Self-Billing using SAP Business ByDesign
Many consultancy companies use subcontractors while delivering their projects. Some companies have extensive use of subcontractors, and the process of following up and pay the subcontractors invoices can be time consuming and in fact no value-added work. To handle this, it is possible to build a self-billing process using Evaluated Receipt Settlements (ERS) in SAP Business ByDesign.
In this blog I will describe:
- The Process
- Scoping requirements
- Preparation of Master Data (Supplier, Service Agent (Subcontractors), Service and Sourcing Contract)
- Creating Projects and Procurement of Service Agents
- Service Agent’s Time Recording and Project Manager’s Approval
- Automatic Invoicing based on ERS (Evaluated Receipt Settlement)
The Process is shown in below diagram. The activities with “persons” are done by Users in the system and the activities with “gears” are done automatically in the system.
The process is in short:
- A project is to be delivered using external resources (Service Agent). The Service (Activity) to be delivered is Management Consulting. The delivery is planned on a Project Task.
- A project Purchase Request is made for procuring the Service delivered by an identified Service Agent employed by the Subcontractor (Supplier)
- A Sourcing Contract with the Subcontractor is made. A Purchase Order is made referenced to this and the Project Purchase request and the Sourcing Contract.
- The Service Agent record Time Sheets in SAP Business ByDesign.
- The Time Sheets are approved by the Project Manager. The approval is a confirmation of received hours.
- Based on the Contract and Approved Time Sheets an ERS invoice is made monthly and sent to the supplier. The invoice can be paid.
In scoping Automatic Settlements must be chosen under Supplier Invoicing. Based on that, the Automatic Settlements Questions related to ERS (Evaluated Receipt Settlement) must be scoped in.
In addition you need to have Sourcing Contracts in your Scope.
The Subcontractors are made as Suppliers in SAP Business ByDesign, the employees of the Subcontractors are made as Service Agents. These Service Agents needs to get a Self-Service User in the system to be able to record time sheets.
There is a need for Services in the system, the Service is the activity that the Service Agent is Delivering. The Service Agent and related delivered Services are assigned to Project Tasks.
To simplify the procurement process, make a Sourcing Contract with the Subcontractor. The Contract must contain:
- Services to be delivered – same Services as used in the Project
- Price of the Services
- Tick: Time Goods and Service Receipt Excepted
- Untick: Invoice Expected
- Tick: Evaluated receipt Settlement
Creating Project and Procurement of Service Agents
Now, when the scoping and master data are in place, it is time to create the project.
Under Team and Staffing plan your Team and how many hours they shall work on the project. If the project Team Member is external Service Agents it will be shown under Company/Supplier beside the Team Members name.
Then Plan the Work for your Service Agents at the different Project Tasks. Adding Service is mandatory when you plan work. It is also the Service that are Procured from Subcontractors when it is delivered by a Service Agent.
It is the planned Activities on Project Tasks that enables the task in time recording.
When the planning is done, release the Project Task. Then go to Products and make the Project Purchase Request for Released Project Tasks. Based on the Project Planning and the Sourcing Contract with the Supplier the Purchase Request is automatically populated with Service Agent, Supplier and Hours. Finish the Purchase Request and Save the Project.
Based on configuration, the Purchase Request can automatically be transferred to a Purchase Order. The Purchase Order has reference to the Service Agent, the Contract with the Supplier and the Project Task. The Purchase Order is sent to the Supplier.
Now the Service Agent can Edit Time Sheets for the Project
Service Agent’s Time Recording and Project Manager’s Approval
When the Service Agent logs into SAP Business ByDesign the Planned Project Task will show up in the Work List in the Time Sheets. Here there are references to:
- Customer, to whom the project is delivered
- Project Task that the Service Agent is entitled to work on
- Activity which is the same as the Service that is delivered and also procured form the Supplier of the Service Agent
- Purchase Order that is used for Procuring the Services from the Service Agent.
Now the Service Agent can record time and release it.
The Project Manager will get the Service Agents Time Sheets for Approval. The Approval is an acceptance of the delivery of the hours, and based on the approval Evaluated Receipt Settlements can be done.
Automatic Invoicing based on ERS (Evaluated Receipt Settlement)
The ERS Invoicing can be set up as an job (ERS Run) that can be scheduled. When setting up the Run you can chose following selection criteria: Supplier, Company, Purchase Orders and Products
Based on the ERS Run the
- Invoice is created based on approved Time Sheets and Purchase Order
- Invoice is Posted Automatically
- Invoice copy is sent to the Supplier
The ERS Invoice will be available under “Accounts Payable” for settling.
Using Evaluated Receipt Settlements for Suppliers delivering Service Agents to projects will simplify the work regarding handling of Supplier Invoices. The Project Mangers Approval of time sheets is enough to support the process of “Self Billing”.
Using the the possibilities ready available in SAP Business ByDesign will help you to Simplify Tomorrows workload.