Vendor contracts and free-cancellation dates
How the Events pack tracks vendor contracts against their free-cancellation dates, and why vendor charges reach the books as supplier invoices.
By Achekam · · 5 min read · For Events businesses in South Africa, Nigeria, Kenya
Launching soon. The Industry CRM add-on described in this article is launching soon. This article describes it as it will work at launch.
Every event is built on other people's contracts: the venue, the marquee, the caterer, the sound and lighting company, the security firm, the portable toilets. Almost every one of those contracts has a date after which cancelling becomes expensive. Before it, you can walk away cheaply or for nothing. After it, you pay a cancellation charge, sometimes the full fee.
For an organiser, those dates are among the most important in the whole plan, and they are usually buried in a PDF nobody has opened since it was signed. When ticket sales disappoint or a headline sponsor pulls out, the question "what can we still cancel for free?" needs an answer in minutes, not days.
Vendor contracts on the event
The Events & trade shows pack in Achekam's Industry CRM keeps four kinds of record: Events, Sponsorships, Exhibitor booths and Vendor contracts. A vendor contract is a record of its own, so each supplier you have contracted for an event has its own record rather than a file in a folder.
That alone changes the picture. Instead of a folder of signed PDFs, the organiser has a list of the event's commitments to work through.
The free-cancellation date
The pack tracks each vendor contract against its free-cancellation date. That is the date that turns a flexible booking into a firm cost.
When you add a vendor contract, read the actual contract for this date. Watch for these traps:
- Staged charges. Some contracts have more than one date: a small charge after one point, a larger one later, the full fee near the event. Record the first date at which cancelling costs anything, and note the later stages.
- Notice requirements. A cancellation may only count if it is given in writing, to a named person or address. Note how notice must be given.
- Deposits. A deposit paid up front may be lost even before the free-cancellation date. Check whether yours is refundable. In South Africa, section 17 of the Consumer Protection Act sets out when a supplier may take a reasonable deposit for a booking or order and what cancellation charge it may keep if the customer cancels; your adviser can say whether it applies to a particular vendor contract.
- Dependent bookings. Cancelling the venue may make other bookings pointless. Know which contracts depend on which.
Deciding before the date passes
A date is only useful if someone decides something before it. For each vendor contract, agree two things in advance:
| For each contract | Example |
|---|---|
| Who decides | The event director, with finance consulted |
| What the decision depends on | Ticket sales against target, sponsorship confirmed, permits granted |
Then hold a short go or no-go review ahead of each significant date. Workflow tasks in the pack can be broken into subtasks up to three levels deep, which suits this kind of review: gather the latest sales figures, check sponsor status, confirm permits, then decide.
Some stages in the pack's pipelines also wait for set conditions, such as an amount being set or a signature being done, before a record can enter them. Where a stage waits for an amount, a vendor contract cannot move into it until the amount is recorded, which keeps unpriced commitments from looking settled.
Here is a worked example in words. A festival has contracts with a marquee supplier and a caterer. The marquee contract's free-cancellation date falls first. A week before it, the director reviews ticket sales, which are behind target, and the main sponsor has not yet signed. Rather than let the date pass, the director reduces the marquee order to a smaller structure within the free-cancellation window. When the caterer's date arrives later, sales have recovered, and that contract stands. The festival avoided a charge it would otherwise have paid for space it did not need.
The pack pays no vendor
The Events pack tracks vendor contracts, but it pays no vendor. Vendor charges go into the books as supplier invoices, through the normal payables process.
That keeps one route for every supplier payment in the business. It also means the vendor contract and the vendor's bill are related but separate: the contract tells you what you agreed and when you could have cancelled; the bill tells the books what you owe.
Vendor charges recorded as supplier bills
When a vendor's invoice arrives, it is recorded as a supplier bill, line by line with VAT. A bill without a purchase order waits for approval before it posts. It can then be paid in full or in parts from a chosen bank account.
For larger vendors, it is worth going further and buying through purchase orders. A purchase order is raised from the selected quotation of an approved requisition, and the person who raised it cannot approve it. Approved orders count as committed spend against your budget, and a supplier invoice matched to its order posts as expense, input VAT and trade payables, with the supplier's invoice number stopping it from being posted twice. Committed spend and budgets are covered in keeping vendor spend inside the event budget.
If a cancellation charge does fall due, it arrives the same way: as the vendor's invoice, recorded as a supplier bill and approved like any other.
Deposits work through the same route. Many vendors invoice a deposit when the contract is signed and the balance closer to the event. Record each invoice as it arrives, and use part payments where you pay a bill in stages. The vendor contract record then tells you what was agreed, while the bills show what has been paid so far.
A habit for every event
As each vendor contract is signed, record it on the event with its free-cancellation date, and write down its notice rule and who decides. Put the go or no-go reviews in the diary at the same time. After the event, check that every vendor bill was received and matched, as part of the closing list in after the event: invoices paid and sponsor reports.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
