Guide

How does Foreign Military Sales billing work?

Updated 27 September 2026Checked against the SAMM: 26 September 2026

After the initial deposit, a Foreign Military Sales purchaser pays against bills. The Defense Finance and Accounting Service sends the DD Form 645, FMS Billing Statement, every quarter; it asks for enough cash to cover costs already incurred and those expected through the next quarter, and the amount billed — not the case payment schedule — is what the purchaser owes. Payments typically fall due by the 15th day of March, June, September, and December.

In this topic

What is on a Foreign Military Sales billing statement?
The DD Form 645, FMS Billing Statement, is the U.S. Government's official claim for payment and an accounting of the costs charged to each case so far. It shows the deliveries and services of the quarter just ended and a forecast of the next quarter's requirements, and it comes with a delivery listing, replies to Supply Discrepancy Reports, a financial forecast and account statements.
How do deliveries show up on a Foreign Military Sales bill?
Through delivery reporting. The Implementing Agency reports each delivery, service performed and accrued cost on a case to the Defense Finance and Accounting Service; those transactions draw on the purchaser's cash in the Trust Fund, carry the applicable surcharges, and appear line by line in the delivery listing that accompanies the quarterly billing statement — at an estimated price until the actual cost is known.
What is a special billing arrangement?
An alternative to the quarterly bill: DSCA sets it up and manages it at the country level, and a Special Bill Letter replaces the amount due.
What is cross-leveling in Foreign Military Sales?
An accounting technique by which DFAS-IN moves funds a purchaser has already paid from one of its Foreign Military Sales cases to another case that needs them.

How does Foreign Military Sales billing work?

The AECA Sections 21 and 22 provide the legal basis for FMS billing policies and procedures. LOA case billing involves many actions but can be viewed as one of two processes. First, the agency provides a commodity or service, from either DoW stock or contractual sources, and then bills the international partner’s or program’s trust fund account managed by DFAS-IN via a performance & delivery report transaction. Second, DFAS-IN sends the international partner the DD Form 645, FMS Billing Statement.

SAMM C9.10.1 — Billing Procedures.

Payments into the FMS Trust Fund, other than Initial Deposits, are based on bills (FMS Billing Statement, DD Form 645, or Special Billing Arrangement (SBA)). DFAS-IN sends the DD Form 645 to the purchaser quarterly. Under DSCA oversight, DFAS-IN assures that sufficient cash is available from the purchaser to cover accrued expenditures, costs to be incurred during the remainder of the current quarter, and costs to be incurred during the next quarter (e.g., contractor progress payments, contractor holdbacks, potential termination charges, and deliveries from DoD inventories). DD Form 645-based billings are the amount shown on the current case payment schedule or the quarterly forecast of the financial requirements accompanying the DD Form 645, bill, whichever is greater. The billing, not the payment schedule, contains the required payment amount. Implementing Agencies (IAs) refer billing problems and questions to DFAS-IN.

Synced 11 September 2026 · View on samm.dsca.mil

DFAS-IN issues the DD Form 645, FMS Billing Statement (with applicable attachments) to international partners for case costs related to defense articles, services, and training. After the international partner accepts the offer and provides DFAS-IN with signed copies of the LOA and the applicable initial deposit, DFAS-IN updates DIFS with applicable LOA data. The case is implemented in DIFS and is then prepared to receive IA delivery transactions. The initial deposit accompanying most FMS cases provides sufficient cash to cover disbursements from the time the case is implemented until availability of funds from the first billing payment due date.

Billing statements are prepared and forwarded to the international partner on a quarterly basis (i.e., for quarters ending 31 December, 31 March, 30 June, and 30 September) (see Table C9.T25). This FMS billing timeline cycle must be taken into consideration during the computation of the initial deposit period and any quarterly payments thereafter.

The payment dates shown on the payment schedules must be compatible with the billing cycle.

References

Drawn exclusively from publicly available authorities.

SAMM

SAMM C9.10.1 — Billing Procedures.
SAMM C9.9.3.5 — Purchaser Requests for Payment Schedule Review.

Facts referenced

Payment schedule — the quarterly payment due dates the schedule typically projects — 15th day of March, June, September, and December (as of 11 September 2026) — SAMM C9.9.1.4

GuideWho pays for FMS sales?GuideWhat is an FMS Trust Fund?Pipeline stageExecution RoleDSCA Country Finance Director

How does Foreign Military Sales billing work?

How does Foreign Military Sales billing work?

References

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