Manage Milestone Payments (Contracts)

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| By Joseph Hartman
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Joseph Hartman
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  • 1/10 Questions

    True or False?  A scheduled payment warning in the system will inform an AP specialist that the invoice is related to a Milestone payment contract.

    • True
    • False
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About This Quiz

This quiz assesses understanding of Milestone Payment Contracts in a business context, focusing on their appropriate usage, system alerts, authorization requirements, and revision processes. It is essential for professionals managing vendor contracts and payments.

Manage Milestone Payments (Contracts) - Quiz

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  • 2. 

    Who is responsible for identifying the need for a Milestone Contract?

    • Buyer

    • Accounts Payable Processor

    • Accounts Payable Manager

    • Purchasing Manager

    Correct Answer
    A. Buyer
    Explanation
    The buyer is responsible for identifying the need for a Milestone Contract. This is because the buyer is the one who is involved in the procurement process and is responsible for identifying the specific requirements and needs of the organization. They have the knowledge and understanding of the project or purchase that requires a Milestone Contract and can determine if it is necessary. The other options, such as the Accounts Payable Processor, Accounts Payable Manager, and Purchasing Manager, may be involved in the process but it is ultimately the buyer's responsibility to identify the need for a Milestone Contract.

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  • 3. 

    When might it be appropriate to use a Milestone Payment Contract?

    • To spread payments across vendor deliverables

    • Always for large purchases or projects

    • When a Buyer determines it is appropriate

    • When the PO setting requires it

    Correct Answer
    A. To spread payments across vendor deliverables
    Explanation
    A Milestone Payment Contract may be appropriate when the buyer wants to spread payments across different vendor deliverables. This type of contract allows the buyer to make payments at specific milestones or stages of the project, ensuring that the vendor is delivering the agreed-upon work before receiving full payment. It provides a level of security for the buyer and helps to manage the financial aspect of the project effectively. This approach is particularly useful for large purchases or projects where the buyer wants to ensure that payments are made in a controlled and structured manner.

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  • 4. 

    Why might you place an invoice on Hold?

    • You have questions or there are discrepancies

    • To reject the invoice for payment

    • To reject it without telling anyone

    • To find more time in the day

    Correct Answer
    A. You have questions or there are discrepancies
    Explanation
    Placing an invoice on hold is done when there are questions or discrepancies regarding the invoice. This allows the person responsible for processing the payment to investigate and resolve any issues before proceeding with payment. It ensures accuracy and prevents any potential errors or fraudulent activities.

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  • 5. 

    Why do you need to authorize sites on a Contract?

    • So rigs/locations can use the Contract for POs

    • To restrict Contract usage to PRs

    • To limit Contracts to Houston Buyers

    • So the Corporate Warehouse can use

    Correct Answer
    A. So rigs/locations can use the Contract for POs
    Explanation
    The reason why you need to authorize sites on a Contract is so that rigs/locations can use the Contract for purchase orders (POs). By authorizing specific sites, you are allowing them to utilize the Contract for their procurement needs, ensuring that the purchasing process is streamlined and efficient. This helps in maintaining control over the usage of the Contract and ensures that it is utilized appropriately by the designated sites.

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  • 6. 

    True or False?  Milestone invoices will arrive in an approver's Start Center Inbox for review and action.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Milestone invoices are a type of invoice that are sent to an approver's Start Center Inbox for review and action. This means that the statement "Milestone invoices will arrive in an approver's Start Center Inbox for review and action" is true.

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  • 7. 

    Which application do you use to receive materials and services against a Milestone Contract?

    • Receiving

    • Purchase Orders

    • Invoice

    • Inventory

    Correct Answer
    A. Receiving
    Explanation
    The application used to receive materials and services against a Milestone Contract is called "Receiving." This application is specifically designed to track and manage the receipt of goods and services in accordance with the terms and conditions outlined in the Milestone Contract. It allows the user to document the receipt of each item, verify its quantity and quality, and update the inventory accordingly. The Receiving application plays a crucial role in ensuring that the contractual obligations are met and that the organization receives the materials and services it has contracted for.

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  • 8. 

    A Contract field was greyed out and now is clear.  What does this tell you?

    • You can revise the field

    • The field has been revised

    • You cannot revise the field

    • The field is locked

    Correct Answer
    A. You can revise the field
    Explanation
    The fact that the Contract field was initially greyed out and is now clear indicates that it is editable and can be revised.

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  • 9. 

    True or False?  The cost of a service or item is not the trigger for a Milestone Payment Contract.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The cost of a service or item is not the trigger for a Milestone Payment Contract. This means that the payment milestones are not based on the total cost of the service or item, but rather on specific milestones or achievements that need to be met or completed. The payment is released when these milestones are reached, regardless of the overall cost.

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  • 10. 

    If you are in a Contract, what system function will let you revise it?

    • Go To > Contracts

    • Select Menu > Create Release PO

    • Select Menu > Revise Contract

    • Select Menu > View Revision History

    Correct Answer
    A. Go To > Contracts
    Explanation
    The correct answer is "Go To > Contracts" because this system function allows you to access the Contracts section where you can make revisions to your existing contract.

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Quiz Review Timeline (Updated): Jul 30, 2024 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Jul 30, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • May 08, 2014
    Quiz Created by
    Joseph Hartman
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