1. Resource-Related Billing
Complex Billing Environments
Susan Kopisch SAP Labs, LLC
Barbara Daves CRM2ERP Consulting, LLC

2. Agenda What is Resource-Related Billing (RRB)? The Power of Pricing
Cost Plus Billing Scenario
Fixed Price with Progress Payments Scenario
Conclusions
Questions

3. Resource-Related Billing
Any company who bills their customers based on resources consumed
Industries include but not limited to:
Airline Operations
Defense Contractors
Engineering & Construction
Service Industry
Consulting Industry
Public Sector

4. Contract Types with Complex Billings
Cost-plus-fixed-fee
Cost-plus-incentive-fee
Max
Fee
Max Fee
Fixed
Fee
Award Fee Pool
100/0 Share
Target
Fee
Share Ratio
Min Fee
Base
Fee
Base Fee (0-3%)
Estimated Cost
Target Cost
Estimated Cost
Firm-fixed-price w/PP
Fixed-price incentive w/PP
Difference types of contracts have been defined by the government to ensure they pay a fair price and can manage the program. These types can be quite extensive in calculation.
Multiple
Incentive
Share Ratio
Target
Profit
Profit
(PTA)
0/100 Share
Ceiling
Price
Cost
Target Cost

5. Billing Complexities
The amount to bill may depend on different calculations:
Resource-Billing
Based on resources consumed
Based on estimated resources to be consumed
Based on labor hours consumed
Disallowed costs
Cost Funding
Cost Withholds
Overheads
G&A
Material
Production
Cost of Money

6. Billing Complexities cont.
Fees
Fixed
Percentage of costs incurred given negotiated cost
Percentage of labor hours consumed
Fee Retention
Fee Funding
Award
Incentive
Schedule
Cost

7. Our job is to build invoices store the data for future use
How can we use SAP for RRB?
The SAP R/3 system is a toolbox from which you can build and store many different things.
Our job is to build invoices
and
store the data for future use

8. Resource-Related Billing Equation
Dynamic Item Processor
Sales & Distribution
Project System
Pricing Procedure
Pricing Routines
Project Structures
Controlling/FI =
Costing Sheets
Cost Tables
Invoice
Materials Management
Material Master

9. How does RRB Work? Proj WBS-1 WBS-2
Resource-Related Billing is used when the amount to invoice the customer is based on the resources consumed by the project
Sales Contract/Order
Line Item Qty
Proj
Product A 1
WBS-1/DIP Profile
Product B 1
WBS-2/DIP Profile
Dynamic
Item
Processor
Resource Bill
WBS-1
WBS-2
Op20
Op50
Active Project
with Postings
Op10
Op60
Op30
Op40 PM
Order PM
Order PP
Order PP
Order

10. Data Flow for Cost Plus DIP Profile Working Area Source Costs on
Project A
Source
Selection
Criteria
Addl DMR Items
Billed Overhead
Costing
Sheet

11. Material Determination
Debit Memo Request
Working Area
Labor
Materials
Award Fee
Fixed Fee
Pricing
Overhead
Routines
&
Requirements

12. Pricing
DMR Items
Pricing
Routines
&
Requirements

13. DMR with Pricing Debit Memo Request Labor $2000 Materials $3000
Award Fee $10000
Fixed Fee $6000
Overhead $12000

14. Pricing Requirements & Routines
Three types:
1. Routine to zero out EK01 cost for additional DMR items
Key Routines
2. Routine to store variables
3. Routine to calculate final values

15. Storing Costs & Revenues
Billing calculations use calculated values from prior billings (i.e. previously billed).
BSEG
FI Doc for
Invoice
Revenue Elements
Sales
Excess Funding
Excess Fee
Withhold
Fees No
cost object ?
End
Yes
Previously billed values are
automatically stored in the
cost tables on revenue elements!
COEP

16. Storing Pricing Condition Values
Pricing calculates variables used in determining values to bill.
During pricing, the pricing conditions are automatically stored in the KONV table!
KONV

17. Fixed Price w/Progress Payments
Fixed Price contracts may be eligible for progress payments based on costs incurred.
SF1443

18. Fixed Price w/Progress Payments
Pay Request
Down
Customer
Send
Sales order
Header
RRB
Send
Item 10
Progress
Payment
Item 20
P/N12345
Down
Payment $
Bill
Deliver
Clear

19. Sales Order Setup Sales order pricing Sales order Header Item 10
Progress
Payment
Item 20
P/N12345
Billing Profile
& WBS Element
Resource Bill Item 10

20. material determination
Billing Profile Setup
material determination
costing sheet

21. Progress Payment Flow Pay Request Down Customer Send Sales order Send
Header
Send
RRB
Item 10
Progress
Payment
Item 20
P/N12345
Down
Payment $
The down payment request is a sales document from which the
the SF1443 output will be generated.

22. Progress Payment DMR Pricing
RRB
From Sales
Order
Debit Memo Request …
Header
EK01 = $500 stat.
Item 10
Labor
EK01 = $900 stat.
Item 20
Material …
Progress Payment
Calculation
Item 30
ZZProg Pay
Net Value = Request for Down Payment

23. Sample Progress Pay DMR

24. Fixed Price Item Flow Bill Sales order Header Item 10 Progress Payment
P/N12345
Down
Payment $
Deliver
Bill
Clear

25. Invoice Pricing
Bill
Price =
LESS
Liquidation

26. The Real Power of RRB Realistic Real-Time Billing
No delay in resource expenditure to billed values
High confidence of billing due to direct project integration
RRB Supports Different Contract Types
The billing profile is configured for each contract type
Flexibility for Complex Calculations
Pricing enables complex calculations adjusting the bill costs such as CIEF, FIEF, Withholds, Retention, Fees, etc to arrive at a net billing amount.
Historical billings easily stored/retrieved from the revenue elements on a project.
Billing overhead rates are applied using costing sheets which allows for re-adjustment of rates. All rate changes are retro-active automatically.

27. Questions

28. Thank you for attending!
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Session Code: 3204