide the following information:
Description
Full Description Enter a description of the pricing terms.
Additional Data View a read-only field that might or might not contain data.
Pricing and Discounts
None Select this option if there is no pricing discount according to this contract.
Discount Percent Select this option if there is a percent discount according to this contract, and enter
the percent discount (for example, 10%).
Tiered Pricing Select this option if you are specifying tiered pricing for this contract. For more infor
mation, see Tiered Pricing [page 79].
Click Define Tiers to open the Tiered Pricing page. For information about working
with the Tiered Pricing page, see Defining Pricing Tiers [page 104].
Term Based Pricing (not available Select this option if you are specifying term-based pricing for this contract. For more
in SAP Ariba Catalog only sites) information, see About Term-based Pricing [page 82].
Click Define Terms to open the Term Based Pricing page. For information about
working with the Term Based Pricing page, see Defining Term-based Pricing for Con
tracts [page 105].
Price Limits Select this option if you are specifying price limits [page 89] to validate the prices of
items that suppliers add to service sheets and invoices.
Click Define Price Limits to open the Price Limits page. For more information, see
How to define price limits in contracts [page 113].
Allow Supplier to Edit Service Available only if the feature to allow suppliers to edit the unit price of items on service
Sheet Unit Price sheets after punchin from Ariba Network is enabled for your site:
If set to yes, suppliers while creating service sheets can edit the unit price of items
added during punchin.
Compound with applicable Specify whether you want to compound the child contract’s pricing terms with the
parent’s pricing terms (child agree parent’s.
ments only)
Add Accumulators to Parent Specify whether you want to allow accumulation from a child contract.
Agreement (child agreements only)
Accounting Accounting fields vary depending on your system’s integration and configuration.
Click Fill Values to default the accounting values or manually specify valid values. For
more information on how the accounting values are defaulted, see Accounting infor
mation on contracts [page 35].
To reset the accounting fields to blank values, click Clear Values and Splits.
Item Category Select a category from the menu.
Account Assignment Select an account assignment from the menu.

Overall Limit (services only) Enter the maximum amount allowed for all services covered by this contract.
rency.
Expected Value (services only) Enter the maximum amount expected for all services covered by this contract.
rency.
Bill To Select a value from the available choices, or click Search for more, to select a differ-
ent value.
 Note
(For sites integrated with SAP ERP) If enabled for your site, specifying the Bill To
value might not be mandatory if you do not specify a company code on contract
requests associated with a global purchasing unit.
Different combinations of the fol Select a value from the available choices, or click Search for more, to select a differ-
lowing options are displayed de ent value.
pending upon the value you set for
the Account Assignment option
above.
Asset Number
Cost Center
GL Account
Internal Order
Project/WBS
Split Accounting Click Split Accounting to spread the cost across multiple accounting groups.
Supply the necessary information for each group
 Note
If you have added split lines before filling the accounting values, and then click
Fill Values, all split lines will be deleted permanently.
SAP Ariba recommends that you click Fill Values (or specify them manually) be
fore adding split lines.
6. Click OK.
7. Click Next to open the Milestones or Access Control page depending on the features enabled for your site.

How to configure pricing terms for a commodity-level
contract request
Context
If you are creating a commodity-level contract, the Pricing Terms page lets you add commodity codes.
Procedure

4. Click Add Items.
Description
Full Description Enter a description of the commodity.
Commodity Code Select a value from the available choices, or click Search for more, to select a differ-
ent value. Depending on your ERP integration, you may have to enter additional
fields, such as Material Group (SAP) or Partitioned Commodity Code (PeopleSoft).
Limits
Minimum Amount Enter the minimum amount you are going to spend according to the contract.
rency.
Maximum Amount Enter the maximum amount you are going to spend according to the contract.
rency.
Tolerance Enter a percentage of the maximum limit by which release orders can exceed the
contract limits.
Receiving Required (no-release or Specify whether receipts are required for items purchased according to this contract.
der contracts only)
Release Limits (release order con

tracts only)
Minimum Amount / Quantity per Enter the minimum amount or quantity required per line item on a release order.
Order
rency.

