Billing invoice processing (Provisional and Differential invoice process)

[Former Member]

Hello,

We have IS-OIL installation and use very limited functionality. The two areas we use for the F&A pricing and the Invoice process. I would like to hear from other people familiar with this functionality, if the customers get both the provisional invoice and the differential invoice. We have gone live since Feb 2007 and have a lot of AR issues around this provisional/final billing process. Reason being, our customers want to see only one billing document. The output for provisional invoice was turned off (customer does not get a copy). And the output for the final invoice was modified to include the amount in the provisional Invoice. This is causing a lot of issues in AR. I would like to hear from others who have IS-OIL functionality and use the billing process, what your customers receive. Basically, I want to know that the best business practise is.

Thanks,

Padma

panantha@sunocoinc.com

[Former Member · Accepted solution]

Hello Padma,

In the oil industry agreements are often made with customers to create invoices based on the average price of a product over a certain period of time. If the product is delivered before the final date we can create a provisional invoice. When the averaging period has ended and the final price is known, the price difference is invoiced by creating a differential invoice.

Say an oil company is shipping the product and the mode of transport is water. The product reaches the place after a month. Its not necessary that the oil company has to wait till the product reaches the customer. Instead, a provisional invoice is created and the customer is billed, but still the final price is taken on the day the product reaches. Then on the final date a final invoice for the differnece amount is generated (Differential Invoice). If there are more than one provisional invoice then all the invoices are cumulated at condition type level and the difference betweem this sum and the final price is given in differential invoice. This is the concept and best pratice when using differential invoices.

But in your case, if the customer expects one bill and you are billing him on the final day, then why use differential invoice?

[Former Member]

Hello Sowmya,

Your question is good - the reason for creating the provisional invoice, is that we know what our revenues are through the month.

Can you tell me the billing type you use for provisional invoice and the differential invoice? we have 'F2' for provisional and 'ZD' for differential. I do not know much about IS-OIL solutions. I have checked with one member of the implementation team to find out if ZD was a copy of a standard SAP billing type for IS-OIL. I am told that this was provided by SAP. When I look through OSS notes, I see OID2 mentioned as differential invoice type. Can you please shed some light on what you know?

Thanks,

Padma

[Former Member]

Hi Sowmeya ,

Could Eaxplain the intrest Calculation in is oil ...as Per my u standing with is oil Inrest Calculation . Provisional invoice made And Payment Not yet received with inthe due date ...and we are cearting final invoice .. in the final invoice we are haveing the Price Diffenrtial price for the Goods & intrest For the Due For the provisional ..

so the final invoice Containes Two Part Diff in price & Intrest For the Provisional ...Pls Correct if am worng .

And For the Final Invoice is made We are Not received Payment from Custmer with in the due ddate .. We will Create the Settle ment invoice ...

Settlementinvoice which its Containes The Final Invoce Amount +intrest for the final invoice ..

Could u tell me this is the secnario we are using this Is oil Industry?? Am Just Entered into IS oil ..Could you Help me in this ..

Thanks and regards

Raja Gulf .

[Former Member]

Hello Sowmya,

We create Provisional Invoice to recognize revenue throughout the month. The customers do not want to receive two billing documents - Prov and Differential. However, our Finance people want to see revenue throughout the month.

We are thinking of scheduling a job to cancel all the provisional invoices that was generated after the price settles and then recreating the invoice (will be created as a final invoice).

What I would like to know is if there are other options available to suit our needs (recognize revenue throughout the month but send only one billing document to customer after price settles). I am hearing that in Error Processing in config for the differential invoice we could add some logic. Is this true? Any help will be much appreciated.

Thanks,

Padma

[Former Member]

HI Padma,

The standard way of running the business process esp. when it comes to Provisional, Differential invoice process (dependent F&A Pricing) is as follows:

1) For the finance to have sales forecast, the standard and ideal way is from the sales order. Finance can do a sales forecast from the sales orders, this will enable them to have a forecasted revenue which is going to come in future months.

2) Regarding Provisional & Differential Invoices, they are processed as mentioned by Ms Sowmya reply in this thread.

Now let us see how your requirement can be met,

This solution is given with assumption of creating invoice from VF04 (billing due list) and not VF01.We have done some changes to VF04 transaction (enhancement points are provided) to suit the oil industry requirements.

We have provided two radio buttons:

Provisional: when this billing due list is run with provisional selected, it will list only deliveries for which invoice is generated and formula status is provisional

Final: WHen this billing dues list is run with final selected, it will list only deliveries for which provisional invoice is generated and formula status is final.

In your case, you can give only final option where it will list only deliveries for which formula status is final.

• I wonder you dont generate the provisional invoice at all.

Regards,

KK

[Former Member]

Hello,

Do you use a (1) Z program to know the revenue from provisional invoices. or (2) just look in to the GL account balance.

If the fact is (1) , then you may think of generating only Proforma Invoice during the course of a month . then create the Final invoice straight once the final price is available.

Trust it helps.

[Former Member]

Hello All,

We are having an issue with out provisional invoices since our upgrade from 4.6C to ECC 6.0. The provisional invoices used to drop off our Billing due List and then show up at the end of the month for final pricing. Since we have gone to ECC 6.0 the provisional invoices do not drop off and the users run RVV05IVB to get them to drop off. Now it seems that once they get some to drop off, they now don't show up for Final Pricing invoice.

Has anyone else had problems with this?

Thanks

Mike