ceu+bar billing+and+fi+workshop v1

Billing and Accounts Receivable Processes

OTCAR102 Billing and AR Processes

Agenda Billing and AR General Overview Billing Process Overview Create and maintain Billing Document BREAK Billing Blocks Accounts Receivable Processes


Key Changes to Billing and Accounts Receivable ProcessesBilling is moving from a manual to an automated process where validation occurs in the order entry and pricing processes McCain is moving from a slower paper/mail based invoicing process to a faster and automated e-invoicing medium (EDI, e-mail, or fax)

Sales and Distribution and Financial/Accounts Receivable postings occur at the same timeIntercompany Billing is automated between operating companies on SAP SAP issues Miscellaneous FI Invoices rather than raising these Invoices manually in a separate system


Billing and Accounts Receivable Processes

Billing represents the final processing stage for a business transaction in Sales and Distribution.

McCains Billing and AR processes includes the following sub-processes:

Billing and AR

Customer Billing Billing Corrections

AR Cash Application

Collection Management

Claim/Deduction and Dispute Management Credit Management

Miscellaneous FI Invoices and Credits

Month End Closing for AR


Billing

In SAP, the term Billing is used broadly to describe the generation of the following: Invoices Credit Notes Debit Notes Cancellation Documents

Pricing is determined at Order Confirmation

Invoice is calculated using the pricing from the order and quantity from delivery

Customer InvoiceFI Module

Order

Delivery

Billing Document/ Invoice

AR & GL PostingsCO Module

Quantity is determined during delivery confirmation

CO-PA Postings


Customer Master Record

Customer Master Record: Serves as a central data repository for all information regarding McCains business partners Is organized according to business partner functions: Sold-to- party (SP): Customer who places the order Ship-to- party (SH): Customer that receives the order Bill-to-party (BH): Customer who receives the Invoice Payer (PH): Customer who pays for the goods Partner Functions Banking Data Address Customer Master Sold-to-party: xxxx Material: xxxx Address Partner Functions Material Type: Industry: Banking Data Description: Unit of Measure:OTCAR102 Billing and AR Processes

Price ConditionsA Condition Type represents aspects of daily pricing activities. A Condition Type can: Directly affect Order/Invoice value Indirectly affect Order/Invoice via accrual Be purely statistical (for info only)

Surcharges Discounts Prices Pricing MasterCondition # 1 Condition # 2 Condition # 3 Condition # 4

Discounts Customer Material Price Group Material Pricing Group Customer/Material Pricing Group Customer/Material Price Group/Material Pricing Group Other

Prices Price List Material Price Customer-specific Other




Types of Invoice Delivery-related InvoiceYou need to create a delivery-related Invoice if you want to make sure that the goods are sent out to the customer before the Invoice is created.

OrderItem 10 Qty20 Item 20 Qty20 Item 30 Qty20

Delivery

Invoice


Types of Invoice Order-related Invoice

You need to create an order-related Billing when you need to generate a billing document without an associated inventory movement (i.e. Debit/Credit Memos) Also, when you bill a customer for a service, you would probably refer to the sales order, since a service is usually based on an order, not a delivery.


Delivery

Billing


Create Billing Documents with Reference

When you create a Credit or Debit Memo request, you can create with reference to an invoice. When creating with reference to an invoice, you can either: Refer to all items Select only certain items Select a certain quantity

Invoice

Credit Memo


Types of Invoice Proforma Invoice Order Proforma Invoice is for Cash In Advance customers Delivery Proforma Invoice is for Export shipments where ownership of the goods has not yet transferred to the customer

It looks just like a customer Invoice with some differences as follows: A Proforma does not post to FI No statistical data is created on the basis of Proforma Invoices


Delivery

Billing Doc/ Invoice

Proforma Invoice (F5)OTCAR102 Billing and AR Processes

Proforma Invoice (F8)

Release to AccountingNormally, Billing documents are automatically released to Accounting. Occasionally, a Billing Document is created but its FI posting fails. For example, if an Invoice is created while the Accounting period is closed, no posting to Accounting will occur and no Accounting document is created.