Is Hard Minimum Limit Specify whether you want to enforce a hard minimum limit on the amount/ quantity
per line item. If set to Yes, users cannot submit a requisition if the minimum amount/
quantity of the line item is less than the minimum line item limit defined on the con
tract. If set to No, additional approval nodes (by default the Contract Manager group)
are added as approvers, but users are not prevented from submitting the requisition.
Maximum Amount / Quantity per Enter the maximum amount or quantity allowed per line item on a release order.
Order
rency.
Maximum Limit Tolerance Specify the tolerance percentage for the maximum limit.
Is Hard Maximum Limit Specify whether you want to enforce a hard maximum limit on the amount/ quantity
per line item. If set to Yes, users cannot submit a requisition if the amount/quantity
of the line item on the requisition exceeds the maximum line item limit (including tol
erances) defined on the contract. If set to No, additional approval nodes (by default
the Contract Manager group), but users are not prevented from submitting the requi
sition.
Discount Percent Select this option if there is a percent discount according to this contract.
Enter the percent discount (for example, 10%).
Tiered Pricing Select this option if you are specifying tiered pricing for this contract. For more infor
mation, see Tiered Pricing [page 79].
Click Define Tiers to open the Tiered Pricing page. For more information, see Defin-
ing Pricing Tiers [page 104].
Term Based Pricing (not available Select this option if you are specifying term-based pricing for this contract. For more
in SAP Ariba Catalog only sites) information, see About Term-based Pricing [page 82].
Click Define Terms to open the Term Based Pricing page. For more information, see
Defining Term-based Pricing for Contracts [page 105].
6. Click OK to return to the Pricing Terms page.

7. Click Edit for an item to edit the accounting information.
8. Click Next to open the Milestones page.

How to configure pricing terms for item-level contracts
If you are creating an item-level contract, the Pricing Terms page lets you add information about the following:
● Materials and services

● Fixed and recurring fees
● Costs and expenses (no-release order contracts only)
● Advanced pricing details for materials
 Note
If you are defining pricing terms for an item controlled by a category definition, you may see additional fields on
the pricing term pages that allow you to overwrite the values set by the category definition. These new policy
values are then used to validate the values you enter when ordering the item.
Related Information
How to configure pricing for goods and services from a catalog [page 95]
How to configure pricing for goods and services for a non-catalog item [page 98]
How to configure pricing for fixed and recurring fees [page 102]
How to configure pricing for costs and expenses [page 103]
How to configure pricing for materials and services items from a

catalog
Procedure

4. Click Next.
5. On the Pricing Terms page, under Materials and Services, click Add Items.
6. Search or browse your catalog to find the item for which you want to set pricing terms.
7. Click Add Item to add the item to the contract. The Add/Edit Item Level Pricing Terms page opens.
Enter pricing terms for the item as follows:
Description

ERS Allowed This field is visible only to members of the Contract Manager group.
Select Yes to enable automatic creation of invoices for fully approved receipts.
Limits
Set Item Limits By Select Quantity or Amount to determine the method by which the next two options
are set.
Minimum Quantity/Amount For minimum quantity, enter the minimum number of items that must be purchased
according to the contract.
For minimum amount, enter the minimum amount you are going to spend according
to the contract.
rency.
Maximum Quantity/Amount For maximum quantity, enter the maximum number of items that can be purchased
For maximum amount, enter the maximum amount that can be purchased according
to the contract.
rency.
Tolerance Enter a percentage of the maximum quantity or amount by which you can exceed the
contract.
Receiving Required (no-release or Specify whether receipts are required for items purchased according to this contract.
der contracts only)
Release Limits (release order con

tracts only)
Order
rency.
Order
rency.
Is Hard Maximum Limit Specify whether you want to enforce a hard maximum limit on the amount/quantity
the Contract Manager group) are added, but users are not prevented from submit
ting the requisition.

