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SIS – Simplified Interline Settlement Impact on Billing Rules

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Presentation on theme: "SIS – Simplified Interline Settlement Impact on Billing Rules"— Presentation transcript:

1 SIS – Simplified Interline Settlement Impact on Billing Rules
RA44 - Breakout Session RAWG

2 Agenda Highlights Structured Billing - Facilitators Specific Changes
Source Codes Memos (Rejection, Billing and Credit Memos) Reason Codes Change Categories & Change Codes (Miscellaneous Billings) Specific Changes Miscellaneous Billing Process Correspondence VAT Changes to the RAM Summary SIS – Impact on Interline Billing Rules 15 Sept 2010

3 Highlights Removal of redundant rules & processes (e.g ARC/BSP missorts) Reduction in the number & type of documents needed to support the billing (more structured electronic data is provided on the invoice) More structured and rigorous billing process – opportunities for diversion from the rules are limited (e.g not possible to jump rejection/correspondence stages) Single audit trail (e.g only one rejection for one billed transaction, all reasons for rejection incorporated into one rejection memo) Clarity on date and proof of submission to SIS – removal of all rules associated with non receipt of documents/ correspondence No hard copy (paper) support is provided to any billings SIS – Impact on Interline Billing Rules 15 Sept 2010

4 Agenda Highlights Structured Billing - Facilitators Specific Changes
Source Codes Memos (Rejection, Billing and Credit Memos) Reason Codes Change Categories & Change Codes (Miscellaneous Billings) Specific Changes Miscellaneous Billing Process Correspondence VAT Changes to the RAM Summary SIS – Impact on Interline Billing Rules 15 Sept 2010

5 Source Codes SIS – Impact on Interline Billing Rules 15 Sept 2010

6 Source Codes Today – not mandatory in IATA, mandatory in ACH
SIS – mandatory for all New Source Codes: Example: 23 EMD Billings Example: 25 Excess Baggage Example: 94 Billing Memos – Frequent Flyer Coupons (optional) Refer to RAM, Ch. A9 Part 2, Attachment G SIS – Impact on Interline Billing Rules 15 Sept 2010

7 Memo’s SIS – Impact on Interline Billing Rules 15 Sept 2010

8 Memo’s Two new recognised document types: Billing and Credit Memos
When to use a Billing Memo: Adjustment billings, Billing based on authority etc. – when the original document has already been billed (adjustments) or the transaction cannot be included in a standard prime billing because detailed explanation is needed with the billing (e.g originally billed the wrong carrier), or the billing is based on a special agreement or communication (or lack of), e.g.billing based on authority, alliance settlement When to use a Credit Memo: Mostly based on bilateral agreements (e.g. commission payments outside ISC), in some (rare) cases for invoice level value corrections Note: Credit Memos will always have to appear on a separate (credit) invoice, they cannot be mixed with debit (billing) transactions in the same invoice SIS – Impact on Interline Billing Rules 15 Sept 2010

9 Memo’s Key changes to RM issuance process
Fixed format rejection memo with extended data – minimising the need for attaching supporting documents: When to use a Rejection Memo: When a billing received from a carrier is believed incorrect – either the entire billing or part of it Key changes to RM issuance process Only one rejection memo for each transaction billed (e.g. no separate memos for fare and tax value differences) RM to show the total value billed and accepted (not just the value under dispute in a particular rejection stage) SIS – Impact on Interline Billing Rules 15 Sept 2010

10 Reason Codes SIS – Impact on Interline Billing Rules 15 Sept 2010

11 Reason Codes To facilitate the processing & accounting of incoming invoices, and To assist with the validation of the information that need to be provided to support the billing/rejection reason Billings on certain document types must carry a reason code putting the textual information explaining the reason for raising the document into a structured format – 2 characters code SIS – Impact on Interline Billing Rules 15 Sept 2010

12 Reason Codes Relationship between Source Codes and Reason Codes
Source codes are used to identify the document type billed and the billing/rejection stage Reason codes explain within a specific document type the reason for the billing/rejection/credit Reason Codes and Billing Memos, Rejection Memos and Credit Memos As Billing, Credit and Rejection Memos are single document types, and they can be issued for various reasons (previously explained only in a text format on the document), with various supporting document requirements they will all have to be issued with an approved reason code in SIS SIS – Impact on Interline Billing Rules 15 Sept 2010

