Difference between Milestone Billing and Resource Related Billing

[Former Member]

Hi All,

Appreciate if there is someone who could explain to me what is the difference between milestone billing and resource related billing as they both are suitable to be used for projects and services.

Thank you in advance!

Regards,

Yvonne

[Former Member · Accepted solution]

Hi,

Milestone Billing comes into picture when you are not having the exact details of Item Data(line Items). This most often observed with Master Contracts & WBS (Work Breakdown Structure) Projects.

E.g. if there is a tender for a Airport Development Project.. this project will required N number of Electrical appliances, Mechanical Instruments, Infrastructural buildings...etc in this case whenever vendor responsible for respective services will complete his job in % & accordingly submit his/her bills based on milestone billing as per the agreement between respective authorities.

Resource related billing:

It's often comes into picture in service industries.

e.g.

If Your service provider is from automobile Industries with manufacturing of 4wheeler Cars with brand XYZ.

Now whatever cars coming for Servicing or maintenance activities for his own brand(XYZ) service provider has full idea of service charges need to billed to the customer. But imagine if some other car with Brand ABC (with complete different mechanism) with some urgency comes for maintenance and the owner of the car agreed to pay whatever charges incurred to repair his/her car. Then in this case b'coz our service provider is not having any pre idea of charges he will need to bill, after the inspection and actual maintenance work done on this new car(ABC brand)and he will charge this new customer based on the resources required , which could be number of hours mechanics worked , oils, Spare parts..etc. This type of billing is known as resource related billing where no Exact charges or cost is known at the time of order confirmation.

Hope this will help you to understand the concept.

Thank You,

RB

[Former Member]

Milestone billing means distributing the total amount to be billed over multiple billing

dates in the billing plan.

As each milestone is successfully reached, the customer is billed either a percentage of

the entire project cost or simply a pre-defined amount.

During sales order processing, the system determines from the item category whether a

billing plan is required and, if so, which type of plan

The type of billing plan that is determined at this point is set up in Customizing and

cannot be changed in the sales document.

Billing plans for periodic billing and milestone billing plans for project-related milestone

billing have different overview screens so that you can enter data relevant to your

processing.

IMG configuration requires :-

1. Maintain billing plan types for milestone billing in OVBO.

2. Define date description in SM30 - V_TVTB.

3. Maintain Date Category for Billing Plan Type IN OVBJ.

4. Allocate date category in SM30 - V_TFPLA_TY.

5. Maintain date proposal for Billing Plan Type in OVBM.

6. Assign Billing Plan Type to Sales Documents Type in OVBP.

7. Assign Billing Plan Type to Item Categories in OVBR.

8. Define rules for determining the date in OVBS.

SAP Resource-related Billings

u2022 Resource items - individual materials, internal company

services and costs - are passed on to the customer.

u2022 A line item is created in the billing request for each of

the resource items.

u2022 Information on quantity, cost and unit of measure is also

copied to the billing request from the individual items.

u2022 If a billing request has already been created for an object,

then the system checks which items have already been

requested when creating a new billing request.

u2022 In the billing request, the system only copies items that

have not yet been requested.

u2022 If only a partial quantity was billed, only the remaining

quantity is copied into the billing request

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[Former Member]

Periodic billing is used when you want to bill the customer at different points of time based on the periodicity or progress of the work.

Milestone billing can be used for this type of billing purposes when you want to have billing control from the project.

Resource billing is based on the resource consumption for the particular activities. Dynamic Item Processor (DIP) profile is used for the resource related billing.

Regards

Chandrasekhar

[Former Member]

Hi, but both milestone billing and resource related billing can be used to bill projects as well and in what scenario can we differentiate the usage of both of these type of billing.

Thank you!

[Former Member]

Please check the following link;

http://help.sap.com/saphelp_erp60/helpdata/en/cd/ace7359c0fb74598ef52569a1780aa/frameset.html

Regards

Chandrasekhar

[Former Member]

Hi, I can't access the link. Do you have another link?

Thank you!