Beruflich Dokumente
Kultur Dokumente
over
1.4 billion
+
Annual Revenues
17,000
professionals ... sustained through client delivery excellence
Ambition
$5B Revenue
and, expanding share of wallet through collaboration with NTT Group companies
55% of
~500
Enterprise Clients
Competencies
Applications ECC CRM SCM, SRM Financials EPM / GRC HCM Technology Netweaver BW/BI/ BOBJ MDM BASIS Security Platforms Mobility HANA Cloud ERP Tools Uptimizer Hot Pack Analyzer ArchivePac SPPED SCEA Achievements / Certifications
SW CMMi L5 and PCMMi L4 SAP Pinnacle Award : RUN SAP Certified Challenger in Gartner ERP MQ Leader in Forrester ERP report Process Aligned Competency
Recognized as LEADER by Forrester in the SAP Service Providers wave report 2011 Forrester Q1-11 IT Service Providers
LEARNING POINTS
Industry Best Practices for Billing and Revenue Recognition in Time & Material, Fixed Bid and Milestone contracts Intercompany billing and cost recovery with offshore, near shore and onside model Challenges with standard out of the box SAP solutions for Profession Services Industry and customizing solutions to overcome them
BEST PRACTICES
Service Contract with Fixed Price Billing Service Contract with T&M Billing Service Contract with Milestone Billing Commercial project inception with Project created automatically with Contract Assignment of Project team using Lean Staffing Time and expense management Project with Percentage of Completion
Time savings
Traditional project
Time
Posted to the respective WBS where the resources were assigned Approved by the Project Manager to post to Accounting Full Time Employees: hourly rate decided on the basis of AOP rates assigned to the employee based on his salary grade Subcon: Rate is based on the rate on the Purchase Order (PO)
Expenses
Payroll Cost: Directly posted to employees home cost center Travel Cost: Billable and Non Billable Costs were posted to the respective WBS where the resources are assigned Subcon Expenses posted to the WBS used in the PO
Time Approved:
WBS (A/c Assigned) Employee Home Cost Center
YY
YY
Expenses - Approved
WBS (A/c Assigned) Employee/ Vendor (AP)
XY
XY
Expenses (Payments)
Employee/ Vendor (AP) Bank/ Cash)
XY
XY
Used for managing consulting arrangements where detailed work planning and execution are not required RRB provided summarized data from defined sources, such as actual cost line items - using the dynamic item processor (DI processor) to facilitate customer billings Expenses in the billing request were flagged as billable or defer items for later billing It was independent of the cost incurred across legal entities (Onsite/Near shore/ Offshore) for customer billing
Invoice list
Used when different invoices for the same customer were required to be combined together and presented as a single invoice.
Fixed price
Periodic billing with fixed monthly amount Revenue recognition dependent upon the billing date and amount in billing plan No Standard SAP solution for weekly revenue recognition WIP usually got cancelled at the month-end
Milestone
Billing as per milestone date on the contract Revenue recognition independent of milestone dates Standard SAP solution was used for weekly revenue recognition WIP did not get cancelled at the month-end
Actual cost (as of today) = $11,000 POC Revenue as per POC Revenue to be recognized
Un-Billed AR
Trade Revenue
$22,000
$22,000
Contract Value
Planned cost
POC
Revenue to be recognized
Contract value
Revenue recognition: 1
Revenue recognition: 2
Onsite company enters into a contractual agreement with the end customer to provide services
2 Project
Onshore process
5 Time Hrs to Controlling
4 Time approval
Approved hours posted to Accounting Offshore signs SOW with onsite legal entity to provide services based on the agreed Transfer Price
2 Project
8 Receivables
1 Contract
Offshore modifies the Project structure based on legal requirements Resources perform work
7 I/C Invoice
Offshore process
4 Time approval
3 Time entry
Intercompany Process
A company code has an engagement with the external customer, executes the project with onsite employees and also involves employees from different company codes (near shore/offshore) Time and Expenses were collected for all employees in the project Time and Expenses that were not incurred in the executing company code were billed at a specific transfer price during intercompany billing Project Revenues were accrued in the executing company based on the invoice received for the employee expenses from the other company code
Revenue Recognition for bundled serviced offerings/ multielement contracts SD Revenue process Results Analysis Inter-Company Billing with Onsite and Offshore model represented by separate legal entities with total cost recovery plus mark-up Inter-Company Resource Related Billing Customer billing with RRB for Sub-contractors time using service entry sheet Resource Related Billing
Weekly revenue recognition in case of Fixed Bid contracts with monthly billing plan SD Revenue process Location wise Revenue Recognition and Revenue Realization based on local legal requirements in some offshore countries like India. Resource related Inter-Company Billing
Inter-Company Billing with Onsite and Offshore model with total cost recovery A custom program which collected all the costs incurred at offshore entity with Intercompany markup Intercompany (IC) Revenue and IC AR posted systematically to offshore books along with the IC AP and COS in the Onsite entity Billing services from Sub-contractor on T&M basis Resource Related Billing enhanced to bring the Employee number and number of hours of Subcontractors time from the service entry sheet
Location wise Revenue Recognition and Revenue Realization based on local legal requirements Custom program posted the Inter-Company revenue based on location details (Profit Center) Weekly revenue recognition in case of Fixed Bid projects A Custom program created to generate weekly DMR for Revenue Recognition based on the service acceptance date
KEY LEARNINGS
Resource Related Billing program collects resources Time and Expenses systematically for Customer Billings. No custom program is required Though Billing and Revenue Recognition processes are independent events in SAP, the account postings may vary based on the sequence of their occurrence Driver for Revenue Recognition process for each contract type in SAP is different Trading Partner (affiliated companies) field is a useful attribute for Intercompany reconciliations and eliminations
Contact Information
Sandeep Bagchi
Global Director, SAP Solutions Email: Sandeep.Bagchi@NTTData.com
Rahul Raina
Principal Consultant, SAP Practice Email: Rahul.Raina@NTTData.com
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