13 Charge Categories & Charge Codes
SIS – Impact on Interline Billing Rules 15 Sept 2010

14 Charge Categories & Charge Codes
(Miscellaneous Billings) Definition: Charge Category – high level grouping of service types Charge Code – lower level grouping of service types within specific Charge Categories Purpose: To facilitate the processing & accounting of incoming invoices, and To assist with the validation of the information that need to be provided to support the billing reason SIS – Impact on Interline Billing Rules 15 Sept 2010

15 Agenda Highlights Structured Billing - Facilitators Specific Changes
Source Codes Memos (Rejection, Billing and Credit Memos) Reason Codes Change Categories & Change Codes (Miscellaneous Billings) Specific Changes Miscellaneous Billing Process Correspondence VAT Changes to the RAM Summary SIS – Impact on Interline Billing Rules 15 Sept 2010

16 Miscellaneous Billing Process
SIS – Impact on Interline Billing Rules 15 Sept 2010

17 Miscellaneous Billing Process
Significant enhancement of Chapter A13 to bring it in line with other RAM Chapters on structure and detailed content Examples: Billing timescales (paragraph 2.1.5) Rejection timescales (paragraph 4.3) The specific information that need to be provided on different types of invoices (attachments) The billing process for different types of taxes (Attachment C Paragraph 2) Multiple form of settlements (Attachment C Paragraph 5) SIS – Impact on Interline Billing Rules 15 Sept 2010

18 Correspondence SIS – Impact on Interline Billing Rules 15 Sept 2010

19 Correspondence All correspondence via SIS
Strictly following billing, rejection, correspondence stages according to Chapter A10 Resulting in: No correspondence in between rejection stages unless bilaterally agreed (not facilitated by SIS) No arguments about the date when correspondence was sent/received – no backdating and no lost correspondence Once settlement is agreed and takes place on a correspondence, the dispute is considered closed (no partial settlement while continuing the dispute) SIS – Impact on Interline Billing Rules 15 Sept 2010

20 VAT SIS – Impact on Interline Billing Rules 15 Sept 2010

21 VAT Introduction of VAT billing capability on passenger invoices (separately from taxes, fees and charges shown under a 2 letter tax code on the ticket) While the RAM will not give direction on whether airlines should move from their current method of billing for VAT, where applicable, to including it on the passenger invoice, airlines should be prepared to see it on their incoming invoices and be able to validate & account for it SIS – Impact on Interline Billing Rules 15 Sept 2010

22 Agenda Highlights Structured Billing - Facilitators Specific Changes
Source Codes Memos (Rejection, Billing and Credit Memos) Reason Codes Change Categories & Change Codes (Miscellaneous Billings) Specific Changes Miscellaneous Billing Process Correspondence VAT Changes to the RAM Summary SIS – Impact on Interline Billing Rules 15 Sept 2010

23 Changes to the RAM A2, A3, A5, A9, A10, A12, A13.
All Chapters impacted to some extent. Chapters with significant changes: A2, A3, A5, A9, A10, A12, A13. Will be discussed further in the main meeting (plenary session). SIS – Impact on Interline Billing Rules 15 Sept 2010

24 Agenda Highlights Structured Billing - Facilitators Specific Changes
Source Codes Memos (Rejection, Billing and Credit Memos) Reason Codes Change Categories & Change Codes (Miscellaneous Billings) Specific Changes Miscellaneous Billing Process Correspondence VAT Changes to the RAM Summary SIS – Impact on Interline Billing Rules 15 Sept 2010

25 Summary SIS is not just about removing the paper from the billing & settlement process and otherwise carry on as before For the paperless billing to work A fundamental change to the structure and the level of detail in the information supplied is required, and Airlines’ internal process flows and working practices will need a major overhaul Sooner you start treating SIS not only as IT but a business process reengineering project, Less painful the implementation is going to be, and More benefits your airline will get out of it at the end Emphasize this applies to you even if you have an external provider. SIS – Impact on Interline Billing Rules 15 Sept 2010

26 Thank you. SIS Website: SIS – Impact on Interline Billing Rules 26 15 Sept 2010 26


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