Cullen Hunter
Crowe Chizek and Company LLC
http://www.crowecrm.com
Summary: Cullen Hunter explains the sometimes confusing contract statuses.
The Microsoft CRM 3.0 contracts functionality allows you to track contracts through the entire contract lifecycle. The system does this by assigning a “Status” to a contract. It is easiest to think about contract statuses by breaking them up into three categories:
1) Contracts that are created, but have not been submitted for activation
2) Contracts that have been activated
3) Contracts that have been cancelled or put on hold
The first group, Contracts that have been created, but are not yet submitted for activation are referred to in the system as “Draft” contracts and can be defined by the following:
Draft: A Contract will be in Draft status if it has been created, but has not been submitted or activated. Contracts in the Draft status are the only contracts that can be edited in the system. Once submitted, the contract cannot be changed back to a Draft status for editing, so make sure it is accurate before continuing through the process! Contracts in a Draft status cannot be chosen from a Case because they are not considered active contracts.
A Draft contract is simply one that has been entered, but is not ready to be activated. When ready, a contract is activated by “Invoicing” the Contract by choosing “Actions-Invoice Contract” from the file menu. (It should be noted that Microsoft CRM 3.0 does not actually invoice the Contract; it merely changes the status of the Contract. Your company could write an integration to your operational system or could create a report to actually invoice the contract if required.)
The sometimes confusing part comes in understanding what happens to the contract status after the contract has been activated or “Invoiced” as defined above. Many would expect that the status of the contract should be “Invoiced” (which is an available status). But, the actual status is determined by the Contract Start and Expiration Dates. The system automatically determines the status of the contract based on these dates. Statuses for invoiced contracts include:
Active: A contract with an “Active” status is one that has been “Invoiced” and the current system date is between the Contract Start Date and the Contract Expiration Date. Active contracts are the only status which will show in the Case lookups.
Invoiced: A contract with an “Invoiced” status is one that has been “Invoiced” and the Contract Start Date is in the future. This status indicates the Contract has been invoiced, but is not yet active because the start date of the contract has not arrived. This will happen most often when renewing a contract. The current contract remains active until its expiration date, at which time the renewal Contract will become active and the current contract will expire (see below). Invoiced contracts will not show in Case lookups because they have not yet reached their activation window.
Expired: A contract with an “Expired” status is one that has been invoiced and the Contract Expiration Date has passed. Expired contracts will not show in the Case lookups as you would expect.
The good news is that the Microsoft Dynamics CRM 3.0 system will take care of changing the contract status for you. You do not need to manage whether a contract is about to expire or whether it is about to become active.
The final statuses available for a contract allow you to either put a contract on hold, or to cancel the contract in the case where you need to end a relationship or to change the contract details. In both of these cases, the contracts will not be available within Case lookups. The final statuses include:
Cancelled: A “Cancelled” contract is what you would expect. It is a contract that has been manually cancelled.
On Hold: “On Hold” contracts are ones that are temporarily held – this could be for payment or other issues.
It is important to remember that once invoiced (Active, Invoiced, Expired, Cancelled or On-Hold), a contract cannot be modified or reopened. The only way to change the contract details is to cancel the contract and create a new one (or to potentially renew the contract). The good news is that a “Copy Contract” feature exists to help with this.
People often want to know why the system works this way. Think of contracts as revision controlled legal documents. Once a contract is entered into, it cannot be changed. To change the agreement or binding contract, the initial contract needs to be cancelled and a new contract must be initiated and agreed to. This gives you full revision control and contact history.
Cullen Hunter, is a CRM Executive at Crowe Chizek (www.crowecrm.com). Cullen currently focuses on CRM Strategy, Business Process Improvement, CRM Tool Selection, and System Implementation including the Microsoft Dynamics CRM 3.0 platform.
