Service contracts in Business Central that bill on time, every period
Business Central service contracts record what you agreed to maintain for a customer, for how long and at what annual amount. Then they create the invoices, period after period. We set up contracts, templates and billing routines in the Premium service module. So a batch job invoices recurring maintenance revenue, not memory.
Last updated
How Business Central service contracts work
A service contract has a header for the customer, dates, invoice period and annual amount, and lines that list the service items covered. Each line holds its own value, response time and service period. So one agreement can cover a fleet of machines with different terms.
Contracts usually start as a contract quote. When the customer accepts, you convert the quote and sign the contract inside Business Central. That locks the terms and makes the contract ready for invoicing. From then on, the contract is the reference for every service order on those items.
Talk through your agreements →
- ✓Customer and ship-to
- ✓Covered service items
- ✓Annual and line amounts
- ✓Invoice and service periods
- ✓Start, expiry and cancel dates
Invoicing Business Central service contracts by period
The Create Contract Invoices batch job finds every contract due up to a date. It then raises the service invoices in one run. The invoice period on the contract sets the rhythm. It can be a month, quarter or year. The next invoice date moves forward after each posting.
Prepaid contracts bill ahead of the period and post to a prepaid contract account. Then a second routine moves the amount to income as the period passes. Non-prepaid contracts bill after the fact. Service contract account groups decide which ledger accounts each type uses. We set those up first.
Fix your contract billing →- ✓Invoice period per contract
- ✓Prepaid or arrears choice
- ✓Contract account groups
- ✓Combined or separate invoices
- ✓Scheduled invoice batch
Business Central service contracts: renewals and price updates
Agreements rarely stay still. A customer adds a machine, retires another or renegotiates. You open a signed contract for change and add or remove lines. Business Central can then raise a credit memo for the unused part of a removed line. It can also raise an invoice for an added one.
You handle annual increases with a price update period on the contract. A batch job then raises contract values by a stated factor. Expiry dates and contract change logs give the service manager a list of what ends soon. So renewal talks start before cover lapses.
Plan renewals with us →- ✓Add or remove contract lines
- ✓Credit for removed items
- ✓Price update batch job
- ✓Expiring contract lists
- ✓Contract change log
How we set up Business Central service contracts
We read a sample of your real agreements first, the clean ones and the awkward ones. That tells us how many contract templates we need. It shows which terms vary and which are fixed. It also shows if contract and service discounts should cover labor and parts.
Then we build templates, account groups and number series in a sandbox. We load open contracts through configuration packages with their next invoice dates. After that, we run a full billing cycle in test. Finance compares that run with what you really invoiced last period. We do this before anything goes live.
Send us a sample contract →- ✓Contract templates
- ✓Account group design
- ✓Open contracts migrated
- ✓Trial billing run compared
- ✓Steps written for billing staff
Where contracts fit and where another feature is better
Service contracts suit maintenance of physical items that you track as service items. Pure subscriptions with usage, tiers or software licenses fit the subscription billing features better. Simple repeating charges can run from recurring sales lines, without the service module at all.
Users who work with contracts need the Premium license. If only a few people manage agreements and the rest of the company is on Essentials, we confirm the license mix with you early. Our service management page describes the wider service order and dispatch process.
Choose the right feature →- ✓Subscription billing for usage
- ✓Recurring sales lines
- ✓Deferral templates for revenue
- ✓Jobs for project-style work
- ✓Field Service for dispatch
Business Central service contracts questions
Which license includes service contracts?
Service contracts are part of service management, which comes with the Business Central Premium license. Essentials users cannot work with them. Microsoft publishes current license terms and prices on its own site, and we help you work out who needs which type.
Can one contract cover several customer sites?
A contract belongs to one customer and one ship-to address. For a customer with many sites, most companies create a contract per site from a shared template and combine invoices by customer, which keeps service history clear for each location.
How is prepaid contract revenue recognized?
Prepaid invoices post to a balance sheet account defined in the contract account group. The Post Prepaid Contract Entries batch job then moves the earned portion to income for each period that has passed, so revenue follows the service period.
What happens to service orders for items under contract?
When a service order is raised for a covered item, Business Central links it to the contract and applies the contract discount to eligible lines. Labor, parts or both can be covered, depending on how the discount is set up.
Can existing agreements be loaded from a spreadsheet?
Yes. We load service items, contract headers and lines through configuration packages, including the next invoice date so billing continues without a gap or a duplicate. Each loaded contract is checked against your source list before it is signed.
Book a discovery call
Let's talk through your move to Business Central.
A focused call with a senior consultant. We learn how your business runs today, give you an honest view on whether Business Central fits, and outline scope and next steps before you commit to anything.
What happens after you send the form