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Provisional and FInal Bill Account Determination

gautham_gopalan
Active Participant
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Dear Experts,

We are implementing SAP SD Module for  a Thermal Power plant.

However for Energy Billing they have a unique requirement

Provisional Billing  (1st to 25th of the month)

Final Billing (26th to 30th of the month)

The want the following Accounting entries to be generated by the system.

When raising Provisional Bill

1. Customer A/c Dr

        To Progress Billing Account Cr (Liability Account)

When raising Final Bill

2. Customer A/c Dr

    Progress Billing Account Dr  (Liability Account)

       To Revenue A/c  Cr

Both these needs to be generated from a single sales order. The Progress Billing Account balance will be Zero.

Please Advice

Regards

Gautham.

Accepted Solutions (0)

Answers (1)

Answers (1)

jpfriends079
Active Contributor
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Did you check Revenue Recognition?

I believe your this requirement can be achieved through that. As "revenue recognition" works on revenue accrual.

Refer following links:

- SAP Help on Revenue Recognition

- Wikipedia on Revenue Recognition

Thanks, JP

gautham_gopalan
Active Participant
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Dear Jyoti Prakash,

Thanks for the response.

We had explored the Revenue recognition process however we want to know how achieve the 2nd process.

2. Customer A/c Dr

    Progress Billing Account Dr  (Liability Account)

       To Revenue A/c  Cr

as

Progress Billing Account Dr  (Liability Account)

       To Revenue A/c  Cr

can be achieved from VF44

Regards

Gautham.

ivano_raimondi
Active Contributor
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Hello Gautham,

it is not clear if customer receives two billing documents or only one.

Could you please provide a practial numerical example, specifyng the accounts must be debited or credited at every step ?

Best regards,

Ivano.

jpfriends079
Active Contributor
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As per my understanding, with use of Automatic revenue recognition, There is no need of


Customer A/c Dr

    Progress Billing Account Dr  (Liability Account)

       To Revenue A/c  Cr

As I understand advance billing amount taken to balance sheet is represented liabilities. So, amount accrued based on revenue recognition.

You can refer following links for reference and further understanding for Revenue Recognition:

- SAP Note 1172799 - New version of Best Practices for revenue recognition

- SAP Help on Automatic Revenue Recognition


Thanks, JP

gautham_gopalan
Active Participant
0 Kudos

Hi Ivano,

This is taking into consideration the Accounting impact as per GAAP. Since cannot show receivable twice against the same customer.

For eg

When raising Provisional Bill (1st bill) the bill value is 30 crore

1. Customer A/c Dr   30 Crore

        To Progress Billing Account Cr (Liability Account)      30 crore

When raising Final Bill (2nd bill) the bill value is 40 crore

2. Customer A/c Dr   10 Crore (2nd bill)

    Progress Billing Account Dr  (Liability Account)     30 Crore

       To Revenue A/c  Cr   40 Crore

So Customer Account has 2 debits for 30 and 10 and Revenue has one credit of 40

So even if we receive part payments we can clear against customer.

3. Bank A/c Dr 25 crore

       To Customer Cr 25 crore

The Progress billing account becomes zero and has to be cleared manually.

Regards

Gautham.

gautham_gopalan
Active Participant
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Hi Jyoti Prakash,

Yes with Revenue recognition we can achieve if its the same Bill.

However the requirement is 2 bills (Provisional and Final)

For Provisional Bill we can configure the Provision GL in VKOA

However we dont want to transfer to Revenue untill we raise the Final bill on the customer.

For this we need to achieve

2. Customer A/c Dr

    Progress Billing Account Dr  (Liability Account)

       To Revenue A/c  Cr

There by clearing the progress billing account

Regards

Gautham

jpfriends079
Active Contributor
0 Kudos
Requirement is 2 bills (Provisional and Final)

Then in this case, it is more a "deferred" revenue scenario, rather than "accrual" revenue.

In that case, I have a suggestion with little enhancement in pricing.

Following is some rough outline of config which can assist your achieve your requirement:

1. Create new A/c Key for deferred revenue, say, ZDR

2. Assign your "Progress Billing A/c" to that Account key ZDR

3. You can have following pricing for your "Provisional Bill", say, ZPRB.

StepC TypeCtype DescFromToSubtotalA/c KeyCondition Value on Sales Doc
100PR00PriceZDR30 Crore
200Total Progress Bill Amt1006 - Carry over value to KOMP-KZWI630 Crore

4. Assign your "Revenue A/c" to your account key for revenue sales, say, ERL.

5.You can have following pricing for your "Final Bill", say, ZF1

StepC TypeCtype DescFromToBasTypeAcc KeyCondition Value on Sales Doc
100PR00PriceERL40 Crore
200Total Billable Amt10040 Crore
300ZDRB

Progress Billing

Item Condition Type

Condition Class = Discount

Calculation Type = Fixed Amount

Here you have to take help of ABAPer to write a routine

for Alternative formula for condition base value in VOFM.

Where you will have too get value stored under

Subtotal Routine 6 - Carry over value to KOMP-KZWI6

in Provisional Bill Pricing

ZDR30 Crore
400Total Receivable20039910 Crore

I hope this should help.

Thanks, JP

ivano_raimondi
Active Contributor
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Hello,

please please check if the process suggested in KBA 1792073 fulfills your requirement.

Best regards,

Ivano.