How to Convert Service Contracts

Because the VAT rate change tool cannot convert service contracts, these contracts must be converted manually. This topic describes several alternative methods that you can use for service contract conversion.

NOTE

This topic provides a high-level workflow.

The following procedure describes how to correct an invoice for a prepaid service contact that has been created a year in advance.

NOTE

For this example, you must change your work date to 01.01.2017.

To correct an invoice for a prepaid service contract

  1. Choose the Search for Page or Report icon, enter Contract Management, and then choose the related link.
  2. Under Lists, choose Service Contracts.
  3. Create a new prepaid service contract. Enter a start date of 01.01.2017 and an invoice period year for customer 20000.
  4. This contract must be signed. On the Home tab, in the Process group, choose Sign Contract.
  5. Create a service invoice.
  6. The invoice is listed as an unposted service invoice. To view the service invoice, choose Service, choose Contract Management, and then choose Service Invoices.
  7. Post the service invoice.
NOTE

Do not change the unposted service invoice. Since the service ledger entries are created when the invoice is created, a change in the unposted invoice will not change the already created service ledger entries. However, the VAT entries are created when the invoice is posted. This lets you change the general product posting group and the GSP product posting group on the unposted service invoice.

To create a credit memo for VAT difference

The following procedure describes how to create a credit memo that only includes the VAT difference for the already invoiced period starting on 01.07.2017. In this example, the VAT amount is only posted to the Financial Management module, not to the Service Management module. The VAT entries that are linked to the service ledger entry will not be corrected.

  1. Create a new general ledger account for the VAT difference. This account will be used for direct posting of the VAT correction.
  2. Add a new line to the VAT posting setup.

To create contract expiration dates in contract lines

The following procedure describes how to create new contracts by working with contact expiration dates in service contract lines.

  1. In the Service Contract window, set the contract expiration date to 30.06.2017.
  2. Choose the Create Credit Memo action to automatically create a credit memo for July 2017 to December 2017.
  3. Because the contract has expired, you need to create a new contract for the period with the new VAT rate for July 1, 2017 to December 31, 2017.

To create a new credit memo

The following procedure describes how to create a new credit memo using the Get Prepaid Contract Entries batch job. Entries that you do not want to correct from January 2017 to June 2017 will be deleted.

  1. Run the VAT rate change tool on July 1, 2017. The general product posting group or the VAT product posting group is changed. For more information, see How to: Work with VAT on Sales and Purchases.
  2. After running the VAT rate change tool, enter a contract expiration date for the service contract. You can now delete the service contract line and create a new line that is identical to the old one.
  3. Create a new invoice for the period of January 2017 to December 2012 using the new VAT rate.
  4. To create another credit memo, in the Service Credit Memos window, choose New to create a new service credit memo.
  5. Choose the Get Prepaid Contract Entries action.
  6. After the conversion is complete, VAT and service ledger entries will be correct.

See Also

How to: Work with Service Contracts and Service Contract Quotes
Finance
How to: Report VAT to Tax Authorities
How to: Work with VAT on Sales and Purchases


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