Vendor Contracts

Vendor contracts capture the terms you agreed with a supplier: the contracted amount, billing frequency, effective and expiration dates, and a terms summary. DayZero compares a vendor's bills against its active contract and stamps a match status. The AP approval workflow reads that status to decide whether a bill can auto-approve, so keeping contracts current keeps routing accurate. Vendor contracts are part of the AP Automation add-on (or a firm plan that bundles it).

Key capabilities

• Per-vendor contracts with a name, contracted amount, and billing frequency (weekly, bi-weekly, monthly, quarterly, annually, or one-time)
• Status you control: Draft, Active, Expired, or Terminated, with filter tabs on the list
• Effective and expiration dates and a free-text terms summary
• Amount-based comparison of a bill against the active contract, with a 5% tolerance
• Match status on each bill: Contract Matched, Over Contract, Under Contract, Needs Review, or No Contract
• Compare Contract on a bill to re-run the comparison on demand and link the contract to the bill
• Analyze Contracts: AI insights on renewals, overspend, and terms, each ranked Info, Warning, or Critical
• Shared vendor records across AP and inventory; the same contracts also appear in Inventory under Contracts

How it works

When a bill with a vendor goes into AP approval, DayZero finds that vendor's active contract and compares the bill amount to it. The resulting status is saved on the bill and used for routing. You can also click Compare Contract on any bill with a vendor.

flowchart TD
  bill["Bill with a vendor"] --> active{"Active contract?"}
  active -->|"no"| nocontract["No Contract"]
  active -->|"yes"| amt{"Amount vs contract"}
  amt -->|"within 5%"| matched["Contract Matched"]
  amt -->|"more than 5% over"| over["Over Contract"]
  amt -->|"more than 5% under"| under["Under Contract"]
  amt -->|"no amount to compare"| review["Needs Review"]

How to use it

1. Open Vendor Contracts in the Accounts Payable workspace (requires the AP Automation add-on).
2. Click New Contract, choose the vendor, and enter the Contract Name and Contracted Amount.
3. Choose a Billing Frequency and set the Effective Date and Expiration Date.
4. Set the Status to Active once the contract is signed, and add a Terms Summary (for example "Net 30, auto-renew annually").
5. Filter by status, search by name, and use the row actions to edit or delete a contract.
6. Click Analyze Contracts for renewal and overspend insights.
7. On a bill, check the contract chip beside the vendor, or click Compare Contract after you change a contract. No Contract bills show no chip.

Pro tips

• Only an Active contract is used for comparison. A contract left in Draft has no effect on routing, so activate it once signed.
• Status does not change on its own. When a contract ends, set it to Expired or Terminated so it stops being compared.
• Keep one Active contract per vendor; if several are Active, the one with the latest effective date is used.
• A contract with no contracted amount leaves bills at Needs Review, so always enter the amount.
• Only a Contract Matched bill can auto-approve. After a vendor's price changes, update the contract and click Compare Contract on open bills.

In-depth guide

Match status and routing

Bills that cannot auto-approve are routed by amount: up to the Operations limit they go to Operations, and anything larger, or a small bill that is not Matched, goes to Advisor review. See AP Approval Workflow for the exact rules.

When the comparison runs

• DayZero computes the status just before a bill enters approval, so routing has a real value.
• Compare Contract on a bill re-runs it and links the contract to the bill. Changing a contract does not update bills automatically.
• Payment Guidance in the client portal flags Over Contract and Needs Review bills so they are reviewed before paying.

AI contract analysis

Analysis reviews your contracts (the first 30) as a procurement advisor and returns up to ten insights, each typed as Renewal, Overspend, or Terms. It looks at vendor, dates, amount, and status, so accurate expiration dates make the renewal alerts useful.

Permissions and edge cases

• Deleting a contract clears the link from any bill rather than deleting the bill.
• A bill without a vendor has no contract to compare against and is stamped No Contract; set a vendor first.
• If the comparison itself fails when a bill enters approval, the bill is routed to Advisor review as the safer path.
• A bill amount of zero or a missing contract amount cannot be compared and shows Needs Review.