Contract thresholds

Contracts thresholds provide a tracked cap on spending. You might have agreed to spend $400,000 with an agency over six months, or to buy no more than 5,000 units at the agreed rate. A contract threshold records that commitment, and Zudello automatically tracks spend against it as requisitions, orders, and invoices are processed.

Components of a contract threshold

Each contract threshold is composed of the following components:

• Description: what appears on documents and in approval emails, so name it the way your team talks about the commitment.
• Threshold Type: either:
  • Amount, which accumulates the line total excluding tax, in your team's currency
  • Quantity, which accumulates the line quantity
• Dimensions: the columns that define what the cap covers.
• Total: the cap itself.

Viewing and editing contract thresholds

Viewing contract thresholds

To view thresholds for a contract:

1. Open the Contracts module.
2. Click the Contracts submodule.
3. Browse or search to find the contract you want to view thresholds for.
4. Scroll down to Contract Thresholds.
5. Each threshold is listed in a separate row, along with its description, type, dimensions, total and allocation.

Adding a threshold

To add a threshold to a contract:

1. Open a contract and scroll down to Contract Thresholds.
2. Use the Dimensions picker to select the dimension columns you need. Each dimension you select becomes a column in the grid.
3. Click Add row.
4. Enter a Description. This is what appears on documents and in approval emails, so name it in a way that will be obvious to your team.
5. Choose the Threshold Type:
   • Amount accumulates the line total excluding tax, in your team's currency.
   • Quantity accumulates the line quantity.
6. Fill in the dimension columns that define what the cap covers. See Threshold Dimensions for guidance.
7. Enter the Total, which is the spending cap.
8. Click Save.

Saving the contract is what triggers the new threshold to take effect. For more, see How spend is refreshed.

Editing thresholds

To edit an existing threshold:

1. Open a contract and scroll down to Contract Thresholds.
2. Make any required changes to the existing threshold rows.
3. Click Save.

Saving the contract is what triggers any changes to take effect. For more, see How spend is refreshed.

Threshold dimensions

A threshold can be scoped by any combination of the following dimensions:

• Account or Account Group
• Item, Item Group, or Item Category
• Location
• Subsidiary
• Department
• Warehouse
• Zone
• Cost Centre
• Cost Type
• Project, Project Group, Project Type, or Project Task
• Expense Category
• Fixed Asset
• Mileage Rate

A threshold matches a transaction line when every dimension set on the threshold matches the transaction line. Dimensions you leave blank will match any value, so the fewer you set, the wider the scope of the threshold.

Note

You cannot set both a dimension and its parent on the same row, for example Account Group and Account, or Item Group and Item.

One transaction line can count against several thresholds at once. For example, an item could affect an Item threshold and an Item category threshold on the same contract, if there is a threshold line created for both.

Reading the allocation bar

The Allocation column shows a coloured bar with a marker for the threshold total. Hovering over it breaks the spend down into the following five categories:

Category	What it holds
New spend	Spend on documents in Review and Ready status
Pending spend	Spend on documents sitting in an approval flow
Committed spend	Spend that is committed but not yet invoiced
Actual spend	Finalised spend, excluding anything rejected or deleted
Processing spend	Spend on documents still being processed

Below the buckets you see the Total, the Total Spend, and what is Remaining. Where the cap has been passed, the bar indicates how far over the threshold you are.

note

The exact mapping of document statuses to spend category is configurable, so your team's spend categories may not perfectly match the table above.

A threshold's own status is one of:

• Under threshold, where total spend is below the total
• On threshold, where spend exactly equals the total
• Over threshold, where spend exceeds the total

Threshold allocation requirements

In order for a contract threshold to accurately track spend across your team all of the following conditions must be met:

• The contract's status type is active
• The contract has both an Effective Date and an Expiry Date, and the document falls inside that window
• The threshold has at least one dimension set
• The threshold has a Threshold Type and a Total
• The contract has a contract configuration that covers the module and submodule of the documents you expect to count

If spend still looks wrong, see Contract threshold is not tracking spend.

How spend is refreshed

For efficient, contracts are refreshed against transactions only when either record is saved. This clears all existing links, finds every matching line inside the contract's date window again, and rebuilds the spend figures.

In short, saving the contract is what makes any changes to the contract or it's thresholds take effect.

Best practices

• Always set a Threshold Type and a Total, since a threshold without them does not behave predictably
• Set at least one dimension, because a threshold with no dimensions matches nothing
• Scope the threshold as tightly as the commitment actually is, rather than capping everything the supplier sells you
• Check the Allocation bar after saving to confirm spend is being picked up

Need help?

Contact your organisation administrator or Zudello support for assistance with contract thresholds.