Prepaid Amounts: Billing and Utilization

When establishing a prepaid amount, you must assign it to a billing plan. Either create a new billing plan for the prepaid amount or assign the prepaid amount to an existing billing plan that is associated with fixed-amount contract lines. The billing plan determines the timing and parameters of the initial prepaid billing.

Note:

You can relate prepaid utilization criteria only to rate-based contract lines. You link rate-based contract lines to a different billing plan from that of the prepaid. The billing plan that is linked to the prepaid is used for the initial billing of the prepaid amount. The billing plan that is linked to the rate-based line is used for the perpetual billing activity that occurs with the utilization of the prepaid.

Determine the parameters against which the prepaid balance can be utilized. You can choose to use the prepaid balance against any of these activities:

  • All billing activity for all (or some) rate-based contract lines that are contained in the contract.

  • All billing activity for one rate-based contract line that is contained in the contract.

  • All billing activity for a particular project or activity that is associated with a rate-based contract line that is contained in the contract.

  • A portion of the billing activity (based on project string, that is, resource type or resource category) for any of the preceding.

    When PeopleSoft Contracts sends rate-based billing activity to PeopleSoft Billing, PeopleSoft Contracts creates additional utilization rows and sends those to PeopleSoft Billing to net out billable amounts. As these rows are sent to PeopleSoft Billing, the prepaid committed amount is increased. After billing is finalized by the PeopleSoft Billing to PC/CA Interface process (BIPCC000), the prepaid committed amount is removed and the prepaid remaining amount is decremented appropriately. In addition, the utilization rows are sent back to PeopleSoft Project Costing for analysis and to adjust the balance sheet accounting. The utilization process continues until the prepaid balance is fully decremented (remaining amount equals zero).

Note:

A value-based billing plan enables users to define and bill independent amounts other than the actual rate-based transactions that are processed for revenue recognition. Value-based billing plans can be assigned only to rate-based contract lines. Prepaids are applied to rate-based contract lines based on the utilization controls. One of the utilization control options is to use the prepaid against all contract lines. However, even if you select this option, prepaids are not applied to any rate-based contract line that is associated with a value-based billing plan. (Value-based amounts are fixed in nature.)