Which special billing processes exist?

The standard billing processes are:

  • Create invoices based on deliveries of goods and/or services
  • Issue credit and debit memos
  • Create pro forma invoices
  • Cancel billing transactions

The special billing processes are:

  • Create billing plans
  • Create instalment plans
  • Create rebate agreements
  • Issue retroactive billing

Billing plan

A billing plan is a schedule of individual billing dates in a sales document that can be applied to the whole document or for a specific item. With a billing plan you are able to control periodic billing, milestone billing and down payments.

Periodic billing activates the creation of billing documents on a period basis until an optional horizon is reached. This billing process is useful for rental contracts.

Milestone billing activates the creation of billing documents when an event is about to start or is finished. This billing process is useful when using projects such as the assembly and delivery of customer specific projects.

Down payments are payments made before completion of the product, with no interest. They represent short or medium term outside capital procurement and therefore improve the company’s liquidity situation.
The SAP system handles a down payment as a variant of milestone billing.

Instalment plan

The instalment plan allows the customer to pay in instalments. With the instalment plan the system creates one invoice for all instalments. On the basis of this billing document you can print an invoice listing all the instalments with the relevant payment dates and amounts to be paid by those dates.

The instalments are calculated by the system by taking a percentage of the total invoice amount for each instalment. The system takes into account any rounding differences for the last payment date.

For each instalment the system creates a customer line item in financial accounting.

The instalments are defined by the payment terms, which are controlled by the payment terms key.

Rebate agreements

A rebate is a special discount that is paid retroactively to a customer. This discount is based on the customer’s sales volume over a specified time period. Details concerning the possible discount are settled in rebate agreements. In the agreement you specify, for example who receives the rebate payment, on what criteria the rebate is based (customer, customer and material, and so on) and how long the rebate agreement is valid.

Within the rebate agreement you create separate pricing condition records for each product the customer buys. These records specify the rebate amount or percentage for each product. You can also specify a pricing scale so that the customer can earn a better rebate by ordering more. Because rebates are always paid retroactively, the system keeps track of all billing documents (invoices, credit and debit memos) that are relevant for rebate processing. The system can, if you wish, automatically post accruals so that the accumulated value of a rebate is recorded for accounting purposes.

A rebate agreement is finally settled when you issue a credit memo to the customer for the accumulated rebate total.

Retroactive billing

Retroactive billing refers to additional billing documents issued after re-evaluation of billing documents that have already been processed and settled based on new pricing agreements made with the customer.

Example: An invoice has been created for a product using the historical net price of £10 each when the current net price is £9 each. Therefore a correction needs to take place.
The system calculates the difference between the net value of the invoice (£10) and today’s net value based on the new price (£9). It then creates a credit memo with the net value of £1 to be credited to the customer.

The system calculates retroactive billing values for primary documents. It can use secondary documents to help calculate this value.

Invoices are always primary documents. Debit or credit notes can be classified as primary or secondary documents, depending on the order reason assigned. Examples of order reasons include price changes, poor quality or ruined material. Depending on how the order reason you entered is customized, the debit or credit note becomes relevant for retroactive billing.

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