How a Contract Works

This section explains how the planned data from the contracts are consumed based on the worklogs and work rates and how the users can track the service progress from them.

Understanding the Data Hierarchy

Before going through the contracts functionality, it is important to know how the system handles the overall information. Although the Contract is the key entity, there are other entities that surround it and which are important to obtain meaningful information related to services consumption and comparison between planned and executed. The diagram below exemplifies this structure:

Organization: represents the customer that will have service contracts created for. A customer can have many different contracts to specify different service types or periods.

Contract: A Contract defines the service agreement with your customers. It helps in managing how customers are charged for services you execute. The contract is also responsible for tracking the status of the agreement. In summary, the contract is the main entity that concentrates the information related to the services contracted, such as the responsible for that contract, start and end dates, recurrence, amount of contracted hours, fixed price, etc.

Accounts: responsible for classifying the services inside a contract. You can add up to 6 accounts per contract. They can be billable or non-billable and assigned to specific teams that will execute the service. The total for billable accounts should always match the contracted hours informed for that particular contract.

Account Slices: used whenever a service/account has to be executed by more than one team. The number of hours for each account (Time & Materials contracts) can be distributed among up to 4 different teams and the sum of the slices should match the total defined for that particular account. For Fixed-Price contracts, you can also distribute the work among up to 4 different teams. The difference is that there is no hours or values distribution among them.

Issues: These are the Jira entities created to describe the tasks executed by the users. When editing an issue, it is necessary to inform the contract and account to be considered for that issue, so the system will know to what account/contract the worklogs should be considered for. There is no restriction on the number of issues created for an account.

Worklogs: time logged by the users in Jira whenever they work on that particular task/story.

Processing the Contracts

Please, refer to the Create a Contract section for detailed information.

When a contract is created for an Customer the system will use the issues or worklogs added against its accounts to track progress/consumption, depending on the Contract Type defined (for now, the only type available is hourly).

Contract Type

Behavior

Hours

When this option is selected, the system will count every hour logged for issues under the respective contract/account and compare them with the contracted hours informed on the contract, since they are logged within the contract start/end date ranges.
If the user who has logged the time is also enrolled in a Team, the system will consider this information to show the team distribution (slices) time spent on the related reports.

Fixed-Price

When this option is selected, the system will calculate the number of hours logged in issues for that particular contract/account x the work rates for that particular team member, then compare with the contract value, since the issue creation date is within the contract start/end date ranges.

The system only starts counting issues, rates or worklogs when the respective contract status is changed from DRAFT to ACTIVE.

Recurrence

In case you have customers whose contract recurring services, the system allows to manage contracts in two different ways, with specific behaviors:

Recurrence Type	Behavior	Comments
None	In this case, the system will understand that the contract simply starts and ends in a specific time range, defined by start and end dates. Contracted hours/value will be considered for calculations only once, given the dates informed. Account slices will also be calculated once, until the end date. Contract expiration rules work normally after the end date is reached and it is still ACTIVE.
Monthly	The system will understand the contract's amount of hours/value should be repeated monthly until the end of the contract. When you inform a monthly recurrence, the total contracted hours/value will become monthly and a new field will be displayed to show the total amount for the contract, given the number of months inside the start/end dates range. Examples: Time & Materials (hours) contracts: if the period inside the start/end dates range is 4 months and you inform 100 hours per month, then your total contracted hours will be 400 hours until the end date as shown below: Fixed-Price contracts (to be implemented in future versions): if the period inside the start/end dates range is 4 months and you inform $1,000.00 per month, then your total contracted hours will be $4,000.00 until the end date as shown below: Account slices will also be monthly calculated, until the end date. Contract expiration rules work normally after the end date is reached and it is still ACTIVE.	You cannot have a contract without an end date. Even the recurring ones should have a start and end date. After the contract time ends, you should add a new contract if you want to continue with the services for this customer/account.