Billing Document

Accounting Document


Integration with Accounting

The Billing document invokes a pricing procedure. Integration with Accounting consists of forwarding billing data to: Financial Accounting (FI - Accounts Receivable) Controlling (CO)

Billing Data

FI - AR

CO


Integration with Accounting (contd)

Integration with Finance (FI) consists of forwarding billing data such as Invoices, Credit, and Debit Memos to FI. Integration with Controlling (CO) consists of assigning costs and revenues to the appropriate sub-ledgers. Costs and revenue can be posted to the following accounts: Customer Accounts Receivable General Ledger (for example, a cash clearing account) Revenue Sales Deductions

Billing

FI

AR


Billing Output

The Billing Output Types defined for McCain are: ZMC1 - print ZMC2 - email ZMC3 - fax ZEDI - EDI ZBDM image (Agilysys)

EDI

Fax

Paper

Email




Perform Billing Procedures

At McCain, the Billing process is used to execute the following procedures: Create Billing Document Change Billing Document Display Billing Document Cancel Billing Document Maintain Billing Document List Billing Documents Generate Billing Output


Create a Billing Document

The following options are available for Billing document creation at McCain: Automatic processing of the Billing Due List in the background, which will process over 95% of all Billing documents Manual processing of the Billing Due List, which will be used on an exception basis


Create a Billing Document (contd)You need to use transaction VF01 to create an individual Billing document. For this: Generate a customer Invoice Recognize revenue Update Controlling-Profitability Analysis (COPA) postings Post to the AR subledger


Instructor DemonstrationCreate a Billing Document (VF01)Scenario: You need to create an individual Invoice for a Standard Sales Order. This would typically be carried out by an automated batch job but there may be exceptions where you need to create a Billing document on an individual basis.


Change a Billing DocumentUse transaction VF02 to make limited changes to an SD Billing document. Most of the fields on a billing document in VF02 are not available for changes. For this, enter the Invoice number and make corrections.


Instructor DemonstrationChange a Billing Document (VF02)Scenario: You want to add additional text to a previously created Billing Document to demonstrate the limited change functionality on this type of document.


Cancel a Billing DocumentPerform this procedure under certain conditions: Billing document has not been sent to customer. Required changes cannot be performed in change transaction screens (VF02). The customer has rejected the billing document due to an error and has requested that a new billing document be sent.


Instructor DemonstrationCancel a Billing Document (VF11)Scenario: You need to cancel the Billing document you just created.


Execute a Billing Due List

Once all orders are successfully Post Goods Issued (PGI), they are ready to be billed to customers. Billing-relevant documents are queued in a Billing Due List and await billing execution. Billing Due List is executed, customer Invoices are generated, and postings are passed to AR and FI.


Instructor DemonstrationExecute Billing Due List (VF04)Scenario: You need to execute the Billing Due List for multiple Invoices.


Generate Intercompany BillingIntercompany Material-based Billing process: The delivering company and the ordering company belong to the same organization. Intercompany Billing document for the delivering company is posted as a supplier Invoice for the ordering company.


Intercompany Billing Interim Solution


Intercompany Billing SAP to SAP


Instructor DemonstrationGenerate Intercompany Billing (VF01)Scenario: You need to create an Intercompany Billing document.


Instructor DemonstrationLog of Collective Run (V.21)Scenario: You need to review the performance of a collective run.


Release Billing Documents for AccountingUse this procedure if an error occurs during the Billing process: Transaction VFX3 creates a list that contains Billing documents that failed to create an Accounting document. From the list, release documents to Accounting once errors have been corrected.

Select the document to be released.OTCAR102 Billing and AR Processes

Instructor DemonstrationRelease Billing Documents for Accounting (VFX3)Scenario: You need to display a list of blocked Billing documents and release your blocked Billing document to Accounting.


Display a Billing DocumentUse transaction VF03 to display a Billing document to view the following information: Material Net Value Cost Billed Quantity PayerDisplays the Billing document.


Instructor DemonstrationDisplay Billing Document (VF03)Scenario: You wish to display a Billing document to view information about a McCain material.


List Billing Documents ReportUse transaction ZVF05 when you need to display a list of Billing documents: Generates an ad hoc report showing all Billing documents

List of Billing documents by Payer


Instructor DemonstrationList Billing Documents Report (ZVF05)Scenario: You need to display a list of Billing documents and then want to drill down to view an individual Billing document.


Generate Customer Invoice OutputUse this procedure when you need to send output to a McCain customer. The following modes of communication or output types are configured for McCain: Print (Output Type ZMC1) Email (Output Type ZMC2) Fax (Output Type ZMC3) EDI (Output Type ZEDI) Interfaced to Datamagine System (Output Type ZBD)

Output print preview


Instructor DemonstrationCreate Output Condition Records: Billing (VV31)Scenario: You need to assign a Billing Output Condition.