Discounted Price Select this option if there is a discount price according to this contract.
Enter the percent price.
rency.
Tiered Pricing Select this option if you are specifying tiered pricing [page 79] for this contract.
Click Define Tiers to open the Tiered Pricing page. For more information, see How to
define pricing tiers on contracts [page 104].
Term Based Pricing (not available Select this option if you are specifying term-based pricing [page 82] for this contract.
in SAP Ariba Catalog only sites)
How to define term-based pricing [page 105].
Term Based Grid Pricing (not avail Select this option if you are specifying term-based grid pricing [page 84].
able in SAP Ariba Catalog only sites)
Click Define Terms to open the Term Based Grid Pricing page. For more information,
see How to define term-based grid pricing [page 106].
Formula Pricing Select this option if you are specifying formula pricing [page 85] .
Click Define Formula to open the Formula Pricing page. For more information, see
How to define formula pricing in contracts [page 109].
Accounting Accounting fields vary depending on your system’s integration and configuration.
Click Fill Values to default accounting values or manually specify valid values. For
more information on how the accounting values are defaulted, see Accounting infor
mation on contracts [page 35].
To reset the accounting fields to blank values, click Clear Values and Splits.
Account Assignment Select an account assignment from the menu.
Account Type Select an account type from the menu.

Bill To Select a value from the available choices, or click Search for more, to select a differ-
ent value.
 Note
(For sites integrated with SAP ERP) If enabled for your site, specifying the Bill To
value might not be mandatory if you do not specify a company code on contract
requests associated with a global purchasing unit.
Different combinations of the fol Select a value from the available choices, or click Search for more, to select a differ-
lowing options are displayed de ent value.
pending upon the value you set for
the Account Assignment option
above.
Asset Number
Cost Center
GL Account
Internal Order
Project/WBS
Split Accounting Click Split Accounting to spread the cost across multiple accounting groups.
Supply the necessary information for each group.
Additional Pricing Details Click the Additional Pricing Details link and enter values for the advanced pricing
details.
 Note
The advanced pricing details fields are not applicable for service line items.
Price Unit Quantity Enter the quantity corresponding to the unit price of the item specified by the sup
plier. The unit price is based on the price unit quantity of the item.
Price Unit Enter the unit of measure for the unit price.
Unit Conversion Enter the ratio used to convert the ordered unit to the price unit. The unit price is
based on the price unit quantity and the price unit.
Pricing Description Enter a pricing description. You can enter any information for the advanced pricing
details.
How to configure pricing for materials and services for a non-

catalog item
Context
You can configure a release order contract to create subscriptions for non-catalog items [page 56]. This allows
purchasing users to search the catalog for the item, and it automatically applies the contract terms to the item.

Subscriptions are always created for non-catalog items in no-release order contracts.
If you do not generate a subscription for non-catalog contract items, then users must create a non-catalog item
with the same supplier name, part number, and (optional) auxiliary ID as the existing item on the contract when
they place an order for the item. If more than one contract applies to that item, a contract is autoselected based on
the contract autoselection criteria as described in About the Autoselection Feature [page 18]. In SAP Ariba Buying
and SAP Ariba Buying and Invoicing, users who belong to a group that can overwrite the autoselected contract can
select a different contract by editing the line item on the Line Item Details page.
If purchasing unit filtering is enabled on your site, the purchasing users’ purchasing unit or the parent purchasing
units will be used to decide which generated subscription items are visible to them.
Note that non-catalog items are not immediately available in the catalog view unless you manually rebuild the
catalog index to publish the subscription. By default, the index is automatically rebuild every two hours.
Procedure
1. On the Pricing Terms page, click Add Items.

2. Click the Add a non-catalog item icon to the right of the search bar.
3. Enter item details as follows:
Full Description Enter a description of the item.
Commodity Code Select a commodity code from the available choices, or click Search for more to se
lect a different commodity code. Depending on your ERP integration, you may have
to enter additional fields, such as Material Group (SAP) or Partitioned Commodity
Code (PeopleSoft).
Unit of Measure Select a unit of measure from the available choices, or click Search for more, to se
lect a different unit of measure.
Negotiated Price Enter the negotiated price for the item.
rency.
Price Unit Quantity Click Additional Pricing Details to view the list of advanced pricing details fields and
enter the values.
Price Unit
For more information, see How to configure pricing for materials and services from a
Unit Conversion
catalog [page 95].
Pricing Description
 Note
The advanced pricing details fields are not applicable for service line items.
Supplier Click the link to see more information about the supplier.
Contact Click the link to see more information about the supplier contact.
Supplier Part Number Enter the Supplier Part Number for the item.
Supplier Auxiliary Part ID Enter the Supplier Auxiliary Part ID for the item.

