What is rate contract in SAP FI-CA-INV - Convergent Invoicing?

SAP Term: rate contract

• Component: FI-CA-INV

• Component Name: Convergent Invoicing

• Description: To furnish all consumption items of a contract with an amount as part of a rating process.

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• Key Concepts: 
  A rate contract is a type of agreement between a customer and a vendor in which the customer agrees to purchase goods or services at a predetermined rate. This type of contract is often used when the customer needs to purchase large quantities of goods or services over a period of time. The rate contract helps to ensure that the customer will receive the same quality and quantity of goods or services at the same price each time they make a purchase.
  
  How to use it: 
  In SAP FI-CA-INV Convergent Invoicing, rate contracts are used to define the terms of an agreement between a customer and vendor. The rate contract includes information such as the quantity of goods or services to be purchased, the price per unit, and any discounts or other incentives that may be offered. Once the rate contract is created, it can be used to generate invoices for each purchase made by the customer.
  
  Tips & Tricks: 
  When creating a rate contract in SAP FI-CA-INV Convergent Invoicing, it is important to ensure that all of the necessary information is included. This includes the quantity of goods or services to be purchased, the price per unit, and any discounts or other incentives that may be offered. It is also important to ensure that all parties involved in the agreement are aware of and agree to all terms before creating the rate contract.
  
  Related Information: 
  Rate contracts are similar to blanket orders in that they are agreements between customers and vendors for large quantities of goods or services over a period of time. However, unlike blanket orders, rate contracts do not require customers to purchase all of the goods or services specified in the agreement. Instead, customers can purchase any amount up to the total specified in the rate contract.