What is central contract in SAP SRM-EBP - Enterprise Buyer?

SAP Term: central contract

• Component: SRM-EBP

• Component Name: Enterprise Buyer

• Description: A long-term purchase agreement by which materials or services are procured over a certain predefined period. This contract is negotiated by a central purchasing organization and is used by all authorized purchasing organizations. In SAP SRM, a central contract has enhanced hierarchy and distribution functions that provide significant scope for cost savings.

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• Key Concepts: 
  A central contract is a type of agreement between a company and its suppliers that allows the company to purchase goods and services from the supplier at pre-negotiated prices. It is used in SAP SRM-EBP Enterprise Buyer Professional (SRM-EBP) to streamline the procurement process and ensure that all purchases are made at the best possible price. 
  
  How to use it: 
  In SRM-EBP, a central contract is created by the company and sent to its suppliers. The supplier then reviews and accepts the contract, which sets out the terms of the agreement. Once accepted, the supplier can then provide goods and services to the company at the agreed upon prices. The company can then use this contract to make purchases from the supplier without having to negotiate each purchase individually. 
  
  Tips & Tricks: 
  When creating a central contract, it is important to ensure that all terms are clearly defined and that both parties understand their obligations under the agreement. Additionally, it is important to review the contract regularly to ensure that it is up-to-date and still meets the needs of both parties. 
  
  Related Information: 
  For more information on central contracts in SRM-EBP, please refer to SAP’s official documentation on the topic. Additionally, there are many online resources available that provide further information on how to create and manage central contracts in SRM-EBP.