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Periodic billing with contract for Insurance service

Jan 05 at 11:37 PM


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Former Member

Hi Experts,

I have a business requirement, where the business needs to sell one warranty service to customers, they call it insurance plan.

With this they would like to bill monthly to the customers, there will not be a delivery in most of the cases except if they have to send a replacement part to customers.

Invoice should happen without delivery, delivery only in cases if some item is being replaced.

Questions I have;

- Can this be achieved using quantity contract or any other contract, followed by sales order in case delivery is required. If there is no delivery then directly bill customers using billing plan.

I tried achieving this using quantity contract only to see some weird results. The net value of the line item is being shown for each of the line in billing plan (please see the screenshot)


- Header or item or both, which billing plan would work best in this case (i tried all of them, but desired results are not achieved).

- Revenue recognition needs to happen at the time of invoice.

If you have any questions on this, please let me know.

Any suggestions would be appreciated.


billing-plan.jpg (101.1 kB)
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2 Answers

Jelena Perfiljeva
Jan 09 at 05:37 PM

I'm not sure what exactly is weird about the included screenshot... You can achieve this requirement with an item type in a contract that has billing plan assigned to it. In the contract, you'll enter the validity dates and then the amount entered for the item should be broken down by billing period (monthly in your case). In the billing plan tab, you'll see as many lines as there are periods, just like in your screenshot.

Then you can actually invoice the contract directly, without any other document in between.

Unfortunately, I don't have a system right now to check this but the billing plan config is pretty simple, from what I recall. There are many SCN posts on this subject and SAP documentation as well. Make sure to search for "periodic billing plan contract".

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Former Member

Hi Jelena,

Thanks for your response on this, the issue i am facing with billing plan is that total net value of the order is shown as the amount for each of the lines in the billing plan.

So for example, the order net value is $ 12,000. The total net value for the billing plan is adding upto $ 1,44,000.

I have tried multiple things in billing plan config., but nothing worked.

Pleas guide what i might be doing wrong here.



Billing plans were used in my two old jobs and, as I said, can't confirm the actual configuration at this time. Had to go back to the old SD book to get a clarification on this. This is what it said:

"Milestone billing bills an amount distributed between dates until the total value is billed. Periodic billing bills a total amount for each date until a predefined end date is reached."

It seems that you've used periodic billing and the amount was multiplied by the number of periods. So I guess you'd need to either enter monthly amount instead or use milestone billing plan that will split the total amount per configuration.

I suspect that what I saw before was kind of a pseudo-periodic plan achieved using a milestone billing plan configured with 12 "milestones" (one per month).

Former Member

Hi Jelena,

Thanks a lot for your reply on this, i will try to configure the system with your inputs.

In the meantime, if possible, kindly share if you have more info on this.


Phanikumar Valiveti Jan 08 at 07:44 AM

If your orders don't have a delivery-then try with Service contracts procedure/Rental contracts..

(Std Sales document type is SC for service and for rental QP with item category TAD for service or MVN-lease item with order relevant billing)

Std Pricing procedure-PSER01(with Condition types PPSV and PPSG)

In case if any delivery involved-you can take this as reference-by using some text at SO level (with sales document type SDF-Subsequent free of charge)

(I am just giving the idea-Hope might be helpful-better ,discuss with client on this on further procedures and proceed accordingly)


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Former Member

Hi Phani,

Thanks a lot for your reply on this, i will go ahead and try creating a service contract.

One question, what about the billing plan in this case. What kind of billing plan would work best header / Item / both. The business wants to bill the customer on monthly basis.