Milestones in contract

Hi all,
Can anyone tell me how to use the "Milestones" concept in MM contracts ?
e.g. I have created a long term contract with a vendor for procuring a special purpose machine . Final delivery will be after 2 years.Now I want to pay to vendor as per the work done by him. Suppose in 1st quarter, 10% of the work is complete, so I will pay only for that 10% work....and accordingly the rest payment will be done.
How to handle this scenario in SAP MM ?
Waiting for your reply,
Pat.

Hi W1N,
Thanks for your reply.
With ME2N, you can find the purchasing documents based on selection parameters.
but, I want something different.
Suppose you have created a PO with invoice plan as below:
date:              - payment
01.11.2007     - 10%     ( when 10% of work will complete)
01.01.2008 -   40%     ( when 50% of work will complete)
01.05.2008 -   50%    ( when remaining 50% work will complete and after GR)
Now, how will I trace the work done by the vendor in SAP ?
How will I link between 10% work completed and payment made for that 10% work on 01.11.2007 ?
waiting for reply,
Pat.

Similar Messages

Value Contract-Milestone Billing

Hi Friends,
I want to know about the value contracts with milestone billing.
How we use milestone billing in value contracts.
with regards
Azeez.Mohd

Hi Azeez,
Please go thru following thread.
[Milestone billing|https://forums.sdn.sap.com/click.jspa?searchID=21566193&messageID=4014303]
regards,
Abhee.

Payment Milestones in SRM?

Hi
At the organisation I work at, we have restricted back end SAP purchasing access and are pushing out the use of SRM instead as primary method for users to raise shopping carts, and have a number of catalogues setup for core commodities such as stationary etc.
However, we have a number of 'project' type contracts that are setup commercially with payment milestones. The suggestion internally has been to setup each Contract as a catalogue, with all the respective catalogue lines; however, for me, this seems a slightyl strange approach as we will only 'request' each catalogue line against the contract once, allied to each payment milestone.
Is this the most effective way to setup Contracts with payment milestones to enabling end user purchasing in SRM? Or are there any other useful bits of functionality in SRM that we should be using to meet this need?
For info, we are using SAP SRM 4.00 (Classic Scenario) and SAP ERP 6.0.
Thanks in advance
Edited by: olly_w on Mar 17, 2011 10:54 AM DF

well,
here is another suggestion.
1. Create Public templates for each Project cotnract (items)
2. Create a querry for Project Contract (i.e Public templates) ONLY
3. Educate the users to use templates for shopping items from project contracts.
This might be simple solution than publishing the contract to MDM catalog. Let us know if this works.
Regs.
Gummadi

Milestone based billing in OM-AR or PA - Help needed

Hello,
need your valuable suggestion to identify the best approach, including modules, for the following business scenario with Minimum Customization.
Business A directly receives orders/ contracts from customers. Business A does not manufacture any product. Instead they cut POs to different suppliers (against the items in the order) and the suppliers in-turn directly ships the material to customers. Business A directly invoice customers and also pay the suppliers.
Key points to note:
- Oracle E-Biz 11.5.10.2
- Customer billing will be milestone based e.g. 20% down payment at order booking, 40% prior to shipment and 40% upon material delivery etc of the total Order value.
- There may be one billing milestone for material acceptance by the customer
Possible solution approaches:
==================
We were thinking about OM, PO, INV (virtual), AR, AP etc with standard Drop Ship process but as we know, milestone based billing cannot be done thru normal OM-AR process.
If we use PA then another approach can be to disable interface transaction from OM to AR and then use customization:
i) In PA billing extension called by Generate Draft Invoice (GDI) process to look at eligible orders (in OM) for billing with appropriate amount
OR
ii) Create an interface to raise billing events in PA (using Event API) by looking at at eligible orders (in OM) for billing with appropriate amount.
However, using PA additionally along with OM will have following disadvantages:
a) Good amount of customizations for needed integrations
b) PA/ Projects will be added as an additional module without much benefit to the above mentioned business model.
Can we use AR in a different way here by disabiling the OM-AR interface transaction but using the OM details for multiple AR invoices thru some short customization. Or for that matter any other approach outside normal OM-AR process.
Any suggestion will be greatly appreciated.
Best Begards

