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SAP ECC 6.

00 December 2006 English

W23: Credit, Dispute, and Collections Management
Business Process Procedure

SAP AG Neurottstr. 16

SAP Best Practices

W23: Credit, Dispute, and Collections Management: BPP

69190 Walldorf Germany

© SAP AG

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.................................4 Creating a Promise to Pay.....................................................................................................3 Creating an Invoice .............................................................................2 Creating Overdue Item......................................................... and Collections Management: BPP Contents 1 Overview.....................1 Purpose...............................SAP Best Practices W23: Credit.........2 Reviewing Customers Open Item Status to Prepare Contact..................................................................................................................................................................................................................................................5 Releasing Blocked Order ..16 5.........................................................................................................................3 Customer Contact...8 4 Scenario Procedure......................15 5....................................................................................4 1..........11 5 Credit Process for a New Sales Order...................................................................................................................9 4..........................................................................7 Clarifying the Dispute and Documenting the Resolution..................14 5...............................................4 1.................8 4.................................................................4 2 Prerequisites................................................................................................................................................................................................................................................................7 3 Process Flow Diagram..........13 5..........................................................................................................................................................................8 4...........4 Changing an Invoice in FI ..............................................................................................16 5.....................................................................................................................................12 5....................6 Posting Incoming Payment. Dispute.....................................................8 Writing off and Closing the Dispute Case .............19 © SAP AG Page 3 of 20 .....10 4..................................................................6 2...............................1 Creating a Sales Order ..................................................................................................12 5......................................................2 Process Flow....................18 5.........1 Creating New Sales Order....1 Creating Initial Stock............................................2 Creating a Delivery .........................6 2...............

The analyst calls the customer to find out why payment has not been made on this outstanding item. the payment terms and net due date of the invoice are changed to reflect the fact that the invoice is past due for payment. and in making more effective credit decisions. • Creation of a dispute case in Dispute Management to document and resolve a customer complaint regarding an outstanding receivable. Receivables are further managed in SAP Collections Management by tracing and collecting outstanding receivables. It supplements the logistics process chain Sales Order → Delivery → Invoice → Payment in the stage between invoice and payment if there are discrepancies with the customer. The processes show how a company can optimize the financial and information flows with its business partners. Customer CWSD1 now has an outstanding receivable that is well past due. The sales order is automatically blocked due to the credit check violation. In this business process procedure we show some of the features of these three components and their integration with the FI-Accounts Receivable and Sales and Distribution modules of SAP ERP 2005.SAP Best Practices W23: Credit. Customer CWSD1 subsequently places another order for 10 units of the same material. Dispute Management. At the time of sales order entry by the Sales Representative. SAP Credit Management helps you determine the risk of losses on accounts receivable from business partners as early as possible. • Use of information in Collections Management to review a customer’s open item status and recording of customer contact. A delivery is promptly made to the customer. 1. and Collections Management within the SAP Financial Supply Chain Management (FSCM) module. The customer informs the Credit Analyst that payment is being withheld because the delivery was late and therefore he should not have to pay the freight charge. The SAP Dispute Management component contains functions for processing receivables-related dispute cases. specifically that there is a past due item. A Credit Analyst responsible for monitoring this customer reviews its open item status and notices an outstanding receivable that is past due. and Collections Management: BPP 1 Overview 1. The analyst creates a dispute case to record the details of the phone conversation. This invoice provides the basis for subsequent processing in Credit Management and Collections. © SAP AG Page 4 of 20 . The key functions demonstrated are: • Credit checking of a business partner at the time of sales order entry and blocking of a sales order due to the existence of a past due item. For demonstration purposes.2 Process Flow This business process procedure starts with a customer (CWSD1) who places a sales order for 1000 units of material W23010 (Tester. coaxial). Dispute. a credit check reveals a problem with this customer/order. and an invoice is sent.1 Purpose This scenario demonstrates several business processes in Credit Management. In this component you have ready access to data that helps you monitor customer accounts. With this information you can easily contact customers and notify them about outstanding receivables.

Upon further investigation by the Shipping Department. Since the customer paid the promised amount. Because the disputed value is less than $100 and the deduction was accepted. The dispute case is updated with the findings and all relevant supporting documentation. Dispute. the residual item is written off. Pending resolution of the disputed freight charge. © SAP AG Page 5 of 20 . it is determined that the customer complaint was justified and a deduction for the freight charge is in order. and Collections Management: BPP The customer agrees to pay the invoice minus the freight charge. The customer pays the agreed upon amount and payment is posted. only a residual item for the disputed freight amount remains open.SAP Best Practices W23: Credit. A promise to pay document is created for the updated amount. the blocked sales order for the additional 100 units is released for fulfillment.

