Resource-Related Billing

Complex Billing Environments

Amlan Sarkar

Role -SAP Functional Consultant

Agenda
What is Resource-Related Billing (RRB)? The Power of Pricing Cost Plus Billing Scenario Fixed Price with Progress Payments Scenario Conclusions Questions

Resource-Related Billing
Any company who bills their customers based on resources consumed
Industries include but not limited to:

Airline Operations Defense Contractors Engineering & Construction Service Industry Consulting Industry Public Sector

Contract Types with Complex Billings

Cost-plus-fixed-fee Cost-plus-incentive-fee
Max Fee Max Fee Fixed Fee Award Fee Pool

100/0 Share

Target Fee

Share Ratio Min Fee Base Fee

Base Fee (0-3%) Estimated Cost

Estimated Cost

Target Cost

Firm-fixed-price w/PP

Fixed-price incentive w/PP

Multiple Incentive
Ceiling Price

Profit

0/100 Share

Target Profit

Share Ratio (PTA)

Cost

Target Cost

Billing Complexities
The amount to bill may depend on different calculations:
Resource-Billing Based on resources consumed Based on estimated resources to be consumed Based on labor hours consumed Disallowed costs Cost Funding Cost Withholds Overheads G&A Material Production Cost of Money

Billing Complexities cont.

Fees
Fixed
Percentage of costs incurred given negotiated cost Percentage of labor hours consumed Fee Retention Fee Funding

Award Incentive
Schedule Cost

How can we use SAP for RRB?

The SAP R/3 system is a toolbox from which you can build and store many different things.

Our job is to build invoices and store the data for future use

Resource-Related Billing Equation

Project System
Project Structures

Dynamic Item Processor

Sales & Distribution

Pricing Procedure Pricing Routines

Controlling/FI
Costing Sheets Cost Tables

Invoice Materials Management

Material Master

How does RRB Work?

Resource-Related Billing is used when the amount to invoice the customer is based on the resources consumed by the project

Sales Contract/Order
Line Item
10 20

Qty

Product A 1 WBS-1/DIP Profile Product B 1 WBS-2/DIP Profile

Proj
Resource Bill Dynamic Item Processor

WBS-1
Active Project with Postings

WBS-2

Processing FI&CO documents from postings

Postings DTE

Postings DTE

Postings DTE

Postings

DTE

Sample Progress Pay DMR

Fixed Price Item Flow

Sales order Header Item 10 Progress Payment Item 20 P/N12345 Down Payment $

Invoice Pricing

Price

LESS

Liquidation

Questions

Thank you for attending!