ERS Allowed This field is visible only to members of the Contract Manager group.
Select Yes to enable automatic creation of invoices for fully approved receipts.
4. Click OK.
Provide the following information.
Full Description The description options are the same ones you set in the previous step. You can edit
them here if necessary.
Limits
Set Item Limits By Select Quantity or Amount to determine the method by which the next two options
are set.
Minimum Quantity/Amount For minimum quantity, enter the minimum number of items that must be purchased
For minimum amount, enter the minimum amount you are going to spend according
to the contract.
rency.
Maximum Quantity/Amount For maximum quantity, enter the maximum number of items that can be purchased
For maximum amount, enter the maximum amount that can be purchased according
to the contract.
rency.
Tolerance Enter a percentage of the maximum quantity or amount by which you can exceed the
contract.
Release Limits (release order contracts only)
Order
rency.
Order
rency.

Is Hard Maximum Limit Specify whether you want to enforce a hard maximum limit on the amount/ quantity
the Contract Manager group) are added, but users are not prevented from submit
ting the requisition.
Discounted Price Select this option if there is a discount price according to this contract.
Enter the percent price.
rency.
Tiered Pricing Select this option if you are specifying tiered pricing [page 79] for this contract.
Click Define Tiers to open the Tiered Pricing page. For more information, see How to
define pricing tiers on contracts [page 104].
Term Based Pricing (not available Select this option if you are specifying term-based pricing [page 82] for this contract.
in SAP Ariba Catalog only sites)
How to define term-based pricing [page 105].
Term Based Grid Pricing (not avail Select this option if you are specifying term-based grid pricing [page 84].
able in SAP Ariba Catalog only sites)
Click Define Terms to open the Term Based Grid Pricing page. For more information,
see How to define term-based grid pricing [page 106].
Formula Pricing Select this option if you are specifying formula pricing [page 85].
Click Define Formula to open the Formula Pricing page. For more information, see
How to define formula pricing in contracts [page 109].
5. Click Add Additional Items to add more items. Repeat steps 2-3.
6. Click Done when you have finished adding items.

How to configure pricing for fixed and recurring fees
Context
Note that creating fixed and recurring fee items always creates a catalog subscriptions. This allows purchasing
users to search the catalog for the item, and it automatically applies the contract terms to the item.
Procedure

4. Under Fixed and Recurring Fees, click Add Items.
Full Description Enter a description of the item or service.
different commodity code. Depending on your ERP integration, you may have to enter
additional fields, such as Material Group (SAP) or Partitioned Commodity Code (People
Soft).
Amount Enter the maximum amount that can be spent on the item or service over the life of the
contract.
If you are creating a contract for recurring fees, then this amount is the maximum
amount that can be spent per recurrence.
Tolerance Enter a percentage of the amount by which you can exceed the contract.
Recurring Select Yes to create a contract for recurring fees.
Select No to create a contract for a one-time fee.
Frequency (recurring only) Select the frequency at which the item is delivered or the service rendered.
Billing Date Select the date on which the supplier can begin billing you for the item or service.
End Date (recurring only) Select the date after which you will no longer accept bills for the item or service
Maximum Recurrences View this read-only field. It is set according to the value of the Frequency option, and the
length of the billing period. For example, if the frequency is monthly and the billing period
is for one year, the value of this field is 12.
Auto Invoice This field is visible only to members of the Contract Manager group.
Select Yes to enable creation of invoices automatically for fixed and recurring fee items
on scheduled dates.


8. Click OK.
How to configure pricing for costs and expenses
Context
Cost and expense items are only available for no-release order contracts. Note that creating cost and expense
items always creates a catalog subscriptions. This allows purchasing users to search the catalog for the item, and it
automatically applies the contract terms to the item. You cannot receive against cost or expense items as they do
not have pricing details.
Procedure

4. Under Costs and Expenses, click Add Items.
Description
Full Description Enter a description of the cost or expense.
different commodity code. Depending on your ERP integration, you may have to enter ad
ditional fields, such as Material Group (SAP) or Partitioned Commodity Code (People
Soft).
Limits
Minimum Amount Enter the minimum amount you are going to spend according to the contract.
Maximum Amount Enter the maximum amount that can be purchased according to the contract.
Tolerance Enter a percentage of the maximum amount by which you can exceed the contract.

