The SD Master Contract Structure and How its Configured?

A Master contract consists of other contracts that are grouped as lower level contracts. Thus, that the master contract has the general data that is relevant for all the levels of contracts over the specific period of time. The main contracts are grouped in order to ensure that all the data in the lower level contracts remain consistent and that terms granted in the master contract are copied into all lower level contracts.

Master Contract Structure

Contracts are agreements between the two parties like Customer and Vendor to supply materials/services for a specific price between a fixed period of time. Most possible types of contracts exists based on the types of contracts. For example, there are different contracts like maintenance contracts, service contracts, quantity contracts, value contracts all of which we will be discussing over the course of this article.

The bottom line however remains the same – A contract is an agreement between the Customer and vendor to supply goods/materials/services of specific quantity/value for a specific price over a specified period. Let’s discuss the different types of contracts.

Also See: SAP SD: Scheduling Agreement Vs Contract

The main documents that can be grouped under the master contract are as follows,

• Quantity Contracts
• Value Contracts
• Service Contract

The master contract contains header data as well as the billing plan data, the partners data, business data, and contract data. To understand and configure a master contract, It is more important and to understand the desired functionality of contract grouping.

Contract grouping is the process whereby several lower level contracts are linked to one master contract to ensure data consistency, When you link a lower level contract to a master contract, the header data of the master contract are passed sown into lower contract. To group contract you must first determine the referencing requirements.

This will be IMG, Sales, Sales documents, contracts, Master contract, Define referencing requirements, Define Reference sales documents types,

The process of assigning reference document types is beneficial if we want to only allow quantity contracts to be assigned to a particular master contract. Now the documents assignments are done and the most crucial procedure is defining the referencing procedures.

Its path IMG, Sales, Sales Documents, Contracts, Master Contracts, Define referencing requirements, Define referencing procedures,

There should be no need for you to create a new reference procedure,

Also See: Commitments Management in SAP Controlling