What is a contract reservation?
Contract Reservation is an additional feature of automatic contract invoicing that defines:
How much service does the customer get with the contract
What happens if the amount is exceeded
When the customer uses more than the agreed amount, Koho invoices the excess hours automatically without anyone having to calculate them manually.
Example of how a contract reservation works
The monthly contract between the company and the customer includes, for example, 10 hours of work. If 12 hours of work are done in a month, Koho will charge for the two more hours according to a separately agreed hourly rate.
Contract booking types
Koho offers a few different contract booking types, from which you can choose the option that suits each situation. The most common type of contract reservation is a fixed contract reservation. It involves agreeing on a fixed price that includes a predetermined amount of service. If this amount is exceeded, Koho will automatically invoice the excess at the agreed hourly or unit price.
In addition, contract reservations can be used to build tiered price lists based on the actual. In this case, the invoiced price changes automatically when a certain amount of performance is exceeded.
This instruction describes the most common way to use a contract reservation, i.e. how to create a contract with a fixed contract reservation.
The contract reservation must be activated by Koho's maintenance. Activation requests can be made through Koho's customer service: asiakaspalvelu@kohosales.com
Content of the instructions
Products and tasks to check for contract reservation
For contract booking, it must be checked that the necessary products can be found in the product register and that the right kind of task can be found for the hour recording project.
These definitions vary slightly depending on the type of contract reservation. This instruction uses the most common contract reservation type as an example : fixed, same product code.
Check the products in the product register
For a contract reservation, the product register (Settings → Products) must contain:
Seasonally billed product, i.e. a fixed product charged periodically by contract
A one-time billable product that is used to define a contract reservation
Example image: The product register contains a seasonal product, as well as a one-time invoiced product
Hour Recording Task
In order for the contract booking to identify when the deliverables posted for the project exceed the fixed amount, the contract customer must have a project with a correctly defined hour entry task.
The position must include:
Product: Same as with contract reservation
Billing method: Billable
Create a contract reservation
Once the contract reservation has been prepared (products and task in order), a contract charge is created as follows:
Add a seasonally charged product to the contract that corresponds to the fixed portion of the contract.
Add a one-time product to the contract for which a contract reservation is defined:
In the Pcs field, enter the number of hours or pieces included in the fixed price
The price field is defined as 0, in which case it is taken directly from the customer's price list.
Enable the Contract reservation button on the product to activate the contract reservation function.
Select the contract booking type.
Contract Reservation Types
Fixed, same product code
A fixed amount is invoiced periodically for the contract product. Excess services are invoiced according to the price list. The contract booking product and the project time entry task must have the same product.Actual, same product code
Invoicing is based on actual performances according to the unit price of the contract product. The contract booking product and the project time entry task must have the same product.Fixed, accumulative, same product code
Unused deliverables can be carried forward to the next billing period. The contract booking product and the project time entry task must have the same product.Fixed, all hour entries
A fixed seasonal price is invoiced. Excess hours will be invoiced according to the price list. All hours that are recorded for a project are included, regardless of the product of the job posting activity.Actual, all hour entries
Invoicing is based on actual deliverables based on the unit price of the contract product All posted hours are calculated for the contract reservation, regardless of the product of the project's hour entry task.
Invoicing
Decrease in a fixed proportion
The contract normally forms an invoice based on a fixed price defined for it.
Overshoot billing
The shifts must be processed on a contract invoice formed from fixed invoicing, after which:
A contractual reservation deducts a fixed number of hours from the invoice.
Exceeding the number of hours will be invoiced at the unit or hourly rate in accordance with the price list.
Association of Ranks
In invoice edit mode, you must enable:
Association of rows: by product
This makes the invoice clearer and brings the lines of the same product together.
Summary of invoice formation
The fixed contract includes 10 hours of work for €500.
A total of 13 hours were recorded for the project, which were added to the invoice.
The fixed contract includes 10 hours, and the exceeding 3 hours are invoiced at €50/h according to the price list.
The invoice will then show the following lines:
Fixed-price line (Accounting, monthly charge 1 pc → 500 €)
Hours exceeded (3 h → total 150 €).
Hours included in a fixed contract (10 h)
The total amount is a fixed fee (500 €) + an hourly charge for three hours exceeded per hour (150 €) = 650 €.
Example image: Invoice rows