8. Click OK.

Results
When you have finished configuring pricing, click Next to open the Milestones or Access Control page.
How to define pricing tiers on contracts
Context
Use the Tiered Pricing page to define tiered pricing for this contract. To access this page, click Define Tiers on the
Pricing Terms page. Tiered pricing allows you to specify different discounts based on the volume (either amount or
quantity) purchased against the contract.
For additional information, see Tiered Pricing [page 79].
The options available on this page change depending upon the type of contract you are creating and the features
enabled for your site. If the contract permits only a single type of tiered pricing, the Type and Scope options do not
provide choices.
Procedure
1. Use the Type menu to select the type of tiered pricing you want to configure:
○ Amount Based Volume Pricing provides a price discount based on the amount of money you spend.
○ Amount Based Volume Discount provides a percentage discount based on the amount of money you
spend.
○ Quantity Based Volume Pricing provides a price discount based on the quantity you order.
○ Quantity Based Volume Discount provides a percentage discount based on the quantity you order.
2. Use the Scope option to select the scope of the tiered pricing:
○ Cumulative applies once you have met the minimum commitment of the contract.
 Note
Cumulative pricing is not available in site configured for SAP Ariba Catalog only.
Supplier-level and commodity-level contracts are always cumulative.
○ Per Order applies to each release order.

3. Enter the appropriate information for each tier, based on the type of pricing you are using.
○ For Amount Based Volume Pricing, enter the Minimum Amount spent, and the Amount per item at that
level of spending.
○ For Amount Based Volume Discount, enter the Minimum Amount spent, and the Percent discount per
item at that level of spending.
○ For Quantity Based Volume Pricing, enter the Minimum Quantity purchased, and the Amount per item at
that quantity.

○ For Quantity Based Volume Discount pricing, enter the Minimum Quantity purchased, and the Percent
discount at that quantity.
4. Click Add to add additional tiers.
5. When you have configured all tiers, click OK.
6. Click OK again to return to the Pricing Terms page, then click Next to open the Milestones page.
How to define term-based pricing
Context
Use the Term Based Pricing page to define term-based pricing for this contract. To access, click Define Terms on
the Pricing Terms page. Term-based pricing allows you to specify different discounts based on specified time
periods within the life of the contract.
For additional information, see About Term-based Pricing [page 82].
The options available on this page change depending upon the type of contract you are creating. If the contract
permits only a single type of term-based pricing, the Type option does not provide choices.
 Note
Term-based pricing is not available in sites configured for SAP Ariba Catalog only.
Procedure
1. Use the Type menu to select the type of term pricing you want to configure:
○ Term Based Discount provides a percentage discount based on the time periods you specify.
○ Term Based Pricing provides a price discount based on the time periods you specify.
2. Enter the appropriate information for each period, based on the type of pricing you are using.
○ For Term Based Discount, set the Start Date on which the discount begins (enter a date or click the
Calendar and select a date), and enter the Percent by which purchases are discounted.
○ For Term Based Pricing, set the Start Date on which the price begins (enter a date or click the Calendar
and select a date), and enter the Amount per item for that period.
3. Click Add to add additional tiers.
4. Click Validate to ensure the terms are complete and valid to calculate the item's price.
5. When you have configured all terms, click OK.

How to define term-based grid pricing
Term-based grid pricing is supported only for partial items in no-release, item-level contracts whose attributes have
string values. Term-based grid pricing allows you to specify the price for an item over time, based on attributes of
that item, and values for those attributes.
For additional information, see Term-based grid pricing in contracts [page 84].
 Note
Term-based pricing is not available in sited configured for SAP Ariba Catalog only.
You define term-based grid pricing on the Term Based Grid Pricing page. The options on this page change
according to the type of item for which you are defining pricing (for example, IT Services vs. Airport Locations), but
the paradigm is the same for all items.
What are terms
Terms define the time periods for which pricing is in effect. A term begins at 00:00:00 AM (midnight) on its start
date, and ends at 11:59:59 PM on the day preceding the next term. For example, if you have terms beginning on
January 1 and April 1, the first term begins at 00:00:00 AM on January 1 and ends at 11:59:59 PM on March 31.
A contract has one default term starting on the effective date of the contract. Each term is identified by its start
date.
You can add new terms, delete existing terms, and make copies of existing terms. When you make a copy of a term,
all of the cell values (pricing for item attributes) for the term are copied to the new term.
 Note
Once a contract request has been fully approved, you can no longer delete terms from the resulting contract.
You can, however, export the contract to Excel, delete terms from the Excel version of the contract, and then
import that version of the contract. The danger of deleting terms in this fashion is that you lose all the spend
data associated with the deleted terms once the new version of the contract is in effect. It is not recommended
that you delete terms from a contract that has been approved.
What are cell values
A cell defines the pricing for an item attribute for a specific term. For example, an item like IT Help Desk Services
might have attributes like networking and security expert. The attributes represent rows on the grid, while terms
represent columns. Cells occur at the intersection of attributes and terms.
You edit the cell values to determine pricing.

