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Resource Related Billing (RRB) Configuration And Usage

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Resource Related Billing (RRB) Configuration And Usage

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TABLE OF CONTENTS

INTRODUCTION ....................................................................................................................................................... 3

RESOURCE RELATED BILLING (RRB) PROCESS FLOW DIAGRAMS ........................................................... 4

Configuration Process Flow ................................................................................................................................. 4

Contract Setup, Maintenance and Billing Process Flow ........................................................................................ 5

CONFIGURATION STEPS ........................................................................................................................................ 6

1. CREATE SALES DOCUMENT TYPE ...................................................................................................................... 6

2. CREATE ITEM CATEGORY ................................................................................................................................. 8

3. ASSIGN ITEM CATEGORY TO SALES DOCUMENT TYPE ..................................................................................... 11

4. CREATE BILLING REQUEST TYPE .................................................................................................................... 14

5. ASSIGN THE DMR TYPE TO THE CONTRACT DOCUMENT .................................................................................. 17

6. CREATE COPY CONTROL FOR BILLING DOCUMENT ITEMS ................................................................................ 18

7. CREATE CONTRACT ITEM TARGET PRICE CONDITION ...................................................................................... 20

8. CREATE PERCENTAGE FEE CONDITION TYPE: .................................................................................................. 24

9. CREATE THE CONTRACT PRICING PROCEDURE ................................................................................................. 27

10. CREATE DMR PRICING PROCEDURE ............................................................................................................... 29

11. UPDATE ZRRB DMR PRICE PROCEDURE ........................................................................................................ 31

12. CREATE DOCUMENT PRICE PROCEDURE .......................................................................................................... 32

13. ASSIGN DOCUMENT PRICE PROCEDURE TO ORDER TYPE.................................................................................. 34

14. CREATE PRICE PROCEDURE DETERMINATION .................................................................................................. 35

15. ASSIGN COST CONDITIONS TO SALES AND DISTRIBUTION DOCUMENTS ............................................................ 36

16. CREATE DYNAMIC ITEM PROCESSOR (DIP) PROFILE ........................................................................................ 37

17. COSTING SHEETS - DEFINE CALCULATION BASE FOR OVERHEADS ................................................................... 46

18. COSTING SHEETS – CONFIGURE OVERHEAD RATES .......................................................................................... 48

19. COSTING SHEETS – DEFINE CREDITS FOR OVERHEAD ...................................................................................... 51

20. CREATE COSTING SHEET ................................................................................................................................ 54

MASTER DATA REQUIREMENTS ....................................................................................................................... 58

The Customer Master ......................................................................................................................................... 58

Service Materials ............................................................................................................................................... 58

Sets and Cost Element Groups ............................................................................................................................ 60

Project Systems Requirements ............................................................................................................................ 62

CONTRACT SETUP ................................................................................................................................................ 65

Contract Period of Performance ......................................................................................................................... 65

Control of Resource-Related Billing and Creation of Quotations ......................................................................... 65

Item Account Assignment .................................................................................................................................... 66

Contract Line Item Pricing ................................................................................................................................. 66

USING PRICING CONDITIONS............................................................................................................................. 68

RESOURCE RELATED BILLING .......................................................................................................................... 70

Resource-Related Billing .................................................................................................................................... 70

Generate Invoice ................................................................................................................................................ 77

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INTRODUCTIONINTRODUCTIONINTRODUCTIONINTRODUCTION

Purpose of this guide Resource Related Billing (RRB) is the SAP term for its functionality whereby billings can be generated based upon the resources (hours, costs etc) consumed. These types of billings are common in both the commercial and government business sectors and appear in many forms: Time and Material Services, Cost Type (Cost Plus Fee etc) Billings, Development Programs, Power by the Hour Support Contracts etc. This document is designed to be a step by step guide to successfully configure and execute a simple resource related billing (RRB) model. While each user’s actual business requirements will vary, the fundamental processes within SAP are fairly standard. By following the steps within this guide, users can create a working RRB solution based upon standard configuration settings that can be tailored to meet their specific requirements. While this document is not intended to be a detailed reference guide on SAP functionality, the following topics are covered in sufficient detail to build the RRB model discussed herein.

• RRB Solution Requirement Considerations

• RRB Configuration in the IMG

• Sales and Billing Documents

• Pricing Procedure Design

• RRB requirements from Project Systems

• Simple Costing Sheet Development

• Executing Resource Related Billing (DP91) Who should use this guide This guide is designed for people in the following roles:

• Contract Administrators

• Contract Billers

• Consultants

• System Administrators

What you should know before using this guide The guide is really intended to be a step by step walk through of a simple RRB solution model. While quite a bit of detail specific to the model is presented, it is not intended to be a reference for general SAP configuration or functionality. It is therefore helpful to possess a good understanding of the SAP Project System, SAP Sales & Distribution, and the integration of these modules with SAP Controlling. You should also have a good understanding of your internal business processes for Contract Management, Contract Billings, and the tracking of costs associated with your projects.


RESOURCE RELATED BILLINGRESOURCE RELATED BILLINGRESOURCE RELATED BILLINGRESOURCE RELATED BILLING (RRB)(RRB)(RRB)(RRB) PPPPROCESS FLOW DIAGRAMSROCESS FLOW DIAGRAMSROCESS FLOW DIAGRAMSROCESS FLOW DIAGRAMS

The following flow diagram illustrates the configuration steps that are required to set up the RRB model described within this document. It may be useful to refer back to it while using this document to understand how the process step fits. Configuration Process Flow


Contract Setup, Maintenance and Billing Process Flow The following is a top level process flow that provides a high level, step by step illustration for the contracts and billing process. This will be useful to better understand the timing and dependencies of the steps described in this document.


