Introducing Subscription Management with Convergent Invoicing (5IK)

1. Navigate to the SAP Best Practices for SAP S/4HANA Cloud solution package in the SAP Best Practices Explorer (https://rapid.sap.com/bp/BP_CLD_ENTPR).
2. Choose the user icon in the upper left corner of the screen and log on.
3. Using the Version dropdown list, choose your preferred local version. Not all local versions have content. If you can’t find anything for your location, use Germany as your local version. Choose English as the language.
4. Click on the Search icon (which looks like a magnifying glass) in the top right part of your screen.
5. In the Search field, enter 5IK and press Enter.
6. In the search results, expand the entry for scope item Subscription Management with Convergent Invoicing (5IK) and choose the version Germany, SAP S/4HANA Cloud.
7. Scroll down and locate the test script and any other information you might be interested in, like the Process Flow and so on.

This scope item covers the customer facing process for subscription management with convergent invoicing.

Note

You can use the navigation buttons in the bottom right corner to see what Kayla has to say about scope item 5IK:

Both B2B and B2C customers are supported. They can be assigned to markets, and contact data can be managed. Credit cards can be assigned for later use in subscriptions. Customer data can be replicated between SAP S/4HANA Cloud and SAP Subscription Billing.

Products can be defined and configured for rating and billing. A company can decide in which markets they want to offer their products and they can define subscription terms that govern the life cycle of the subscriptions. Subscription parameters can be configured to allow license-based billing and assign technical resources to enable usage-based billing.

Rate plans are at the core of SAP Subscription Billing. A company can choose from different rating models such as recurring, license-based, and usage-based or combine them as needed. A billing cycle can be set such as monthly, quarterly, or annually and a company can decide which charges are billed in advance or in arrears. Rate plan templates can be defined to ease the creation of individual rate plans, and the rate plan life cycle can be managed with rate plan snapshots. A rate plan can be attached to a product or directly to a subscription.

Allowances define an amount of usage credit that can be used together with a subscription. Allowances can be tailored to a company's market’s needs by configuring appropriate usage credits, purchase prices, and expiration. Allowance templates can be configured an assigned to a company's products. The system can then automatically generate allowances for newly created subscriptions.

The complete life cycle of a company's subscriptions can be managed, such as renewal, cancellation, withdrawal, and extension. An event-based orchestration process can be triggered if there is a need to provision subscriptions and start billing only after provisioning has been completed. Add-on products can also be added and removed as required. Subscriptions can be set-up for automatic price updates, active subscriptions can be protected against price changes, and individually negotiated prices can also be set. A payment method can also be set and payment card data can be picked or created as needed.

The rating process applies rate plans to calculate monetary amounts for recurring, one-time, and usage-based charges and credits. When usage data is imported, it is aggregated and rated in real time. Re-rating takes place when pricing-relevant attributes have changed in a subscription.

During billing, the calculated charges and credits are aggregated into bill items and collected into bills according to predefined and customizable split criteria. It is possible to define how to deal with late arrival of usage data and to possibly keep bills open for a longer period of time if needed. When bills are ready, they can be transferred to SAP S/4HANA Cloud for invoicing and accounting.

Note

The SAP training course BR470 SAP Subscription Billing provides more details for the solution SAP Subscription Billing.

Most businesses in the telecommunication, public transport, electronic toll collection, and postal services industries enable customers to use their services without any need for human interaction. The respective services consumed are rated and stored as event data records. These billable events (or event data records) are automatically recorded and documented, in preparation for invoicing according to predetermined schedules (for example, monthly or weekly). In addition, rather than receive numerous invoices for individual services from one or more providers, customers can receive a single invoice from a single provider that includes the total cost of services consumed within a given period, along with an itemized overview for each individual service.

Scope item Convergent Invoicing - Invoice Creation for Usage and Service (2BG) describes the convergent invoicing process in much more detail and test script chapters for detailed billing process steps can be found for this scope item using http://rapid.sap.com.

Note

Please refer to the course and documentation for SAP S/4HANA Cloud - Finance for more information about scope item Convergent Invoicing - Invoice Creation for Usage and Service (2BG).