Resource-related billing involves invoicing customers based on resources consumed. It is common in industries like airlines, defense contracting, engineering, consulting, and public sector. Billing can be complex depending on contract type and calculations that consider resources, overheads, and fees. SAP allows building invoices by linking project systems with controlling, finance, sales, and materials management modules. Dynamic item processors generate invoices by processing financial and cost accounting documents from project postings.
3. • What is Resource-Related Billing (RRB)?
• The Power of Pricing
• Cost Plus Billing Scenario
• Fixed Price with Progress Payments Scenario
• Conclusions
• Questions
Agenda
4. Resource-Related Billing
Any company who bills their
customers based on resources
consumed
Industries include but not limited to:
Airline Operations
Defense Contractors
Engineering & Construction
Service Industry
Consulting Industry
Public Sector
5. Contract Types with Complex
Billings
Cost
Firm-fixed-price w/PP
Profit
0/100 Share
Cost-plus-fixed-fee
Estimated Cost
Fixed
Fee
100/0 Share
Base Fee (0-3%)
Award Fee Pool
Max
Fee
Base
Fee
Estimated Cost
Multiple
Incentive
Target
Fee
Cost-plus-incentive-fee
Share Ratio
Target Cost
Max Fee
Min Fee
Fixed-price incentive w/PP
Target Cost
Target
Profit
Ceiling
Price
Share Ratio
(PTA)
6. Billing Complexities
The amount to bill may depend on different calculations:
Resource-Billing
Based on resources consumed
Based on estimated resources to be consumed
Based on labor hours consumed
Disallowed costs
Cost Funding
Cost Withholds
Overheads
G&A
Material
Production
Cost of Money
7. Billing Complexities cont.
Fees
Fixed
• Percentage of costs incurred given negotiated cost
• Percentage of labor hours consumed
• Fee Retention
• Fee Funding
Award
Incentive
Schedule
Cost
8. How can we use SAP for RRB?
• The SAP R/3 system is a toolbox from which you can
build and store many different things.
Our job is to build invoices
and
store the data for future use
10. How does RRB Work?
Active Project
with Postings
Proj
WBS-1 WBS-2
Resource-Related Billing is used when the
amount to invoice the customer is based
on the resources consumed by the project
Postings DTE Postings DTE Postings DTE Postings DTE
Sales Contract/Order
Line Item Qty
10 Product A 1
WBS-1/DIP Profile
20 Product B 1
WBS-2/DIP Profile
Dynamic
Item
Processor
Resource Bill
Processing FI&CO documents from postings
Difference types of contracts have been defined by the government to ensure they pay a fair price and can manage the program. These types can be quite extensive in calculation.