Understanding Spend Thresholds and Contract Alerts


A spend threshold is a specific monetary amount for a contract or contract item. When using the Spend Threshold feature, you can define the threshold and then notify users when spending on a transactional contract crosses the threshold amount. In addition to defining a spend threshold, Supplier Contract Management provides the Contract Alert Workflow component to notify buyers when spend thresholds have been reached.


The spend threshold is available at the contract header, contract line, and contract category levels. The notification is a standard PeopleSoft workflow event that is triggered through the application engine program.


In addition to the worklist, the system can e-mail notifications. E-mail notifications are triggered using the same conditions as workflow notifications. The decision to create a worklist, send an e-mail, or to do both depends on the user-profile workflow-routing preferences.


A single notification is sent when the amount reaches the threshold. If you change the spend threshold amount on the header or a line, the system deletes existing notifications on the header or the changed line and reevaluates the threshold when you run the application engine job again. This action enables you to keep increasing the spend threshold amount and to be notified as necessary.


Ways to Set-up Spend Threshold Amounts


To set up the system to process contract-level spend threshold amounts:


  1. Access the Contract Entry - Contract Page.
  2. Click the Thresholds & Notifications link.
  3. Select the Send Threshold Notification check box.
  4. Define the threshold amount.
  5. Select the notification type and at least one user to whom you want to send notifications.
    Use the Notification Assignments grid to make these selections. Examples of notification types include maximum amount, renew, and draft due notifications.
  6. Click OK.


You can set up spend threshold amounts for the contract along with line items or category lines, or you can use only the line-item or category-line spend threshold to trigger workflow events for a particular item or category on a contract.


To set up the system to process line-item or category-level spend threshold amounts:


  1. Access the Contract Entry - Contract Page
  2. Select the Spend Threshold tab for the contract lines or category lines.
  3. Select the Notify on Spend Threshold check box and enter spend amounts.
  4. Click Save.


While you don't have to use the Thresholds & Notifications page to define line items, the contract totals for released line amounts appear on the page.


Thresholds & Notifications Page


Use the Thresholds & Notifications page (CNTRCT_NOTIFY_SEC) to define Contract Header Spend Thresholds for Transactional Contracts.


Navigation


Select Supplier Contracts, then select Create Contracts and Documents, then select Contract Entry. Click the Thresholds & Notifications link on the Contract page.

Image: Thresholds & Notifications Page


This example illustrates the fields and controls on the Thresholds & Notifications page.






Maximum Amount Notification


Use this section to set up amounts that trigger notifications to the buyer when the total contract released amount is either within the specified amount or percentage of the maximum contract amount.

 

Field or Control

Definition

Amount Less than Maximum 

Enter the amount below the contract maximum amount for which you want the system to notify the buyer that the contract is about to reach its maximum amount.

Percent Less than Maximum 

Enter the percentage below the contract maximum amount for which you want the system to notify the buyer that the contract is about to reach its maximum amount.

Notification Amount 

The system determines and displays the notification amount. When a contract reaches this notification amount, the system notifies the identified buyer that the contract is about to exceed the maximum limit amount. The buyer receives a workflow email notification.


Spend Threshold Notification


Use this section to enter the amount at which the system sends a notification to the buyer that the contract amount has reached or exceeded the spend threshold. The system totals the individual line item amounts to arrive at the total amount for the contract. The buyer is notified only after when this threshold is reached. See Understanding Spend Thresholds and Contract Alerts.