In SAP, various business scenarios there is requirement to Bill customers on some specific dates or specific periods, this is achieved by Billing Plan in system.A Billing plan is a schedule of individual billing dates for single item, it can also be defined at Header level applying to entire sales document. In System there are types of Billing plans –Periodic & Milestone billing plan, which are used depending on the business scenario.

Billing plan processing in system has following functions available:

• Automatic Creation of Billing dates
• Pricing
• Billing Block
• Billing rule in case of Milestone billing
• Billing status
• Exchange rate determination

These functions are available at Item level and also at Header level so that they can be applied to all items in the document.

Periodic Billing

It means billing a total amount for each individual billing date in the plan defined. Like in a rental contract with a customer, system would propose schedule of monthly rental payments.

• Start & End dates, Period (monthly, quarterly, annually), Horizon are important for billing date determination.
• These dates can be proposed by system based on settings in customization for Billing plan type Alternatively they can be manually changed in sales document.

Milestone Billing

It means distributing total amount to be billed over multiple billing dates based on specific milestones defined. This is used for billing projects like Construction or Engineering, which involve milestones marking completion of different stages of work. For Each billing date in milestone billing plan, it can be specified if date is Fixed or always updated with actual date. Updated with actual date if date is earlier than planned date.

Billing Plan Controls

Following parameters in customizing control Billing plans in Sales:
Billing Plan Type: Basic control of billing plan is by Billing plan type. It contains the rules for date determination for start & end dates of billing schedule. It also contains rule for determining horizon for the plan.
Standard system has following billing types:

1. Milestone billing
2. Periodic billing

Date Description: These are for information purpose to describe the various purpose for billing plan usage.
Date Category: Date category in turn defines Billing rule, Date description, Billing block, and is used to define data for each billing date that appears in billing plan.
Proposed Date Category: Default date category assigned to Billing plan type by which it can be proposed by system in billing plan.
Proposed Date: Used in Milestone billing where a proposal can be used as reference during order processing and changed as required.