Enable Billing Before Shipping Using a Standard Method

  • by Gaetano Altavilla, Senior SAP Solutions Architect, Instructor, Project Manager, and Team Leader
  • June 2, 2009
Learn all the customizing settings needed to implement the billing before issuing solution using standard SAP tools.
Key Concept
Billing before issuing occurs when a customer wants to buy goods in a large quantity to get the appropriate discounts but doesn’t have enough space in its warehouse to store them. In this case, you need to bill the customer, but hold on to the merchandise until the customer is ready to receive it.

A company I once helped had a customer who purchased a specific quantity of finished products to take advantage of appropriate discounts as well as guarantee that it had sufficient stock of the items needed. The trouble was, the customer didn’t have enough space in its warehouse. Furthermore, it didn’t need all the quantity shipped in one delivery. Therefore, my client needed to devise a way to bill the customer before actually shipping a partial delivery of the goods.

Billing before issuing the goods is not that uncommon. Many companies try to address this need by modifying standard SAP objects and reducing the amount of customizing work. However, this is not recommended by SAP, nor is it really a good practice. Instead, I propose that you create custom objects by copying the standard ones. Then, based on your customers’ needs, you can have subsequent deliveries and good issues posted in your SAP system.

My solution can help you:

  • Improve customer relationships

  • Increase your company’s revenues (by allowing customers to pay in advance for their orders)

  • Provide full visibility of the deliveries

  • Provide additional services (i.e., granting warehouse space)

  • Meet sales targets

  • Reduce administrative work

I will explain the customizing steps to be done to meet an example I created. Based on my experience, I’ll provide solutions already implemented in production environments for Sales and Distribution (SD) and Logistics Execution Shipping (SHP) in SAP ERP Central Component (SAP ECC) 6.0. However, the process I describe also applies to all previous versions of SAP SD and SHP.

Before I begin my method, I would like to go over some financial logistics involved. When you send out the invoice and receive cash, the usual accounts that are hit in the normal sales cycle are affected. No changes are required for account determination. The company receives money and has an obligation to deliver goods of a certain value. To report on the sales that still need to be delivered, you can use standard reports available for Open Sales Orders/Outbound Deliveries (using the custom document types listed in the article). Basically, paying before issuing in SAP SD is the equivalent of the standard process you have in SAP materials Management (MM). Before implementing this solution, the logistic department should have a sign-off from the finance department. Additionally, in this specific case, the normal G/L accounts are hit.

Gaetano Altavilla

Dr. Gaetano Altavilla is a certified associate senior SAP solutions architect, instructor, project manager, and team leader located in Naples, Italy. His focus is on pre-sales, delivery of SAP application solutions for large international corporations and SAP knowledge management across regions.

In his 16 years of SAP application experience working for many multinational companies, such as Procter & Gamble and Hewlett-Packard, he has covered a wide range of ERP logistic areas, focusing on the MM, WM, SD, LES, PP, PP-PI, PLM (QM, PM, PS) modules, as welll as CRM (TFM), SRM (EBP), SCM (APO), SCM (TM) and SCM (EWM) components.

Dr. Altavilla holds a degree with first-class honors in mathematics from the University of Naples and is certified in many SAP modules: SAP Logistics Bootcamp, SAP MM, SD, LE (SHP/WM/LE), PP, PLM (PM, QM, PS), SRM, CRM, SCM (APO), SCM (TM), FI, CO, and Solution Manager. He also has experience in ABAP/4 and application link enabling (ALE) and IDocs. He has participated in numerous industry conferences, such as the SAP Skills Conference in Walldorf at SAP SE.

See more by this author


Comments

No comments have been submitted on this article. 


Please log in to post a comment.

To learn more about subscription access to premium content, click here.