James and Lisa Discuss Milestone Billing
Since now part of the project work is finished, James (who works as a project planner at Hybrid Machinery) discusses the realization of revenues in projects with Lisa, who works as a Sales representative at Hybrid Machinery. They talk about the process of milestone billing.
Billing Projects with Milestone Billing
The benefit of billing projects with milestone billing is that milestones in your project trigger billing processes for your sales order.
The requirements for using milestone billing are as follows:
- A Work Breakdown Structure (WBS) with a billing element
- A sales order item account assigned to the WBS billing element
- A milestone with an integration to sales and distribution
- A billing plan that is assigned to a sales order item and linked to a milestone
The starting point for milestone billing is a sales order item that has a billing plan whose dates are related to milestones of the assigned project. If you enter actual dates in the billing milestones (for example, by confirming the assigned activity), the billing block imposed on the corresponding date in the billing plan is disabled. The figure shows the confirmation of a milestone, and the lock disablement in the respective billing plan item.
The unlocked billing date is billed during the next billing run. Like the sales order item, the invoice document is assigned to a WBS element. This means that the actual revenues are posted in the project. The system sets the date in the billing plan to Fully Processed (billing status C).
Project billing is not necessarily based on milestone billing. Project billing can be based on the following:
- Resource-related billing of the sales order
- A combination of milestone billing and resource-related billing
- Direct billing without a sales order
Depending on your business process, you can configure billing to fit your needs.