The SAP S/4HANA Cloud for Contract Accounting and Invoicing supports the key parts of a fully integrated Consume-to-Cash process. A wide range of SAP customers, mainly from the service industry, contributed to the solution’s features.
Any consumed service from any metering platform, for example, a digitial download, a toll, a mobility service, or a subscription for print or cloud services, can be received in a flexible operated way, carrying specific usage or custom-specific data that may influence the downstream processes in billing, invoicing, contract accounting, and payment handling.
Consumption can be priced or not yet rated, either to be paid after invoicing, or by usage, or prepaid. Recurring or one-time charges can be requested from flexible billing plans.
All granular events are persisted as consumption or billable items and aggregated based on configurable criteria in the billing and invoicing process. This enables the itemization of all events in a billing period on the invoice and the invoice correction on items level.
Invoices can be sent via any communication channel, and create postings to the contract accounting subledger. From there, aggregated records will be transferred to the general ledger, so that there's no line item posting.
Invoicing and Contract Accounting
- Invoicing of Usage and Subscriptions
- Processing rated and unrated events from several multi-vendor rating, or billing streams.
- Managing service pricing from multiple sources to produce transparent and itemized invoices that drive loyalty and market differentiation, providing intelligent capabilities for billing plans and billing cycles, pre- and post-paid, complex hierarchical discounts, invoice agreements, immediately settled paid usage, and many more.
- Consolidating all information into one single converged invoice.
- Contract Accounting
- Processing open items for collection and payment services.
- Managing receivables with high throughput and automation for B2B and B2C.
- Enabling compliant accounting, reconciliation, and period closing up to SAP S/4HANA Finance.
Examples for Usage and Subscriptions in Business-to-Customer (B2C) Scenarios:
- Transportation Ticket Services (Bus, Train)
- Music or Television Streaming Services
- Usage of Automotive Services
- Software License Services
- Sports Club Membership
- Credit Card Services
- Mobile Services
- Car Charging
Examples for Usage and Subscriptions in Business-to-Business (B2B) Scenarios
- Cloud Services (SAP Cloud)
- Hardware Installation and Maintenance Services (SAP IT)
- Travel Agency Services (SAP Concur)
- Fleet Services (SAP Car Fleet)
- Dealer Services (SAP Ariba)
- Credit Card Services
- Car Rental Services
- Cleaning Services
- Parcels Services
- Print Services
The usage and subscriptions economy has revolutionized how businesses engage with their customers and changed the way how customers buy. Innovations in business models have a singular aim of retaining customers by building long-term relationship with them and not focusing on single, one-off transactions.
Example for High-Volume Cloud Communication Services
CallMeNow is a Cloud Communication Service Provider.
They offer:
- Customer cloud-based communication services.
- 24/7 support in case of problems around the cloud-based communication(optional).
CallMeNow runs a SAP Cloud Architecture with:
- SAP Subscription Billing.
- SAP S/4HANA Cloud for Contract Accounting and Invoicing.
- SAP S/4HANA Cloud for Contract-Based Revenue Recognition asan additional subledeger in order to create the legally correct accounting viewon the operational revenue of subscriptions.
Price Model
- Cloud Communication
- 1,000 EUR activation fee
- 100 EUR a month for each active user account.
- Payment for 1 Year in advance
- Cloud Support
50 EUR for each ticket, billed at the end of the month.
Example for High-Volume Subscription Business
Description
- B2C business
- High-volume business
Challenges
- Manage high amount of subscribers/subscriptions.
- Manage high amount of bills efficiently.
- Manage high volume of usage records in pay-per-use scenarios.
Value Proposition
- Cloud technologies enable high performance and scalability.
- SAP provides a dedicated solution for mass volumes, and SAP Subscription Billing is a key enabler and major part of the Q2C end-to-end process for high-volume subscription-based business models.
- Capabilities to manage efficiently high volumes, for example, usage records.
Business Scenario: Printing Service
Customer Miller has a service contract with the Print Service Company.
Let's map this business example to the Consume-to-Cash process.
Mr Mueller has signed a contract with tariffs for different print formats, as well as black and colored.
Tariffs of Mr. Mueller
| Recurring | Monthly Service Fee | 10.00 EUR |
|---|---|---|
| Usage | Colored / Black | Format DINA3 |
| 22.03.2023 | Colored | 5.00 EUR |
| 23.03.2023 | Colored | 5.00 EUR |
| 22.03.2023 | Black | 2.50 EUR |
| 23.03.2023 | Black | 2.50 EUR |
| 24.03.2023 | Colored | 5.00 EUR |
Tariff
The tariff defines the usage-based fees for printing colored or black in DINA3 format.
The tariff defines the monthly fee for provisioning of the print service as well.
Usage
On 22.03.2023, Mr Miller prints colored and black pages in DINA3 format.
On 23.03.2023, Mr Miller prints additional colored and black pages in DINA3 format.
On 24.03.2023, Mr Miller prints additional colored pages in DINA3 format.
The consumption detail records are created and submitted to Print Service Company.
Charging
The Print Service Company receives all data records and the customer is determined.
The reference to Mr Miller's contract account is completed so that the items can be billed.
Billing
Five usage items are loaded into the invoicing system of Print Service Company.
Five items are aggregated in the billing process to one billing item to the sum of 20.00 EUR.
A monthly print service fee of 10.00 EUR is incurred and billed as well.
Invoicing
All source documents will be invoiced into one single invoice.
Invoicing
All source documents will be invoiced into one single invoice.
Mr Miller receives an invoice with reference to his contract account requesting a payment of 37.50 EUR to the bank account of the Print Service Company.
Contract Account
An open item with the amount of 35.70 EUR is posted to Mr Mueller's contract account.
Mr Miller wants to pay his invoices via SEPA Direct Debit, and the Print Service Company collects the money from Mr Miller's bank account.