Exploring the Integration of Sales Billing and SAP Subscription Billing

Let’s begin by exploring the integration of SAP Subscription Billing and SAP Sales Billing for the public cloud.

Public cloud integration allows the transfer of billing and subscription data from SAP Subscription Billing to SAP S/4HANA Cloud Public Edition for invoicing in Sales Billing and subsequent financial processes. Subscriptions are created with the help of APIs from upstream system transactions, which may include solution orders in SAP S/4HANA Cloud. This integration is enabled by the SAP Best Practices scope item 57Z. Some replication is required before the integration is successful.

The data flow for each replication is generated from prebuilt integration packages that seamlessly connect with other applications or systems without the need for extensive customization. These packages are designed to simplify the integration process and enable smooth communication between different software tools. For example, to replicate the Business Partners from SAP S/4HANA Cloud, refer to the Cloud Integration tool for access to the Replicate Business Partners from SAP S/4HANA to SAP Subscription Billing functionality. For subscription replication, refer to the Business Events functionality. Once you release a solution order in SAP S/4HANA, a subscription is created in SAP Subscription Billing. This triggers a subscription creation event that is sent back to the SAP S/4HANA system to create a provider contract.

In SAP S/4HANA Cloud, provider contracts for Sales Billing represent the accounting view of subscriptions. Their data is mapped from subscriptions in SAP Subscription Billing. Provider contracts store the data for analyzing revenue and costs related to a subscription in addition to information not available in SAP Subscription Billing, such as the profit center. This enables revenue recognition for services that are consumed but invoiced in arrears.

The items of the provider contract store extra attributes that are relevant for follow-on processes in SAP S/4HANA Cloud Finance, including:

• The revenue recognition key for event-based revenue recognition.
• The profit center.

The provider contract becomes part of the market segment and the journal - the basis for profitability analysis in SAP S/4HANA Cloud for subscriptions.

Billing forecasts in SAP Subscription Billing provide estimates of predicted billable amounts during a given time frame, as required for event-based revenue recognition (EBRR). Billing forecasts are mapped to billing plans in SAP S/4HANA Cloud, which in turn are referenced in the provider contract item. While the billing plan is generally a standalone business object, in this scenario it can be considered an attachment to the billing plan used by event-based revenue recognition to accrue revenue independently of the actual invoice amount.

Each subscription product in SAP Subscription Billing has an assigned rate plan containing rate elements. Both a product and its rate elements are replicated as products in SAP S/4HANA Cloud.

To enable analysis of how well a product sells, SAP S/4HANA Cloud Finance maps the top-level product to the product sold. The sublevel products are passed through as "products used." For example, the revenue recognition key is derived from the top-level product.

Once a bill document containing preparatory billing data is closed in SAP Subscription Billing, the document is transferred to SAP S/4HANA Cloud Sales Billing and transformed into billing document requests (BDRs). A BDR contains a reference to a provider contract item. When BDRs are invoiced, the provider contract item reference is transferred along with the profitability segment to general ledger entries in Finance.

Now that we’ve had a chance to consider some of the important features of Sales Billing integration in the public cloud, let’s look at the different features of Sales Billing integration in the private cloud.

Data flow is similar to the public cloud edition. However, the private Cloud does not include a solution order to create subscriptions on SAP S/4HANA side. Similar to the public cloud, subscriptions are replicated as provider contracts to SAP S/4HANA. But billing forecast replication is not present - private cloud does not support Revenue Recognition.

The business process begins with the creation of subscriptions in SAP Subscription Billing, either through the user interface or an API from an upstream system. Subscriptions are managed by SAP Subscription Billing. Use cases determine one-time, recurring, and usage-based charges. These charges are collected in SAP Subscription Billing as a bill. The bill is transferred as a billing document request to SAP S/4HANA Cloud Private Edition.

Accounting-relevant data in billing document requests is forwarded from invoices in Sales Billing to SAP S/4HANA Finance. To provide further information for finance processes, a provider contract is created automatically in SAP S/4HANA for each subscription in SAP Subscription Billing. The provider contract contains the contract data of the subscription, such as the billable charges.