Invoice - Royalty

[Former Member]

Hi all,

Company A receives royalties from customers. So company A needs to invoice customers for the royalty amount. How can this be achieved? I assume this will work like a debit memo request, but Iu2019m not clear and I have following questions.

Does new sales order type required?

Any new condition type required?

What will be other conditions in the pricing procedure?

Has anyone set up such scenario?

Thank you.

[Former Member · Accepted solution]

You could use a debit memo request, although it's possibly not the best way to go. DMR's are usually used for price adjustments where a customer has been under-charged.

In this case I would set up a DIEN (service) material for the royalty with a suitable description and item category group LEIS (so no delivery is required). You will then be able to bill the order directly, with no need for a delivery.

I don't see a need for a new order type to handle this, unless you hit some other requirement which your regular order type can not deal with.

Your question gives no clues as to what pricing conditions would be required, so PR00 and MWST should be adequate.

Cheers

The Moose

[Former Member · Accepted solution]

Sorry I didnu2019t update in my previous post that there is a material created for this and the item cat. group is NLAG (Non-Stock material) I tried creating a standard order with this but, systems throws incomplete message. Loading date, material avil.date, transport planning date and goods issue dates are missing. Since the material has item cat. group NLAG and item cat. is TAX (Non stock item) I thought delivery will be skipped?

So I have created a new material with DIEN and item cat. group as LIES as you suggested, when I create a billing from standard order I didnu2019t get any error message but in the invoice creation screen I came across an error. On the invoice screen under processing status it says u201CIncorrectu201D, in the log it says The billing type could not be determined. What does it mean? Since it is already an existing standard order Iu2019m sure copy controls have already been configured.

By the way the main reason why I chose DMR is to avoid delivery. And new condition type idea came from the below thread.

Please suggest how to fix the above issue.

[Former Member]

Thanks

[Former Member]

Hello,

few tips for this implementation:

1- do not call royalties, but make reference to a general "commission" (important to remeber in case you have to maintain a description for the material or condition or document); royalty word should not be printed on any document

2- you may use Debit Memo Request to register this flow (no need to create a new document type if you already have a DMR doc type; if does not exist, better to create a DMR document type)

3- suggestion to create a new condition type (in order to better isolate this type of flow)

4- link the new condition type to a different account key (in order to better isolate also FI point of view this type of flow)

5- assign new condition type to adjustment pricing procedure is existing or current pricing procedure

6- create a service material (it's a dummy material) with category LIEF (no goods movement for this category)

7- in material master for this service material try to fill in as much as possible information (e.g.: lab/off, material pricing group, product hierarchy, material group); the impact of this step it will be visible in profitability segment at time of the posting, it will be easy to identify later in profitability this type of flow

8- remember to do not mention in the description of the material the word "royalty" (in some countries is not legal using this terminology)

Regards,

[Former Member]

Hi Viv,

Before I try in the system could you please say about the below points.

Point 3. Could you please say a suitable reference condition type where I can copy the new eg. PR00

Point6 are you sure about the category LIEF as I didnu2019t find this

Will post the feedback soon

Thank you

[Former Member]

Hello,

about point 6 [General item category group] I mistaped the code: it is LEIS (Service w/o delivery).

About point 3 the new condition type, you may try to create it as follow:

[Control Data 1]

Condition class A (disocount or surcharge)

Calculation type C (Quantity)

Plus/Minus you may leave empty so it will accept positive and negative values/percentage

[Changes which can be made]

Manual entries C (Manual entry has priority)

Flag Amount/percent

Flag Value

Flag item condition (if you wish to be able to enter a value for each item; if not flagged it means that the amount will have to be maintained in the header condition only)

Do not hesitate to come back.

Regards,