Configuration StepsConfiguration StepsConfiguration StepsConfiguration Steps

1. Create Sales Document Type Since RRB is a billing function, it relies on some sort of customer sales document as its source. This sales document defines the customer, the payment terms, shipping information etc to facilitate the sale. Within SAP, there are several different documents types that can be used for this purpose, such as Contracts, Sales Orders, Service Orders, Plant Maintenance Orders etc. Although these document types vary a bit in logistics functionality, for RRB purposes they all behave pretty much the same. For more detailed information of the differences in these document types, see the SAP Help. For purposes of this guide, we will use a Contract as our document type. The following steps guide through the creation of a basic a basic Contract. Steps:

a) Enter Implementation Guide (IMG) Transaction SPRO

b) From the IMG

Follow menu path : Sales and Distribution>Sales>Sales Document Header> Select: Define Sales Document Types

SAP will open a window with a list of all the currently defined Sales Order Types. A new Sales Order type can either be entered from scratch or created by using an existing document as a template. We will use the document type CQ as a template and use the “Copy” functionality. The advantage in copying an existing document type is that it will bring along a lot of configuration that likely already meets many of your requirements. In many cases, only a little editing will be required. On the down side, it may bring along more than you really need. This is usually not a real problem as you can easily delete what is not needed.


c) Select the sales order type (SaTy): CQ = Quantity Contract as the source document to copy.

d) Press the “Copy” icon.

Pressing the copy icon will open CQ contract in change mode. The user can then make the required changes to the document definition and rename it:

e) Rename the document type. For this document example, we will call it ZRRB = Resource Rel Contr.

That is really all that needs to be done at this time. The configuration that comes along will be sufficient for now. The Billing Request document type (LV) that is assigned by default will need to be changed, but we will need to first go create a new request type and then come back and assign it.


f) Save doc type ZRRB

Notice that during saving, that the copy control configuration was also created.

2. Create Item Category Once our Contract type is created, we are ready to create the item category. The item category is very important. The item category defines how sales items on the sales document will behave in terms of logistics, pricing and billing . For our RRB example, we want an item category that identifies our Dynamic Item Processor (DIP) and our price procedure. These two ingredients are really all that we need from the item category that will be unique. We therefore want to again find a suitable “template” item category that we can use to copy from. Configuration Steps:


b) From the IMG

Follow menu path : Sales and Distribution>Sales>Sales Document Item> Select: Define Item Categories


The Define Item Categories button will open a list of all the existing item categories. This will probably be a very long list and there will be many very subtle variations between them if any at all. Still, it is usually a good idea to create a new item category if it can be logically identified to a specific business process. This will make it much easier to change later without causing an impact in other business processes. For our purposes we will use the item category TAD as our template.

c) Press the “Copy” icon.

Pressing the copy icon will open the item category in change mode. The user can then make the required changes and rename it:


d) Rename the item category. For this document example, we will call it ZRRB =

RRB Service. The only items that are required to be set are the Pricing and Business item selections in the Business Data block and the DIP profile in the Control of Resource-related Billing and

Creation of Quotations block (at the bottom).

e) Set the Dynamic Item Processor (DIP) profile. The DIP is the key to resource related billing. It establishes the rules for how the costs will be gathered and categorized for billing. Since we are creating this item category from a template, it already has a DIP profile assigned. We will need to create a new DIP profile in configuration and then come back to assign it to our item category.

f) Save the new item category.


Notice again that the copy control comes along from our template item category.

3. Assign Item Category to Sales Document Type A sales document, (our contract in this case), is capable of having many different item categories useable. In order to utilize the item category that we created in the prior step, there are some assignments that must be made. SAP uses a combination of keys to reconcile which item category to propose on a sales document. These relationships must be established in configuration first. Later in this document we will discuss the role that the Service Material has in determining the item category. Configuration Steps:


b) From the IMG

Follow menu path : Sales and Distribution>Sales>Sales Document Item> Select: Assign Item Categories


The Assign Item Categories button will open a list of all the existing item category assignments. The assignment table has the following keys: SaTy : Sales Document Type ItCGr: Item Category Group Usg: Usage HLevICa: Higher Level Item Category DfltC: Default Item Category MltCa: Manual Item Categories Allowed For purposes of this document, we will only need to worry about the relationship between: SaTy>ItCGr>DfltC This will propose an item category based on our new document type and the type of material that is entered (We will be using a Service Material).

c) Find a suitable entry to copy. Because we have been creating everything from copies of existing configuration, there is already an entry for our new document type. Select a ZRRB entry

a) Press the “Copy” icon.


When we press the copy icon, the selected assignment opens in change mode. We can now change the Item cat group and default Item category.

b) Change Item Category Group to LEIS

The item category group is a characteristic that is associated with the material that will be sold. We are going to be selling a service in our example and will use the standard ItCGr LEIS. LEIS = Service w/o delivery. This code will be entered onto our Service Material that we will create later in this document.

c) Change Default Item Category to ZRRB

The default item category is the item category that the system will propose. In this case, we want it to propose the ZRRB item category that we created earlier.

d) Save the new item category assignment.


4. Create Billing Request Type During the billing a process, a debit memo request (DMR) is generated with billing line items as proposed by the DIP profile. In RRB, a billing request or DMR can be thought of as a pre-billing document. The purpose of the DMR is to show how the billed resources/costs have been handled and provide a way for the user to review and approve the billing prior to final invoice. Once approved, the DMR is billed and an invoice is created. We referred to the need to create a new billing request earlier in this document in the “Create Sales Document Types” section. To better understand the relationship between the contract and DMR, consider the following example:

Contract Item 010 Deliver Prototype Target Price = $1,000,000 Billing Request (RRB billing)

Item 010 Labor Price=$100,000 Item 020 Material Price=$250,000 Item 030 ODC Price=$75,000

Total Billing $425,000 The above example illustrates that the contract identifies what is being sold while the DMR is the product of the RRB process and contains the billing line items derived from the DIP profile. In our ZRRB document, the Billing Request type LV defaulted in since we used a template to create our document type. We must now create a new billing request type by copying LV and assign it to the ZRRB document. Configuration Steps:


b) From the IMG

Follow menu path : Sales and Distribution>Sales>Sales Document Item> Select: Define Sales Document Types


SAP will open a window with a list of all the currently defined Sales Order Types. We will use the document type LV as a template and use the “Copy” functionality.

g) Select the sales order type (SaTy): LV = Deb.MemoReq. f.Ctrct as the source document to copy.

h) Press the “Copy” icon.

