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Forecasting in SAP
5 min read

Achieving Accurate Forecasting and Faster Billing in SAP

Inaccurately tracking time and expenses can severely hurt your business's profits through revenue leakage. Revenue leakage occurs when your business is not being compensated in full for the services you provide. This is often the result of using spreadsheets or paper processes, which often equate to mistakes and inaccurate invoices that can hurt your reputation. But how do you know when it is time to make the jump from a mostly manual process to one that is automated? The most common factors include your business offering several different products or services, each with unique subscription terms. Another tell-tale sign? When it comes time to produce a billing report, you might be combining several separate spreadsheets. As a growing business, leveraging billing software will only continue to prove a worthwhile investment as you make further plans to scale.  

An accurate billing solution will automatically compile the information required to generate an invoice, reducing the chance for errors and minimizing the potential for revenue leakage. Many billing specific solutions are available on the market that can automate these processes. However, businesses have also noted that using a tool that connects to the rest of their ERP system can provide insightful data that can also make planning and forecasting simpler.   

Track Billing with SAP ECC or S/4HANA 

To ensure subscriptions, services, time, and expenses are all billed, many decide it is easiest to track their billing within SAP. One of the simplest billing documents that can be created in SAP is done using the T-Code, VF01. This tcode opens a window for users to enter any information specified by company policies for bookkeeping entries. Hitting save automatically stores this information into your SAP backend for easy reference. With information stored in a central ERP system, team members can access this information to look for upselling opportunities, edit the billing document or cancel it. There are also several other more sophisticated processes for billing services and order to cash processes within S/4HANA and SAP ECC. 

Your business likely will have enough functionality using this variety of tcodes, however, some businesses have billing cycles with more complex subscription services that require a variety of follow ups and renewals. In these cases, SAP provides users with another solution, SAP Subscription Billing which offers greater capability for automation.  

Managing Billing with SAP Subscription Billing  

Regardless of the solution you choose to manage billing, the most useful thing you can do is collect and sort all the data collected through billing. Any information, proposals, demographic data, or invoices relevant to the customer can then be easily accessed by the people in your business that require the information, which can provide your sales reps with visibility into existing customers' entitlements. In SAP, this targeted product is known as SAP Subscription Billing. This is SAP's premier product for increasing customer satisfaction and retention with an automated subscription billing process. The tools include subscriptions, services, time, and expenses. However, to give your business an added advantage, SAP Subscription Billing can be integrated with the rest of your data in SAP, including the business intelligence (BI) capabilities of SAP Analytics Cloud (SAC).   

SAP Subscription Billing solution gives you the power to deliver simplified, personalized CFQ (Configure, Price, Quote), Order Management, and Subscription Billing experiences from the cloud. This offering can also help your business's overall strategy to gain speed and agility to adapt to an ever-changing economy.  

Combining Forces with SAP Analytics Cloud  

By integrating your current tools with your billing software, you unlock an extensive set of features that help you to capture every billable event across your business. However, as an SAP customer, you can do one better and connect your billing services to a business intelligence tool. This can be done first by transferring SAP Subscription Billing to SAP Entitlement Management. As a central entitlement repository, you will be able to summarize all subscriptions, ensuring no billable items have been left behind. More information about Integration with SAP Entitlement Management can be found on the SAP website.  

Afterwards, SAP Entitlement Management can be integrated with SAP Analytics Cloud. Once the integration has been completed on the backend, your team can create SAC stories as an Entitlement Analytics Report. Stories created with information from SAP Subscription Billing can help your business analyze data, define patterns in payments and better forecast sales and plan accordingly. This tool can also use automated machine learning to automatically reveal relationships and patterns in the data collected. All of this is done without transferring large amounts of data from your source system, since any data analyzed is connected to this tool and uses S/4HANA as your back end.  

Why Your Business Requires More Than an Accurate Billing Solution 

Proper analytics are important for your billing. Consider the following example. Your business might notice an increase in sales, but your revenue has remained the same. Upon initial inspection, this doesn’t make sense. A standard billing automation process might tell you that your revenue vs. booked sales has changed. However, an analytics tool can tell you the root cause of the discrepancy. For example, certain billing items not being recognized as revenue or deferred revenue that hasn’t been accounted for in the right period, fulfillment, or finance functions might also contain some insights as to where improvements can be made. 

Accurately Generate Your Expense and Cost Plans  

Putting a strategy behind how your business is billing can be challenging. Fortunately, there are tools like SAP Analytics Cloud (SAC) that can help! By utilizing these tools, your business can track billing and focus on more pressing measures to accelerate your business growth. As an end-to-end enterprise planning solution, your organization can provide more accurate billing and real-time insights into metrics such as revenue churn and average committed monthly recurring revenue (CMRR).  

Determining the overall strategy and setup of your SAP backend can be challenging. To help guide this process, visit our SAC page below. This can be used as a guide to determine if SAC aligns with your business objectives, and what the next steps to deployment might look like.