Planning Revenue for Projects

Before starting the project execution phase by releasing the project, James, who works as a project planner at Hybrid Machinery, discusses with Lisa, who works as a sales representative at the same company, the planning and realization of revenues in projects.

In the SAP Project System (SAP PS), you can plan revenues for projects in the following ways:

• Manual revenue planning for Work Breakdown Structure (WBS) elements
• An SAP PS billing plan assigned to WBS elements
• Sales and Distribution (SD) documents account assigned to WBS elements

To plan revenues for projects, you specify billing elements. A billing element is a WBS element that is specified for billing. The operative billing element indicator must be active.

We’re now going to focus on revenue planning with sales order items being account assigned to WBS elements. For example: your customer has placed an order for a custom development project, F-10030, and they are willing to take over all or a part of the costs. You have agreed a sales price of EUR 75,000 with the customer. After the completion of production (activity 0100) and final approval (activity 0110), partial payments are due for both. You enter this information in the system by defining billing milestones for the activities. It is also possible to agree on a down-payment with the customer. In that case a down-payment request is sent to the customer instead of an invoice.

You assign the sales order item to the billing element of the project, and copy the billing milestones for the activities 0100 and 0110 to the billing plan of the order item. This assignment and billing plan forms the basis for planning revenues in your project.

In the project execution phase, the locks for the individual items in the billing plan are lifted automatically when the activities 0100 and 0110 are confirmed. After a billing run, the actual project revenues can also be updated automatically in this way.