Pressing the copy icon will open LV contract in change mode. The user can then make the required changes to the document definition and rename it:


There really are just a couple of changes required to the LV for our example. The standard LV document will suite our model just fine, but we will need to change the document pricing procedure to one that is specific to our RRB model. This key field helps identify what pricing procedure to use (and therefore how to calculate price) on the sales order. By creating a new document price procedure, it will be easier to assign the actual price procedure later in this document. For now just note where the assignment is made. We will create a new document price procedure in the IMG and come back to this field later.

i) Rename the document type. For this document example, we will call it ZLV = Resource Rel Contr.


Note the default billing type (the invoice that will be ultimately created from the DMR) is assigned to type L2. This is sufficient for most needs. If not, then a copy of L2 should be created and entered into the order related billing field on the DMR type. This is located near the bottom of the document in the Billing section.

j) Save the new Debit Memo Request

5. Assign the DMR type to the Contract Document In this step, we will assign the new DMR (billing request) that we just created to the sales document (contract) that we created earlier. Configuration Steps:


b) From the IMG

Follow menu path : Sales and Distribution>Sales>Sales Document Type> Select: Define Sales Document Types

c) Choose document type (SaTy) ZRRB

d) Press magnifying glass icon. This will open the existing document in change mode.

e) Enter “ZLV” (our new DMR type) in the field labeled Billing request


f) Save the document by pressing the save icon The new billing request is now associated with our contract

6. Create Copy Control for Billing Document Items The new DMR type ZLV has a default billing type of L2 because it was copied from the LV document. The item category ZRRB needs to be added to the copy control so that it is brought in during billing later. Configuration Steps:


b) From the IMG Follow menu path : Sales and Distribution>Billing>Billing Documents

Select: Maintain Copy Control For Billing Documents

c) Choose Copy control: Sales document to billing document

d) Enter Data: Billing Type = L2 SalesDocType=ZLV


e) Select the Entry and Press the Item Folder to see the current entries.

f) Create Entry for ZRRB by copying and existing entry:


g) Save the addition to copy control by pressing the save icon

7. Create Contract Item Target Price Condition Now that all the document types have been created, it is time to develop the pricing rules that will be applicable in the contract document and in the billing request. Each will have its own pricing rules and therefore its own pricing procedure. To review, in Resource Related Billing, the DMR is really the document where the individual

resources are priced and sold. The contract (or sales order if applicable) pricing procedure

therefore only needs information that is applicable to the Service Material being sold such as the

item target price etc. It is not actually billed.

We will need to create two pricing procedures: One for the contract and one for the DMR. Before we can create these pricing procedures, we need to create the pricing conditions that will be used within the procedures.

Configuration Steps:

a) Enter Implementation Guide (IMG)

Transaction SPRO

b) From the IMG Follow menu path : Sales and Distribution>Basic Functions>Pricing>Pricing Control>

Select: Define Condition Types


A popup menu will appear with some additional choices.

c) Choose Maintain Condition Types

This will display the existing conditions and provide an opportunity to create new ones. We are going to first create a condition called “ZCON” to represent the contract item target price. We will then add it to a contract price procedure in a follow on step.

d) Select condition type (CTyp) PPSV=Service Price Item This condition type will provide all the functionality that is required for this example. We will therefore use it as a template to copy from and create a new condition type.

e) Press the copy icon The condition type PPSV will open in change mode. This will need to be modified slightly for our requirements, however not much functionality is required.


f) Update PPSV Condition Type. Resave as ZCON condition Type

Change Condition Type to “ZCON” Remove “PPPV” access sequence. It will not be required for our model. Change Description to Contract Item Price Change Calculation type to “C” = Quantity


No other changes are required for this condition. This will be sufficient to hold the contract item target price.


8. Create Percentage Fee Condition Type: When we create the pricing procedure for the DMR later in this document, our model will require a percentage fee to be applied to the incurred costs. We will therefore need another condition type which we will call “ZFE1” that will serve as a percentage fee condition and allow us to create a “cost plus fee” billing. We will use the “ZCON” condition type created in the previous step as a template. If you skipped that step then use the standard “PPSV” condition type as the template.



Transaction SPRO


Select: Define Condition Types

A popup menu will appear with some additional choices.

c) Choose Maintain Condition Types

This will display the existing conditions and provide an opportunity to create new ones. We are going to first create a condition called “ZFE1” to serve as a surcharge on the DMR billing items that will be generated during RRB. We will then add it to a DMR procedure in a follow on step.


d) Select condition type (CTyp) “ZCON”= Contract Item Price We will use this as our template, but several changes will need to be made.

e) Press the copy icon The condition type ZCON will open in change mode. This will need to be modified in several places.

f) Create ZFE1 Condition Type from ZCON

• Change Condition Type to “ZFE1”

• Change Description to Cost Type Fee Item

• Enter access sequence if required. The access sequence is simply a way to establish various condition values within master data and then determine which one will come into the pricing procedure. There are a lot of standard ones available that can be used or custom access sequences can be developed for specific requirements. The creation of these is beyond the scope of this document, but can be easily found within SAP Online Help. We will use a custom access in this example called ZAPR which allows our fee to be assigned to a specific contract number.


• Change Calculation type to “A” = Percentage

• Enter “C” for Manual Entries. This will allow us to override the calculation if desired.

After all the entries have been made, the condition must be saved.


