Billing Type
The billing type characterizes the composition of billing units and classifies billing documents.
You can use the billing type optionally instead of the determination of the document type and the source document type of the billing document. The billing type is also available in events for billing (for example, in the events 8120, 8125, and 8130).
You create new billing types in Customizing for Contract Accounts Receivable and Payable under 
Convergent Invoicing
Billing
Billing Processes
Define Billing Types
.
Example
You want to distinguish between billing documents that belong to periodic billing and billing documents that arise due to the contract being ended (final billing documents). You make this distinction using the billing type.
For final billing documents, you want to add additional informational items that are not relevant for posting. At event 8125, you use the billing type to control the creation of the additional billing document items.