sis – simplified interline settlement impact on billing rules ra44 - breakout session rawg

SIS – Simplified Interline SettlementImpact on Billing Rules

RA44 - Breakout Session

RAWG

15 Sept 2010SIS – Impact on Interline Billing Rules 2

Agenda Highlights

Structured Billing - Facilitators Source Codes

Memos (Rejection, Billing and Credit Memos)

Reason Codes

Change Categories & Change Codes (Miscellaneous Billings)

Specific Changes Miscellaneous Billing Process

Correspondence

VAT

Changes to the RAM

Summary


Highlights Removal of redundant rules & processes (e.g ARC/BSP missorts)

Reduction in the number & type of documents needed to support the billing (more structured electronic data is provided on the invoice)

More structured and rigorous billing process – opportunities for diversion from the rules are limited (e.g not possible to jump rejection/correspondence stages)

Single audit trail (e.g only one rejection for one billed transaction, all reasons for rejection incorporated into one rejection memo)

Clarity on date and proof of submission to SIS – removal of all rules associated with non receipt of documents/ correspondence

No hard copy (paper) support is provided to any billings


Agenda Highlights



Reason Codes



Correspondence

VAT

Changes to the RAM

Summary


Source Codes


Source Codes Today – not mandatory in IATA, mandatory in ACH

SIS – mandatory for all

New Source Codes: Example: 23 EMD Billings Example: 25 Excess Baggage Example: 94 Billing Memos – Frequent Flyer Coupons (optional)

Refer to RAM, Ch. A9 Part 2, Attachment G


Memo’s


Memo’sTwo new recognised document types: Billing and Credit Memos

When to use a Billing Memo:Adjustment billings, Billing based on authority etc. – when the original document has already been billed (adjustments) or the transaction cannot be included in a standard prime billing because detailed

explanation is needed with the billing (e.g originally billed the wrong carrier), or the billing is based on a special agreement or communication (or lack of), e.g.billing

based on authority, alliance settlement

When to use a Credit Memo: Mostly based on bilateral agreements (e.g. commission payments outside ISC), in

some (rare) cases for invoice level value corrections

Note: Credit Memos will always have to appear on a separate (credit) invoice, they cannot be mixed with debit (billing) transactions in the same invoice


Memo’sFixed format rejection memo with extended data – minimising the need for attaching supporting documents:

When to use a Rejection Memo: When a billing received from a carrier is believed incorrect – either the entire billing

or part of it

Key changes to RM issuance process Only one rejection memo for each transaction billed (e.g. no separate memos for

fare and tax value differences) RM to show the total value billed and accepted (not just the value under dispute in a

particular rejection stage)


Reason Codes


Reason Codes To facilitate the processing & accounting of incoming invoices, and To assist with the validation of the information that need to be provided to

support the billing/rejection reason

Billings on certain document types must carry a reason code putting the textual information explaining the reason for raising the document into a structured format – 2 characters code


Reason Codes Relationship between Source Codes and Reason Codes

Source codes are used to identify the document type billed and the billing/rejection stage

Reason codes explain within a specific document type the reason for the billing/rejection/credit

Reason Codes and Billing Memos, Rejection Memos and Credit Memos As Billing, Credit and Rejection Memos are

single document types, and they can be issued for various reasons (previously explained only in a text

format on the document), with various supporting document requirements

they will all have to be issued with an approved reason code in SIS


Charge Categories & Charge Codes


Charge Categories & Charge Codes

(Miscellaneous Billings)

Definition: Charge Category – high level grouping of service types Charge Code – lower level grouping of service types within specific Charge

Categories

Purpose: To facilitate the processing & accounting of incoming invoices, and To assist with the validation of the information that need to be provided to support

the billing reason


Agenda Highlights



Reason Codes



Correspondence

VAT

Changes to the RAM

Summary


Miscellaneous Billing Process


Miscellaneous Billing Process Significant enhancement of Chapter A13 to bring it in line with other RAM

Chapters on structure and detailed content

Examples: Billing timescales (paragraph 2.1.5) Rejection timescales (paragraph 4.3) The specific information that need to be provided on different types of invoices

(attachments) The billing process for different types of taxes (Attachment C Paragraph 2) Multiple form of settlements (Attachment C Paragraph 5)


Correspondence


Correspondence All correspondence via SIS Strictly following billing, rejection, correspondence stages according to

Chapter A10

Resulting in: No correspondence in between rejection stages unless bilaterally agreed (not

facilitated by SIS) No arguments about the date when correspondence was sent/received – no

backdating and no lost correspondence Once settlement is agreed and takes place on a correspondence, the dispute is

considered closed (no partial settlement while continuing the dispute)


VAT


VAT

Introduction of VAT billing capability on passenger invoices (separately from taxes, fees and charges shown under a 2 letter tax code on the ticket)

While the RAM will not give direction on whether airlines should move from their current method of billing for VAT, where applicable, to including it on the passenger invoice, airlines should be prepared to see it on their incoming invoices and be able to validate & account for it


Agenda Highlights



Reason Codes



Correspondence

VAT

Changes to the RAM

Summary


Changes to the RAM

All Chapters impacted to some extent.

Chapters with significant changes:

A2, A3, A5, A9, A10, A12, A13.

Will be discussed further in the main meeting (plenary session).


Agenda Highlights



Reason Codes



Correspondence

VAT

Changes to the RAM

Summary


Summary SIS is not just about removing the paper from the billing & settlement

process and otherwise carry on as before For the paperless billing to work

A fundamental change to the structure and the level of detail in the information supplied is required, and

Airlines’ internal process flows and working practices will need a major overhaul

Sooner you start treating SIS not only as IT but a business process reengineering project, Less painful the implementation is going to be, and More benefits your airline will get out of it at the end


Thank you.

Email:

[email protected]

SIS Website:

www. t .or .sia a g is

mailto:[email protected]

http://www.iata.org/s

sis – simplified interline settlement impact on billing rules ra44 - breakout session rawg

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