Implementing the Contract Functionality: To Create Labor Items and a Case Class for a Support Contract

In the following implementation activity, you will learn how to create a labor non-stock item and a case class of per case billing mode to create an empty template for a support contract.

Story

Suppose that the SweetLife Fruits & Jams company, in addition to deploying juicers, also specializes in providing maintenance. The Unifruit LLC customer previously purchased juicers and now needs to enter into a maintenance support contract. On 3/8/2023, the support contract was signed by both parties.

According to the terms of the contract, it has the Expiring status, and the contract span is three months. The service of maintenance specialists costs $120 per hour, and the price is not dependent on the skills and position of the employee who performs this service. The billing of the contract will be performed on a per-case basis. On 3/10/2023, the service under the contract was provided by one regular specialist for hours for a total sum of $480.

Acting as a sales manager, you will create a non-stock labor item and a case class to be used in an empty contract template for a support contract.

Process Overview

On the Chart of Accounts (GL202500) form, you will update the chart of accounts. On the Non-Stock Items (IN202000) form, you will create a labor non-stock item and specify the default price of the item. Then on the Case Classes (CR206000) form, you will create a new case class for the support services and specify the reaction time for cases with different priority levels.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

System Preparation

To prepare to perform the instructions of this activity, do the following:

Step 1: Updating the Chart of Accounts

First, you need to add a new GL account to the chart of accounts. This account will accumulate the revenue earned when SweetLife Fruits & Jams provides support services. To add this account, proceed as follows:

1. On the table toolbar of the Chart of Accounts (GL202500) form, click Add Row, and specify the following settings:
   • Account: 40400
   • Account Class: SALES
   • Description: Sales - Support Hours
2. Save your changes.

Step 2: Creating a Labor Item

Now you need to create a labor non-stock item and specify the default price of the item. Do the following:

1. Sign out from the johnson account. Sign in to MYOB Advanced as David Chubb, the sales manager. Use the following credentials:
   • Username: chubb
   • Password: 123
2. Create the non-stock labor item for the support service as follows:
   1. On the Non-Stock Items (IN202000) form, add a new record.
   2. Specify the following settings in the Summary area:
      • Inventory ID: CTSUPPORT
      • Description: Support service by contract
   3. On the General tab, specify the following settings:
      • Type: Labor
      • Posting Class: NONSTOCK
      • Tax Category: EXEMPT
      • Require Receipt: Cleared
      • Require Shipment: Cleared
      • Base Unit: HOUR
      • Sales Unit: HOUR
      • Purchase Unit: HOUR
   4. On the Price/Cost tab, specify 120 in the Default Price box.
   5. On the GL Accounts tab, specify the following settings:
      • Expense Account: 79000 (Contract Expenses)
      • Sales Account: 40400 (Sales - Support Hours)
   6. On the form toolbar, click Save to save the non-stock item.

Step 3: Creating a Case Class of Per Case Billing Mode

Now you need to create a case class. A case class contains the settings specific to a particular category of cases. The system will automatically add these settings to the case that you create later.

To create a case for support contract on the Case Classes (CR206000) form, do the following:

1. Add a new record.
2. Specify the following settings in the Summary area:
   • Case Class ID: REGULARSUP
   • Description: Regular support services
3. On the Details tab, specify the following settings:
   • Require Customer: Selected

     With this check box selected, a customer must be specified for each new case of the class; otherwise, the user will not be able to save the case.

   • Require Contract: Selected

     With this check box selected, a contract must be specified for each new case of the class; otherwise, the user will not be able to save the case.

   • Billable: Selected

     With this check box selected, all new cases of the class are marked as billable.

   • Billing Mode: Per Case

     The Per Case billing mode indicates that the cases of the class will be billed on a per-case basis. A case of this class can be billed only after all work related to the case is completed and the case is closed.

   • Labor Item: CTSUPPORT
   • Overtime Labor Item: CTSUPPORT

     In the Labor Item and Overtime Labor Item boxes, you have selected non-stock items of the Labor type. These items will be used as the sources of prices for billing.

   • On the Reaction tab, specify the reaction time for cases with different priority levels, as shown in the table below. (The settings in the first row, for example, mean that a case with the Urgent severity level should be updated by a SweetLife Fruits & Jams company employee within half an hour after the case has been submitted.) You specify these settings for informational purposes. The system does not enforce them.

     Severity	Reaction Time
     Urgent	0d 00h 30m
     High	0d 01h 00m
     Medium	0d 08h 00m
     Low	2d 00h 00m

4. Click Save to save the created case class.

In this activity, you have created the labor item and a case class you will use later for creating an empty contract template for support contracts.