9. Create the Contract Pricing Procedure As mentioned earlier, we will need two pricing procedures for our RRB model. The first procedure will be assigned to our contract document and utilize the ZCON price condition to hold our line item target price. Configuration Steps:


Transaction SPRO


Select: Define and Assign Pricing Procedures

A popup box will appear when the selection is made. Within this box are several options related to price procedure configuration. We will perform several of these functions in the next few steps.

c) Choose Maintain pricing procedure

The contract price procedure requires very little functionality for our model. We will therefore not need to use a template to create it as we have done on other areas in this document. The following workbench will open. The left side of the screen controls the navigation to the various levels within the procedures. The right side of the screen shows the existing procedures.


d) Press New Entries button A blank line will appear where a new procedure can be entered.

e) Create ZCONT Pricing Procedure Procedure = “ZCONT” Description =”Contract Pricing”

No other information is need at this level, However, we will need to click on the “Control Data” icon to enter the details.

f) Select ZCONT and Press Control data The control data is just the steps within the price procedure that determines what the price will be. Since it is a new procedure and not copied from a template, there will not be any rows until we create them.


g) Press New Entries button The rows will change from grey to white and allow entry

h) Create the Contract Item Pricing Steps Step CTyp Description Stat Reqt BasTy AccK

10 ZCON Contract Item Price 2 ERL

20 Total Contract Value X 2

This procedure will use the pricing condition ZCON to allow the user to manually enter a contract item price.

The requirement is set to 2. This just checks to make sure that the condition is actually a price condition in this step. The BasType is set 2. This setting controls how the base is calculated for the step. In this case, the total contract item value is the net value that is calculated in the procedure. If additional surcharges or discounts are later added, this entry will keep the Total Contract Value statistic accurate.

10. Create DMR Pricing Procedure


In addition to the contract pricing procedure that we just created, we will need a price procedure for the DMR. This procedure will be more complicated than the ZCON because it will need read costs from our source (Project Structure) and add a percentage fee (condition ZFE1). It may be desirable to find a template procedure to use. A good procedure to use as a template is PREP01 because it has the basic elements required for resource related billing. Configuration Steps:


Transaction SPRO



A popup box will appear when the selection is made. Within this box are several options related to price procedure configuration. We will perform several of these functions in the next few steps.

a) Choose Maintain pricing procedure

As before, a workbench will open. The left side of the screen controls the navigation to the various levels within the procedures. The right side of the screen shows the existing procedures.

b) Select the PREP01Repairs price procedure. This will be the template for our DMR price procedure.

c) Press the copy icon


d) Change the Procedure name to “ZRRB” and press the save icon

Our new price procedure ZRRB is now created. It will need to be modified however to include a surcharge for preparing cost plus fee billings.

11. Update ZRRB DMR Price Procedure For our example we will need to delete the condition type PRRP because it will not be needed. Additionally, we will need to add a percentage fee that will be applied to the actual posted costs for billing purposes. Configuration Steps: Reopen the ZRRB price procedure in change mode. Refer to earlier screenshots if necessary.

a) With the ZRRB procedure open in change view, select the Control data tab to the left.


a) Delete PRRP Condition. This is not needed for the model.

• Select step 10. Press the delete icon

b) Add a Percentage Fee ZFE1 condition (created earlier in this document). This condition will allow a fee to be added to the incurred costs.

• Press New Entry button

• Enter the following Data o Step = 250 o CTyp =ZFE1 o From =100 o Print = X o AcctK=ERL

c) Optional: Delete unnecessary rows in the procedure. For purposes of simplifying the

example, all but the bare essentials have been deleted from the procedure.

Note: In this model, the percentage fee would be applied to all billing items. If this is not desired, a requirement (Reqt) should be created based on the materials that are to appear in the DMR. For instance if the fee was not applicable to material, but is applicable to labor. 12. Create Document Price Procedure


The document procedure is simply a key that will help during pricing procedure determination. This was discussed earlier in this document.



b) From the IMG

Follow menu path : Sales and Distribution>Basic Functions>Pricing>Pricing Control> Select: Define and Assign Pricing Procedures

A popup box will appear when the selection is made. Within this box are several options related to price procedure configuration. Choose Define document pricing procedure

c) Press New Entries Button and Enter Data

• DoPr = Enter an unused character to be used as the new Document Price Procedure

• Description


d) Press the save icon 13. Assign Document Price Procedure to Order Type Configuration Steps:


Transaction SPRO



A popup box will appear when the selection is made. Within this box are several options related to price procedure configuration. Choose Assign document pricing procedure to order types

c) Assign the New Document Price Procedure to the ZLV Document

d) Press the save icon


This document price procedure is now assigned. This can also be seen by viewing the document type itself.

14. Create Price Procedure Determination

This step will establish criteria underwhich our previously created price procedures will be utilized in our sales order types (both the contract and the DMR).



b) From the IMG

Follow menu path : Sales and Distribution>Basic Functions>Pricing>Pricing Control> Select: Define and Assign Pricing Procedures

A popup box will appear when the selection is made. Within this box are several options related to price procedure configuration. Choose Define Pricing Procedure Determination

c) Press New Entries and Enter Data

• Sales Org = Sales Organization

• DChl = Distribution Channel

• Div = Division

• DoPr = Document Price Procedure created earlier

• Price Procedure = ZRRB

• CTyp = This is the Condition that will be displayed on the sales order line item. Choose EK01.


d) Press the save icon The ZLV DMR will now have the correct price procedure assigned to it (ZRRB). It is a good idea to validate that the contract document will bring in the correct price procedure also. In our model, the ZRRB document (the contract) has the document price procedure “1” . The correct entry for Price Procedure Determination of this document is therefore:

The pricing procedure determination is now complete.

15. Assign Cost Conditions to Sales and Distribution Documents

In this step we will tell identify which condition used within the price procedure represents cost. In our case, we want EK01 to be identified as a cost condition and to hold the value of the actual costs from the project during pricing.



b) From the IMG

Follow menu path : Project Systems>Revenues and Earnings>Integration with SD Documents>>Creating Quotations and Project Billing>

Select: Assign Cost Conditions to Sales and Distribution Document Types


c) Choose New Entries and Enter Data

• SD document type = ZLV

• Condit type = EK01

d) Press the save icon

16. Create Dynamic Item Processor (DIP) Profile

The DIP profile contains the rules for how the resources (incurred costs and hours) will be grouped for billing. It is simply taking those costs and putting them into the applicable billing buckets.

