Explaining the Revenue Sharing & Partner Settlement Process

The lesson gives an overview about the functionality of Revenue Sharing & Partner Settlement.

An end customer buys digital content (i.e. music download) for which the provider has to pay fees to 3rd parties: I.e. royalties to SONGY and mechanicals to GEMA in Germany.

From the end customer billable item for the download, a partner item for SONGY and a partner item for GEMA are split off as consumption items for rating.

These consumption items are sent to SAP Convergent Charging for rating and charging and received back as partner billable items in SAP Convergent Invoicing. Billing and invoicing of end customer and partner billable items generate debit for the end consumer as well as credit memos for the partners.

This lesson deals with revenue sharing and partner settlement. If an end user uses services or purchases products of a service provider, and these services or products use rights, infrastructure, services or products of a partner, then payment is due to this partner. In these cases, a portion of the amount that you invoice to the end customer has to be paid to one or more partners.

From the end customer billable item, partner items are split off as consumption items for rating. These consumption items are sent to SAP BRIM charging for rating and charging and received back as partner billable items in SAP BRIM. Billing and invoicing of end customer and partner billable items generate debit for the end consumer as well as credit memos for the partners.

The advantage of running Customer Invoicing and Open Item Management and Partner Invoicing and Open Item Management in the same component is, that the customers' payment default risk can be shifted to the partner:

1. Define Risk Category for the partner in the partner settlement rule assigned in the partner agreement.

2. Link Customer Bits with Partner BITs for payment control.

3. Partner credits can be adjusted for the concerned partner items when an end customer receivable is subject to dunning or written off.

4. The generated adjustment BITs are tracked and linked to the original partner and end customer BITs

Depending on the role and the importance of the partner, either the service provider determines the amount owed to the partner, or the partner does. In the first case, the partner receives credit memos; in the latter case, the service provider receives invoices from the partner.

The functions that are available for partner settlement are focusing on the scenario in which the service provider undertakes the calculations and creates credit memos for the partner.

The BRIM Partner Settlement architecture provides additional functionality in the areas:

• CRM back office transaction - Creation of partner products and partner agreements and distribution of partner data in to the ERP and Convergent Charging systems.
• SAP S/4 HANA Convergent Invoicing - Split off partner chargeable items from one single end customer billable item. The partner chargeable items are rated in SAP Convergent Charging in charge plans assigned to partner products and partner agreements or in case of a very simple Rating Process in a function module in Convergent Invoicing.
• SAP S/4 HANA Convergent Invoicing - Execution of partner billing and invoicing providing options for time dependency of partner billing on an end customer invoice, for itemization of the individual amounts in the partner credit memo, for first alignment with the partner based on a preliminary invoice, and for tracking and evaluating the partner shares only without issuing and posting a credit memo.
• SAP S/4 HANA FI-CA - Deflecting the end customers' payment defaults to the partner and adjust the disbursed credits.

With enhancement package 7 of ERP 6.0 SAP Convergent Invoicing and Contract Accounts Receivable and Payable are able to deflect the end customers' lack of payment to the partner and adjust the disbursed credits. Thus the payment default risk can be shifted to the partner.

Partner settlement uses processes analog to those in the billing and invoicing of end customers, and hereby uses the same data objects.

The following objects of the partner and end customer are the same. Some objects are marked as used for partner settlement.

For partner settlement, the same objects are used as for end customers, but in a form that is tailored to partner settlement. The objects are replicated in BRIM from creation in CRM into the SAP S/4 HANA FI-CA and Convergent Charging systems using the mechanisms used up to now, which were also used for the replication of end customer objects product replication using middleware, partner agreement replication using Common Object Layer.

You distinguish between provider contracts and partner agreements by means of the Contract Category field. From a technical perspective, they are both provider contracts, and the system stores their data in the same tables. The divisibility in the Business Data Toolset makes it possible for different transactions to be offered on the basis of different values in the Contract Category field. The result is that the system provides a tailored context for partner agreements.

The Contract Category field is not visible on the interface. However, it is available in the contract header during replication and can be set as needed. The contract category also controls which fields are available.

For partner agreements, the Partner Settlement Rule field was added to the contract item. You use the partner settlement rule to configure partner settlement such as specifying when settlement takes place and who bears the default risk.

You can process and display partner agreements on the SAP Easy Access screen under Master Data → For Integration with Rating and Charging → Partner Agreement.

The following transactions are available:

• FP_PV2 - Change Partner Agreement
• FP_PV3 - Display Partner Agreement
• FP_PV0 - Overview Partner Agreement

In the SAP Fiori launchpad you can use the apps Maintain Partner Agreement and Overview Partner Agreement.

How to create Partner CITs with reference to Customer BITs?

The system generates consumption items for partner settlement when the end customer billable item is created. It must be possible for the system to recognize from the billable item, if partner items need to be generated and for what reason. Therefore the starting point is an attribute of the billable item, the Partner Settlement Category. The Partner Settlement Category must be populated with a value that categorizes the transaction from the viewpoint of partner settlement.

As a category for partner settlement, the identifier 'APDL' for application download is used in customizing. The customer items and the partner items linked jointly via field source transaction id . The customer items are viewed as primary items and partner items as secondary items; partner items contain a reference to the customer items that they belong to. The link ensures bundled processing whenever this is required, for example in re-rating, reversals and adjustments.

To feed consumption items for partner settlement to rating, sent them to SAP Convergent Charging using the Perform Rating transaction in SAP Convergent Invoicing or do a simple Rating in a function module in Convergent Invoicing The resulting partner items are received and processed by SAP Convergent Invoicing as billable items for partner settlement.

With this procedure a kind of re-injection into SAP Convergent Charging is achieved and from one single customer event several appendent partner items can be derived and rated.

Prerequisites for Partner Bill Adjustments:

1. On company code level you can determine whether partner adjustments are generally allowed. This setting overrides the setting in the partner settlement rule that the partner bears the default risk. This specification can be defined in customizing under the IMG path: Contract Accounts Receivable and Payable → Convergent Invoicing → Partner Settlement → Make Specifications for Adjustment of Partner Settlement.
2. Partner Settlement Rule in Partner Agreement: One of the controlling parameters on item level of the partner agreement is the indicator in the partner settlement rule that a partner bears the end customers' payment deafult risk for payment of services containing partner shares.

Process Steps:

1. Create Adjustment Trigger: An adjustment trigger in table DFKKPARTADJ is created, if the open item (overdue, written-off, contained in a payment agreement) contains value 'A' in the DFKKOP PTITM Status of Partner Settlement Using Billable Items field, which means that third-party revenue sharing is possible and adjustments are allowed.

2. Create billable Items as adjustments for Partner:

The actual adjustments of partner settlements are made by the mass activity Generate Adjustments for Partner Settlements (transaction FPPARTADJ_MA). This mass activity analyzes the customer receivable related to the trigger in order to recognize, if it is still is open, (partially) cleared, or written off. The system determines all billable and billed partner items that are assigned to the customer receivable. The system then creates new billable partner items with the amount of the necessary reduction as a proportionate percentage of the partner share belonging to the open customer receivable. The assigned source transaction type is 'PSADJ'.

3. Delete Trigger after adjustment:After billable item creation the trigger is deleted. In case a written-off receivable is adjusted the trigger is deleted from the table. The trigger entry for a FI-CA document is also deleted, if the end customer item has been cleared be full payment.