SIS – Simplified Interline Settlement
Impact on Billing Rules
RA44 - Breakout Session
RAWG
Agenda
 Highlights
 Structured Billing - Facilitators
 Source Codes
 Memos (Rejection, Billing and Credit Memos)
 Reason Codes
 Change Categories & Change Codes (Miscellaneous Billings)
 Specific Changes
 Miscellaneous Billing Process
 Correspondence
 VAT
 Changes to the RAM
 Summary
SIS – Impact on Interline Billing Rules
2
15 Sept 2010
Highlights
 Removal of redundant rules & processes (e.g ARC/BSP missorts)
 Reduction in the number & type of documents needed to support the billing
(more structured electronic data is provided on the invoice)
 More structured and rigorous billing process – opportunities for diversion from
the rules are limited (e.g not possible to jump rejection/correspondence stages)
 Single audit trail (e.g only one rejection for one billed transaction, all reasons for
rejection incorporated into one rejection memo)
 Clarity on date and proof of submission to SIS – removal of all rules associated
with non receipt of documents/ correspondence
 No hard copy (paper) support is provided to any billings
SIS – Impact on Interline Billing Rules
3
15 Sept 2010
Agenda
 Highlights
 Structured Billing - Facilitators
 Source Codes
 Memos (Rejection, Billing and Credit Memos)
 Reason Codes
 Change Categories & Change Codes (Miscellaneous Billings)
 Specific Changes
 Miscellaneous Billing Process
 Correspondence
 VAT
 Changes to the RAM
 Summary
SIS – Impact on Interline Billing Rules
4
15 Sept 2010
Source Codes
SIS – Impact on Interline Billing Rules
5
15 Sept 2010
Source Codes
 Today – not mandatory in IATA, mandatory in ACH
 SIS – mandatory for all
 New Source Codes:
 Example: 23 EMD Billings
 Example: 25 Excess Baggage
 Example: 94 Billing Memos – Frequent Flyer Coupons (optional)
 Refer to RAM, Ch. A9 Part 2, Attachment G
SIS – Impact on Interline Billing Rules
6
15 Sept 2010
Memo’s
SIS – Impact on Interline Billing Rules
7
15 Sept 2010
Memo’s
Two new recognised document types: Billing and Credit Memos
 When to use a Billing Memo:
Adjustment billings, Billing based on authority etc. –
 when the original document has already been billed (adjustments) or
 the transaction cannot be included in a standard prime billing because detailed
explanation is needed with the billing (e.g originally billed the wrong carrier), or
 the billing is based on a special agreement or communication (or lack of), e.g.billing
based on authority, alliance settlement
 When to use a Credit Memo:
 Mostly based on bilateral agreements (e.g. commission payments outside ISC), in
some (rare) cases for invoice level value corrections
Note: Credit Memos will always have to appear on a separate (credit) invoice, they
cannot be mixed with debit (billing) transactions in the same invoice
SIS – Impact on Interline Billing Rules
8
15 Sept 2010
Memo’s
Fixed format rejection memo with extended data – minimising the need for
attaching supporting documents:
 When to use a Rejection Memo:

When a billing received from a carrier is believed incorrect – either the entire billing
or part of it
 Key changes to RM issuance process


Only one rejection memo for each transaction billed (e.g. no separate memos for
fare and tax value differences)
RM to show the total value billed and accepted (not just the value under dispute in a
particular rejection stage)
SIS – Impact on Interline Billing Rules
9
15 Sept 2010
Reason Codes
SIS – Impact on Interline Billing Rules
10
15 Sept 2010
Reason Codes
 To facilitate the processing & accounting of incoming invoices, and
 To assist with the validation of the information that need to be provided to
support the billing/rejection reason
Billings on certain document types must carry a reason code
putting the textual information explaining the reason for raising the document into a
structured format – 2 characters code
SIS – Impact on Interline Billing Rules
11
15 Sept 2010
Reason Codes
 Relationship between Source Codes and Reason Codes
 Source codes are used to identify the document type billed and the billing/rejection
stage
 Reason codes explain within a specific document type the reason for the
billing/rejection/credit
 Reason Codes and Billing Memos, Rejection Memos and Credit Memos
 As Billing, Credit and Rejection Memos are
 single document types, and
 they can be issued for various reasons (previously explained only in a text
format on the document), with various supporting document requirements