This step will create a simple DIP profile that would be applicable for our model. For our purposes, we will need a profile that includes the following:

Direct Costs

• Labor

• Material


• Travel

• Other Direct Costs

Non direct costs

• Labor and Material Overhead Burdens

• Cost of Money Burden

• General and Administrative Expense Application

There are a couple of different paths to the configuration of DIP profiles. In our case we will go through the Project Systems Menu path since we will be using a project as our cost collector anyway. Alternatively the transaction ODP1 will also open the configuration window for DIP.



b) From the IMG

Follow menu path : Project System>Revenues and Earnings>Integration with SD Documents>Creating Quotations and Project Billing

Select: Maintain Profiles for Project Billing

Alternatively: Transaction ODP1 will go to the same location

This selection will open the DIP profile workbench.

c) Press New Entries button and enter new profile name and text:


Alternatively, the copy function could be used if a reasonable template exists.

Press the save icon to create the profile.

d) Select the new profile (while in change mode) and press the “Usage” tab The usage tab controls how the profile will be utilized in processing. It identifies the documents and functionality.

Pressing the usage tab will display the current usage. Since this is new and not copied from a template, no items will appear.

e) Press the “New Entries” button


f) Enter Usage For this model, only one usage is required. Select the pulldown box on the first line item to see the available choices.

Choose “Billing and results analysis” Enter “ZLV” in the Sales Doc. Type field. This will allow the newly created DMR to be utilized during resource related billing.

The next step will be to determine the behavior of the DIP profile during RRB.

g) Press the Characteristics button The characteristics button will show all the possible entries on the right hand pane. Additional characteristics can be added, but it is not the topic of this document. See SAP Online Help. In the table, make settings that:


• Determine if the characteristic is relevant during creation of dynamic items

• Determine whether the relevant characteristic is used in material determination (used to identify billing items)

• Determine whether to summarize material determinants

For this simple RRB model and for the typical usage, the following settings should be sufficient.

Press Save icon. Next we will need to determine the “sources” of posted costs and resource usage.

h) Press the Sources button and enter data The sources button identifies the types of resources that will be used during dynamic item processing.

Press the New Entries button


For our purposes, we will want to pull actual costs as opposed to planned costs or some other source.

Choose Actual costs – Total records Either of the Actual cost entries would be fine. The Total records choice however is much faster to process than using Line item records and should be used if possible. It of course depends on how the dynamic items are going to be created and the level of structuring needed. In most cases, Actual costs-Total records is sufficient Enter 100% in the Percentage field: This is simply the proposed percentage of resources to be billed. This is changeable during processing. Enter ZRRB in the Cstg sheet field. The costing sheet was created earlier in this document and is used to calculate our burdens which we want to appear as line items on the billing document.

Press save icon

i) Choose Selection Criteria icon and enter data The selection criteria button is used to limit the records that are considered for dynamic item processing. The available choices for criteria comes from the characteristics which were chosen as “relevant” earlier.


This step is actually optional, but it is recommended as a way to reduce the population of data that will be processed. This will help limit the billing of resources to only those which are billable. For this model, we will enter a selection criteria for cost elements.

In the field Set Name enter RRB_All. This is the SET ID for all the cost elements which are applicable to our model. The SET ID must exist before it can be added as an entry in this field. See the Master Data section for creation of the SET IDs

Press the save icon

j) Press the Material Determination Icon and New Entries Blank lines will appear to allow input of material determinants.

The Material Determinants are the billing items generated during RRB and represent the resources processed through the DIP profile.


For this model, we will enter a typical set of material determinants for a cost plus fee billing.

k) Enter Material Determinants

Important: The material determinants that are entered into the table MUST have material records created before they can be entered. The Master Data section of this document discusses creating these materials.

Line Material/Service Transfer Quantity/Costs 1 RRB_LABOR Transfer Costs and Quantity 2 RRB_MATERIAL Transfer Costs Only

3 RRB_LABOR_BURDEN Transfer Costs Only 4 RRB_MATL_BURDEN Transfer Costs Only

5 RRB_ODC Transfer Costs Only 6 RRB_TRAVEL Transfer Costs Only

7 RRB_GENERALADMIN Transfer Costs Only

8 RRB_COM Transfer Costs Only

Notice that the RRB_LABOR material transfers costs and quantity. This is not strictly necessary for a cost type billing, but it is very useful to facilitate reconciliation of costs later.

Press save icon These Material Determinants are the items that will show up on the DMR during RRB. Each of these buckets must now be defined as to what costs roll into them. The next step is to establish the rules for sorting the costs into the Material Determinants (cost buckets) that were just created.

l) Enter Criteria for Material Determinants

This step will establish the criteria for the Material Determinants (how costs will be sorted into the buckets established in the previous step). Important: The criteria will be based on cost element groups. This provides a convenient way to organize costs. These cost element groups must first be created. See the Master Data section of this document for information on how these are used.

Select Line 1 (RRB_LABOR) and Press the Criteria icon


Earlier, we established that Activity Type and Cost Element were relevant characteristics for Material Determination. These now appear as possible entries. We will use Cost element for all the material determination since all the labor costs can be grouped together. If the labor costs needed to be broken out by labor activity type for purposes of applying different fees etc, then the Activity Type criteria could be used.

Enter Cost Element Group in Cost Element field: Criteria can be entered as single values, ranges or as Sets. A set is nothing more than a named group of criteria. These are discussed in the Master Data section. We will use Cost Element Groups as Sets. Enter Cost Element Group RRB_LAB. This cost element group contains all the cost elements that are billable under our model scenario. Repeat this step for each Material Determinant and Cost Element Group

Material Determinant SET (Cost Element Group) Value (Single Cost Element) RRB_LABOR RRB_LAB

RRB_MATERIAL RRB_MAT RRB_LABOR_BURDEN 0000620500 (See Below) RRB_MATL_BURDEN 0000620100 (See Below) RRB_ODC RRB_ODC

RRB_TRAVEL RRB_TRAVEL

RRB_GENERALADMIN 0000620990 (See Below) RRB_COM 0000620991 (See Below)


Enter Single Value Cost Elements for Costs Derived From Costing Sheet: Some of the costs that will be billable, are calculated costs and not pulled directly from the project. In this model, the labor and material burdens as well as G&A and cost of money are calculations. These will use a single cost element instead of cost element groups. These cost elements must be set up prior to configuration. See the Master Data section and the Create Costing Sheet section in this document for more information.

