Vendor Contracts¶

Credence supports several vendor contract types which are managed through the Vendor Contracts page. Use the page to monitor contract status, track spend against contract obligations, and navigate to individual contract details. Contracts are scoped to the properties selected in the property selector.

Vendor contracts are strongly encouraged because they:

• Improve invoice matching.
• Tie spend to budgets and properties for better control and reporting.
• Establish charge schedules so accruals and forecasts are accurate.
• Centralize contract details for audits, renewals, and operational clarity.
• Keep vendor activity aligned across multiple aspects of the Credence System.

*NOTE: Purchase Orders are managed separately in their own distinct page.

Draft parents and approval¶

You can save a draft vendor contract with a drafted vendor or parent service contract, including one already in workflow. Before submission or any approval step, the vendor and any parent service contract must be approved and active.

Contract Types¶

Purchase Order¶

Purchase Orders are used for specific, approved vendor work. They help document scope, tie spend to a project or a parent service contract, and support accurate payable matching.

• Examples: Roof replacement, parking lot repaving, elevator modernization tied to a capital project.
• By default, each charge line spans a start and end date. A charge marked One-time applies to a single date: Credence keeps the charge's end date equal to its start date.

Development Purchase Orders¶

A Purchase Order scoped to a development job is a development purchase order. Development purchase orders are managed under Development Contracts. Each vendor charge on a development purchase order must include both the job and a cost code from that job property’s Cost Breakdown Structure so that the spend can be tied back to the right scope of work and budget line. Charges without a cost code cannot be saved on a development purchase order.

Credence checks development coding when the Purchase Order is saved and again before it can enter approval or be approved. Each development charge must use the Job's property, a cost code from that property's Cost Breakdown Structure, and the Job's configured account when one is set. When the Job has no configured account, the charge account can be changed after payables are linked only if it matches the account on every active approved non-tax payable line. Cancelled, rejected, and tax lines do not restrict that change.

Development purchase orders are also checked against the budget before approval. Approval is blocked when the Purchase Order would take any job and cost-code budget line past its Available amount plus the portfolio's budget tolerance. A budget line with no current budget does not block approval, and a portfolio without a budget tolerance limit is never blocked on budget.

Change Orders¶

Change orders record proposed amount changes to an approved, active Purchase Order. A change order preserves the approved Purchase Order as the current source of truth while the proposal is drafted and reviewed.

• A drafted change order can change the amount of an existing Purchase Order charge or propose a new charge line.
• Existing charge coding is read-only in the change order. Its proposed final amount can be increased or reduced to zero. A zero proposed amount keeps the charge on the Purchase Order with a zero balance after approval.
• New standard Purchase Order lines include property, project, expense account, and amount. New development lines include job, cost code, expense account, and amount; the property comes from the selected job.
• Each adjusted or added line can include an optional description of that specific change. For an added line, the description becomes the new Purchase Order charge's description after approval.
• Change order documents can be uploaded while the draft is edited. They remain attached to the change order, but appear in the Purchase Order's combined Change Orders document group only after the change order is approved.
• Starting approval makes the change order read-only until it is withdrawn, returned to the submitter, rejected, or approved.
• If an approval workflow is configured for the applicable portfolios, the change order follows its role-based steps. If no workflow applies, an authorized user can approve it directly.
• A configured workflow can route a change order through development-specific steps when its parent Purchase Order is development-related.
• Hold and deny actions do not change the Purchase Order. A withdrawal or return to the submitter makes the draft editable again.
• Rejected change orders remain in history and never change approved Purchase Order charges.
• Credence validates every affected charge before approval can start and revalidates it at final approval against the current Purchase Order. If any line is invalid, approval is blocked and none of the changes are applied.
• A development change order cannot be approved when its changes would take any job and cost-code budget line past its Available amount plus the portfolio's budget tolerance.
• Final approval creates each proposed new line as a live Purchase Order charge.
• Before approval, change-order pages show the Purchase Order impact, related job budget impacts — at the job and cost-code level for development change orders — and each line's initial and proposed final amounts. After approval, these projections are hidden because the Purchase Order and job budgets already reflect the change; approved history shows each line and its net change.

