Contract Scenario 4: Installment Payment (Milestone Billing) 

You want to represent contracts in which the payments to be made by the licensor are managed using a fixed fee. Billing of this fee is to take place for specific milestones. These are specific points in time that you define.

 

Representation in the license acquisition contract

You agree a fixed royalties payment for the author rights to the original language with the author. The royalties amount of $6000 is to be divided into three quarterly payments.

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When creating an item in the license acquisition contract, you can use item category IEM3 (IPM acquisition rights and royalties item with installments) from the SAP Implementation Customizing settings, or a similar item category that you define to represent the milestones.

·         Use the Rights tab page to restrict the content of the right within this item.

·         Record the royalties amount of $6000 that was agreed with the licensor with condition type 17FO (fixed license fee OR) from the SAP Implementation Customizing settings or a similar condition type that you define, on the Conditions tab page for this item.

The system uses the Customizing settings you have made to generate three billing request items for this item, which are used to perform settlement of the installments

Check the milestone dates proposed by the system on the Billing Plan tab page and change these if necessary.

Result

When the items are released and the contract is saved, the transaction is transferred to billing.