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Today we will talk about the Milestone billing used in SAP S/4 HANA. The blog will give you a crisp and clear understanding of the Milestone billing.
Milestone billing means distributing the total amount to be billed over multiple billing dates in the billing plan. This approach is particularly beneficial for industries such as engineering, construction & professional services where projects are linked to project completion phases.
Business example:
Engineering firm such as Windmill Manufacturing company uses milestone billing as follow,
At each milestone Billing date Invoice triggers to the Client.
Below are the Configuration steps for Milestone Billing in SAP S/4HANA:
Note: To Add or Remove Billing Plan Tab in Sales order - Header level Screen > Go to Transaction code VOV8 Select sales document type in Billing Tab > Billing Plan type maintain as Business requirements.
Advantages of Milestone billing to clients:
Milestone billing gives clients the option to change project focuses while reducing the financial risk by connecting payments to finished milestones. It helps businesses keep high quality, Standard and builds a trust in client. Linking payments to the project phase clears the result encourages trust and openness, Clients can monitor the progress and make sure payments match the billing value delivered. This approach also improves project management by setting clear targets and timelines, which helps stay on schedule and budget while matching cash flow Alignment with project advancement.
Upgrade in S/4HANA compared to ECC:
Conclusion: Milestone billing is a useful way to send invoices that brings several advantages to companies. These advantages include better cash flow control, improved project handling, and stronger relationships with clients. By linking payments to certain project milestones, companies can maintain financial steadiness, lower financial risk, and encourage quality work. Using milestone billing helps companies succeed and gain both profit and customer satisfaction.
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