In Oracle Projects, an agreement represents any form of contract, written or verbal, between you and one of your customers. For example, an agreement may correspond to a purchase order, a continuing service agreement, or a verbal authorization.
An agreement provides the funding for projects and tasks. Each agreement you define includes the following items:
A customer
A hard or a soft limit for revenue and/or invoice
A currency amount
An organization that owns the agreement
If you specify a hard revenue and invoice limit on an agreement, Oracle Projects prevents revenue accrual and billing activity beyond the amount you funded to a particular project or task.
If you specify a soft revenue and invoice limit, Oracle Projects provides a warning telling you when revenue and billing for the project exceeds the amount you funded.
Note: You can specify a hard limit for both revenue and invoice limit, or a hard limit for revenue or invoice limit.
No project or task can accrue revenue without an agreement to fund its revenue budget.