Billing Process

Cost Reimbursable Billing

Cost reimbursable billing is based on actual project costs (direct and indirect) incurred up to the billing date within a maximum authorized amount.

Cost reimbursable billing for the federal government sponsorships is conducted in accordance with OMB Circular A110 and applicable agency regulations. Other sponsors may also require cost reimbursable billing.

Cost reimbursable billing in SAP requires a sales order master for the project being billed. The sales order is used to summarize the project costs and produce a bill.

Schedule Billing

Schedule billing is necessary when a sponsor requires MIT to submit a bill for a fixed amount on a periodic basis. This type of billing is not based on actual costs of the project.

Schedule billing in SAP requires a sales contract master for each sponsor being billed. The contract includes important information such as the specific amounts and dates required for billing.

In case of federal sponsors whose projects qualify for the Federal Advance Payment Pool, advance payments may be obtained through the letter of credit business process. While no sponsor billing may be required for these projects, an internal bill is created to record revenues for the projects, based on the Institute’s revenue recognition criteria.

Letter of Credit / Request for an Advance / Cost Reimbursement

Most of the money received for the NASA grants and contracts is by letter of credit. Other methods of receiving money for NASA grants and contracts are by request for an advance and cost reimbursement.

• Letter of credit is a process used to request money for a group of accounts. At least once a week, there is a comparison of the cash on hand and the estimated expenses. Based on the result, a request is made to cover the difference.
• Request for an advance is a process used to get money for a particular account. At least once a month Form SF 270 is submitted requesting the difference between the cash on hand and expenses for the month.
• Cost reimbursement is a process used to get money for a particular account based on actual expenses. At least once a month Form 1034 is submitted requesting reimbursement for the actual expenses on an account. This process is usually used for contracts that are not covered by letter of credit.