Billing

Sales & Distribution

Company
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 Topics

1. Introduction

2. Billing Document Structure

3. Billing Document Types

4. Billing Methods

5. Integration with Accounting

6. Invoice List
 Introduction

 In Sales & Distribution, Billing represents the final

processing stage for any business transaction.
 Billing is linked with Order and delivery processing and
information is available at each stage.
 Billing transactions can be assigned a specific sales area
from where the bill would be generated towards the
customer.
 An interface to Accounting exists from Billing hence
company code needs to be associated with Billing
document.
 Billing Document Structure

 Billing Document is always created with reference to a

preceding document, either an Order, Delivery or
Credit/Debit memo request.
 Billing documents have following structure

Header
Header data has information valid for entire
document like Payment terms, Document
currency etc.

Items
Items contain data like Material no, billing qty
Net value of item, weight volume etc.

 Billing document is controlled by Billing Type.

 Billing Document Type

 Major functions in Billing are controlled by Billing type.

 Different billing types are provided in system for different
business transactions
Billing Name
Type
F1 Order Related Invoice
F2 Delivery Related
F5 Invoice
Proforma Invoice
G2 Credit Memo
L2 Debit Memo
S1 Cancellation Invoice
IV Intercompany Invoice

 Three basic types of Billing documents are explained

next
 Billing Document Type

 Invoice
Sales document used to bill customer for Goods/service
is an Invoice.
Invoice is created either with reference to sales order or
delivery as seen below:
Order Related Invoice Delivery Related Invoice
 Billing Document Type

 Credit Memo & Debit Memo

These are Billing documents created on basis of
customer complaints. Credit memo reduces receivables
while Debit memo adds on to it.
Following Figure explains Credit memo creation
 Billing Document Type

 Proforma Invoice
Invoice document created for exported goods to indicate
cost of goods to authorities is Proforma Invoice.
There is no difference between Invoice and Proforma
except that it does not pass on to accounting.

 F5 – Order related Proforma

 F8 – Delivery related Proforma

These are two billing types for

Proforma in standard system.
 Billing Methods

 Following methods are used in Billing


Individual Billing Document
A single Billing document is created for each sales document,
example one Invoice per delivery. In copy control routine can be
defined to have an individual billing document.
 Billing Methods
 Collective Billing
Collective Billing combines different documents (orders /
deliveries) into a single Invoice document provided certain data
specified is common across these source documents. The
Header data appearing in billing document must be same.
 Billing Methods
 Invoice Split
If Invoices are to be created separately according to some
predefined criteria even for items originating from same source
document invoice split can be used.
In copy control requirements can be defined with split criteria to
ensure sales orders or deliveries are not combined into a
collective billing document.

Example – Invoice split

based on material group
in figure →
 Integration with Accounting

 Integration of Billing Document in Sales & Distribution

with Accounting is one of the main integration points in
system.
 Here integration consists forwarding billing data to

Financial Accounting (FI – Accounts Receivable)

Controlling (CO) module
 On creation of billing document system can automatically
create documents for

General Ledger (G/L) in FI-AR

Profit Center

Profitability Analysis (CO-PA)

Cost Accounting.
 Integration with Accounting

 System can post entries from Billing documents to

relevant accounts via ‘Account determination’.
 Costs and revenue can be posted to following accounts

Customer Accounts receivables.

Revenue accounts

Sales deductions

Accrual accounts for rebates etc.

General Ledger accounts.
 Reference number and Assignment number can be
carried from Billing document to Financial document to
be used as reference when incoming payments are
posted from customer.
 Integration with Accounting

 Billing document can get blocked for accounting for two

reasons i.e if it is set in customizing to block for the
billing type or if errors occur in account assignment.
 System has provided with a tool to analyze errors in
account determination with which errors can be
corrected and billing document released to accounting.
 For certain Billing documents or certain scenarios it is
required that Billing documents be first checked by
relevant authorities prior to releasing it to accounting, in
such cases automatic block is setup in customizing.
 Integration with Accounting

 In integration with Controlling, costs and revenues from

billing document data can be transferred to following
sub-ledger accounts

Profit & Cost center

Extended General Ledger

Make-to-order Sales orders

Profitablity (CO-PA)

Projects
 Customization for activation of Controlling area and
integration needs to be setup for transfer to take place.
 Invoice List

 Invoice List is a functionality within billing provided by

system to create, at specified time intervals or on
specific dates, a list of billing documents, to be sent to a
Payer.
 Billing documents in Invoice list can be individual or
collective documents.
Invoic
e List

 Standard system includes two type of invoice lists


LR – For Invoice and Debit memo’s

LG- For Credit Memo’s