How to add or copy a term for term-based grid pricing
Procedure
1. On the Pricing Terms page, click Add Items to add the item for which you want to define term-based grid
pricing.
2. On the Add/Edit Item Level Pricing Terms page, choose Term Based Grid Pricing.
3. Click Define Terms to open the Term Based Grid Pricing page.
4. Click Add Term.
5. Click the calendar control to select a start date.
6. Click OK.
Next Steps
You can also quickly add new terms by copying existing terms:
1. Click Copy Term.
 Note
The Copy From field defaults to the latest term.
2. Click Select Term to set the value for the Copy From field.
3. Click the radio button for the term you want to copy, then click OK.
4. Set the value of the Copy To field. Use the calendar control to select the start date of the new term.
5. Click OK. The new term is displayed in the appropriate chronological position.
How to edit the grid for term-based grid pricing
Context
You can edit the cell values for one or more item attributes and one or more terms by using the Edit Grid
command.
When you edit the grid, you specify the terms across which your changes are effective.
If you want to restrict your changes to smaller date ranges than are currently defined in the grid, you need to add
new terms.
If you select multiple item attributes, the same changes are applied to all of them.
 Note
If your grid contains more terms than can be displayed at one time, you can use the view control to page
through the terms to see the ones you want.

● Click Start to page to the first term in the grid.
● Click End to page to the last term in the grid.
● Click the single arrows to page one term at a time.
● Click the double arrows to page six terms at a time.
● Click the calendar control to select a date. The grid then displays a maximum of three terms prior to that
date and three terms after that date
Procedure
1. Click the check box for one or more item attributes, or click the check box for the attribute column head to
select all attributes.
2. Click Edit Grid.
From Term Click Select Term to select the first term in which you want your changes to take ef
fect.
To Term Click Select Term to select the last term in which you want your changes to take ef
fect.
Price Enter the price for all selected item attributes for the time range you have specified.
Click the link to select a currency.
Max. Quantity Enter the maximum number of units of all selected item attributes for the time range
you have specified.
Max. Amount Enter the maximum amount you will spend for all selected item attributes for the
time range you have specified.
When you are editing the grid by this method, you need to enter values for the Price, Max. Quantity, and Max.
Amount fields. If you enter a value for only one field, then the other two fields are set to a null value for all
affected attributes.
4. Click OK.
How to edit cell values for term-based grid pricing
Procedure
1. Click the link for the cell whose values you want to edit.

Price Enter the price for the item attribute for this term.
For example, this might be the price per hour for a particular type of temporary labor
or the rent per square foot for an airport location.
Max. Quantity Enter the maximum number of units for which you will pay during this term.
For example, this might be the maximum number of hours of temp labor or the maxi
mum number of square feet of airport real estate.
Max. Amount Enter the maximum amount you will spend for this item attribute during this term.
For example, the maximum amount you will spend for a security expert or for rent for
a ticket gate.
Amount Spent This field is read only, and indicates the amount spent so far.
Used Quantity This field is read only, and indicates the quantity used so far.
3. Click OK.
 Note
If you plan to export to Excel a contract that contains term-based grid pricing, you must define values for all
the cells in the grid. If you export cells with no values, for example Price cells, the currency information is
not exported. If you then import an Excel version of that contract without currency information, the system
may assign a currency (for example, the default site currency) which may not be what you expect.
How to define formula pricing in contracts

Formula pricing is available when a partial item is added to your contract request.
Use the Formula Pricing page to define formula pricing for this contract.
Formula pricing allows you to specify a price based on a mathematical formula. Your SAP Ariba solution supports
different types of formula pricing, including Matrix and Multiplier pricing.
The Formula Pricing page has three areas that you can use in conjunction with one another to define the pricing
formula you want to use for an item:
● Create and Validate Pricing Formula, where you combine item attributes, arithmetic operators, functions.
● Add Attributes to Formula, where you can edit and select the attributes you want to add to a formula.
● Define Values for Item Attributes, where you can define values for item attributes and create matrixes.
For additional information, see Formula pricing in contracts [page 85] .
The examples in the sections that follow use a catalog item Men’s T-Shirt.