Hello,
need your valuable suggestion to identify the best approach, including modules, for the following business scenario with Minimum Customization.
Business A directly receives orders/ contracts from customers. Business A does not manufacture any product. Instead they cut POs to different suppliers (against the items in the order) and the suppliers in-turn directly ships the material to customers. Business A directly invoice customers and also pay the suppliers.
Key points to note:
- Oracle E-Biz 11.5.10.2
- Customer billing will be milestone based e.g. 20% down payment at order booking, 40% prior to shipment and 40% upon material delivery etc of the total Order value.
- There may be one billing milestone for material acceptance by the customer
Possible solution approaches:
==================
We were thinking about OM, PO, INV (virtual), AR, AP etc with standard Drop Ship process but as we know, milestone based billing cannot be done thru normal OM-AR process.
If we use PA then another approach can be to disable interface transaction from OM to AR and then use customization:
i) In PA billing extension called by Generate Draft Invoice (GDI) process to look at eligible orders (in OM) for billing with appropriate amount
OR
ii) Create an interface to raise billing events in PA (using Event API) by looking at at eligible orders (in OM) for billing with appropriate amount.
However, using PA additionally along with OM will have following disadvantages:
a) Good amount of customizations for needed integrations
b) PA/ Projects will be added as an additional module without much benefit to the above mentioned business model.
Can we use AR in a different way here by disabiling the OM-AR interface transaction but using the OM details for multiple AR invoices thru some short customization. Or for that matter any other approach outside normal OM-AR process.
Any suggestion will be greatly appreciated.
Best Begards

Error while creating Credit Memo Request for Milestone billing invoice

Hi All,
I have a scenario where i have Milestone billing(% based) at header level in Contracts. I create Invoice for that and then try to create Credit Memo Request with reference to the Invoice.
Problem comes when we try to change the qty in the credit memo request. we are able to change the qty but the value is not changing. It remains the same constant value of that milestone.
In my copy control from Invoice to Credit memo request for the item category i have maintained the pricing type as "C" because i want to copy and manual conditions.
So kindly let me know which config setting should be done so that whenever i change the qty the value should also be changed.
Please Note : This is happening only when my billing plan is at header level. For Billing plan at Item level its working fine.....
Thanks.....

Hiiii.....
Can anyone please advise on the below issue of mine.....
Thanks alot for the help.......in advance

Milestone Billing for third party order process

hai Gurus
             Pls help me in understanding of milestone billing with example.
             Is it possible to link the milestone billing for Thirdparty order process?
             pls send me documents to my Id [email protected]
I will reward points for the helpfull answers
Regards
SaravananS
Message was edited by:
        Saravanan Sevuga perumal

Hello Saravanan,
Milestone billing means distributing the total amount to be billed over multiple billing
dates in the billing plan.
As each milestone is successfully reached, the customer is billed either a percentage of
the entire project cost or simply a pre-defined amount.
During sales order processing, the system determines from the item category whether a
billing plan is required and, if so, which type of plan
The type of billing plan that is determined at this point is set up in Customizing and
cannot be changed in the sales document.
Billing plans for periodic billing and milestone billing plans for project-related milestone
billing have different overview screens so that you can enter data relevant to your
processing.
For example, for milestone billing, you must be able to enter data to identify the
individual milestones.
IMG configuration requires :-
1. Maintain billing plan types for milestone billing in OVBO.
2. Define date description in SM30 - V_TVTB.
3. Maintain Date Category for Billing Plan Type IN OVBJ.
4. Allocate date category in SM30 - V_TFPLA_TY.
5. Maintain date proposal for Billing Plan Type in OVBM.
6. Assign Billing Plan Type to Sales Documents Type in OVBP.
7. Assign Billing Plan Type to Item Categories in OVBR.
8. Define rules for determining the date in OVBS.
Milestone billing is typically used for billing projects, such as plant engineering and
construction projects. Such projects often include a series of milestones that mark the
completion of different stages of the work. In the SAP R/3 System, milestones are defined
in a network along with planned and actual dates for the completion of work. The milestones
are also assigned to the billing dates in the billing plan.
Each milestone-related billing date is blocked for processing until the Project System
confirms that the milestone is completed.
Delivery-relevant order items for which a milestone billing plan applies are billed on the
basis of the requested delivery quantity and not on the total of the confirmed quantities.
The connection between the project and the sales document item is made in the individual
schedule lines of the item. Each schedule item can be assigned to a network in a project.
To display the project-related data for a schedule line, proceed as follows:
In one of the overview screens of the sales document, select
1. Item -> Schedule lines.
2. Mark the schedule line and select Procurement details.
The following figure shows an example of milestone billing where only the Contract have
been billed :
Order Item Turbine    100,000
Billing Plan
Billing date Description    % Value Billing Block   Milestone   Billing Status
01-10-94     Contract      10 10,000      -             x           x
01-03-95     Assembly      30 30,000      x             x
01-04-95     Maintenance   30 30,000      x             x
01-05-95     Acceptance    30 30,000      x             x
01-06-95     Final invoice ..    ..        x
Network/Activities
Milestone    Estimate      Actual
Assembly     01-03-95      01-03-95
Maintenance 01-04-95
Acceptance   01-05-95
For each billing date in a milestone billing plan, you can specify whether the billing
date is:
1. fixed
2. always updated with the actual date of the milestone
3. updated with the actual date of the milestone, if the date is earlier than the
    planned billing date for the date
<b>**REWARD IF THIS HELPS**</b>
Regards
AK

