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Resource-Related BillingComplex Billing Environments
Susan Kopisch SAP Labs, LLC [email protected]
Barbara Daves CRM2ERP Consulting, LLC [email protected]
• What is Resource-Related Billing (RRB)?• The Power of Pricing• Cost Plus Billing Scenario• Fixed Price with Progress Payments Scenario• Conclusions• Questions
Agenda
Resource-Related Billing
Any company who bills their customers based on resources consumed
Industries include but not limited to:
Airline Operations Defense Contractors Engineering & Construction Service Industry Consulting Industry Public Sector
Contract Types with Complex Billings
Cost
Firm-fixed-price w/PP
Profit 0/100 Share
Cost-plus-fixed-fee
Estimated Cost
Fixed Fee
100/0 Share
Base Fee (0-3%)
Award Fee Pool
MaxFee
Base Fee
Estimated Cost
MultipleIncentive
TargetFee
Cost-plus-incentive-fee
Share Ratio
Target Cost
Max Fee
Min Fee
Fixed-price incentive w/PP
Target Cost
TargetProfit
CeilingPrice
Share Ratio
(PTA)
Billing Complexities
The amount to bill may depend on different calculations: Resource-Billing
Based on resources consumed Based on estimated resources to be consumed Based on labor hours consumed Disallowed costs Cost Funding Cost Withholds
Overheads G&A Material Production Cost of Money
Billing Complexities cont.
Fees Fixed
• Percentage of costs incurred given negotiated cost• Percentage of labor hours consumed• Fee Retention• Fee Funding
Award Incentive
Schedule Cost
How can we use SAP for RRB?
• The SAP R/3 system is a toolbox from which you can build and store many different things.
Our job is to build invoices and
store the data for future use
Resource-Related Billing Equation
Project System
Controlling/FI
Sales & Distribution
=
Invoice
Materials Management
Pricing ProcedurePricing Routines
Project Structures
Costing SheetsCost Tables
Material Master
Dynamic Item Processor
How does RRB Work?
Active Projectwith Postings
Proj
WBS-1 WBS-2
Resource-Related Billing is used when the amount to invoice the customer is based on the resources consumed by the project
Op60Op10
Op20
Op30
Op50
Op40
PM Order
PM Order
PP Order
PP Order
Sales Contract/Order
Line Item Qty10 Product A 1
WBS-1/DIP Profile20 Product B 1
WBS-2/DIP ProfileDynamicItemProcessor
Resource Bill
Data Flow for Cost Plus
Costs onProject A
CostingSheet
Working Area
Billed Overhead
Addl DMR Items
410000 $2,000420000 $3,000655901 $10655902 $10655801 $6,000655802 $3,000655803 $3,000
SourceSelection Criteria
Material Determination
Working Area
410000 $2,000420000 $3,000655901 $10655902 $10655801 $6,000655802 $3,000655803 $3,000
Pricing
Routines&
Requirements
Pricing
Pricing
Routines&
Requirements
DMR Items
POSNR MATNR XKWERT MATKL10 Labor $2,000.00 40120 Materials $3,000.00 40330 Overhead $12,000.00 40840 Award Fee $10.00 49650 Fixed Fee $10.00 497
DMR with Pricing
410000 $2,000420000 $3,000655901 $10,000655902 $6,000655801 $6,000655802 $3,000655803 $3,000
Pricing Requirements & Routines
Three types:
1. Routine to zero out EK01 cost for additional DMR items
3. Routine to calculate final values
2. Routine to store variables
Key Routines
Storing Costs & Revenues
Billing calculations use calculated values from prior billings (i.e. previously billed).
FI Doc forInvoice
cost object?
BSEG
No
Yes
COEP
End
Revenue Elements4600000 Sales4601000 Excess Funding4602000 Excess Fee4603000 Withhold4604000 Fees
Previously billed values areautomatically stored in the cost tables on revenue elements!
Storing Pricing Condition Values
Pricing calculates variables used in determining values to bill.
KONV
During pricing, the pricing conditions are automatically stored in the KONV table!
Fixed Price w/Progress Payments
Fixed Price contracts may be eligible for progress payments based on costs incurred.
SF1443
Fixed Price w/Progress Payments
Item 10ProgressPayment
Item 10ProgressPayment
HeaderHeader
Item 20 P/N12345
Item 20 P/N12345
Sales order
Dow
n
Dow
n P
ay R
eque
st
Pay
Req
uest
Send
DownPayment
$
Customer
Send
Bill
Bill
Deliver
Clear
RRB
Sales Order Setup
Item 10ProgressPayment
Item 10ProgressPayment
HeaderHeader
Item 20 P/N12345
Item 20 P/N12345
Sales order
Billing Profile& WBS Element
Sales order pricing
Resource Bill Item 10
Billing Profile Setup
Progress Payment Flow
Item 10ProgressPayment
Item 10ProgressPayment
HeaderHeader
Item 20 P/N12345
Item 20 P/N12345
Sales order
Dow
n
Dow
n P
ay R
eque
st
Pay
Req
uest
Send
DownPayment
$
Customer
SendRRB
The down payment request is a sales document from which thethe SF1443 output will be generated.
Progress Payment DMR Pricing
Item 10Labor
Item 10Labor
HeaderHeader
Item 20 MaterialItem 20
Material
Debit Memo Request
Item 30 ZZProg Pay
Item 30 ZZProg Pay
EK01 = $500 stat.
EK01 = $900 stat.
From SalesOrder
Net Value = Request for Down Payment
RRB
Progress Payment Calculation
…
…
Sample Progress Pay DMR
Fixed Price Item Flow
Item 10ProgressPayment
Item 10ProgressPayment
HeaderHeader
Item 20 P/N12345
Item 20 P/N12345
Sales order
Bill
Bill
Deliver
Clear
DownPayment
$
Invoice PricingB
illB
ill Price
Liquidation
LESS
=
The Real Power of RRB
• Realistic Real-Time Billing – No delay in resource expenditure to billed values– High confidence of billing due to direct project integration
• RRB Supports Different Contract Types– The billing profile is configured for each contract type
• Flexibility for Complex Calculations– Pricing enables complex calculations adjusting the bill costs
such as CIEF, FIEF, Withholds, Retention, Fees, etc to arrive at a net billing amount.
– Historical billings easily stored/retrieved from the revenue elements on a project.
– Billing overhead rates are applied using costing sheets which allows for re-adjustment of rates. All rate changes are retro-
active automatically.
Questions
Thank you for attending!Please remember to complete and return your evaluation form following this session.
Session Code: 3204