HI,
Retroactive Billing (SD-SLS-OA)
Use
New pricing agreements that you make with your customers may affect billing documents that have already been processed and settled. If a new pricing agreement is effective before the pricing date of the billing documents, you can perform retroactive billing to call up a list of these documents and reevaluate them with the new price. You can then create additional billing documents to settle any differences.
Integration
Retroactive billing is a special billing function often used in scheduling agreement processing.
Features
With the retroactive billing function, you can:
Call up a list of documents affected by price changes
Trigger the system to create the necessary retroactive billing documents directly from the list
Create credit or debit memos directly
Review any errors in a log
Simulate the retroactive billing process for any document
How does Retroactive Billing work?
The following graphic shows a simple example of retroactive billing:
In this example, the system calculates the difference between the net value of the invoice ($100) and today's net value based on the new price ($90). It then creates a credit memo with the net value of $10 to be credited to the customer.
Primary and Secondary Documents
The system calculates retroactive billing values for primary documents. It can use secondary documents to help calculate this value.
Invoices are always primary documents.
Other billing documents, such as debit or credit memos, can be primary or secondary documents. This depends on the order reason entered in the billing document.
For more information on how the order reason is used to control primary and secondary documents, see Order Reason in Retroactive Billing. This section will also provide a more detailed example of how retroactive billing works.
Primary Documents
Primary documents are:
Invoices
Credit memos that refer to returns
Credit and debit memos in which you have entered the relevant order reason
You can also assign an order reason to a memo request which then passes it along to the referenced credit or debit memo.
Secondary Documents
Secondary documents are the following billing documents in which you have entered the relevant order reason:
Credit and debit memo requests
Credit and debit memos
The system displays such a document only when it has been created with reference to the invoice and when the currencies in both documents match.
If you create a credit or debit memo (or memo request) without reference to an invoice, you will not be able to see in the retroactive billing list if the invoice has already been billed retroactively.
When you create a credit or debit memo request which is relevant for retroactive billing as a secondary document, the system will use it to calculate retroactive billing for the referenced document.
The system does not take into account whether or not a request has been rejected, partially billed, or billed using another pricing procedure. Also, it does not take into account any changes in the payer, sold-to party, sales organization, billing date, or material.
Order Reason in Retroactive Billing
Use
Credit and debit memos and memo requests are not included in the retroactive billing list. However, you may find it necessary in some cases to designate these documents as relevant for retroactive billing. You do this by entering the relevant order reason in the billing document.
Examples of order reasons include price changes, poor quality or ruined material. Depending on how the order reason you entered is customized, this billing document becomes relevant for retroactive billing.
Prerequisites
To make the credit and debit memos and memo requests relevant for retroactive billing, you need to assign a type to the order reason as follows:
for primary documents, assign type 2
for secondary documents, assign type 1
for documents which are not relevant for retroactive billing, do not assign a type
You assign types to order reasons in Customizing for Sales and Distribution (choose Sales ® Sales Documents ® Sales Document Header ® Define order reasons).
Features
When you enter an order reason which has been assigned a type in Customizing, the billing document becomes relevant for retroactive billing as follows:
Primary Document (order reason is assigned type 2)
If you enter an order reason with type 2 in a credit or debit memo or memo request, the system will use this billing document in retroactive billing as a primary document.
The system will then calculate the retroactive billing amount for this billing document just as for a standard invoice.
"Poor quality" would be a typical order reason for this type, for example.
Example 1:
In this example, the customer was sent an invoice with a net value of $100. Because 3 pieces were of poor quality, the customer received a credit of $30.
This credit memo (no. 601) would normally not be included in the retroactive billing list. However, the order reason poor quality has been assigned type 2 in Customizing, which means that the credit memo is a primary document relevant for retroactive billing. Therefore, the system calculates the difference between the net value ($30) and today's net value ($27) and creates a debit memo of $3 on the basis of the credit memo no. 601.
Invoices are always primary documents. Therefore the system also calculates the difference between the net value of the invoice ($100) and the today's net value ($90) and creates credit memo no. 602 ($10) on the basis of the invoice.
The credit and debit memos created by the system both have the order reason price too high, which has been assigned type 1 in Customizing. Should there be a subsequent retroactive billing run, these billing documents will be relevant for retroactive billing as secondary documents.
Secondary Document (order reason is assigned type 1)
If you enter an order reason with type 1 in a credit or debit memo or memo request, the system will use this billing document in retroactive billing as a secondary document.
"Price difference: price was too high" would be a typical order reason for this type, for example.
Example 2:
This example continues the process of the previous example.
The credit and debit memos created by the system both have the order reason price too high, which has been assigned type 1 in Customizing. Therefore, they in turn, become relevant for retroactive billing, but as secondary documents.
As in the first example, the system calculates the difference between the net value of the invoice ($100) and today's net value ($85). It then takes this difference ($15) and subtracts the net value of the secondary document, credit memo 602 ($10) and creates credit memo no. 604 ($5) on the basis of the invoice.
The system carries out the same procedure for credit memo no. 601. It calculates the difference between the net value of the credit memo ($30) and today's net value ($25.50). It then takes this difference ($4.50) and subtracts the net value of the secondary document, debit memo no. 603 ($3) and creates credit memo no. 605 ($1.50) on the basis of credit memo no. 601.
Documents with Other Order Reasons
Although the system does not take documents with other order reasons into account, it displays them in the list in another color.
Regards,
Murthy
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