Adding Contracts to Rillet
If you’re a recurring revenue company, you’re used to creating and sending invoices on a regular basis. Monthly or weekly invoices may be easy to manage if you only work with a handful of companies. But as you grow and take on more clients, managing those recurring invoices will get complicated, especially if you work with an accounting system that makes you create them from scratch every billing period.
That’s where Rillet can help. With Rillet, you can create contracts that collect all your current and future recurring invoices in one place and send them to your customers automatically. Additionally, contracts will create long term revenue recognition schedules to ensure compliance with ASC 606. For example, let’s say you are set to deliver a product to a customer for a year, which they will need to pay for by month. That means you’ll send twelve invoices to that customer over the course of the year. Rillet can collect all twelve invoices from that year into one contract, rather than making you create each of the twelve invoices from scratch. That means less time spent invoicing, and more time delivering great products to your customers.
Below, we’ll explain how you can add contracts to your Rillet account. If you want to learn more about why using contracts can help propel business growth, read this article. Note that, in order to add a contract, you must first add a relevant customer and product.
Adding New Contracts
First, follow the steps to navigate to the Contracts section of your Accounts Receivable window. Click the pencil and paper icon in your left navigation bar, and then click Contracts.
This will open your contracts window, where you can add and edit contracts. Again, before you can add a contract, you need to create a customer you’re selling to and a product you’re selling them. The articles below will explain how to do both:
📄 Add a New Customer to Rillet
If you’ve set up a customer and a product for the contract, click the + Add Contract in the upper right corner.
A new window will open, which will walk you through a series of steps to create your contract. The last step in the contract process is a summary of your contract setup, but the others are more complicated. Let’s look at each step one by one.
General Details
The General Details step is where you can set up basic details about your contract. These details include:
A customer for the contract,
The contract’s name,
The type of contract,
A close, start and end date,
The duration of the contract, and
The currency the contract will be recorded in.
All of these fields, except for the end date, are required. Once you’ve finished filling out at least the required fields on this screen, click the Next Step button in the lower right corner.
Products
The next step is adding a product to your contract. This is what you’ll be selling to your customer through this contract, and you’ll need to select at least one product to continue. Click the + Add Product button in the center of your screen.
A pop-up modal will appear where you’ll need to select a product from your existing list of products. In this example, we selected “Subscription Plan”.
Once you select a product, your screen will automatically populate with the details you added to your product when you created it earlier. You can always edit these details if you need additional customization by contract, and your changes will be reflected in your contract.
If you’d like to add another product to your contract (for example, if your customer is paying you for two subscription plans), you can do so by clicking on the + Add Product button in the top right corner. Then, just follow the same steps to add your additional product. You can add as many products as you’d like.
Once you’ve added your product(s), click the Next Step button to continue to the Invoicing portion of your contract.
Invoicing
The Invoicing step is where you’ll be able to set up the cadence and amounts of the invoices that will be sent as a part of the contract. Here, you can set up the frequency (for example, monthly or yearly), the day that the invoice will be sent, and the terms of payment.
In the example above, we’ve created a contract for a yearly subscription plan to be billed monthly. Notice at the bottom left corner that the total amount of the contract is displayed.
Because we’re billing monthly, you’ll see a list of invoices that split that amount evenly twelve ways.
If one of the pre-set templates doesn't quite fit your needs, you can edit or delete individual invoices by clicking on the pencil or trash can icons next to a specific invoice. You can also add an additional invoice to your contract by clicking the + Add Invoice button in the top right corner.
This will open a pop-up modal where you’ll need to add details about your new invoice and can add an amount for the invoice. Clicking Save will add the invoice to your list and update your overall contract amount.
Once you’ve made any necessary changes to your invoices screen, click Next Step to be taken to the Revenue step.
Revenue
The Revenue step is where you can set up your revenue recognition schedule. This records how much revenue you’ll earn each month, completely independent of when invoicing occurs. For example, you may invoice your customer annually for a yearly subscription fee, but your revenue likely needs to be recorded by month to be compliant with when service is provided.
Additionally, you can customize the default schedule. For example, if you’d like to recognize a month of revenue during October instead of November, you can set that up in this screen. You can also add an additional revenue recognition month by clicking on the + Add Entry button in the top right corner.
A new entry will be added to your list at $0.00. You can update the amount of the entry and adjust which month you want it to be recognized during.
Once you’ve made the adjustments, click Next Step to be taken to the final Summary step. This is where you can view all the details of your contract before finalizing. If anything looks off, return to the previous step where it needs to be corrected and make any adjustments.
If you have no further changes to make and are satisfied with the contract, click Confirm Contract in the lower right corner.
You’re all set! Your contract is now ready to go. Invoices and journal entries will now be created automatically according to the parameters you set up.
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