Problem: How to bill a service contract that is created from Order Management?
OK, you have seen how to create a service contract from order management and some technical details so far. What we have done so far is, understanding the standard functionality. Knowing this basic functionality is the key to understanding what we are going to discuss in this article.
When a service contract is created from order management service line is always billed from order management. Let us take an example. Assume that you are on a shopping binge this weekend. On the list say you have 65” TV, one Black Berry and internet connection at home.
When you walk into a store to buy a TV, you might end up buying a service contract apart from warranty that comes along with the product. We all do this to protect ourselves from the risks that we might encounter with the product. When we buy the service contract, we get billed for the service right there. We pay for it and get out with the TV. To enter the same transaction in the system, this is what we do: we enter the TV item in the first line and enter the service line in the next line and assign service reference information in the service tab of order lines. Once we fulfill the transaction this line goes to the receivables interface (ra_interface_lines_all) for it to be imported into the AR. The companies can recognize the revenue over the period of service contract by using the revenue contingencies or accounting rules. Good for the retailer in this industry that the out of the box functionality works here.
Say you next move on to buy a cell phone. As the deal says, you get the instrument for about $100 and there is a two year service contract. There is a base charge for about $50 per month and if you exceed the minimum number minutes “usage” you will be charged 10 cents for each minute of usage. I will discuss the usage at a later point of time. Let us talk about the base charge. The agreement is that the base charge invoice for $50 should be generated and sent to you every month. This is where the problem starts. Unlike service agreement for TV retailer cannot charge one time invoice for entire service contract amount in this case. A $50 dollar invoice needs to be generated every month. So we cannot create a service contract from order management in this case as this is expected to bill from Order Management and have to create this manually in Service Contracts or you have to extend either workflow in OM or by other means to create service contract.
This disjointed process hurts productivity. Think about it, we create an order for the sale and service contract has to be authored manually in order to bill from the service contract for 2 years (we call this as bill schedule).
What can be done?
With the change in the way the service contracts are created from OM starting R12, there is a flexibility to automate this process. Please see the part II of this series to understand the technical details behind this process.
The code behind the program (package oks_ocint_pub) has some extendable custom package. The good thing about this package (OKS_OMIB_INT_EXTNS_PUB) is that if the contract is successfully created, it gets contract ID, topline_id and subline_id as parameters to this procedure post_integration. That is it. If you understand the service contract module’s data model you can manipulate the contract to make it eligible for billing again. So, when you are creating a service line in the order, you do not invoice it there, but you will only fulfill that line so that the contract can be billed from here.
What exactly happens behind the scenes to prevent the contract from billing into AR?
- Contract is created
- Line is created with a covered line that has item instance which was shipped in the order.
- Bill schedules are created with date_completed pre-populated in the oks_level_elements.
- oks_bill_cont_lines is pre-populated with the with btn_id (id from oks_bill_transactions) as -44 for contract line ID (topline_id). This is the same when we suppress the credits for a termination of contract line.
- And finally there is a row created in the okc_k_rel_objs for the contract line id that is created. Billing program ignores these contract lines from being billed.
So we need to do this:
- Take care of the tables oks_bill_cont_lines and oks_bill_sub_lines.
- Take care of the table oks_level_elements (since date_completed is already populated).
- Take care of the table where related objects are populated (okc_k_rel_objs).
- And finally recreate the schedule so that the billing can happen every month for the period of the contract.
Created a simple package that takes the out values from the post_integration procedure of the API OKS_OMIB_INT_EXTNS_PUB and did all the above. Contract got billed!
That is it folks. You can download the code here. There is table script to capture the out variables of the API. Please note that this article provides you a guideline and not a complete solution!