From the Business perspective, Milestone Billing refers to payments scheduled according to completion of certain and a specified stage.
Milestone Billing is typically used for billing projects such as engineering & constructions. These projects generally include a multiple no of milestones that signifies the completion of a certain task. In SAP R/3 System, the milestones are defined in a network along with the planned and actual dates of completion of the task. The milestones are also assigned to the billing dates in the billing plan. The milestone remains blocked till it is confirmed by the Project Systems as completed and can be billed only after that.
The figure given below explains the Milestone Billing.
During Sales order processing, the system determines from the Item category whether a billing plan is required or not.
Now lets start with the steps involved in configuring the Milestone Billing
1. Define Billing Plan Type
Create your own billing plan type here. Enter the Name & Description of the billing plan, the Start date. The Online Order under control data & FCode-OvervScrn under general control data also needs to be filled. The Start date is the rule for origin of start date of the billing plan.
The Online Order filed is where we mark the indicator for automatic date creation in the billing plan. We mark this field if we want the dates in a billing plan of this type to be determined automatically and entered in the billing plan and we leave the field blank if we want to enter the dates in a billing plan manually
In the FCode-OvervScrn, we put the code for Milestone Billing. Basically the code entered here determines which fields are offered for processing in the overview screen of the billing plan. For Milestone Billing it is 0003.
2. Define Date Descriptions
Date Descriptions are noting but the textual descriptions for the respective billing dates in the billing plan. The descriptions are only used for differentiating between the billing dates. Date Descriptions have no controlling function.
3. Maintain Date Category for Billing Plan Type
Date category defines data for each billing date that appears in the billing plan. While we define the Date category, we maintain the Billing Rule, Date Description, Billing Block, Billing Type & whether the date is fixed or not.
The Billing Rule determines the value to be billed, for example whether on a percentage basis or a value basis.
The Billing Block controls the milestone in a way that it cannot be billed unless and until the milestone has not been confirmed.
The Billing Type controls the billing document type that is to be used for milestone billing.
4. Allocate date category
In this step, assign the date category to the billing plan type.
5. Maintain Date Proposals For Billing Plan Types
The Date Proposal the sequence of dates which can be used at the time of order processing. However, please note that in case of milestone billing the dates are redetermined on the basis of the current rules.
6. Assign Billing Plan Types To Sales Document Types
In this IMG activity, assign the Billing Plan to the relevant Sales Document
7. Assign Billing Plan Types To Item Categories
In this IMG activity, assign the Billing Plan to the Item category.
During sales order processing, the system determines from the item category whether a billing plan is required and, if so, which type of plan.
Now, Under Project Systems, the Milestone usage needs to be defined
8. Define Milestone Usage
In the Project Builder Screen (T Code CJ20n), Project System creates the Milestone. The milestone usage and the invoice percentage are also entered there.
While creating the sales order, the WBS element is entered in the Account Assignment Screen and the system determines the milestones which can be copied to the order. Once the Milestone is confirmed by the Project System, The billing block is removed and billing can be done accordingly.
Also note that while maintaining the copy control for Sales to billing, the Pricing Type indicator must be ‘D’ and ‘G’ or ‘K’ for item categories that are relevant to a billing plan.