they will all have to be issued with an approved reason code in SIS
SIS – Impact on Interline Billing Rules
12
15 Sept 2010
Charge Categories
& Charge Codes
SIS – Impact on Interline Billing Rules
13
15 Sept 2010
Charge Categories & Charge Codes
(Miscellaneous Billings)
 Definition:
 Charge Category – high level grouping of service types
 Charge Code – lower level grouping of service types within specific Charge
Categories
 Purpose:
 To facilitate the processing & accounting of incoming invoices, and
 To assist with the validation of the information that need to be provided to support
the billing reason
SIS – Impact on Interline Billing Rules
14
15 Sept 2010
Agenda
 Highlights
 Structured Billing - Facilitators
 Source Codes
 Memos (Rejection, Billing and Credit Memos)
 Reason Codes
 Change Categories & Change Codes (Miscellaneous Billings)
 Specific Changes
 Miscellaneous Billing Process
 Correspondence
 VAT
 Changes to the RAM
 Summary
SIS – Impact on Interline Billing Rules
15
15 Sept 2010
Miscellaneous Billing
Process
SIS – Impact on Interline Billing Rules
16
15 Sept 2010
Miscellaneous Billing Process
 Significant enhancement of Chapter A13 to bring it in line with other RAM
Chapters on structure and detailed content
Examples:
 Billing timescales (paragraph 2.1.5)
 Rejection timescales (paragraph 4.3)
 The specific information that need to be provided on different types of invoices
(attachments)
 The billing process for different types of taxes (Attachment C Paragraph 2)
 Multiple form of settlements (Attachment C Paragraph 5)
SIS – Impact on Interline Billing Rules
17
15 Sept 2010
Correspondence
SIS – Impact on Interline Billing Rules
18
15 Sept 2010
Correspondence
 All correspondence via SIS
 Strictly following billing, rejection, correspondence stages according to
Chapter A10
Resulting in:
 No correspondence in between rejection stages unless bilaterally agreed (not
facilitated by SIS)
 No arguments about the date when correspondence was sent/received – no
backdating and no lost correspondence
 Once settlement is agreed and takes place on a correspondence, the dispute is
considered closed (no partial settlement while continuing the dispute)
SIS – Impact on Interline Billing Rules
19
15 Sept 2010
VAT
SIS – Impact on Interline Billing Rules
20
15 Sept 2010
VAT
 Introduction of VAT billing capability on passenger invoices (separately from
taxes, fees and charges shown under a 2 letter tax code on the ticket)
 While the RAM will not give direction on whether airlines should move from
their current method of billing for VAT, where applicable, to including it on the
passenger invoice, airlines should be prepared to see it on their incoming
invoices and be able to validate & account for it
SIS – Impact on Interline Billing Rules
21
15 Sept 2010
Agenda
 Highlights
 Structured Billing - Facilitators
 Source Codes
 Memos (Rejection, Billing and Credit Memos)
 Reason Codes
 Change Categories & Change Codes (Miscellaneous Billings)
 Specific Changes
 Miscellaneous Billing Process
 Correspondence
 VAT
 Changes to the RAM
 Summary
SIS – Impact on Interline Billing Rules
22
15 Sept 2010
Changes to the RAM
 All Chapters impacted to some extent.
 Chapters with significant changes:
A2, A3, A5, A9, A10, A12, A13.
 Will be discussed further in the main meeting (plenary session).
SIS – Impact on Interline Billing Rules
23
15 Sept 2010
Agenda
 Highlights
 Structured Billing - Facilitators
 Source Codes
 Memos (Rejection, Billing and Credit Memos)
 Reason Codes
 Change Categories & Change Codes (Miscellaneous Billings)
 Specific Changes
 Miscellaneous Billing Process
 Correspondence
 VAT
 Changes to the RAM
 Summary
SIS – Impact on Interline Billing Rules
24
15 Sept 2010
Summary
 SIS is not just about removing the paper from the billing & settlement
process and otherwise carry on as before
 For the paperless billing to work
 A fundamental change to the structure and the level of detail in the information
supplied is required, and
 Airlines’ internal process flows and working practices will need a major overhaul
 Sooner you start treating SIS not only as IT but a business process
reengineering project,
 Less painful the implementation is going to be, and
 More benefits your airline will get out of it at the end
SIS – Impact on Interline Billing Rules
25
15 Sept 2010
Thank you.
Email:
sis@iata.org
SIS Website:
www.iata.org/sis
SIS – Impact on Interline Billing Rules
26
15 Sept 2010