 Note
The examples guide you to using the user interface buttons to develop the formula. Once you are familiar with
this process, you can simply type in the formula in the text box and click Validate.
Related Information
Creating a Simple Formula for Contract Pricing [page 110]

Creating a Pricing Matrix for Contracts [page 110]
Creating Multiplier Pricing for Contracts [page 111]
Creating a Simple Formula for Contract Pricing
Context
In this example, you create a simple formula of BasePrice * Quantity.
Procedure
1. Under Add Attributes to Formula, click Add to formula for the first attribute.
2. In the Create and Validate Pricing Formula area, click the arithmetic operator you want to add to the formula.
3. In the Add Attributes to Formula area, click Add to formula for the second attribute.
4. Click Validate to validate the formula.
If errors occur during validation, an error message displays. Correct the errors and validate the formula.
Creating a Pricing Matrix for Contracts
Context
In this example, you create a formula attribute that specifies a base price of $15.00 for a medium shirt, and a price
of $20.00 for a large shirt. That attribute is then incorporated into the formula, wherein the price of the item is
determined by quantity and size.

Procedure
1. Under Define Values for Item Attributes, select two values (such as color and size).
2. Click Create Matrix.
For... Do this...
Formula Attribute Name Accept the default name, or enter a new name for the formula attribute. The name
must:
○ Begin with an alphabetic character
○ Contain only alphanumeric characters
○ Use an underscore (_) to separate word pairs
Value fields Enter the values you want to use for the attributes.
In this example, 15 is used for values in the Medium column, and 20 is used for values
in the Large column.
4. Click OK.
The new attribute is added to the attributes list.

5. Click Add to formula for Quantity.
6. Click the multiplication operator (*) to add it to the formula.
7. Click Add to formula for the new attribute (for example, color_size).
8. Click OK.
The new formula is displayed under Pricing and Discounts.
In this example, the price for the line item is calculated as follows:
quantity of shirts ordered x price per size
For example, a purchase order made under the terms of this contract for 100 medium shirts (100 x 15 = $1500)
and 100 large shirts (100 x 20 = $2000) would have an amount of $3500.
Creating Multiplier Pricing for Contracts
Context
In this example, you create a formula that specifies the multipliers you want to use against the base price:
BasePrice * 1 for medium shirts, and BasePrice * 1.5 for large shirts.
Procedure
1. Under Define Values for Item Attributes, click Define values for an appropriate attribute (for example, size).

For... Do this...
Formula Attribute Name Accept the default name, or enter a new name for the formula attribute.
The name must:
○ Begin with an alphabetic character
○ Contain only alphanumeric characters
○ Use an underscore (_) to separate word pairs
Value fields Enter the values you want to use for the attributes.
In this example, 1 is used for values in the Medium row, and 1.5 is used for values in the
Large row.
3. Click OK.
The new attribute is added to the attributes list.

4. Click Add to formula for Quantity.
Click the multiplication operator (*), then click the left parenthesis operator ( ( ).
Click Add to formula for BasePrice, then click Add to formula for size.
Click the right parenthesis operator ( ) ).

5. Click OK.
The new formula is displayed under Pricing and Discounts.
In this example, the price for the line item is calculated as follows:
quantity of shirts x (the base price x the price per size)
For example, a purchase order made under the terms of this contract for 100 medium shirts (100 x (15 x 1) =
1500) and 100 large shirts (100 x (15 x 1.5) = $2250) would have an amount of $3750.
Using Functions in Formula Pricing for Contracts
You can define advanced formulas using the following custom functions. To include functions in your formula, type
the expression directly into the Formula text box:
● Min: returns the lowest value in a list of values.

