What is a project contract in Project Operations?

The project contract describes what the customer has purchased, at what price, and how it will be invoiced. It links the sales opportunity to the project being delivered.

It controls invoicing

The contract lines determine what can be invoiced and how—at a fixed price, based on hours worked, or a combination of the two. Hours logged against something that is not included as a contract line will not be invoiced automatically.

Set it up before starting

It can be tempting to start the work and sort out the contract later. In that case, hours that have already been logged must be linked to it afterwards, which is both cumbersome and a potential source of accounting errors.

It should reflect reality

If the project has a fixed-price component and an additional component billed by the hour, both should be included as separate lines. If this is simplified to a single line, you lose the ability to see which component is profitable.