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Administrator Guide
Last Updated: 2023-06-23
Concept: Billing

Concept: Billing

Workday uses the information that you specify on the customer contract to create a billing schedule. The billing schedule is based on the billing installments established in the terms of the agreement. On the appropriate date, Workday then uses the installment information to create a customer invoice and routes it for management approval.

Milestones

You can create milestones to track the completion of tasks and specify when Workday can process billing and revenue recognition schedules and installments. You can assign multiple milestones to schedules and installments. Workday doesn't process schedules or installments with pending milestones.
You can use these tasks to configure standard milestones:
  • Maintain Date Milestone Types
  • Create Date Milestone
Standard milestones become customer milestones once you add them to a customer. You can view customer milestone details using the
Find Milestones
 report. Customer milestones are unique for each customer and company combination.
Workday supports these milestone types:
  • Billing Schedule First Invoice: Use to initiate revenue recognition once billing has occurred.
  • Date Milestones: Use standard date milestones as the basis for creating customer date milestones.
  • Project Tasks: Mark project tasks as milestones in the project. Use project milestones to control when you bill project transactions and recognize revenue. You can define project milestones for a project phase or for the overall project to determine when transactions are available for billing. You can use project tasks marked as milestones as contract milestones. You can't delete project tasks that are in use on a contract. You can enter estimated and actual completion dates. Once the project task is complete and you enter an end date, billing can occur. Workday uses the end date as the milestone completion date.

Schedule Types

You can use the
Maintain Schedule Types
 task to configure schedule types for use on billing and revenue recognition schedules. When you enable a schedule type for use on:
  • Billing schedules, you also have the option to enable
    Prepaid
     or
    Consolidated Billing Schedule
    .
  • Revenue recognition schedules, you also have the option to enable
    Usage-Based Subscription
     or
    Multi-Period
    .
Workday displays the usage count for each schedule type, and you can set a schedule type as
Inactive
 at any time. When you set a schedule type as
Inactive
, Workday removes the option from the
Schedule Type
 prompt on billing and revenue recognition schedules.

Billing Schedules and Installments

You can:
  • Link contract lines that span multiple contracts for the same company and customer to the same billing schedule.
  • Define schedule types so you can classify your schedules. This process simplifies searches, approvals, and reporting.
  • Create installment or transaction billing schedules to manage certain types of contract lines, or consolidated billing schedules to manage installment, transaction, and prepaid contract lines in 1 schedule.
Workday creates installments based on the scheduled start and end dates, which can differ from the contract line start and end dates. You can also configure the invoice date to assign, which can differ from the installment start date.
Workday supports these billing methods for each billing schedule, and you can change methods throughout the life of the schedule:
  • Defined Installment
    : Define the first and last installment amount for each contract line. Workday spreads the remaining amount evenly among the other installments. You can't use this billing method on consolidated billing schedules.
  • Spread Even
    : Define a set number of installments with equal amounts.
  • Custom
    : You control all aspects of the installments.
A billing schedule includes 1 or more installments. Each billing installment:
  • Creates a customer invoice.
  • Becomes an invoice line.
  • Derives attributes from the associated contract line.
Once you generate installments, you can:
  • Manually update individual installments.
  • Regenerate billing installments automatically after changes to contract amounts. This function only applies to
    Spread Even
     billing methods or
    Spread Even
     and
    Number of Days
     revenue recognition methods.
  • Update your schedules automatically when you make changes to your contract lines.
  • Edit all installments at once when you have a custom schedule.
Workday assigns an
Out of Balance
 status when:
  • You don't schedule your contract line installments exactly.
  • A custom schedule overbills.
You can create customer invoices from billing installments after you approve the billing schedule.

Billing for Order Fulfillment

When you record order fulfillment for customer contract lines, you can generate billing based on partially and completely filled orders.

Create Customer Invoices from Billing Installments

With the
Create Customer Invoices from Billing Installments
 task, you can run this task as needed or as a scheduled process. This task enables you to:
  • Select available billing installments to invoice.
  • Mark invoices to submit for automatic approval.
You can:
  • Make limited changes to the customer invoice and add more lines.
  • Create invoices that reference contract lines when you have invoice adjustments.
Workday reflects any changes to invoice line amounts on the billing installment. The contract line billed amount reflects all approved invoices.

Retention for Customer Invoices

You can:
  • Withhold a portion of a customer invoice, enabling you to use billing schedules for retention tracking, and reducing manual entry errors.
  • Post the accounting for the retained amounts from invoices to different ledger accounts using a new posting rule.
  • Support multiple types of billing schedules, including transaction and installment billing.
  • Release all or a portion of the retention balances by contract line for invoicing, when your contract meets the requirements.