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Author's profile photo Oleh Korolyk

SAP Billing and Revenue Innovation Management: commodity and non-commodity services on one (or separate) invoice is no longer a dream

Traditionally, non-commodity billing and invoicing required complex and manual processes, which are time-consuming and prone to errors. Being in the Utilities world for many years, I have seen many different approaches for invoicing non-commodity. Some of the solutions used in the field include:

  1. The SAP Sales & Distribution component: while SAP SD allows users to streamline non-commodity invoicing and billing to a certain extent, it has its limitations. For one, an SD customer is required. Integration with SAP IS-U Invoicing is not straightforward and overall flexibility is limited, for instance when it comes to Item Postings (main/sub transactions). Moreover, each use case requires implementation time.
  2. Using a ‘dummy’ utility contract to simulate a recurring billing plan: this solution involves creating a billing plan for non-commodity services and linking it to a dummy contract. However, this requires duplicating master data (MRU, rate determination, utility installation data, division, etc.), setting up utility contract management and creating specific billing rates. Additionally, the budget billing plan has its limitations regarding flexible billing plans.
  3. Using Z-rates that read Z-tables and insert the non-commodity lines to the billing document when executing the billing process.
  4. Using external applications or posting manually in FI: some utilities use external applications to manage non-commodity billing and invoicing and interface the postings in FI. Others opt for an even less desirable solution and manually post these invoices in FI. Clearly, this approach is time-consuming, extremely sensitive to errors and allows for limited visibility due to the multiple interfaces.

Have you seen other ways that your client implemented for adding non-commodity on the Utilities invoice or to invoice non-commodity services?  Don’t hesitate to share these in the comments.

Optimising process design, sales, billing and reporting with SAP BRIM

Why is BRIM (Billing and Revenue Innovation Management) so interesting for the Utilities world?

It consists of the following main components:

  • Subscription order management to manage product catalogues, services and physical goods
  • Convergent charging to rate consumption items with prices
  • Convergent invoicing to bill incoming items from external interfaces, programs, convergent charging, billing plans, etc.
  • Integration with Contract Accounts Receivable & Payable: BRIM seamlessly integrates with FICA and is thus easy to implement for IS-U (and other industries)

 

SAP BRIM is a flexible and modular solution with interfaces that allow users to activate required components per billable item. It features enhanced customisation tools for managing incoming billable items, such as grouping and selection variants, clarification worklists, duplicate checks, processing rules, field derivation, source item management, defining the billing form per invoicing type, and flexible integration with the IS-U billing and invoicing process. Additionally, it has a faster time to market and a lower cost to serve compared to previous solutions. BRIM can be implemented with a use case approach. SAP BRIM (more specific Convergent Invoicing) is included in the S4 Utilities Core offering, and

Since SAP S/4HANA 2020 FPS0, SAP offers two ways of integration between ISU and BRIM:

Option 1: Transfer Billable Items to your ISU Billing engine

 

Focussing on the integration between BRIM and ISU, this is the most classic way to set up your system.  You keep the normal way of working for your commodity part that you have been setting up and fine tuning over the last years.  On top of that, you create specific billable items that you can target to be invoiced in ISU.

Technically the system will still create an invoicing document in CI, which is integrated in your Utilities invoice.  The difference is that you cannot create the invoicing document via CI invoicing. You can specify which Utilities process triggers this invoicing process, and what are the selection conditions under Contract Accounts Receivable & Payable -> Convergent Invoicing -> Invoicing -> Invoicing Process -> Define Invoicing Process.

To do the exact integration, you can assign the desired billable item class to the right Target process under Contract Accounts Receivable & Payable -> Convergent Invoicing -> Integration -> External Invoicing -> Assign Billable Item Classes to Target Processes

 

Option 2: Create Billable items in CI using Utilities Billing and deactivate Utilities Invoicing

 

This way, you leverage maximally the power of CI, and you disable the invoice printing and invoice posting for the ISU print document.  Once the billable item is created, CI takes over and performs billing and invoicing.

* Note that this will not support the adjustment reversal process in Utilities.
** You can transfer synchronously or asynchronously to CI.

 

SAP BRIM in action

Over the next  weeks, I will show the flexibility of BRIM by detailing the particularities of four  scenarios taken directly from the Belgian energy market.

Case 1: Maintenance contract

The customer has a boiler maintenance contract. The service fee needs to be added to their monthly energy invoice. Perform a rating using convergent charging and invoice in CI.

Case 2: Grid fee

The utility wants to receive grid fee billable items from Central Market System and invoice them together with the standard IS-U invoice.

Case 3: Home battery rental

An energy provider recently launched a home battery rental service. They want to create a billing plan and invoice it together with the partial IS-U invoices.

Case 4: Create billable items in CI for an IS-U billing document

In this case, we don’t want to use the SAP Utilities invoicing.  We create a simple Utilities billing document with consumption data, and create Billable Items in CI.

 

 

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      Author's profile photo Rahul Paldiwal
      Rahul Paldiwal

      Nice blog Oleh ! I found the case 4 interesting, have you seen any real life example where customers are switching off the utlities invoicing and using CI invoice functionality ? Oleh Korolyk 

      Author's profile photo Oleh Korolyk
      Oleh Korolyk
      Blog Post Author

      Thanks Rahul!

       

      Great that you appreciate it! The ISU to CI invoice functionality I did not see yet at a real company, only in demo systems. As all suppliers I know use the adjustment reversal process, this would be a considerable change of way of working for these companies.

      Kind regards,

      Oleh

      Author's profile photo David Stopp
      David Stopp

      Hello Oleh Korolyk ,

      thanks for pointing out the new integration option with S/4 HANA Utilities. I assume that your option 2 is referring to SAP note 2935426 .
      Based on this the BIT creation still required the print document in S/4 Utilities, but does not create any FI-CA postings. The actual invoice and related FI-CA postings will then be created by the CI invoicing process.

      Regards,

      David

      Author's profile photo Oleh Korolyk
      Oleh Korolyk
      Blog Post Author

      Hello David,

      thanks you for your comment! I updated the document to make this more clear.

      Kind regards,

      Oleh

      Author's profile photo Joao Sousa
      Joao Sousa

      First of all, great blog post, on a very relevant and pressing topic.

      One question that i have seen raised is "Why not use Convergent Charging for charging/rating of electricity, as smart meters become more and more like smartphones?" (while of course keeping ISU billing for more legacy sources).

      It seems like CC was built from the ground up for these scenarios, and it's a very powerful and scalable rating tool.  Do you have any view on that topic?

      Author's profile photo Oleh Korolyk
      Oleh Korolyk
      Blog Post Author

      Hi Joao,

      I found your comment very interesting.

      For pure rating of the commodity component, I would agree with you that this could be interesting.  But that would mean that you would also skip multiple functionalities that are out of the box in Utilities, and heavily used:

      • meter reading management and complex validations of consumptions (based on intra/extrapolations, load profiles,...)
      • conversions for transformers or gas procedures
      • settlement of consumptions
      • unbilled revenue reports
      • budget billing extrapolations
      • others...

      Idealy, the utilities billing schema should be replaced by convergent charging (as an option), but untill SAP provides a standard solution for this, I think there is too much functionality to develop.

       

      Kr,

      Oleh

       

      Author's profile photo Sachin Srivastava
      Sachin Srivastava

      Thanks Oleh, for sharing this document. I was searching for centralized information like this to begin with.