Milestone payment for vendor in project system

Dear sapient
As per our client requirement vendor payment is based on the basis of milestone i.e activity based. As per the contract agreement payment is made on the basis of certain percentage as mention below.
1st payment 5% of total order value (with out tax)
2nd payment 10% of total order value (with out tax)
3rd payment 65% of total order value (Including tax 100 % )
4th payment 20% of total order value (with out tax)
Is there any standard or workaround functionality available in sap for vendor payment in project system ?
Regards
Soraj

Thnx for reply
As per our requirement payment is based on completion of work. can i use payment term on the basis of completion of work/activity not on due date basis?

Down payment request for contract with periodic billing

Hi Friends,
Could anyone help me in understanding the configuration settings for down payment / advance payment senario for a CONTRACT which has Order related billing (I have done for Order with milestone billing plan).
The contract has order related *periodic billing plan* where settlement period is suppose quaterly billing and actual invoice is happening on 1st date of the quarter. But i want to create a down payment request say 10 days before the billing date[(actual invoice(F2) date] of every quater as an advance payment/ down payment.
FYI...
For order i am using standard billing rule 1 in milestone billing plan for final invoice but for downpaymnet billing dates (added additional settlement periods then actual invoice settlement period like 3 adv pay ment og 20%, 30% 50% & one actual invoice period for whole amount 100% as D4 doc only) i am manually changing the billing rule as 4 to create a down payment req.
But in contract as its has periodic billing plan no billing rule changing option (no additional settlement period can be added, only settlement period for actual invoice is getting proposed) so i can't have two different rule for a settlement period. no settlement period can be added separately for adv paymnet/down payment.
Kindly respond ASAP.
Rgds
Manish

Hi, Many thanks for your response.
But the down payment functionality for a SO with milestone billing i have already implemented.
The question was for CONTRACT Side (say rental / service contract). The contract has periodic billing (monthly / Q'ly).
Kindly let me know if you/anyone has any idea for config settings for a contract with the senario mentioned in previous thread post.
Thnx & Rgds
MG

