SAP B1 blog

Use and advantages

Various documents such as sales orders, purchase orders or deliveries can be created on the basis of a framework agreement. The prices and quantities stored in the framework agreement are automatically transferred to the supporting documents adopted.

Simplified document entry

The automatic transfer of data from the framework agreement speeds up and simplifies document entry, which saves a considerable amount of time.

Transparency and control

The degree of fulfilment of a framework agreement can be viewed at any time via the "Framework agreement list" report. This enables constant monitoring and adjustment in order to achieve the agreed targets.

Improved planning security

By agreeing fixed quantities and prices over a longer period of time, planning security is increased for both the company and the contractual partners.

Outline agreement types in SAP Business One

There are two main types of outline agreements in SAP Business One:

General framework agreements:

This type of contract is ideal for goods where the time of delivery is not a critical factor. Companies that require flexibility in the delivery and purchase of goods benefit from these contracts. The advantage lies in the short time commitment, which makes it possible to purchase goods as required.

Specific framework agreements:

These contracts are intended for goods or services that must be delivered at fixed intervals. They contain precise schedules and ensure that delivery takes place on precisely defined dates. These contracts are particularly suitable for situations where precise planning and scheduling is required.

The differences between the two types of framework agreement lie mainly in the time structure and the degree of Liability the delivery dates. While general framework agreements offer more flexibility, specific framework agreements ensure that deliveries are made within a clearly defined time frame.

Practical example: Procurement agreements

A practical example of the use of framework agreements is the procurement agreement in SAP Business One. These contracts help companies to consolidate long-term business relationships with suppliers and optimise procurement processes at the same time.

Effects of framework agreements on financial accounting

Framework agreements have several important effects on a company's financial accounting that can significantly improve its efficiency and accuracy:

1. Simplified booking processesSince the conditions are already defined in the framework agreement, the posting of individual deliveries or services is simplified. This means that the accounting department does not have to check new prices or conditions every time.
2. Reduced administrative effortBy bundling orders and defining contract terms, the process and transaction costs in accounting are reduced.
3. Improved planning capabilityFramework agreements allow for more precise budget planning and cost calculation, as prices and quantities are fixed over a longer period of time.
4. AuditFinancial accounting can check incoming invoices more easily and quickly against the conditions agreed in the framework agreement.

1. DemarcationsFramework agreements with fixed purchase quantities or periods make it easier to plan and post the necessary provisions or accruals in accounting.
2. controllingFramework agreements facilitate controlling, as target/actual comparisons between agreed and actually called quantities or services can be carried out more easily.
3. Risk managementThe long-term fixing of prices and conditions can reduce the financial risk of price fluctuations, which has a positive effect on financial planning.
4. Recognition of discountsQuantity discounts or rebates agreed in framework agreements must be correctly recorded in the accounts and accrued periodically.
5. Stock assessmentFramework agreements for goods can simplify the valuation of inventories, as the cost prices remain constant over a longer period of time.
6. Liquidity planningThe payment terms defined in the framework agreement make it easier to plan and control payment transactions.

Framework agreements and projects

In SAP Business One, master sales agreements can also be assigned to projects. This offers additional advantages for project planning and implementation:

1. Planned volume of hoursThe sales framework agreement defines a planned hourly volume for the project and determines how many hours of the volume have already been invoiced.
2. Integration with PZE app: The link between the framework agreement and the project means that the framework agreement information is always included when invoicing via the PZE app.
3. Hourly rate calculationThe hourly rate is taken either from the price list on which the customer is based or from the framework agreement when the invoice is created. In this case, the framework agreement must be specifically defined as a contract type.

This integration facilitates the tracking and invoicing of project hours and ensures a seamless connection between project management and financial accounting.

Several framework agreements with overlapping periods

In SAP Business One, companies can now activate the function that allows them to create multiple framework contracts with overlapping periods for the same customer. This option is particularly useful when different contracts cover different conditions or services that should apply at the same time. This flexibility can be set up by ticking the appropriate box in the settings. Without this setting, the system would prevent two or more framework agreements from being created for identical periods for one customer, which could restrict the contract design.

Framework agreements: Predictability, risk minimisation and increased efficiency

Framework agreements in SAP Business One offer medium-sized companies an efficient way to optimise their business processes and strengthen relationships with their business partners. By clearly defining quantities, prices and delivery conditions, companies can not only save costs, but also make their supply chain more stable and predictable. The positive effects on financial accounting also contribute to better planning, risk minimisation and increased efficiency. The option of assigning sales framework agreements to projects offers additional benefits for project management.