White Paper on Down Payment Request with reference to Billing Plan

Issue Description – SAP Invoices with reference to Contract to be created Regular timelines and in Future
timelines to reflect the Media and Entertainment Renewal/Subscription Business.

Key Tax/Finance Considerations:

a. Billing EUR from UK Entity with GBP functional currency creates FX exposure between
invoice date and the payment date
b. Deferred Revenue should not be recorded until payment is received or subscription
period has started
Fix –

Current Functionality

The Subscription orders in the system are with the current start date as billing date and if any future date
orders are processed in the system will have a billing in future.
There is no functionality of Down payment request in the current system or any deferred revenue possibility.
Desired Functionality

 Send a pro-forma invoice to request payment in advance of service period.

 Invoice should look that same as a firm invoice except noted as “not a Tax invoice”.
 Noted items in AR for collections, but not posted to General Ledger or Tax. A/R is held in the billing
entity until next step
 Generate a firm invoice upon earlier of payment receipt or subscription start (to coincide with
transfer of receivable to IP owners)
 If payment is received, invoice will show the applied payment amount and balance due
 If payment is not received, but subscription period started, the firm invoice is generated with
balance due referencing the original invoice number.
 when payment is received after the subscription period start, there will be FX differences between
date of firm invoice (start of sub) and payment
 UK issued invoices subject to VAT tax require the final firm VAT invoice to be sent to the customer
 US issued invoices should send advance invoice only, with firm invoice created in system to post
to GL and trigger intercompany, but not sent to customer.
 Deferred Revenue, Tax and AR are recorded at FX spot rate. If paid, AR is cleared immediately.
No FX gain/loss.
 Intercompany will be created to transfer revenue to IP entity at time of the firm invoice.
1) Billing Due List standard. : to be enhanceed for adding sales office exmaple below. VF04

2) Control the FAZ Requirement

Need to include the Logic in LV60A007 ( Copying requirements Billing ) or create a new one for
checking if the FAZ exists for the Contract order else create FAZ billing.

3) Billing Date logc in User-Exit “EXIT_SAPLV60F_001” to populate the “Billing Plan – Billing date”
field (FPLT-AFDAT)
a. For all Contract Orders with Sales office Billing Plan -Billing date will be Current date of
Order Creation even if the Contract date is in Past or Future. Billing plan –Billing date will
be VBKD-FKDAT from the Billing Tab instead of Order Creation logic )
b. Identify the payment based on the down payment FAZ. No checking on the Payment
during the Order creation . Once the Payment if receivedd from Customer against the FAZ
the Order needs to be updated with Billing Plan Date as Payment receipt date.

4) RAR Billing

AWZR condition type copy from order to down payment request and ZF2 (AR)

· Condition type “AWZR” should be copied from Contract order to Down payment request (FAZ)

· Condition type “AWZR” should be copied from down payment request.

Down Payment Request.

Down Payment request (FAZ) uses billing Rule (milestone billing) “4 or 5”. Update the Billing rule during
the FAZ and ZF2 creation as “ 4 - Down payment in milestone billing on percentage basis” from “6”.
No Changes to configuration - Routine 023 and 008 are used.
When Customer Pays the Down Payment request it includes the Tax amount . One Source updates the
Tax amount on the Down Payment in Fixed Feed Condition. Since it’s a fixed fee and Tax GL is similar to
Billing GL implement below Logic.
If TAXIT = X then copy the Account Key from ZF2 – Tax line to Down Payment line.
If the Tax Amount ZIFT = 0 then no chages to KBERT else Update the KBERT to 100%.