Milestone Billing Plan issue

Hi all,
I have a scenario of project sales. The billing will be order based - 50% after order confirmation, 40% after delivery & 10% after installation & testing.
I am using milestone billing plan for my project sales. I am not using the project system. I have created the billing plan in the following way:
1. Define billing plan types. I have copied from standard billing plan 01 & saved as Z type.
2. Define date descriptions. I have created 3 different date descriptions - a) Order confirmed, b) Delivery done, c) Installation & testing done.
3. Define & assign date categories. I created 3 different entries. First for the down payment at the time of order confirmation........i used the date description as down payment. The billing rule selected was "Down payment in milestone billing on percentage basis". The fixed date selected was "Fixed date, date not copied from milestone". The billing block selected was "calculation missing". The billing type selected was "FAZ".
For the second part (40% after delivery) I used the date description as delivery done. The billing rule selected was "Milestone billing on a percentage basis". The fixed date selected was "Fixed date, date not copied from milestone". The billing block selected was "calculation missing". The billing type selected was "FV".
For the third part (10% after installation) I used the date description as installation done. The billing rule selected was "Closing invoice in milestone billing". The fixed date selected was "Fixed date, date not copied from milestone". The billing block selected was "calculation missing". The billing type selected was "FV".
4. Maintain date proposals. I maintain 3 different dates with an interval of 5 days. For first step i selected the date description as "order confirmation"......billing % as 50%........selected the block......billing relevance as down payment on % basis.........payment term..........billing type as FAZ.
For second step i sselected the date description as "delivery done".......billing % as 40%........selected the block........billing relevance as "Milestone billing on a percentage basis".......payment term........billing type as FV.
For third step i selected the date description as "installation done"......billing % as 10%.......selected the block..........billing relevance as "Closing invoice in milestone billing".......payment term......billing type as FV.
5. Assign billing plan types to sales document types....I assigned the billing plan to the sales doucment for project sales.
6. Assign billing plan types to item categories.....I assigned the billing plan to the item category of the project item....with billing relevance as "I-Order-relevant billing - billing plan".....billing plan as the milestone billing plan.
Copy controls: I maintained the copy control settings in VTFA.......sales order to billing document type FAZ & FV as well. In the transaction code VOV8 for the sales order document type I maintained the order related billing type as FV.
Now I created a project sales order.......the system displayed the billing plan tab......the milestones were shown but the data regarding the billing percentage.......payment terms.........billing relevance.....was not shown. I entered all the details......with the document types as
FAZ
FV
FV.
I removed the block from the first milestone......down payment.
Now i created an invoice in VF01......selected the order number for reference......the system created 2 invoices.......1 for the down payment request & the other contract invoice. The down payment request had the correct amount but the contract invoice did not display any value.......
How should i correct the settings so the system will only create the relevant invoice......
With best regards,
Niyaz.

Hi,
You have done a good job.
Enter different dates in sales order for each Milestone and assign billing block save the sales order.
Goto change sales order, remove the block for one billing date.
In billing screen, enter sales order no. don't press enter
Click on Selection date (Shift+F7) enter the date range and press enter. you will get only first billing that is 50%.
Actually we are using PS, milestones and billing dates will be copied from there.
Regards,
Chandra

HOW TO DIVIDE THE COST PER MONTH IN CONTRACT WHICH IS PER YEAR

Dear all,
i am triggring a project with reference to a quotation and i get the planned cost in
of the project in my quotation.So this cost of the quotation is for a year assuming the duration of the project is one year.
i am copying a contract document from this quotation in which the monthly billing
plan is there.here it is again multiplying for 12 months whereas i want it to divide it
by 12.can some body throw light for me to get a solution for this problem.
Assured reward points for timely support
Best regards,
R.Srinivasan

I think the answer is very simply that you should be using a 'milestone' billing plan rather than a 'periodic' billing plan. The milestone billing plan divides the total net value of the line into the milestones determined by the milestones in your WBS element, network, manually maintained in billing plan screen, or from a reference milestone billing plan. The periodic billing plan instead creates a billing periodically for the entire net value which in essence multiplies the amount by the number of billings in your plan.
You mentioned cost. If you want to divide cost across the term of the contract, you will need to look at CO functionality such as networks, service orders, RA, or other cost planning and accrual tools.
If you are trying to bill in accordance with your costs, you need to use resource related billing which can be integrated with milestone billing.

Contract of intent buy or sell? Contractor as a supplier or customer?

Hi
I am newbie to Projects.
We are implemeting oracle apps for One of Govenrment Client, Government of Gujarat(GOG).
Now GOG, Creates a Project P1 with two tasks Task1(Road Construction 5km) and Task2(Road Construction another 5km). This tasks are to be outsourced to two different contractors
Question
should we define contractor as a customer or supplier
should we create contract of type buy or sell.
Please respond asap as same affects our Go live Milestone.
Regards
Vimal K

Hi
I'm not sure I could understand the business requirement.
Let's assume GOG has contracted contractor AAA for 100,000 USD.
Over time, that contractor will raise invoices, and GOG, the customer, should pay the supplier invoices.
You are saying that GOG require deposit from the contractor, at the begining of the project. I assume this is a method of guaranty. My understanding is that customer will want to keep that deposit and reduce the amount he is paying to supplier, until the project is finished. Only then the customer will release the deposit and pay it back to the supplier.
The method of reducing payments on invoices and delaying it to future date is usually known as retention. However, Oracle does not support retention functionality for suppliers.
Dina