Instructor DemonstrationChange Output Condition Records: Billing (VV32)Scenario: You need to change a Billing Output Condition.


Instructor DemonstrationGenerate Customer Invoice Output (VF31)Scenario: You need to generate print output for a Billing document. Use the print preview option instead of printing the document.




Billing BlocksBilling blocks prevent an order-related or delivery-related sales document from being billed. Billing blocks occur: At the Order Type level At the transaction level At the Customer Master level If errors occur in account assignment If the Billing document is incomplete If errors occur in pricing


Billing Blocks (contd)

In the standard version of the SAP system, Billing blocks include: Calculation Missing Complete Confirmation Missing Prices Incomplete Price Change Approval Check Terms of Payment Check Terms of Delivery Check Credit Memo Check Debit Memo




Accounts Receivable

The AR application component records and administers accounting data for all customers: Accounting data for customers is posted in the SAP AR sub-module.

In AR, when the Invoice or Credit Memo journal is posted: The system creates a document Updates the customer account Automatically updates the GL reconciliation account


Display Accounts Receivable Document

Use this procedure to display the following Accounts Receivable documents: Customer Accounts Receivable document Miscellaneous customer Invoices Miscellaneous customer Credit Notes Clearing documents


Instructor DemonstrationDisplay a Document (FB03)Scenario: You need to view an Accounting document to validate the GL account postings.


Parked Documents

In the Miscellaneous FI Invoice and Credits process, the parking function is used to save incomplete Invoices and Credit Notes for subsequent processing. When parked documents are created in the system, they are stored as information only with no impact on any other accounting aspects. Customers and GL accounts are not updated until parked documents are released for posting.


Create FI-AR Invoice

McCain creates Miscellaneous Invoices in the following cases: Sale of scrap Sale of starch Sale of waste oil Sale of services rendered Sale of any product or service that is not handled via SD module


Instructor DemonstrationCreate and park FI-AR Invoice (FV70)Scenario: You need to create an Invoice for a sale of non-inventory items.


Create FI-AR Credit Memo

McCain generates Miscellaneous Credit Notes for the following scenarios: Credit Note to cancel a previous Miscellaneous Invoice generated for sale of non-inventory product. Example: Erroneously generated duplicate Miscellaneous Invoice

Credit the customer when they are overcharged on a previous Miscellaneous Invoice Credit the customer for valid cash discount deductions and/or valid penalties levied against McCain by a customer


Instructor DemonstrationCreate FI-AR Credit Memo (FV75)Scenario: You need to create a Credit Memo for a customer penalty that was charged to McCain.


Post Parked Documents

When a document is parked, it is in a holding pattern and is not posted into the accounting system yet. This document can be updated and posted into the accounting system. This allows online evaluation of the data in the documents for reporting purposes.


Instructor DemonstrationDisplay Parked Documents (FBV3)Scenario: You need to display a parked Miscellaneous FI Credit Note.


Instructor DemonstrationChange Parked Documents (FBV2)Scenario: You need to change a parked Miscellaneous FI Credit Note.


Instructor DemonstrationPost Parked Documents (FBV0)Scenario: You need to edit a parked document and post it into the accounting system.


Customer Line Item Report

The report provides the following options for selecting the customer line items: Open items Cleared items All items Parked items


Customer Line Item Report (contd)

In McCain, the FBL5N transaction is the central report used by all members of the Billing and Accounts Receivable teams. A report can be used to generate: A list of open items and/or cleared items by customer/group of customers Credit/Debit report A list of all potato Invoices Open Chargeback report Customer open item by country Dispute cases assigned to open items


Instructor DemonstrationCustomer Line Item Report (FBL5N)Scenario: You need to execute the Customer Line Item display report and validate the various functions provided by the transaction. You need to look at all items for customers in your Company Code.


Print Correspondence

This procedure involves three steps:1. FB03/FB12 - Request the correspondence 2. F.61 - Trigger the correspondence 3. SP02 - Print the correspondence


Instructor DemonstrationDisplay Accounts Receivable Document (FB03)Scenario: Display a miscellaneous customer credit note.


Instructor DemonstrationRequest, Trigger and Print Correspondence for Miscellaneous Invoice, Credit Note and Re-Bill (FB12)Scenario: Print or email a miscellaneous FI credit note to a customer.