Press save icon

The DIP Profile is complete. 17. Costing Sheets - Define Calculation Base for Overheads

The costing sheet when used in RRB is a very powerful tool that allows us to perform calculations (for overheads in our case) and then pass them to RRB in the form of line items.

Before we can create the costing sheet, we need to complete some preliminary configuration steps.

In this step, we will configure the calculation base for overheads. This will identify the base upon which the overheads are calculated.



b) From the IMG

Follow menu path : Project System>Costs>Automatic and Periodic Allocations>Overhead >Costing Sheets

Select: Define Calculation Bases Referring to Cost Element and Origin


This selection will open the Calculation Base workbench.

a) Press New Entries button and enter the Calculation Base and Descriptions:

Calculation Base Name ZRLA RRB Labor

ZRMA RRB Material ZROD RRB ODC

ZRTR RRB Travel

a) Select ZRLA and Press Details icon Enter Details:

• Controlling Area


Enter whatever is applicable. In this case the model has been created in controlling area 1000

• Cost Elem. Group = RRB_LAB The cost element group must have already been created prior to this step. See Master Data section of this document.

Press save icon ZRLA is now complete. Repeat steps for the remaining bases that need to be created using the following data:

Calculation Base Name Cost Element Group ZRLA RRB Labor RRB_LAB

ZRMA RRB Material RRB_MAT

ZROD RRB ODC RRB_ODC ZRTR RRB Travel RRB_TRAVEL

Press save icon The calculation bases are now complete. In the next step, we will create the overhead rates that will be used in the costing sheet. 18. Costing Sheets – Configure Overhead Rates

In the previous step, the overhead bases were configured that will be used within the costing sheet. In this step, we will configure the overhead rates.


c) Enter Implementation Guide (IMG)


Transaction SPRO

d) From the IMG Follow menu path : Project System>Costs>Automatic and Periodic Allocations>Overhead >Costing Sheets

Select: Define Percentage Overhead

This selection will open the Overhead Rates workbench.


b) Press New Entries button and enter the Overhead Rate and Descriptions:

The actual Rate name will vary depending upon existing configuration. Create rates ZBXX, where XX is a number not already assigned.

O/H Rate Name Dependency Description ZBXX Indirect Labor D000 Overhead Type

ZBXX Material OH D000 Overhead Type ZXXX G&A D000 Overhead Type

ZXXX COM D000 Overhead Type

a) Select each rate, press the Details icon to enter data

a) Press New Entries Button and Enter Data:

• Valid From = Starting Date for the Rate

• To = Ending Date of the rate

• CO Area = Enter Applicable CO Area

• Overhead Type = “1” Actual

• Percentage = Applicable Burden for Overhead Type


Repeat for Each Overhead Rate.

Press save icon The OH rates are now complete. These will be used in the costing sheet in later in this document. 19. Costing Sheets – Define Credits For Overhead

In this step, we will configure the Credits for Overheads. The keys defined in this step dictate how the overheads will be posted. This is critical because the overheads that are calculated will be placed into cost elements that will then be processed by the DIP profile during RRB.

Note that the cost elements must be created before they can be used in configuration. See the Master Data section regarding creation of the cost elements.



b) From the IMG

Follow menu path : Project System>Costs>Automatic and Periodic Allocations>Overhead >Costing Sheets

Select: Define Credits


This selection will open the Overhead Credits workbench.

c) Press New Entries button and enter Data: The actual credit name will vary depending upon existing configuration. Enter ZBXX, where XX is a number not already assigned.

Credit Name ZBXX Labor OH

ZBXX Material OH


ZBXX G&A

ZBXX COM

d) Select each Credit individually and Press the Details icon

e) Press New Entries Button and Enter Data:

Enter detailed cost element posting information. The following shows the cost elements for the model.

• Valid To: Validity date when no longer applicable.

• Cost Element: Enter cost element where the calculated OH will be posted.

• Fxd %: Enter “*”

• Cost Center: Applicable Cost Center for posting

Repeat for each Credit Key


Press save icon All preliminary set up has been completed. The next step is to build the Costing Sheet. 20. Create Costing Sheet

The costing sheet when used in RRB is a very powerful tool that allows us to perform some calculations (for overheads in our case) and then pass them to RRB in the form of line items.

This step will create a simple Costing Sheet that would be applicable for our model. For our purposes, we want a Costing Sheet that will work in conjunction with our DIP profile to calculate billable overhead rates. These will then be added as line items into our DMR once processed through the RRB. :

There are a couple of different paths to the configuration of Costing Sheets. In our case we will go through the Project Systems Menu path since we will be using a project as our cost collector anyway.



b) From the IMG

Follow menu path: Project System>Costs>Automatic and Periodic Allocations>Overhead >Costing Sheets

Select: Define Costing Sheets


This selection will open the Costing Sheet workbench.

b) Press New Entries button and enter Costing Sheet name and Description: Alternatively, the copy function could be used if a reasonable template exists.


Press the save icon to create the Costing Sheet.

c) Select the new costing sheet (while in change mode) and press the “Costing sheet rows”

tab

A blank costing sheet will be opened where new entries can be added. Enter Data:

Row Base Overhead Description From To Credit 10 ZRLA RRB Labor 20 ZB01 Labor OH 10 Z10

30 ZRMA RRB Material 40 ZB02 Material OH 30 Z11

50 ZROD RRB ODC

60 ZRTR RRBTRAVEL 70 All Base and OH 10 60

80 ZB10 G&A 70 Z13 90 ZB11 COM 80 Z14

Press the save icon


Note: that the Base, Overhead and Credits already have the correct detail information because they were done in the previous steps. They can be modified in this workbench or from the individual configuration areas as desired. The Costing Sheet is now complete.


