Analyzing the Delivery Related Billing in Margin Analysis

With the Create Billing Documents app, you can create billing documents, for example, invoices and credit memos that reference sales and distribution documents.

An invoice created with reference to a sales order is referred to as "Order-Related Billing." The standard type for order-related billing is F1, commonly used in service companies and third-party sales processes. An invoice created with reference to delivery documents is known as "Delivery-Related Billing," which is the focus of this learning session. Billing typically represents the final step in completing a sales process.

In this learning scenario, we created and delivered a sales order involving a standard product from inventory. Billing is tied to the delivery and the associated goods issue. Without a goods issue, creating a billing in this scenario would be impossible.

In our scenario, we refer to the delivery of the customer order. As a reminder, here's an overview of the process flow for the customer order with details of the created delivery. To find the process flow of your sales order, use the Track Sales Orders app.

When you create the billing, you must check whether the settings are correct.

In the figure, you see the process flow. You can see that there is an invoice, but it is only a temporary document. Hence, the document number TMP00015. This temporary document is replaced when the invoice is entered.

To create the billing document, use the Create Billing Documents app.

The following figure shows you the created invoice containing the revenue plus value added tax.

In the following figure, you see the process flow for the sales order.

The illustration shows that the billing document 90000015 has been created and that the journal entry 9400000001 has also been created. The temporary document is deleted. 

In the General Ledger View, the journal entry 9400000001 shows the posting of the receivables against the revenue and the value added tax.

You can navigate from the FI document, created through billing, to all relevant documents in the order-to-cash process.

Event-Based Revenue Recognition

The following figure shows the offsetting entry to the WIP for the adjusted revenue because of the billing. Then, it shows the formation of the work in process (WIP) for the adjusted revenue when posting goods issue for delivery.