Solaris 10 svc:/milestone/single-user timeout during patch run

Hello all,
when doing a patch run (Oct 07 baseline) on a Solaris 10 client the machine rebooted into single user as per normal. However the time for the patches to be applied in single user took so long the single-user milestone timed out and the machine went into maintenance mode. The machine did continue to complete the rest of the patch run. Anyone else seen this and have a work around? I don't really want to blanket increase the service timeout. Selected console output below..
( 27 / 37 ) Installing '127111-02' - succeeded.
( 28 / 37 ) Performing 'Mandatory reboot with reconfigure and action as single-user'
( 29 / 37 ) Installing '127753-02' Nov 22 10:30:08 svc.startd[7]: svc:/milestone/single-user:default: Method or service exit timed out. Killing contract 31.Nov 22 10:30:08 svc.startd[7]: milestone/single-user:default failed: transitioned to maintenance (see 'svcs -xv' for details)
Requesting System Maintenance Mode
(See /lib/svc/share/README for more information.)
Console login service(s) cannot run
Root password for system maintenance (control-d to bypass): Nov 22 10:30:20 svc.startd[7]: network/ntp:default failed repeatedly: transitioned to maintenance (see 'svcs -xv' for details)
Nov 22 10:30:20 svc.startd[7]: failed to abandon contract 45: Permission denied
- succeeded.
( 30 / 37 ) Installing '119757-09' - succeeded.
( 31 / 37 ) Installing '127737-01' - succeeded.
( 32 / 37 ) Installing '127718-01' - succeeded.
( 33 / 37 ) Installing '125184-04' - succeeded.
( 34 / 37 ) Installing '124444-01' - succeeded.
( 35 / 37 ) Installing 'postpatch' - succeeded.
( 36 / 37 ) Performing 'Reboot'
( 37 / 37 ) Performing 'Reboot with reconfigure'

Hi, yes I see it all the time and it's normal and in fact documented in the release notes:
http://docs.sun.com/app/docs/doc/820-0428/6nc5u3kou?l=en&a=view#smftimeout
One workaround is to ignore it and not do anything! In fact I think that is the preferred workaround.
Another question, just out of curiosity, what does your "postpatch" Post action script do? Just wondering if it might be something useful for other sites too?

Service contract mapping based on PS job

Dear Experts,
the business requirement is describing below
A contract is fixed with customer and for drilling the ground and making borewells
Contract
job
Sub job
Soil work
Drilling
Drill 100 feet
Drill 150 feet
Drill 200 feet
Tubing
2-5/8 size
3-5/8 size
10-5/8 size
Cementing
100 feet
150 feet
Acidification
100 feet
Each sub job is identified through WBS element , the above bifurcation , how do i interpret in sales contract?
when the job came with drilling 150 feet - need to bill it?
Experts please advice me how to map this process in SAP SD?

thanks Ricardo,
ok understood
my document type ZSOL(Contract) identified as soil work
Drilling is a line item
drill 100 feet is one of the phases of milestone
Am i right sir? if not please guide me to map this scenario
moreover , i need to bill the customer based on the manpower involved and equipment involved- per hour basis
I have decided to go with RRB , please suggest me.. does it works?
Regards,
Pratheep

How to conf mile stone billing for contract sales

Dear Gurus,
I want to config sales of Residential flats through contract with mile stone billing.could u pls send the conf steps reg this senario.
Steps
1.Contract agreement
2.sales order
3.Mile stone billing.
These r the 3 steps in this process.I hope better solns from u.
Regards
Rams

Dear rams,
Milestone billing : Normaly used in projects , means, payment released as work progreses .
Goto *VOV8* and select your order type and click on details , Goto Billing , keep billing plan type as 01 , (if billing plan not available , create u2013 Goto VOB0 and create an new billing plant for milestone billing ).
Then create sales order u2013 Goto header -- Billing --- billing plan --- plan your billing date and Define date description , % of billing and billing type .
Now, system will allow you to make the billing as per your plan
saravanan

Billing value should not exceed contract(value based contract) value

Hi,
We are using value based contract and in item category we set E in incompletion rule which stops me to create relaease order where its value exceeds the contract value.
But via release order we recognize revenue(service based revenue recognition) and we do billing directly through contract via milestone billing plan,
At present i can bill more then my contract value.Now i want to system should not allow me to bill mre then contract value.
I checked the option in VOV8 and VOV7 but all those are meant for release order not for bliing.
Thanks in advance.

Hi Satya
You can set the billing amount in milestone billing plan itself. based on that value billing will done.

Milestones in contract

Similar Messages

Maybe you are looking for