Ariba Buyer must be configured to create contracts, including milestone-based contracts. See the Ariba Contract Compliance Guide for details.

You can also add milestones to requisitions. For more information, see About requisition milestones.

Milestones

When creating a contract, you can add milestone items, in addition to materials and services items, fixed and recurring fee items, and cost and expense items.

Milestones help you monitor time-dependent deliverables, and control payments associated with those deliverables. Milestones facilitate timely communication with suppliers and can help you manage contract funds effectively.

A milestone represents an obligation that must be completed by a supplier to properly fulfill the requirements of a contract. Milestones are typically tied to due dates, and result in payment upon successful completion. You might use milestones to specify:

• A completion date in the progress of a development project. The milestone could require that a certain amount of progress on a project is complete by a specified date, in order to receive payment for work done to date.
• A review date for monitoring / tracking the progress of services rendered. The milestone could require the buyer and supplier to review progress to date, confirm that services are on time and according to plan, and review the contract for compliance.
• A tangible deliverable, such as a report, a proposal, or other document to be delivered by the specified date (for a Market Research Contract, for example).

If your contract is project-related, such as a construction project, you might use milestones to allocate a certain percentage of the total contract amount.

When creating a milestone, you can assign a payment amount, and designate a verifier to ensure that the milestone is successfully complete before payment will be made.

Milestone-based contracts

A milestone-based contract is based on one or more milestones or deliverables. When setting up this type of contract, you specify the:

• unique name
• description that lists the tasks or conditions that must be met in order for the milestone to be considered complete
• date by which milestone must be complete
• amount to be paid to the supplier upon successful completion of the milestone
• verifier who confirms that the milestone status is “Completed” before payment is made
• notification date that triggers a notification email to remind the verifier to confirm that the milestone is complete
• supplier contact (the name of a person on the supplier side who can verify successful completion of the milestone); you can include email, telephone, and other contact details

Additionally, you can set up the contract so that:

• The appropriate users can reconcile an invoice that is created against a milestone.
• Automatic reconciliation can take place. If allowed by your company's business rules, an invoice can be reconciled against the contract automatically, once a milestone is verified as complete.
• Users can verify successful completion of a milestone using a milestone tracker.