Instructor DemonstrationPrint Correspondence (F.61)Scenario: Print a Miscellaneous FI Invoice to send a hard copy to the customer.


Questions?


New Terms in Billing and Accounts Receivable ProcessesTermOrganizational Unit

DescriptionRepresents a specific area within your organizational structure

Business PartnersCustomer Master Record Material Master Record Customer-Material Info Record

A general term that refers to anyone McCain does business withHolds key information that defines the business relationship between a company and its customer Holds key information to manage a material within an organization, including the one that is required to produce, store, valuate, and sell it Defined for a Customer-Material combination and used for storing Customer-specific Material data

Pricing Condition Master DataOutput Master Data

Prices, surcharges, discounts, freight, and taxes (conditions) for a business transaction are brought in automatically by the system using the condition techniqueOutput is anything leaving the SAP system in Sales, its information sent to a customer via various media (fax, EDI, email) and at McCain, includes Order Acknowledgements and Invoices


New Terms in Billing and Accounts Receivable Processes (contd)TermBilling Billing Document Invoice Customer Intercompany Billing Billing Due List

DescriptionThe activity of issuing an Invoice after goods have been issued and/or shipped to the customer A generic term for Invoices, Credit Memos, Debit Memos, Proforma Invoices, and billing cancellation documents A billing document used to bill a customer for a goods delivered or a service provided A business partner with whom a business relationship exists, involving the sale of goods or services The process in which business transactions take place between two companies belonging to one organization The Billing Due List is a collection of billable transactions: orders and deliveries that is run daily. Executing the Billing Due List is also done at month-end to process open sales documents that are ready for billing


New Terms in Billing and Accounts Receivable Processes (contd)TermPost Goods Issue (PGI)

Description(Ship Confirm) Post Goods Issue is performed for Delivery-relevant Order Items to make these items available for billing. When a user Post Goods Issue, they are indicating in the system that the goods have left the building

Credit Memo Request A Sales Order Type used to request a reduction in the customer Accounts Receivable account for product quantity discrepancies or damage. It is Quantitynot delivery relevant but it may involve an inventory adjustment as a subsequent process. The Request is not yet a Credit Memo.

Credit Memo Request A Sales Order Type used to request a reduction in the customer Accounts Receivable account for value-related discrepancies (i.e. pricing, freight Valueerrors). It is not delivery relevant and will not involve an inventory movement. The Request is not yet a Credit Memo.

Debit Memo Request Quantity

A Sales Order Type used to request an increase in the customer Accounts Receivable account for product quantity discrepancies (typically overages). It is not delivery relevant but it will involve an inventory adjustment as a subsequent process. The Request is not yet a Debit Memo.


New Terms in Billing and Accounts Receivable Processes (contd)TermDebit Memo Request Value Credit Memo Debit Memo

DescriptionA Sales Order Type used to request an increase in the customer Accounts Receivable account for value-related discrepancies (i.e. pricing, freight errors). It is not delivery relevant and will not involve an inventory movement. The Request is not yet a Debit Memo. A customer Billing document that decreases the customers Accounts Receivable balance. A customer Billing document that increases the customers AR balance.


Roles and ResponsibilitiesTermBilling Analyst

DescriptionGenerates Billing documents and follows-up on Billing errors to ensure correction through the correct source

Billing Manager

Oversees the Billing process. Tracks the frequency of billing errors. Authorized to cancel Billing documents and delete billing blocks (approve Debit and Credit Memo Requests)Analyzes new customers Credit worthiness and proposes Credit limits; performs Credit reviews of existing customers and recommends changes in maintaining Credit accounts Oversees the Credit Management process. Approves and implements changes to Customer Credit Accounts and approves Customer Credit Limits

Credit Analyst

Credit Manager


Roles and Responsibilities (contd)TermAccounts Receivable Analyst Accounts Receivable Manager

DescriptionGenerates Miscellaneous FI Invoices and Credits, runs A/R reports for month-end, and identifies those customers with negative AR performance Oversees the Accounts Receivable process. They have the authority to approve Miscellaneous FI Invoices and Credits. Responsible for ensuring that customers pay within their terms

Cash ApplicatorCash Application Manager

Posts incoming payments and clears open itemsOversees the Cash Application process. They are authorized to reset and reverse payments


Perform Billing Process Flow


Billing Corrections Process Flow


ceu+bar billing+and+fi+workshop v1

Documents

customer master

forwarding

accounts receivable

billing output

intercompany

miscellaneous

sales order

billing due