Master Data RequirementsMaster Data RequirementsMaster Data RequirementsMaster Data Requirements

Master data refers to the information required to create a specific contract in SAP such as customers, materials, and prices. The following section provides an overview of the master data required to set up and execute a simple (cost plus fee) resource related billing model. Special attention is given to areas that are critical for RRB. For more detailed information about setting up master data, refer to the SAP Online help. The Customer Master This setup is required before creating a contract in SAP. The customer master setup process can entail setting up sold-to, ship-to, bill-to, payer or other business partners. Identify the correct partners that will be used in this transaction. No special requirements are necessary for a customer in the RRB business case. The customer master data can be verified by using transaction: XD03. Service Materials Service Materials are used to represent the contract line items. The item category for the service material when entered onto the contract must be ZRRB. This will appear automatically as long as the correct Item Category Group has been used. The following setup is required for the service materials that will be used for the items of this contract. Transaction: MM01= Create Material (Master Data)

• Material: Enter Material Name

• Industry Sector: Any

• Material Type: Enter Service There are very few requirements for the service material. Since it is not a deliverable item (requiring logistics settings), it only needs to have the Basic Data and Sales Area data completed. Choose the following selections when the popup box appears:

• Basic Data 1

• Basic Data 2

• Sales: Sales Org. Data 1

• Sales: Sales Org. Data 2

• Sales: General/Plant Data

• Foreign Trade: Export Data

• Sales Text


Enter Item Category Group: The item category group is what controls which item category appears on the contract when the service material is entered. On the Basic Data 1 Screen = Enter Item Category Group LEIS. Based upon the configuration established earlier in this document in the Assign Item Category section, it will drive the appropriate item category determination.


Sets and Cost Element Groups Sets (Sometimes called Set IDs) are nothing more than the defined buckets of resources that will be billed during RRB. Examples or Set IDs are Material, Labor, ODC etc. SetIDs are used within the DIP profile to group costs for billing purposes. There are various ways to create SetIDs for cost groupings. It is important to understand how your Set IDs work so that they can be managed properly. Occasionally, these IDs need to be updated to include or eliminate certain items from billing. Sets are commonly established a couple of different ways. Basic Sets are established using the transaction GS01. Creating Sets in this manner allows the greatest flexibility because different criteria can be used for the grouping. Another way to identify sets is to utilize Cost Element Groups. In this manner, the user can define a Set ID such as “Material” as all the cost elements in a certain range. This is a very easy way to establish Sets, but obviously only works when cost element can be used as legitimate grouping criteria. The example DIP Profile shown earlier uses Cost Element Groups to define all of its Material Determinants. The following steps illustrate how to set the cost element groups for the RRB model: Groups to Create:

Cost Element Group Parameters RRB_ALL Include All Cost Element Groups from Below

RRB_MAT All Material Cost Elements – Will be assigned to RRB_ALL RRB_LAB All Labor Cost Elements – Will be assigned to RRB_ALL


RRB_ODC All Other Direct Cost Elements – Will be assigned to RRB_ALL

RRB_TRAVEL All Travel Cost Elements – Will be assigned to RRB_ALL RRB_OH Includes the OH Cost Elements from Costing Sheet (See Configuration

Settings for Costing Sheet)– Will Assign to RRB_ALL Requirements before starting:

• All required cost elements should have been created for the Overhead Cost Element Group (used in the costing sheet).

• Planned how cost elements should map to the cost element groups. Steps:

a) Create Cost Element Group Transaction KAH1

b) From the Menu

Follow menu path: Accounting>Controlling>Cost Element Accounting>Master Data >Cost Element Group

Select: KAH1 - Create

c) Enter Cost Element Group Name

d) Enter Data: Use data from table above. Note the Overhead cost elements must be created

before this step can be done.


Note that each of the sub cost element groups are entered here as well. This can be done as a single step or the individual cost element groups can be created one at a time and then assigned.

Once this structure has been completed, Press the save icon.

If during billing, a billable resource is not picked up during RRB, it is a good idea to check the parameters of the target cost element group (or Set) that is feeding the material determinant. For example, if it is a new material cost elements was created and is not showing up in billing, it may not have been added to the cost element group.

Project Systems Requirements A Project is a method used to define and organize the total work scope and associate it with the costs and resources required to accomplish activity. The project is comprised of individual WBS elements arranged hierarchically that can be used for either cost collection (account assignment) or billing purposes. To be billable, contract line items in SAP must be assigned to a billing WBS element. This is a special type of WBS element where the billing element indicator is set which identifies this as the level that you will bill and post billed sales. There must not be any billing elements defined below the level to which you want to bill because the system will not include those costs during the resource-related billing transaction.


Process Steps to Validate WBS Setup: Transaction CJ20N

The project builder workbench will open with the entire structure shown in the left hand pane.

Select a WBS element to view

Select the tab and review the information displayed in the Operative Indicators section. If a WBS is intended to be billed against the contract, it must have the billing indicator

selected. If it is intended to collect costs then the account assignment box must be selected. The following example shows a WBS element that is BOTH an account assignment element (costs can be collected to it) and a billing element (it can be assigned to a contract CLIN).


Validate that the project structure is created and that the correct billing WBS elements is identified. Transaction Code: CJ20N


Contract Contract Contract Contract SetupSetupSetupSetup

The contract is created with transaction code VA41. Identify the correct contract type which was configured for your inception-to-date billing business scenario. After entering the correct organization structure and customer information, enter your item information. The billing WBS element must be correctly assigned to the proper contract line item. All costs under this node of the WBS structure will bill together on this CLIN (contract line item). The prices that are entered into the contract are the value of each CLIN so that the total contract value is the sum of all of the contract values for each item. Enter the item contract value in the item�conditions tab. Contract Period of Performance The contract start and end dates are defined as the period of performance of the contract and will automatically control which costs will be billed versus excluded during the resource-related billing process.

