SAP SD Introduction to Billing

In SAP Sales and Distribution, billing is the ultimate stage for executing all the business transactions. When you purchase an order the process starts until the delivery is made. So, the billing information is available at every stage of the order processing and it comprises the following components:

1. The memos (credit and Debit) for goods that are to be returned.
2. The invoices for the services and delivery of the product need to be created.
3. The transactions of all the cancelled bills need to be cleared.
4. The price function of each commodity.
5. The rebates and discount available for each good.
6. All the billing data needs to be transferred to Financial Accounting or FI.

Billing is very closely associated various structures of the organization and it can be assigned to a Distribution Channel, a Division and the Sales Organization. The major functions associated in billing are- Match codes, Blocking Reasons, Types of billing, Number Range, Display billing due list and Display Billing list.

Why is a billing document created?

A billing document is created for a debit memo, a credit memo, a cancelled transaction and an invoice. Every billing document has a header and below the header, the list of the items purchased is placed. All the billing documents are under the control of billing type.

The information that is present in the billing document header is-

1. The first thing is the date of billing.
2. The unique payer identification number which you also receive on your emails or text messages right after you purchase a product.
3. The Billing Value.
4. The currency in which you are buying (if imported, then the currency value will be of that particular country from where you are importing)
5. The Partner ID numbers which comprises the numbers of sold to part or ship to party, etc.
6. All the pricing elements.

The following data which are present below the header are-

1. Material Number.
2. The number of goods you purchased.
3. The volume and weight of the entire product.
4. The value of each item.
5. The price element of each item.

You can create, delete and change the billing processes of a document like credit memos, invoices and debit memos, etc. Your billing processes will also include the documents like the credit memos, invoices and debit memos.

Invoice vs billing in SAP

If you look through the SAP Sales and Distribution point of view, then there is not much difference between billing and invoice. In SD terminology, the word Billing is used and in FI terminology, it is called Invoice. In Material Management, the only INVOICE is used for Vendors. Invoice refers to all the documents which indicate delivery of goods and makes billing a receipt of the payments. So, if you receive goods as an organisation from the vendors then the receipt is called a bill but when you give these goods to the customers, the receipt will be called ‘invoice’.

Bill is paying the amount against the due amount and invoice means receiving the amount against the due amount. Invoice works for both Customer and Vendor Invoice. VF01 and VF02 are billing Tcodes and FB60 and FB70 are Invoice Tcodes.