Lesson 1 of 6
Billing basics
9 min
Billing is where order to cash turns into money. The billing document is the invoice, credit memo or debit memo SAP sends to the customer, and saving it normally posts a journal entry: a receivable on the customer, revenue, and tax. Everything earlier in the chain, prices, quantities, partners, is tested again here, because billing copies it forward and the customer sees the result.
Two ways to bill
SAP decides how an item is billed from the billing relevance of the sales document item category. The two common cases are:
| Delivery-related billing | Order-related billing | |
|---|---|---|
| Source document | The outbound delivery (after goods issue) | The sales order item |
| Quantity billed | The delivered quantity | The order quantity (or a portion, for example by billing plan) |
| Typical use | Physical goods shipped from stock | Services, credit and debit memo requests, some make-to-order or project items |
| Contoso example | 50 CMC-ALT-100 shipped on delivery 80001234 | A field service visit to repair an alternator at a fleet depot |
Some business processes combine both. A sales order with alternators and an installation service can produce one invoice with a delivery-related item and an order-related item, if the header data matches. Whether they are combined is decided by split rules, covered in the next lesson.
Billing types
The billing type controls numbering, which documents it can be created from, whether it posts to accounting, how it is cancelled and which output it sends. SAP standard content includes these common types; projects often copy and rename them:
| Billing type (standard) | Purpose | Typical source |
|---|---|---|
| F2 Invoice | Standard customer invoice | Delivery or order |
| F5 / F8 Pro forma invoice | Document for customs or prepayment; does not post to accounting | Order (F5) or delivery (F8) |
| G2 Credit memo | Reduces what the customer owes | Credit memo request |
| L2 Debit memo | Increases what the customer owes | Debit memo request |
| RE Credit for returns | Credits the customer for returned goods | Returns order or returns delivery |
| S1 Invoice cancellation | Cancels an invoice | The invoice itself |
| LR Invoice list | Groups posted invoices for a payer | Posted billing documents |
Common standard billing types. Your project's names and numbers may differ.
What happens when you save
- Source selectedDelivery 80001234 or order item, by user or by billing run
- Data copiedCopy control brings partners, quantities and prices; pricing may be re-determined
- Billing document savedInvoice 90001877 for Great Lakes Fleet Services
- Statuses updatedBilling status on the delivery and order set to fully billed
- Journal entry postedReceivable, revenue, deductions and tax in company code 1710
- Output and creditInvoice output is determined; the customer's credit exposure moves from open delivery to open item
The billing date is normally copied from the source document, for example the goods issue date for delivery-related billing, and becomes the posting date of the journal entry unless configured otherwise. A billing run on the first of the month that bills last month's deliveries will post in the period of the billing date, which matters at period end.
Billing blocks
A document can be ready to bill and still be held back. A billing block on the sales order header or item, set manually or proposed by the order type, keeps it off the billing due list until someone removes it. Contoso uses a billing block on credit memo requests so that a supervisor approves the amount before a credit memo is created. Incomplete billing data, such as a missing payer or a missing required price, also stops billing. When an expected invoice does not appear, check for a block or an incompletion first, before suspecting the billing run.
- Billing relevance on the item category decides delivery-related or order-related billing.
- The billing type controls numbering, source documents, posting to accounting, cancellation and output.
- Saving a billing document updates statuses, posts a journal entry and triggers output.
- The billing date normally becomes the posting date of the journal entry.
Check your understanding · not graded
Lesson check
1. What is the source document for delivery-related billing?
2. Which standard billing type is a pro forma invoice that does not post to accounting?
3. What decides whether an item is billed with reference to the order or the delivery?
4. Which quantity does delivery-related billing use?