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Milestone Billing based on Percentage & Quantity

Former Member
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Can you please guide how to map the following scenario

I have Business Scenario in Milestone Billing.

The Milestone terms are assigned in CJ20N and the same is copies to

sales order. The Milestone terms defined in the Project are

50% Advance Payment

40% Agaisnt Supply (Treating this also as advance)

10% At the time of Installation.(Treat this also as advance)

50% Revenue Realisation

50% Revenue Realisation

Order quantity is 100RMT

Order Value 10000

The definition of the each milestone is as follows -

Advance Payment: This Milestone raised at the time of booking of sales

order for Advance Payment. Unless advance is receivd orders are not

execute in the business. It means 50% of 10000 = 5000

40% Agaisnt Supply : This Milestone is raised based on supply of

material to the customer. It means as of Milestone Billing Date if

material dispatched is 20MT then the Milestone Billing Booked in the

system is 10000*40% *20/100= 800 (treat this also as advance payment

and client called it as Running Bill) and the same way book the billing

in the system upto completion of 100RMT.

At the time of Installation: This Milestone is raised when the

Installation process is starts. It mean example, if finish the

Installation of 10RMT, then the Milestone Billing is raised as per

below formula - 1000010%10/100 =100 (Treat this also as Advance

Payment and call it as Running Bill).

Actual revenue is booked in the system, once receive the completion

certificate from the client.

As of now in the system, only accept the value base or percentage base

milestones in the system. This type of above scenario how to map in

the system, can please propose a solution.

Kindly help me



Accepted Solutions (0)

Answers (1)

Answers (1)

Former Member
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hi Goutham,

you need to configure your item categories for revenue recognition based on milestones. Thus, what happens then is you are separating revenues and billing. You can continue billing your customer for whatever milestones you have 50/40/10%, and the revenue can be recognized on the completion of the final milestone.

For customizing revenue recognition type on item category level go to

Sales and Distribution -> Basic Functions -> Account assignment / Costing ->

Revenue Recognition, Or via transaction: OVEP.

Set Revenue recoginition as Category ‘A’ timebased revenue recognition

and Accrual period start as B -proposal based on billing plan start date

in a milestone billing plan, the billing date of the first milestone is then taken as accrual start date.

You can work on the latest version of the Revenue Recognition Best Practices Guide. The link can be found in note 779365.