Contracts
A contract holds the commercial terms of an engagement: pricing, rates, billing model, service quality terms, and the P&L line each charge belongs to. Contracts connect what you deliver to what shows up in the P&L.
Header
| Field | Purpose |
|---|---|
| Name | Short label. |
| Customer | The consuming party, external or internal. |
| Engagements | Which engagements this contract covers. |
| Currency | Reporting currency for the contract. |
| Start and end date | Validity window. |
| Status | Draft, Active, Expired, or Renewed. |
Rate card
Hourly rates by role used for cost and revenue. The platform picks a rate in this order:
- A rate set on this contract for this engagement.
- A rate set on this contract.
- The default rate card for your organisation.
- Any matching rate card.
See Library for default rate cards.
Billing model
| Model | Behaviour |
|---|---|
| Fixed fee | Revenue recognised on schedule. |
| Time and material | Revenue = hours × rate. |
| Hybrid | Fixed fee plus variable hours. |
| Outcome based | Revenue tied to KPI results. |
Service quality terms
For each KPI in the Performance template:
| Field | Meaning |
|---|---|
| Threshold | The point at which the term is missed. |
| Direction | Whether higher or lower is worse. |
| Penalty type | Fixed amount, percentage, or tiered. |
| Post penalty automatically | If on, missed terms post a cost to Finance. |
| Penalty destination | Which P&L line the penalty lands on. |
This is the link between service quality and the bottom line.
How contracts feed the P&L
When you record data on an engagement, the contract tells DigitalCore how to:
- Calculate revenue (rate times hours, or fixed schedule).
- Calculate labour cost (rate card times hours).
- Detect missed service terms and post the penalty.
- Place each line on the right P&L category.
That is what produces an automatic per-engagement P&L.