Vendor Contracts

Vendor contracts capture the terms you agreed with a supplier — the contracted amount per period, the billing frequency, effective and expiration dates, a terms summary, and the original document PDF. When a bill comes in, DayZero compares it against the vendor's active contract and stamps a match status. That signal is what the AP approval workflow reads to decide whether a bill auto-approves or escalates, so keeping contracts current is what makes routing accurate. Vendor contracts are part of the AP Automation add-on.

Key capabilities

• Per-vendor contracts with name, contracted amount, and billing frequency
• Contract lifecycle: draft → active → expired / terminated
• Effective and expiration dates, with auto-expiry once the expiration date passes
• Amount-based comparison of incoming bills against contracted terms
• AI document comparison (bill PDF vs contract terms) when the amount check is inconclusive
• Match status feeding AP approval: Matched, Over Contract, Under Contract, No Contract, Needs Review
• The matched contract linked back onto the bill
• Original MSA/contract PDF stored securely and a terms summary (AI-extracted or manual)
• AI contract analysis surfacing renewal, overspend, and terms insights with severity
• Shared vendor records across AP and inventory

How it works

When a bill is created, DayZero finds the vendor's active contract, compares the amount within tolerance (escalating to an AI document check when ambiguous), and stores a match status the approval workflow processes on.

flowchart TD
  bill["New bill"] --> active{"Active contract?"}
  active -->|"no"| nocontract["No Contract"]
  active -->|"yes"| amt["Compare amount to contract"]
  amt -->|"within"| matched["Matched"]
  amt -->|"over / under"| drift["Over / Under Contract"]
  amt -->|"ambiguous"| ai["AI document compare → Needs Review"]

How to use it

1. Open Vendor Contracts under the Payables sidebar group (requires the AP Automation add-on).
2. Click New Contract, select the vendor, and enter the contract name and contracted amount.
3. Choose a billing frequency (weekly, biweekly, monthly, quarterly, annually, or one-time).
4. Set the effective and expiration dates and the status (Draft, Active, Expired, Terminated).
5. Optionally attach the contract PDF and add a terms summary.
6. As bills arrive, DayZero compares them against the active contract automatically; run AI analysis for renewal and overspend insights.

Pro tips

• Only an Active contract is used for comparison — a contract left in Draft won't influence routing, so activate it once signed.
• Bills flagged as "Over Contract" or "Needs Review" skip auto-approve even when the amount is under your threshold; update the contract when vendor terms change.
• Small billing variances may still match; material overages land as "Over Contract" and escalate past auto-approve.
• An AI document comparison only runs when the amount check is inconclusive (marked as Needs Review) and both a contract PDF and bill PDF are available — attach the MSA to unlock it.
• Set the expiration date accurately: a contract auto-counts as expired once that date passes, which removes it from active comparison.

In-depth guide

Match status (feeds AP approval)

Comparison logic

DayZero compares each bill to the vendor's active contract and assigns a match status (see table above). When the amount comparison is ambiguous and both a bill PDF and the contract PDF are available, an AI document comparison can resolve the status from the documents.

How it feeds the AP approval workflow

• Before the workflow starts, DayZero pre-computes the bill's match status and links the matched contract, so routing has a concrete value to act on.
• The workflow then escalates "Over Contract" and "Needs Review" bills past auto-approve regardless of amount — see AP Approval Workflow.
• You can also re-run the comparison on demand from a bill's contract-comparison action.

AI contract analysis

Contract analysis reviews your contracts as a procurement advisor and returns up to ten insights, each typed as Renewal, Overspend, or Terms and ranked Info, Warning, or Critical — useful for catching upcoming renewals and spend drift before they bite.

Permissions & add-on

Vendor contracts (and the AP approval queue/policies) require the AP Automation add-on, which is bundled into the Firm Enterprise tier.

Edge cases

• A vendor with multiple contracts is compared against its single active one; keep only one active to avoid ambiguity.
• Deleting a contract clears the link from any bill rather than deleting the bill.
• If the AI comparison fails or times out, the status falls back to the amount-based result so routing still proceeds.