Billing Plan
A billing plan in SAP SD defines when and in what amounts a sales document item is billed – instead of billing everything at once after delivery.
Billing
Explanation
SAP SD has two main types of billing plans:
• periodic billing – the same amount is billed at regular intervals, for example monthly rent or maintenance fees,
• milestone billing – partial amounts are billed on specific dates or when defined milestones are reached, as in projects or customized equipment.
Billing plans can include down payment requests, final settlement, and blocks that are released when conditions are met.
Why It Matters
Billing plans determine the timing of invoices – not the timing of revenue. Under ASC 606 and IFRS 15, revenue follows the satisfaction of performance obligations. Differences between billing plan dates and performance create contract assets or contract liabilities. When integrating SAP SD with SAP Revenue Accounting and Reporting (RAR), billing plan data must be passed so that invoices can be matched to performance obligations.
Related Terms
Milestone Billing · Down Payment · Billing Document · Contract Asset · SAP SD
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