Example: Min(2,NumColors). If the number of ordered colors is greater than 2, return 2.
● Max: returns the highest value in a list of values.
Example: Max(0,NumColors - 2). If the number of ordered colors is less than 2, return 0.
● Curr: associates a currency to the expression
Syntax: curr(<actual formula expression>, "UniqueName of the currency to which the
expression value is to be associated")
Examples:
○ BasePrice + curr(color, "EUR") where color is the partial field with its pricing grid and BasePrice a
pricing value users enter during requisitioning (typically in the user's preferred currency and converted to
the site's default currency). During formula evaluation, the curr function ensures that the value for color is
converted to the site’s default currency before adding to the BasePrice, so that the result of the calculation
is in the default currency.

○ curr(size + color, "EUR") where size and color are partial fields with pricing grids and the pricing
values are in Euro.
● If: allows evaluation of conditions
Syntax: if (condition-expr, true-expr, false-expr)
If condition-expr is True, then the true-expr is evaluated and returned, otherwise false-expr is
evaluated and returned.
Example:
if (x > 0 , 20, 40) returns 20 if x > 0, otherwise it returns 40.
 Note
You can also use standard math and trigonometric functions supported by the Java Math Expression Parser
library, such as: LOG, LN, SQRT, ABS, MOD, SUM, RAND, SIN, COS, TAN, etc.
How to define price limits in contracts
Context
Use the Price Limits page to define price limits for contract items that suppliers add to service sheets and
contract-based invoices. To access, click Define Price Limits on the Pricing Terms page. You can define time
periods and price limits based on which the price of items that suppliers add to service sheets and contract-based
invoices are to be validated.
Procedure
1. Use the Type menu to select the type of price limits you want to configure.
2. Enter the appropriate information for each period.
○ Set the Start Date and End Date to define the time period that the limits are applicable to.
○ Enter a value in the Minimum Price field to set the lower limit of the price.
○ Enter a value in the Maximum Price field to set the upper limit of the price.
If you selected the Scale Factor Based type, then enter a scale factor value as a percentage to derive the
maximum price.
3. Click Add to add additional time periods and price limits.
4. When you have configured all terms, click OK.

Managing compliance contracts with SAP Ariba
Contracts
SAP Ariba Procurement solutions provide features and functionality that enable the modeling and management of
contract pricing and terms to help support both internal compliance as well as supplier invoice compliance. SAP
Ariba Contracts provides visibility and control over the contract authoring and management process. These two
solutions can be integrated to allow seamless contract management from authoring to compliance enforcement.
If you have contracts that you have already created within your SAP Ariba invoicing or buying solution, and later
purchase SAP Ariba Contracts, you can still manage those contracts from your invoicing or buying solution.
 Note
After you have SAP Ariba Contracts enabled on your site, you must create all new contracts in SAP Ariba
Contracts.
For information about managing compliance contracts with SAP Ariba Contracts, see Managing contract spending
from contract workspaces. For information about contract authoring in SAP Ariba Contracts, see the Contract
authoring guide.
Considerations when using contract compliance with SAP Ariba Contracts
● If your SAP Ariba Procurement solution is integrated with SAP Ariba Contracts, you cannot create new
contracts using your SAP Ariba Procurement solution. Instead, you must create new contracts by first creating
a contract workspace in SAP Ariba Contracts. In addition, you cannot import contracts using the Import
Contracts data import task in your SAP Ariba Procurement solution.
● Contracts that have a contract workspace associated with them are listed in your SAP Ariba Procurement
solution with a “CW” at the beginning of their identifier. For example, CW22211.
● SAP Ariba Contracts uses calendar dates in contracts. These dates are not time zone-specific. Your SAP Ariba
Procurement solution uses actual dates, which have a time zone associated with them. Note that due to this
time zone difference, dates in contracts can have different interpretations depending on in which application
the contract date is specified.
● When a contract workspace is closed in SAP Ariba Contracts, the corresponding contract is closed in the SAP
Ariba Procurement solution.
● When a contract workspace is amended in SAP Ariba Contracts, a new version of the corresponding contract is
created in the SAP Ariba Procurement solution with the status Open.

114 PUBLIC Managing compliance contracts with SAP Ariba Contracts
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and abilities.

Important Disclaimers and Legal Information PUBLIC 115
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Managing contract compliance

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Managing contract compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5