- SAP Managed Tags:
Introduction
Today, many companies have gone global and have numerous interactions with their subsidiaries worldwide. Consequently, resource-related intercompany billing has become a crucial process for cross-company billing of intercompany services and expenses. In this blog, we discuss the primary motivations and prominent features of the new intercompany billing solution
Why new Resource-Related Intercompany Billing in S/4HANA Cloud, Public Edition?
The earlier solution for intercompany billing has been in place for quite some time in S4HANA Cloud, Public Edition. However, it came with certain limitations, such as the restriction that we could have only one intercompany sales order for a combination of ordering and delivering company codes. This resulted in double billing of cost posting. Furthermore, numerous enhancement requests indicated a need to revisit the old solution. The goal of the new solution is to:
Overcome the limitations to ease the customers' experience with the intercompany billing process.
Enrich the solution with new capabilities.
Address critical customer pain points, for example, providing end-to-end traceability of the intercompany billing process.
Delivery
Firstly, the resource-related intercompany billing process flow remains unchanged. This also signifies that the scope items required for the solution's activation remain constant. Reiterating the scope items for reference
Intercompany Billing for Cross-Company Cost Accounting Postings (4AN)
Intercompany Processes - Project-Based Services (16T)
Project Control – Intercompany (4AU)
Intercompany Billing for Service Documents (53Y)
These scope items are non-standard scope items and need to be activated explicitly. As of release S/4HANA Public Cloud 2408, the new intercompany billing solution is not localized for Brazil. For future updates, please refer to latest release notes.
Activation of New Solution
You might wonder, if the scope items remain the same then how can the new solution be activated. Currently the new solution is released as a non activate feature. The end user can activate the new solution by selecting the feature ID FTGL_500717 (new Resource-Related Intercompany Billing) via the 'Activate features' SSCUI. The 'Activate Features' SSCUI can be accessed via 'Manage Your Solution' application with Application Area: Application Platform and Infrastructure, Sub Area: General Settings and Item name: Basic Settings
Upon activation, the migration to new process is immediate. The existing 'Generate Intercompany Billing Request' application itself considers all that is currently unbilled and generates the new type of document called Billing Document Request, instead of the Debit Memo Request, thereby redirecting the existing process flow. Consequently, the Billing Document will be generated from the Billing Document Request, followed by IDOC, Accounts Payable, and Accounts Receivable creation, as before. A brief overview of the process flow is reflected in the image below.
Fig 1. Overview of process flow
Furthermore, after activation, if any of the already generated Debit Memo Requests are rejected and cost postings are reopened, then these records are considered for next billing cycle and billed via new solution.
Overview
The Intercompany process starts with cost allocations. Please refer to blog Intercompany Cost Allocations in S/4HANA Cloud. Cost allocations must be billed for taxes, revenues, receivables and payables. This is handled via intercompany billing process
The Intercompany billing process starts with the specification of intercompany sales order defining the ordering and delivery company codes. Starting 2408, multiple Intercompany sales orders can be specified as input. This is followed by selection of Intercompany billing relevant postings for the specified combination of company codes.
Selection of Relevant Intercompany Cost Postings
Today, the process considers the intercompany cost postings to several controlling objects like WBS elements ( any kind of projects) , Service orders, Repair orders, Cost centers ( only settlement and direct postings) . This forms the initial filtering level of intercompany cost postings.
This is further facilitated by enabling the same fields as filters in 'Generate Intercompany Billing Request' application. This allows the user to define relevant filters during invoice generation. Please note, that although sales order is not a controlling object capturing costs in public cloud, it is made available as filter parameter to filter based on associated project and its intercompany costs to be considered for billing.
Fig 2. Generate Intercompany Billing Request
Additionally, the application provides simplified date selection options to specify the date range for intercompany cost posting selection to be considered for billing. The parameters and date selection specified on the application become the second level filter.
Inherently, only the intercompany cost postings with a G/L account that are part of the YBPS_BILLI cost element group are selected for billing. This becomes the third and final level filter.
Flexible Material determination
Although the aggregation of the intercompany postings is based on fixed parameters stated below,
Activity type
Personnel number
Service organization
Transaction currency
Unit of measure
Work item ID
Month
Profit Center of sender
Profit Center of receiver
with new solution, it is possible to define one's own material determination and its criteria. This configuration is provisioned via' Manage Your Solution' application through the business role 'Business Expert - Configuration'. The user can setup the material determination based on a combination of Activity type, G/L Account and Source material.
