How to handle sales in contract for Telcom company

[Former Member]

Hi all ,

i posted an earlier question about how beatifically it is to use the service contract regarding sales operation in a telecom company and didn't get a definitive answer , so i decided to break the problem  into sums  in order to solve it 

the below is a briefing of information that i think  matters :

- the implementation i am doing is for a telecom company that offers internet services 

-the sales activity must have a starting and end date , while the payment is done before selling the service . - so  the contract in SD is the best way to start

-alongside the service being sold the company leases / Rent a router to its customer ( which is treated as a fixed asset ) so for every sale action there is the service alongside the router (physical  material)

-the router is managed in the system as non valuated material to keep track of the stock - it is fixed asset

- the contract will have two items one for the service and the other for the router (of the service for leasing the router )

-there must be a good issue  to the routers also

-billing document will be generated to what exactly ?

the problem is that i cant figure out the To-Be process for such case ,  and that is because i am new to contract functionality in SAP SD

can anyone help me in that manner

[Former Member]

ok.

there is no billing plan involved as most of the payments are in advance ! and i think treating the router as a consignment stock  is not a good practice because they are fixed assets and not a trading material .

the question here is i want to solve this problem  in one "To-Be" process not break it to more complicated issues 

[jignesh_mehta3]

Hello,

You can also look at option of mentioning Routers as Text Item in Contract (which are relevant for Delivery). You will have to create Release Sales Order with reference to Contract & subsequrntly create Delivery for this Text Items. These will not be relevant for Billing.

But I still feel that in future your client will like to keep a track of the Routers lying with various Customer & Consignment process is a perfect suit here.

Thanks,

Jignesh Mehta

[Former Member]

Hi again ,

when you suggest a consignment setup , can you please draw the full picture here !

we start with service contract and then the consignment order with be created based on the sales contract .

can you explain with more details

thank you

[jignesh_mehta3]

Hello Alexy,

Basically there are three things involved here:

1. Billing for the Internet Service, which as you know can be very well handled with form & to dates in Contract.

2. Billing (Rental) for Router that is given to the Customer for the fixed period, which will be returned back to your conpany after some x number of months.

3. Creating Delivery for Router as it is your asset & given to Customer for execution of Internet server.

Please understand, I am given the below suggestion just off hand & you will be in the best position to discuss with the client & come to a final conslusion.

For Billing for Internet Server & Rental for Router, you can use Service Contract with Periodic Billing (with Billing Plan), which will enable you to create monthly Invoice on the Customer for Internet Server & Router Rentals.

For creating Delivery for the Router, I suggest you to use Consignement Process, which will ensure  that you can track the stock (Routers) lying at Customer's premises & there is no accounting entry for Consignment Fill-up tranaction. The benefit of this is you can anytime use T-Code MB58 & get details of Router given to each Customers. When these Routers are returned, you can create Consignment Pick-up cycle will bring them back on your Stock records.

Thanks,

Jignesh Mehta

[former_member184065]

Dear,

The contract will have two items one for the service and the other for the router (of the service for leasing the router )

First of all , You have to know one thing in Contracts . Please have a look into below points .

1. Service will be provided to Customers by Company  as Continuously Process . This is not End Less  .

2. Product will be provided as once to Customers So this is not a Continuously Process .When Customer got Material ( Router ) then we have to Provide Some Validity Date ,within the date only he can use it . When Validity will be expired the he wants pay money on that Material with Validity .

VA41 ( Non Valuated Material )-> VA01->VL01N->VF01

VA41->VF01 oe else VA41->VA01->VF01  ( No Delivery )

Note : I need more info on this .

If you have any doubts please let me know .

Thanks,

Naren

[Former Member]

Hi

what more info do you actually need ?

the scenario : a company is providing internet service for its customers , alongside this service they rent a router to the client, he will have to give it back after the service expired. the payment is done before selling the service and there should be a delivery phase where the router gets activated.

now ,

-is it right for me to include the non valuated material (router) in the service contract ?  or should i create a service material for leasing the router ? if that is the case , then how the goods issue is going to be done!

-can we create a delivery for a sold service in SAP ?

-what is the relation between a contract and a sales order !  thus the billing should be done based on the contract or sales order or delivery ?

-except for a validity date , i cant see any difference between a contract and a sales order and how is a service contract is different !

i did read all the help.sap info on contracts and didn't get any "help" from that because its rarely explain service handling 

[former_member184065]

Dear,

-is it right for me to include the non valuated material (router) in the service contract ?  or should i create a service material for leasing the router ? if that is the case , then how the goods issue is going to be done!

For your First Query , I dont know , it is good to use No Valuate Material or not . Best way is consultant your MM Consultant .

Yes , you can very well create .In this case , you have go by Delivery Level to do PGI as you can see in my first post .

-can we create a delivery for a sold service in SAP ?

No , Why because ,here we are not doing any goods to Customer so ,create Service Contract and Billing .

-what is the relation between a contract and a sales order !  thus the billing should be done based on the contract or sales order or delivery ?

Copying Control relation ,Based on Delivery , we can create Billing .

-except for a validity date , i cant see any difference between a contract and a sales order and how is a service contract is different !

Simply as Validity Date .

If you have any doubts please let me know.

Thanks,

Naren