Milestone Billing

Milestone billing means distributing the total amount to be billed over multiple billing dates in the billing plan. As each milestone is successfully reached, the customer is billed either a percentage of the entire project cost or simply a pre-defined amount. During sales order processing, the system determines from the item category whether a billing plan is required and, if so, which type of plan. The type of billing plan that is determined at this point is set up in Customizing and cannot be changed in the sales document. Milestone billing is typically used for billing projects, such as plant engineering and construction projects. Such projects often include a series of milestones that mark the completion of different stages of the work. In the SAP R/3 System, milestones are defined in a network along with planned and actual dates for the completion of work. The milestones are also assigned to the billing dates in the billing plan. Each milestone-related billing date is blocked for processing until the Project System confirms that the milestone is completed.

Configuration required for Milestone Billing Plan:

1) Billing Plan Type:

The billing plan type defines the basic control data for the billing plan. For example, the billing plan contains rules for date determination. These rules determine, for example, the beginning and end dates for the schedule of billing dates. The billing plan type also contains a date rule for determining the horizon for the billing plan. The horizon calculates the last billing date in the billing plan, based on the current date plus a specified time period (for example: today’s date plus one year). The standard version of the SAP R/3 System includes the following billing plan types:

·       Milestone billing: For example, billing dates determined by the percentage of  project completion

·       Periodic billing :For example, monthly fees for a rental contract

 The billing plan type is displayed in the sales document but cannot be changed.

 Sales and distribution -->Billing-->Billing Plan-->Define Billing Plan Types-->Maintain billing plan types for milestone billing-->New Entries 

a)    Create New Billing Plan-->BA

b)    Start date --> 01 (today’s date)

c)    Online order --> Deadlines Created Automatically

d)    FCode-OvervScrn-->0003 (Milestone Billing)

2) Date Description:

Date descriptions are defined to describe the various purposes for which billing plans can be used. Depending on the date category you use, the system proposes a date description for the billing dates in the billing plan. The descriptions are for information purposes only and do not affect processing.

Sales and distribution-->Billing-->Billing Plan-->Define date descriptions-->New Entries

a)    B001 - Signing the Task Order  

b)    B002 - Completion of Clinical Period Of Study

c)    B003 - Completion of Analytical Period Of Study

d)    B004 - After Draft report Submission

e)    B005 - After Final report Submission

3) Date category:

The date category defines data for each billing date that appears in the billing plan.For example, the date category determines the following data:

·         Billing rule: Determines whether the billing date is based on, for example, the percentage of project completion or a monthly periodic payment for a service contract, and so on.

·         Date description: specifies, for example, whether the billing date is for a rental contract, maintenance contract, and so on.

·         Billing block: The billing date may be blocked, for example, if a project milestone has not been confirmed

·         Whether the date is fixed or not: In milestone, you may want the system to use the actual date of the milestone, for example.

·         Billing type: proposes the type of billing document to be used during billing: invoice, pro forma, and so on.

Sales and distribution-->Billing-->Billing Plan-->Define & Assign Date Categories-->Maintain Date Category for Billing Plan Type-->New Entries

a)    Billing Plan Type-->BA

b)    Date category-->BA

c)    Billing rule-->2 (Milestone Billing on Value Basis)

d)    Fixed date-->1 (Planning actual date of Milestone)

e)    Billing block -->AB (Accounts Block)

f)     Billing type-->ZCI

4) Proposed date category:

For every billing plan type, you can assign a date category. During sales order processing, the system then automatically proposes the date category and its corresponding data for each billing date in the plan.

Sales and distribution-->Billing-->Billing Plan-->Define & Assign Date Categories-->Allocated date categories

·         Put date categories against billing plan type

5) Proposed date:

The date proposal function is used only for milestone billing. This function enables you to create a standard billing plan as a reference. This billing plan can be used during order processing. The dates can be used as the basis for an actual billing plan and changed if required.

Sales and distribution-->Billing-->Billing Plan-->Maintain date proposal for billing plan types-->Maintain Date

a)    Start date-->today’s date 

b)    Put Billing date as per your requirement

c)    Put Date Description & Percentage against billing date

Please Note that - Table Entries of FPLA, FPLT & TPFLA to be copied separately because Billing plan references cannot be transported

6) Assign Billing Plan types to Item categories:

Billing Plans are controlled by item category. In customizing for sales, you can specify that individual item categories are relevant for order related billing by means of  billing plan. You can also specify billing plan types of each item category.

Sales and distribution-->Billing-->Billing Plan-->Assign Billing Plan types to Item categories

 Enter following details against Item categories

a)    Billing Relevant-->I (Order relevant Billing – Billing plan ) 

b)    Billing Plan type-->BA

Integration Between Sales and the Project System

The connection between the project and the sales document item is made in the individual schedule lines of the item. Each schedule item can be assigned to a network in a project.

To display the project-related data for a schedule line, proceed as follows:

       1.      In one of the overview screens of the sales document, select Item ® Schedule lines.

       2.      Mark the schedule line and select Procurement details

Suggested T Codes:

• CN11

• CJ20N

• CJ27

• CJ2D

• CNMT