Billing Plan

We have often come cross the term like Periodic & Milestone billing .This is nothing but a Billing Plan

A Billing Plan is a plan for the Billing dates for each line in a Sales order. It can also be setup at the Sales order header level, in which case it would be applicable for all the items then. SAP provides two Billing plan options – Periodic Billing and Milestone Billing. Depending on your Business process flows, these Billing plans could be setup and carried out.

For example, in a Construction project type of business Milestone Billing would be more applicable.  In case of a Service industry, the Periodic Billing plan would be more feasible.

Periodic Billing Plan implies that the total Billing amount (mostly fixed) is paid in full for each individual date in the Billing plan. For example, if you are creating a rental contract, the system can propose a schedule of monthly rental payments, according to the length and conditions of the contract.

On the other hand, in Milestone Billing the Total amount to be billed is distributed across multiple Billing dates with a set criterion to be completed upfront for each Billing date. For example, you can use a billing plan for billing a make-to-order item that is assigned to a project in the SAP Project System. When you enter the project-related make-to-order item in the sales order (or assembly order), the system proposes a billing plan based on milestones defined for networks in the project. As each milestone is successfully reached, the customer is billed either a percentage of the entire project cost or simply a pre-defined amount.

The few advantages of using a Billing Plan is that

• It automatically creates the Billing plan dates
• Puts Billing block by default
• Creates Billing documents with reference
• Updates Billing index

Billing plans are setup in Customizing for Sales using few of the below-mentioned important attributes

• Billing Plan Type
• Date Description
• Date Category
• Proposed Date Category
• Proposed Date
• Assigning billing plan types to sales document items

Pre requisites integration point –SD & FI

1. Enterprise structure for SD is Setup
2. Integration is setup between FI and SD
3. Billing type configured and process flow setup from Sales order to Billing

What is BAM & BPM

Business Activity Monitoring or BAM, is the the automated monitoring of business process activity affecting an enterprise. BAM is generally implemented as a module of ERP, BI, EAI or BPM products. BAM requires a business to identify its Key Performance Indicators (KPIs) and create a system that allows monitoring and responding to changes, preferably real time.

Virtually for everyone in a organization can benefit from BAM.  Business Activity Monitoring enables a company to respond faster to new opportunities and threats.  BAM is not just about technology, but about recognizing a business' KPIs and implementing the right technology in place to monitor them. 

• BAM provides Real-Time, Graphical Key Performance Indicators & Analysis
• BAM enables control and manage ongoing business operations using closed-loop visibility.
• BAM will enable you to respond quickly to change based on business events as they occur.
• BAM enables zoom in on cross-process metrics with real-time analysis to determine which processes are creating bottlenecks or which customer is most profitable.

Business Process Management or BPM makes it easy for companies to program their current processes, automate their execution, monitor their current performance and make on-the-fly changes to improve the current processes.

• The process managed enterprise is the company of the future.
• A BPM software enables you to automate those tasks that are currently being performed manually. Many of these tasks require some type of application process, approval or rejection process, notifications and status reports. A BPM solution can make these processes automatic.
• Handling exceptions is an area where BPM really shines. Organizations have few problems when its process run smoothly ninety nine percent of the time. However, it's the one percent that are exceptions that dominate the majority of the company's time and resources.
• BPM is excellent for processes that extend beyond the boundaries of an enterprise and communicate with processes of the partners, customers, suppliers and vendors.
• BPM Gives businesses the agility to stay competitive
• BPM reduces the time elapsed in a business process
• Increases the productivity per person
• Business process consists of many steps. A typical BPM initiative reduces the number of steps by 50%.
• A Business Process needs many people and resources. A good BPM should reduce the number of resources needed for the same process.
• BPM helps improve coordination across departments and geographic locations of a company

Basic of SAP MM

SAP SD & SAP MM has similar functionality

SD Basically deal with Customer whereas MM deal with Vendor

So it’s good to have some MM Knowledge as well 

SAP MM (Material Management) is one of the important modules in SAP ERP software and MM application module supports the procurement and inventory functions occurring in day-to-day business operations.

MM module contains many aspects such as purchasing, goods receiving, material storage, consumption-based planning, and inventory. SAP MM module is fully integrated with other modules in the SAP R/3 System such as Finance (FI), Controlling (CO), Sales and Distribution (SD), Quality Management (QM), Plant Maintenance (PM), Production Planning (PP), and Warehouse Management(WM).

It supports all phases of materials management materials planning and control, purchasing, goods receiving, inventory management, and invoice verification. 

Procurement in Materials Management 

MM Process flow 

The typical procurement cycle for a service or material consists of the following phases:

1.   Determination of Requirements

Materials requirements are identified either in the user departments or via materials planning and control. (This can cover both MRP proper and the demand-based approach to inventory control. The regular checking of stock levels of materials defined by master records, use of the order-point method, and forecasting on the basis of past usage are important aspects of the latter.) You can enter purchase requisitions yourself, or they can be generated automatically by the materials planning and control system.

2.   Source Determination

The Purchasing component helps you identify potential sources of supply based on past orders and existing longer-term purchase agreements. This speeds the process of creating requests for quotation (RFQs), which can be sent to vendors electronically via SAP EDI, if desired.

3.   Vendor Selection and Comparison of Quotations

The system is capable of simulating pricing scenarios, allowing you to compare a number of different quotations. Rejection letters can be sent automatically.

4.   Purchase Order Processing

The Purchasing system adopts information from the requisition and the quotation to help you create a purchase order. As with purchase requisitions, you can generate Pos yourself or have the system generate them automatically. Vendor scheduling agreements and contracts (in the SAP System, types of longer-term purchase agreement) are also supported.

5.   Purchase Order Follow-Up

The system checks the reminder periods you have specified and - if necessary - automatically prints reminders or expediters at the predefined intervals. It also provides you with an up-to-date status of all purchase requisitions, quotations, and purchase orders.

6.     Goods Receiving and Inventory Management

Goods receiving personnel can confirm the receipt of goods simply by entering the Po number. By specifying permissible tolerances, buyers can limit over- and under deliveries of ordered goods.