Billing with Differential Billing Documents

Billing with differential billing documents enables you to bill outbound delivery items or sales order items. It is suitable for business processes for which only an approximate item value can be determined, and for which determination of the final value can take weeks or months.

By using a provisional billing document, the approximate value can be claimed quite quickly. The final billing document then claims a difference or grants it on the basis of the final item value. If required, differential billing documents are created in the meantime if particular milestones in the process have been reached or significant changes have occurred with respect to the price assumed until now.

A typical application area is sales of commodities. As a rule, commodity pricing is used here. The provisional billing document is created, for example, on the basis of a fixed price or extremely short-term averaging of price quotations. The final billing document is created after an averaging period of several weeks or months, or after agreement on the quality of the delivered goods. Milestones for quality analysis or serious changes to price quotations can trigger differential billing documents.

For more information, see Commodity Pricing.

There are the following billing documents:

The provisional billing document is the first billing document for a delivery item or sales order item.
The differential billing document is an intermediate stage between the provisional billing document and final billing document.
The final billing document concludes the billing process.

The provisional billing document and the differential billing documents are not final; they do not set the billing status to C = Completely processed, and therefore allow further billing. In the standard delivery, the same billing type is therefore used for provisional billing documents and differential billing documents.

The selected billing type, more precisely, the billing category of the selected billing type, determines the billing document to be created for a delivery item or sales order item. The billing document is one of the following:

A normal billing document
A non-final billing document, that is, a provisional billing document or differential billing document
A final billing document

For more information, see Billing Type.

In the standard delivery, billing type F2 creates a normal billing document. The billing category is blank.
Billing type F2D1 creates a provisional or differential billing document. It has billing category N = provisional or differential billing document.
Billing type F2D2 creates a final billing document. It has billing category O = final billing document.

In the standard delivery, delivery-based billing of sales order items of item category TAN are supported in copy control. For more information, see Copy Control.

Caution Caution

Billing with differential billing documents is only supported for items with simple delivery-related or sales-order-related billing relevancies (A, B, C, G, H, M, and D for cross-company code stock transfers). For more information, see Billing Relevance.
For a delivery item or a sales order item, there can only be one chain of billing documents so that a unique preceding billing item can always be determined. The full delivery quantity must therefore be billed, for example, for a delivery-related billing document.
You cannot use differential billing together with down payment processing on the basis of document conditions. For more information, see Down Payment Processing (Basis: Document Condition).

End of the caution.

Note Note

Billing with differential billing documents can be used analogously for intercompany business processing. For more information, see Intercompany Business Processing.
Billing with differential billing documents is essentially possible for returns and associated credit memos. However, it cannot be used in connection with enhanced returns management. For more information, see Returns and Advanced Returns Management for Customer Returns.

End of the note.

Features

Provisional Billing Document

The provisional billing document is by definition the first billing document for a delivery item or sales order item. It creates a single billing item in accordance with current pricing. It sets the billing status of the delivery item or sales order item to B = Partially processed.

Differential Billing Document

The differential billing document is by definition an intermediate stage between the provisional and final billing documents. It creates an item pair that represents the difference for each delivery item or sales order item. First, the system creates a normal billing item in accordance with current pricing. Then the immediate preceding billing document item for the delivery item or sales order item is determined and copied with a negative value to the billing document. The differential billing document leaves the billing status of the delivery item or sales order item with B = Partially processed. You can define as many differential billing documents as you need.

In the standard delivery, there is no distinction between provisional and differential billing documents. In each case, the system tries to determine the preceding billing document item. If none is found, the billing document for this delivery item or sales order item is a provisional billing document, otherwise it is a differential billing document. If multiple delivery items or sales order items are billed in one billing document, this billing document can be a combination of single items and differential item pairs.

Final Billing Document

The final billing document creates an item pair, like the differential billing document. It sets the billing status of the delivery item or sales order item to C= Completely processed.

You can also omit the provisional billing document and create the final billing document directly, it then creates only one billing item for the relevant delivery item or sales order item, because no preceding billing item exists. If multiple delivery items or sales order items are billed in one final billing document, it can contain items for which there is no provisional billing document; for these items, only single billing items are created. In this way, a final billing document can be a combination of single items and differential item pairs.

Note Note

If you want to make a stronger distinction between provisional and differential billing documents, you must split billing type F2D1 into two billing document types, one for a provisional billing document and one for a differential billing document. In copy control, you can set copy conditions that forbid or demand the existence of a preceding billing document. For more information, see Copy Control.
Analogously, you can use a copy condition to ensure that no final billing document is created unless a preceding billing document was created earlier.
The provisional billing document or differential billing document gives you the option to post revenues as provisions for the time being and not affecting net income. In the final billing document, these provisions are resolved and are posted as revenues to the corresponding profit and loss accounts. To do this, you can make appropriate settings for account determination for each billing type. For more information, see Account Determination.
For billing with differential billing documents, copy control offers a copy routine for transferring data of the second item in the item pair. You can use this, among other things, to force an invoice split that distributes positive and negative items to different billing documents. For more information, see Invoice Split.
You can also use billing with differential billing documents as invoice correction for existing normal billing documents. To do this, you must define an invoice correction billing document type analogously to the final billing document, but with a copy condition that allows to bill again a completely billed delivery item or sales order item. The two-line concept (MM-IV-LIV) allows for a more detailed representation and posting of the differences than the usual process for the invoice correction request. For more information, see Invoice Correction Request.

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Activities

As a rule, differential billing is a manual process, because it concerns high values that are consciously to be billed by a user. To do this, select the required billing document type provisional/differential or final billing document and the deliveries or sales orders to be billed.

Note Note

Normal entries for the billing due list are also created. By doing this, you can also automatically create a billing document with the billing document type proposed in the sales document type. For more information, see Creating Billing Documents via the Billing Due List.
If you use Global Trade Management, you can use the Invoice Forecasting Worklist (IFW) to propose suitable dates and billing document types for billing deliveries and sales orders.

End of the note.

Example

For an example, see Example: Differential Billing.