Project Management – Billing Plan vs Billings (Conceptual Overview)

Project Management – Billing Plan vs Billings (Conceptual Overview)

Purpose

This article explains the conceptual and operational relationship between the Billing Plan and Billings.

While these two features are closely related, they serve different roles in the project-to-cash lifecycle:

• Billing Plan defines what should be billed and when (planning & control)

• Billings manages how billing is executed and processed (operational execution)

Understanding this separation is essential for correct financial governance, automation, and traceability.

High-Level Concept

In short:

💡The Billing Plan plans billing.
      Billings execute billing.

The Billing Lifecycle at a Glance

1. Billing conditions are defined centrally (Control Center)

2. Billing events are planned in the Project Billing Plan

3. On the planned date, the system automatically creates a Billing record

4. Billing execution is managed in the Billings module

5. Billing status feeds back into project financials and KPIs

Billing Plan: Planning & Financial Control

What the Billing Plan Is

The Billing Plan belongs to a project and represents a financial schedule of future billing events.

It answers questions like:

• When should this project be invoiced?
• For how much?
• Under which contractual conditions?

What the Billing Plan Contains

Each Billing Plan entry defines:

• Planned issue date
• Planned value
• SOW percentage
• Holdback amount or percentage
• Billing description / document identifier

These records are not invoices.
They are planned billing commitments.

Control Center: Billing Automation Rules

Before billing execution can occur, automation rules are configured centrally.

Example Control Rules

Configured under:

💡Operations Management → Billings → Configuration

These rules define:

• Which project or timesheet statuses allow billing creation
• Lead time for billing notifications
• Conditions under which billing records can be generated
• Status transitions allowed during execution

These rules ensure:

• Billing is consistent
• Billing is auditable
• Billing respects operational and contractual constraints

Automatic Billing Creation (Key Concept)

What Happens on the Planned Issue Date

When a Billing Plan entry reaches its planned issue date:

1. The system checks:

   • Billing Plan validity

   • Project status

   • Control Center rules

2. If conditions are met:

   • A Billing record is automatically created

   • This record appears in the Billings module

3. The Billing Plan entry becomes:

   • Linked to its execution document

This automation ensures:

• No manual invoice creation from projects
• No missed billing dates
• Full traceability from plan to execution

Billings: Execution & Financial Processing

What the Billings Module Is

The Billings module is the operational execution layer where billing documents are:

• Reviewed
• Approved
• Issued
• Cancelled or closed

This is where financial control takes place.

Typical Billing Status Flow

Billing documents usually move through stages such as:

• Worksheet (draft)
• Submitted
• Validated
• Issued
• Canceled / Closed

The exact lifecycle depends on configuration.

Relationship Between Billing Plan and Billings

A single Billing Plan entry usually generates:

• One Billing document

But execution status always lives in Billings, not in the project.

Financial Traceability

This separation ensures:

• Clear audit trails
• Accurate revenue recognition
• Controlled invoice approval
• Consistent reporting

Project users:

• Plan billing in the project

Finance users:

• Execute billing in Billings

Both views remain synchronized.

Common Misconceptions

“If I create a Billing Plan, I already invoiced the client.”
❌ Incorrect — you only planned the billing.

“Invoices must be created manually from the project.”
❌ Incorrect — they are created automatically.

“Billing Plan and Billings are the same thing.”
❌ Incorrect — they serve different lifecycle phases.

Best Practices

• Always define the Billing Plan early
• Ensure Control Center billing rules are validated
• Monitor upcoming billing dates regularly
• Use holdbacks to manage delivery risk
• Let automation create billing records — do not bypass it
• Manage approvals and issuance only in Billings

Summary

• Billing Plan = financial planning and scheduling
• Billings = financial execution and control
• Automation bridges both
• Control Center rules govern behavior
• This design ensures scalability, compliance, and financial accuracy

Related Articles

Project Management – Projects (Overview)
Project Management – Billing Plan
Project Management – Commercials
Operations Management – Billings
Operations Management – Billing Configuration
Project Management – Track Project Progress & KPIs