Control of Resource-Related Billing and Creation of Quotations The Billing Form and the DIP profile field appears on the item�sales B tab of the SD Contract. These fields appear in the section Control of Resource Related Billing and Creation of Quotations and specifically control how resources will be billed.

Billing Form


The billing form selection controls whether you do billing based on the costs found on from the account assigned WBS element or from a predefined fixed rate for the service. This should always be set to Costs for cost type billings.

Item Account Assignment The link between the contract line item and the project WBS where the costs are collected/billed is on the Account assignment tab (line item level). Select the contract line item and go to the “Account Assignment” tab. Enter the billing level WBS from the project. This WBS must have the “billing” indicator checked (See Project Systems Requirements in this document).

Contract Line Item Pricing Within the contract document, only the contract line item prices will be entered. These represent the total CLIN prices and must be manually entered. The actual pricing will be determined on the debit memo request and is a function of incurred costs and calculations from the pricing procedure. Select the contract line item and go to the “Conditions” tab. Enter condition type (CnTy). In the following example, the CnTy ZCON is used to store the CLIN value. Enter CnTy ZCON and a CLIN amount. Press Enter


Repeat for all the contract line items. When done, the total contract price can be viewed at the header level.

The Net value of the contract is identified at the header level of the SD contract. This is the total CLIN value and is independent of the billed values. To see the total invoiced amount you should look at the document flow and the value of the individual invoices.


Using Pricing Conditions Using Pricing Conditions Using Pricing Conditions Using Pricing Conditions

Earlier in this document, we looked at the Contract Pricing Procedure (ZCON). This price was simply the total CLIN value for the contract and represented a maximum. A second price procedure is used for the debit memo requests (DMR) generated during resource related billing (RRB). The DMR price procedure will have the pricing conditions for all the calculated prices and fees. Additionally, price conditions can be used to further limit funding usage below the CLIN level. Shown below is a screenshot of the sample DMR pricing procedure created earlier. It has a single pricing condition that must be maintained (ZFE1).

Setting Up Price Condition Records Transaction: VK11,VK12 Create/Change Price Condition Records Enter Price Condition

Press Enter A box will popup requesting a key combination. This key combination determines at what level the pricing condition is relevant. In the following example for ZFE1, a different fee can be established for a specific service material if desired. For example, a 10% fee may apply to all items on the invoice except for outside service labor which would only get 5%.


Select Key Combination Press Enter Enter Data All Pricing Conditions must have validity information. This will control when the condition becomes relevant in pricing. If the condition is not showing up during pricing it may be because the document pricing date is before the condition validity date.


RESOURCE RELATED RESOURCE RELATED RESOURCE RELATED RESOURCE RELATED BILLINGBILLINGBILLINGBILLING

Resource-Related Billing Resource-related billing (RRB) is a transaction which extracts costs from a project, summarizes them according to the configuration of the DIP profile specified in the contract item, and places them in a pre-bill called a debit memo request. The following transaction codes can be used to execute RRB: DP90, DP91, DP96. DP99A, DP99B and DP99C show the document flow of the billings. Resource Related Billing Process Steps: Transaction DP91: RRB Request

• Enter Data o Sales Document: Contract Number created in Master Data section. o Sales Document Item: If left blank, all items will be billed. o Posting date to: End posting date for costs on the project. o Pricing Date is optional unless the user wants to direct a specific pricing date

otherwise the current pricing is used.

• Press Enter button


There are two views available during RRB processing. The Expenses view and the Sales Price view. The view shown below is the Expenses view. To toggle between the views, push the applicable button.

• Press the Sales Price button. This will display the billing items and will the associated prices as calculated from SD pricing.

Shown in the example below, the SD billing items are displayed in the top frame while the pricing details (as calculated from the pricing procedure) are displayed in the bottom pane.


• Press the Expenses button. This button will display the associated costs from the project and sorted into the appropriate Dynamic Line Items (determined from the DIP profile).

In the below example, the Net Value of the proposed billing document is $9,626.66. This amount represents $8,751.51 of costs which are itemized by DLI in the bottom pane.


• Determine Amount to Bill - The workbench will automatically propose to bill all of the available costs. The Amount, Qty and Percent tabs allow this to be changed.

Amount = Controls the value to be billed. Qty = Controls the number of units to bill. For instance, labor hours. Percentage = Controls the percentage of the value to bill.


• Optional: If you would like to see what the document would look like without actually creating it, you can select the Simulate Sales Document from the Goto menu.

Simulated Debit Memo Request


Press the Copy button to return to the cost overview screen.

• The final step of resource-related billing results in the generation of a debit memo request. The DMR can be thought of as a pre-bill. It has line items which represent costs that are extracted via RRB using the rules defined in the assigned DIP profile. The DMR document show the items that will be invoiced. It will automatically open in change mode and once reviewed can be invoiced from this screen or from the VF01 transaction.

� Press the Billing Request Button – This button will create the Debit Memo Request. The DMR is simply a pre billing sales document and provides an opportunity for a final review of the billing items.

If you performed the Simulate Sales and Distribution Step, you will see that this will produce nearly the same result. The difference is that this step will actually create the DMR and display it in Change view and allows normal editing prior to billing. Note: If the resources/costs that are brought into the DMR need to be changed, then the DMR should be canceled and reprocessed through DP91 after the appropriate corrections have been made.



Generate Invoice The debit memo request is used to generate the invoice and release to accounting which performs the financial postings. There is usually a posting block between the generation of the invoice and the posting to accounting to allow for a final review of the invoice output before the financial postings are created.

To Bill the DMR (Generate the Invoice) follow these steps.

• Open the DMR in Change Mode

Transaction VA02

• Remove the Billing Block Header>Billing Document Tab

Bill Document

• From Menu: Sales Documents>Billing


• Press the Save Icon The Invoice is now saved and billing is complete.

After the invoice is reviewed and approved then the invoice it may need to be released to accounting. This can be accomplished with transaction code VF02 or VFX3. The accounting postings are created at this time. To view the accounting entry, press the Accounting tab and double click the Accounting document number.


Accounting Document


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