Introducing Billing for High Volume Industries

Objectives

After completing this lesson, you will be able to:

  • Explain the consume-to-cash process
  • Discover the business motivation behind SAP ConvergentInvoicing
  • Provide an example of the consume-to-cash process
  • Define a billable item

The Consume-to-Cash Process

SAP provides a fully integrated consume-to-cash process. Convergent invoicing is part of this process chain. To understand the consume-to-cash requirements for high volume industries, this lesson will examine the business requirements in these industries.

Business Example

Customer Bovi has a print service contract with the company Print Service Corporation. With this service he has the possibility to print colored or black in different formats (DIN A3, DIN A4, DIN A5). The provisioning of the print service costs a monthly fee of EUR 19.90. Mr. Bovi has bought a package called Print Plus that offers a number of up to 200 Pages black printing for only EUR 5.

This figure is showing the functional process steps within the Consume-to-Cash Process. In addition the BRIM application component is assigned to each process step.

The Business Motivation Behind SAP Convergent Invoicing

SAP Convergent Invoicing is included in SAP S/4 HANA 2021 and integrated in FI-CA. Convergent invoicing supports the process upload of consumption detail records (CDR), storage of billable items, aggregation of billable items and invoicing. Convergent invoicing is highly integrated with contract accounting.

All tariffs are summarized:

Mr. Bovi has signed a contract with different tariffs for different print formats, as well as black and colored:

Tariffs of Mr. Bovi

Monthly Service FeeEUR 19.90  
FormatsDIN A3 (large Page)DIN A4 (medium Page)DIN A5 (small Page)
Colored PCOL (usage)EUR 0.10 TEL 4EUR 0.05 TEL2EUR 0.04 TEL1
Black PBLW (usage)EUR 0.8 DAT3EUR 0.03 DAT2EUR 0.02 DAT1

All tariffs are summarized.

An Example of the Consume-to-Cash Process

Let´s map our business example to the consume-to-cash processes first.

Consumption

On 22/01/2017, Mr. Bovi prints 300 colored pages in DINA4 format (medium size). The consumption detail records are created and submitted to Print Service Corporation.

On 23/01/2017, Mr. Bovi prints an additional 300 black pages in DIN A5 Format.

Charging

Print Service Corporation receives all printing data records. The charging process determines which customer/contract holder is responsible.

Rating

Mr. Bovi has printed 300 black pages. The consumption detail record needs to be evaluated, if it was colored or black and which size was printed. The rating calculates 300 pages of black in DIN A5 for 0.02 euro/page.

Billing

300 usage items are loaded into convergent invoicing. The reference to Mr. Bovi´s contract account is completed, so the item can be billed. 300 items are aggregated in billing process to 1 billing item to the sum of EUR 3.

Each month a recurring base fee for the service is billed. The recurring charges are created by SAP Convergent Charging 4.0 or another rating system and loaded into SAP Convergent Invoicing.

Invoicing

All source documents will be invoiced into one single invoice.

The print service has a monthly fee of EUR 19.90 for provisioning of the print service. He has to pay EUR 19.90 for January.

On 22/01/2016, Mr Bovi prints 300 colored pages in format DIN A4. Each page costs EUR 0.05. This is a total amount of EUR 15.00. On 23/01/2016, Mr Bovi prints 300 black pages, the total amount is EUR 6.

The invoice for January has the following positions:

Positions of the Invoice of January

PositionPrice
Monthly ChargeEUR 19.90
Colored 300 Pages DIN A4EUR 15.00
Additional 200 DIN A5 BlackEUR 6
SumEUR 40.90

Mr Bovi receives a printed invoice with reference to his contract account and invoice number requesting a payment of EUR 40.90 to the bank account of the Print Service Corporation.

Contract Account

An open item with the amount of EUR 40.90 is posted to Mr. Bovi´s contract account. The amount includes tax. Mr. Bovi has to pay his invoice by February 20th. If he does not do so, he will receive a dunning letter one week later.

The Billable Item

Origins of Billable Items are:

  • Downloaded song
  • Payment for purchase
  • Purchased voucher
  • Activation of content
  • Call detail records
  • SMS
  • Content download
  • Route section
  • Crossing bridges, tunnels, passes
  • Parking ticket
  • Tram ticket
  • Museum ticket

Billable items occur in very different service industries. The following section names some examples.

In the telecommunication industry, a call includes technical data about the connection between two phone numbers. After the data has passed a charging plan and the price of the call has been calculated, it represents a billable item.

In the postal services industry, a parcel shipment can be regarded as a billable item. There may be additional insurance for the parcel shipment, so that both constitute billable items to be calculated and printed on one invoice.

In the Internet services industry, the download of a song or an e-book is an example of a billable item.

What is a billable item?

  • A priced event transaction record received by SAP Convergent Invoicing from a source system, which is to be applied to a customer or partner statement or invoice.
  • The billable item is stored and processed by SAP Convergent Invoicing.
  • Usage-based transactions, which occur when a customer uses a service and the usage generates a transaction to be charged to the customer and/or a provider. These transactions often originate in technical systems such as mediation engines based on the customer’s active use of a service.

    Examples:

    • Content download (Ringtone, Song, Movie, Games)
    • Broadband usage (a metered Internet session charged by MB)
    • Phone usage (voice calls, SMS)
    • Use of a toll road
    • Parcel charges

Billable Items - Charges

Recurring charge or subscription transactions

These transactions occur when a customer subscribes to a service and pays a fixed amount at agreed intervals (daily, monthly, quarterly, and so on) for the duration of the contracted service.

Examples:

  • Monthly fees for a cell phone voice.
  • Annual fees for a software license.
  • Equipment rental fees such as set top box.
Non-recurring or one time charged transactions

These transactions occur when a customer purchases a product or service and a single charge needs to be invoiced.

These are distinct from usage-based charges in that there is no measurement of usage required. Examples:

  • One time account set up.
  • Equipment/installation charges.
Collection of fields, which are expected in a billable item data structure. These could be: Amount, Currency, Status, Accounting Information and so on.

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