Pending proposals do not affect the Purchase Order total, committed amount, project budget availability, or payable matching. Those values change only after the change order reaches final approval.

Service Contract¶

Service Contracts cover ongoing work with a predictable schedule. They keep recurring services aligned with budgets and make it easier to match payables to the right vendor terms.

• Examples: Janitorial services, landscaping maintenance, HVAC servicing, security monitoring.

Management Agreement¶

Management Agreements document property management fee structures and payment timing. They ensure management fees are applied consistently across a portfolio and allow users to calculate and charge monthly management fees.

• Examples: Third-party property manager fees, asset management fees.

Calculating management fees¶

Each charge on a Management Agreement must include a property, a fee type, and a positive fee percentage before fees can be calculated. While any charge is missing one of these, Credence blocks the fee calculation and management fee payable creation, and the blocked calculation lists each incomplete charge with the fields it still needs.

Real Estate Tax¶

Real Estate Tax contracts track assessed values and tax schedules for a property. They are necessary to budget for known tax cycles and to keep tax accruals aligned with actual bills.

Create one Real Estate Tax contract per parcel, then update that contract each year as new assessment and billing data is available. Set an estimated amount upfront so accruals can be posted before any payables are processed, then update the amount once the actual tax bill is known. This keeps accruals and payables aligned so the tax expense ties out at year-end.

Use an RE tax expense account for operating properties. When the taxes are part of a development project and should be capitalized, use the Construction in Progress (CIP) account instead.

• Examples: County property tax bill, municipal tax assessment, special tax district obligation.

Lease Commission Agreement¶

Lease Commission Agreements define brokerage commissions for leasing activity. They keep commission rates consistent and ensure amortization is set up correctly. Obligations that are deal-specific are captured as standard purchase orders and are affiliated to a lease commission agreement in a parent-child relationship.

Charge Commission calculates lease value from rent and free rent charges with the selected amendment number. The base lease uses amendment number 0. Charges with a blank amendment number are excluded, and free rent reduces the commission basis.

• Examples: Brokerage commission for new tenant deals, renewal commission terms, exclusive leasing agreement.

Insurance Policy¶

Insurance Policies document coverage terms and premium schedules. They help align policy dates with payment schedules so coverage and premium tracking remain accurate and auditable.

Use an insurance expense account for operating properties. When the insurance is part of a development project and should be capitalized, use the Construction in Progress (CIP) account instead.

• Examples: Property casualty coverage, liability policy, builder's risk policy.

Key Contract and Charge Fields¶

• Start Date — the earliest start date across all charge items on the contract.
• End Date — the latest end date across all charge items on the contract.
• Payment Schedule - the defined or estimated timing and cadence of payments that will be made towards the contract.
• Expense Account - the account into which expenses toward the charge should be posted.
• RE Tax Account - the expense or Construction in Progress account into which real estate taxes should be posted.
• Insurance Account - the expense or Construction in Progress account into which insurance costs should be posted.
• Accrual Account - the liability account into which accrual activity related to the charge should be posted.
• Budget Tolerance - the percentage by which a vendor charge can exceed its defined amount before a related payable is blocked from approval.
• Amount / Amount per payment - see expanded detail below.

Contract Amounts¶

Contract types use one of two amount models depending on how they are structured.

Fixed-amount contracts define a total committed amount per charge item. The Total Contract Amount is the sum of those amounts across all charge items — representing the full obligation under the contract.

• Real Estate Tax, Insurance Policies, Management Agreements, Lease Commission Agreements, and Tenant Improvement contracts all use this model.
• Example: an insurance policy with three property-level charges of $4,000 each shows a Total Contract Amount of $12,000.

Per-payment contracts define a recurring amount per payment cycle rather than a total commitment. The Total Contract Amount shown on the list is the sum of the per-payment amounts across all charge items — not the full lifecycle cost.

• Service Contracts are the only type that use this model.
• Example: a janitorial service contract with a $2,500/month charge shows a Total Contract Amount of $2,500. To understand the full-term cost, open the contract and review the payment schedule alongside the per-payment amount.

Spend, Committed, and Project Budget Formulas¶

Credence separates three concepts that are easy to confuse:

• Total Spend is what has already been paid or spent to date.
• Committed is the remaining contractual obligation that has not yet been spent.
• Available Budget is the portion of the current approved budget that is still free for new commitments.