A key aspect to note is that the intercompany billing process in S/4HANA Public cloud is greatly simplified with introduction of margin with cost allocations and cost plus billing. This simplification continues with new solution. Hence the material determination does not provide an option other than 'Transfer cost only' during configuration setup.
Fig 3. SSCUI Manage Billing Profile
Note: There is no pre-delivered configuration and hence it would be recommended pre-requisite step before the start of intercompany billing process.
Generation of Invoice
The aggregated items are then transformed into Billing Document Request and its items, instead of the Debit Memo Request as outcome of the application 'Generate Intercompany Billing Request'. This can then be used for Billing Document creation.
Billing document triggers the IDOC creation following by Accounts Receivable and Payable creation. The status of IDOC can be viewed under the output items, as depicted in the image below
Fig 4 IDOC Status
The billing document reflects the document trace under the process flow section connecting the Accounts receivable to billing document to intercompany sales order. A similar process flow is also reflected in the intercompany sales order.
Fig 5 Document trace via Process Flow section
The billing document provisions an invoice preview. Similar to customer project billing invoice, this preview shows not just the aggregated billing details but the item level details corresponding to the postings that participated in the generation of this invoice. Furthermore via process extensibility, a custom field enabled in timesheet application can be seen in invoice preview under itemized list of postings. For more details, refer to Extensibility: Timesheet to Invoice | SAP Help Portal
What stays the same as before?
The new intercompany billing process definitely enriches the old solution with numerous new capabilities as listed above. However, it maintains the some key aspects of the old solution. Here is a summary of what has not changed from previous solution
- Scope items
- Business Roles involved
- Intercompany sales order setup (except the removal of restriction )
- ICO cost rate setup
- Cost allocations (with optionally margin)
- IDOC creation
- Support billing of settlements to cost center
- Only cost plus billing
Withdrawal of "One Intercompany sales order" restriction
In former solution, you were required to maintain only one intercompany sales order between a combination of ordering and delivering company code. Otherwise, it would lead to double billing of already billed postings. For more details, refer to sap note 1341136 - RRICB .
With new solution this restriction has been lifted. Now, the end user can choose to create multiple intercompany sales orders to trigger the billing for same combination of ordering and delivering company codes. Since the process stores a trace to predecessor documents at each stage till the cost postings, it is possible to ensure there is no double billing. The same is partly reflected as document trace shown above.
Enablement of extensibility from sales order header till billing document
Starting S/4HANA Public Cloud 2402 release, a custom field that is introduced in sales order header can be extended till the Intercompany Billing document. The custom field, along with standard fields, also controls the aggregation logic of the Billing document items.
Trackability via core data views
The I_ProjectBillingElement view, in conjunction with the I_ProjBillgElmObjectLink, defines which combination of sender and receiver company codes the billing data is being prepared for. Intercompany postings relevant to billing for this combination are priced and stored in the table associated with the I_ProjectBillingElementItem view. The corresponding journal entry for each entry in the I_ProjectBillingElementItem view can be accessed through the I_PrjBlgElmEntrJrnlEntrLink.
When intercompany billing is initiated, an entry is created in the table corresponding to the I_ProjectBillingRequest view, with reference to the intercompany sales order. The items for the billing request are derived from the I_ProjectBillingElementItem view, based on the selection duration and applied filters, and are stored in the table associated with the I_ProjectBillingRequestItem view. Once the Billing Document Request (BDR) is created, its reference is also stored in the I_ProjectBillingRequest view. In summary, the Billing Request set of views stores a snapshot of the data used for a particular billing cycle and bi-directional traceability from Journal entry to Billing Document is possible.
The CDS views from new solution are available starting with 2402 release. For more details, refer to help documentation and the interplay of the CDS views is depicted in the diagram below
Note: As the same set of views are valid for Project Billing and New Intercompany Billing, the billing data can be differentiated based on Billing profile category, which is ICBL in case of Intercompany Billing
Deprecation of predecessor solution
With the enablement of new solution enlisted with features mentioned above, we plan to deprecate the earlier resource-related Intercompany billing solution. Post deprecation, the new customers can only use the new solution. Please follow the roadmap for timelines.
Further references
- Documentation on SAP Help Portal
- Planned roadmap on SAP Road Map Explorer
12 Comments
