Last post we discussed a simple synergy with AP and the basis of a client’s persistence of why he may want specialized resources.

http://faoblog.com/processes-ar-billing-4/

We talked about manufacturing billing. Let us look at another scenario. Let us talk of a manufacturing unit, which supplies capital machinery, i.e. machinery which is expected to be used in other industries. Do you think the billing process will be the same as that of manufacturing food products / consumer durables?

Absolutely not. Here billing will be specialized. It could be event based or on the basis of the levels of completion. Interesting isn’t it?

The engineers will have to certify the level of completion of the machinery and based on this, partial billing will have to happen. This is again dependant on the contract between your client and his customer. Even though the product is not fully ready or delivered, billing has to happen.

Similar to this is a construction industry, say for an apartment or commercial complex. The builder will technically bill at completion of each stage.

We can call this outcome based or event based billing.

 

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