Contract-Level Definitions¶

For purchase orders and other vendor contracts, Credence calculates:

Committed = Total Contract Amount - Total Spend

Where:

• Total Contract Amount is the contract's defined amount based on its charge structure.
• Total Spend is the sum of all payable charge items tied to vendor charges for that contract and any child contracts.

Notes:

• If a contract is closed, Credence treats Committed as $0.
• If spend exceeds the contract amount because of adjustments or overages, Credence does not show a negative committed amount. It is treated as $0.
• Committed is not the original full contract amount. It is only the unspent portion that still represents an obligation.

Project-Level Definitions¶

Projects use the current approved budget to show two different budget views:

Budget Remaining = Current Budget - Spend to Date

Available Budget = Current Budget - Committed - Spend to Date

Where:

• Current Budget is the approved budget currently in effect for the project.
• Spend to Date is the amount already spent against the project.
• Committed is the remaining unspent obligation from project-scoped purchase orders and other committed sources tracked on the project.

This distinction matters:

• Budget Remaining shows how much budget is left after actual spend.
• Available Budget shows how much budget is still free after both actual spend and open commitments are reserved.

Example¶

Assume a project has:

• Current Budget: $100,000
• Total Contract Amount on an approved purchase order: $40,000
• Spend to Date on that purchase order: $10,000

Credence shows:

• Committed = $40,000 - $10,000 = $30,000
• Budget Remaining = $100,000 - $10,000 = $90,000
• Available Budget = $100,000 - $30,000 - $10,000 = $60,000

In this example, the project still has $90,000 left before considering open obligations, but only $60,000 is actually available for new commitments.

Contract Details Report¶

The Contract Details report lists vendor contracts with nested vendor charges and approved change-order line items. Use it to review contract coding, amounts, invoiced totals, and approved change-order variance across the properties selected in the property selector.

Report settings and filters¶

• Contract type toggles control which contract types appear. By default only Development Purchase Orders are included; other types are opt-in.
• Table filters narrow which contracts appear. The report Property filter also focuses Amount and Invoiced to charges on the selected properties and limits nested charge rows to those properties.
• Job and Cost Code filters narrow nested charge rows without changing the contract Amount to a property-focused total.

Nesting and Net CO Var.¶

• Each contract expands to its charges. Approved change-order lines nest under the linked charge when that charge is shown; otherwise they fall back under the contract.
• Net CO Var. is the sum of approved change-order line amounts for the rows included under that contract or charge. Draft, pending, and rejected change orders are excluded from the tree and from Net CO Var., consistent with pending proposals not affecting Purchase Order totals.

Example¶

Assume a Development Purchase Order of $1,000 has one charge and an approved change-order adjustment of $250 on that charge:

• Contract Amount shows $1,000.
• Contract Net CO Var. shows $250 (25% of Amount when Amount is non-zero).
• The charge row shows the same $250 Net CO Var.; the change-order line appears nested under that charge.

Contract Statuses¶

Splitting a Purchase Order Charge Across Properties¶

Each vendor charge line on a purchase order can be split across one or more target properties so that the obligation is distributed the way the work is shared. Use the Split action on a charge to open the split modal, choose the target properties, choose how the amount should be divided, and preview the allocation before applying it.

Split Methods¶

Rules and Behavior¶

• The source amount must be greater than zero before a split can be applied.
• Select at least one target property. Each target property can be selected only once per split.
• Target properties are not limited to the purchase order's own ownership chain; you can split to any property you have access to.
• When Square Footage is used, the allocation is source amount × (property RBA ÷ total selected RBA).
• When Percentage is used, the allocation is source amount × (percentage ÷ 100). Negative percentages are not allowed, and the sum must equal 100%.
• The split creates a separate vendor charge allocation per target property based on the preview you confirm.

Common Scenarios¶

• A landscaping purchase order covers three buildings in the same portfolio and you want to split the cost evenly across each building's ledger.
• A roof replacement shared by a parent property and two children should be allocated by square footage so each property reflects its share of the building area.
• A vendor charge spans two properties under a negotiated 70/30 split, so you enter the percentages explicitly and apply the allocation.