Billing in SAP SD

What is Invoicing and Billing in SAP SD


In terms of SAP Sales and Distribution, Billing is a very important part of the process. Whenever you purchase a product, the function of billing starts right from there. There are two interchangeable concepts that occur during this process. The majorly used two interchangeable terms are billing and invoice. The billing comprises the credit and debit memos of the return goods, the cancelled bills’ transactions, and the functional price of each product, the various discounts and rebates that are available on each commodity and all the other billing data which has to be transferred to FI for creating the invoice.

The Distribution Channel, Sales Organization and the Division are the various structures which are associated with Billing. The Billing is an automated invoice which is completely based on the sales, orders and the deliveries of the product made by the organization. The crucial functions which are attached to billing are:

  1. Match Codes.
  2. Types of billing.
  3. Number Range.
  4. Blocking Reasons.
  5. Display Billing List.
  6. Display Billing Due List.

The Billing also serves as a function for processing all the debit/credit and rebate memos and integrates with the CO-PA and FI. They help in updating customer’s credit data and also be used to create proforma invoices. The billing due list will also help you to frame a work list of all the pending invoices that need to be generated. There are various types of Billing in SAP SD and they are as follows.

  1. Delivery Referencing Billing.
  2. Order Reference Billing.
  3. Performa invoice delivery related.
  4. Performa invoice order related.
  5. Debit Memo.
  6. Credit Memo.
  7. Cancellation of Invoices.

There are three crucial methods which are used for Billing. They are- a) Separate invoice per delivery where if you order many products in bulk, you receive separate invoices for each product. B) Collective Invoice, where you receive only one invoice for all the products you buy and they are delivered together at your doorstep. C) Invoice Split, where some of the ordered products are delivered before and some of them are delivered after a span of time and you receive two invoices for the split orders.

There are 4 types of billing plans which are formulated. The first one is periodic, where the total amount is billed against a plan. B) Milestone, where you distribute the total amount into several billing dates, c) Instalment, where amounts are proportionally divided into definite payment dates and d) Resource related where service and consulting of consumed resources are carried out.

The invoice contains any type of bills altogether and this word is specified to FI terminology only whereas, Billing is used for SD terminology. FB60 and FB70 codes are used for creating invoices in terms of raw materials and sales tax, respectively. There is no such crucial difference between invoice and bill and,

Bill= payable accounts = Services/Goods received from Suppliers.

Invoice= Receivable accounts= Services/Goods delivered to Customers.

You can get both Vendor Invoice as well as Customer Invoice as per your need because they do not make much difference and are often used interchangeably in SAP SD.

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