1 Creating Initial Stock Use This activity creates initial stock for the BOM components of the finished good. Note the message “Document XXXXXX posted. for example to create initial stock for goods movements. Dispute. Usually. 6. 8. Once the stocks have been used up.SAP Best Practices W23: Credit. On the Enter Other Goods Receipt: Initial Screen. Choose Enter. 10. Choose Save. 2. and Collections Management: BPP 2 Prerequisites This section contains activities that you need to carry out before you run through the Business Process Procedure. 7. execute this activity again to create more. 9. you only have to execute these steps before you run the BPP for the first time. make the following entries: Field name Material Quantity SLoc 5. On the Automatic batch number allocation dialog box. On the Enter Other Goods Receipt: New Items 0002. Once you create the initial stock. 4. Storage location Description User action and values W23010 3000 0002 For each material Comment Description User action and values 561 BP01 Comment Result © SAP AG Page 6 of 20 . Procedure 1.” 11. you will have ample stock available to run the BPP several times. choose Back twice. Access the activity choosing one of the following navigation options: SAP ECC Menu Transaction code Logistics ® Materials Management ® Inventory Management ® Goods Movement ® Goods Receipt ® Other MB1C 2. enter today’s date as the date of production for material W23010 / Batch XXXXX. choose Yes. make the following entries: Field name Movement Type Plant 3. then choose Enter. On the Enter Other Goods Receipt: New Items screen. On the Enter Other Goods Receipts: Classification screen. A warning message “Enter the date of production” may display. Choose Back. Choose Enter.

The corresponding master data (for example. W23: Credit. Dispute. batches) must be maintained in the system as follows: Production plant Material Sold-to party Ship-to party Payer Plant Shipping point Sales organization Distribution channel Division User Actions/Values W23010 CWSD1 CWSD1 CWSD1 BP01 BP01 BP01 01 01 © SAP AG Page 7 of 20 . materials. SAP FI-FI. conditions.SAP Best Practices You have created initial stock. and Collections Management: BPP 2. customers. SAP LO-MM.2 Creating Overdue Item Use This activity creates an overdue item that exceeds the credit limit. prices. Prerequisites Modules involved: SAP LO-SD.

SAP Best Practices W23: Credit.1 Create New Sales Order 4.3 Customer Contact 4.7 Clarify Dispute and Document the Resolution Accounts Receivable 4. and Collections Management: BPP 3 Process Flow Diagram W23: Credit. Dispute and Collections Management Credit Process for a New Sales Order Sales Represent ative 4.6 Post Incoming Payment 4 Scenario Procedure 4. Dispute.8 Writing Off and Closing the Dispute Case Warehouse 4. Access the transaction using: SAP ECC Menu Transaction code Logistics → Sales and Distribution → Sales → Order → Create VA01 © SAP AG Page 8 of 20 .2 Review Customers’ Open Item Status to Prepare Contact 4.1 Creating a Sales Order Use This activity creates a sales order.4 Create a Promise to Pay 4. Procedure 1.5 Release Blocked Order Credit Analyst 4.

enter the following data: Field name Order Type Sales Organization Distribution Channel Division 3. 4. Choose Enter. On the Create Standard Order: Overview screen. Choose Save. and Collections Management: BPP 2. 4. 7. Description User action and values CWSD1 <Reference number of the customer. On the Create Sales Order: Initial Screen. Note the order number: _ . Choose Enter. enter the following information on the next screen: Field name Sold-to party PO number Material Order Quantity 5. Procedure 1. 6.2 Creating a Delivery Use This activity creates a delivery. Access the transaction using: SAP ECC Menu Logistics → Sales and Distribution → Sales → Order → Change © SAP AG Page 9 of 20 . Dispute. Enter any value> W23010 (HAWA) 1000 EA Comment Description User action and values OR BP01 01 01 Comment The plant and shipping point is BP01.SAP Best Practices W23: Credit. Result The sales order is created.

Access the transaction using: SAP ECC Menu Transaction code Logistics → Sales and Distribution → Billing → Billing Document → Create VF01 2. On the Change Sales Order: Initial Screen. on line item 0010 scroll to the right and choose the Batch Split Exists button then Enter. Choose Save to create an invoice for your delivery. you may receive an error message stating that delivery is not possible due to credit limit violation. Description User action and values 1000 EA Comment Enter in line item 900001 Field name Picked Qty 5. 6. 4. In the Picking tab. Your delivery will be defaulted in the list. enter your sales order number and choose Enter. you must release the sales order block via transaction VKM1. perhaps due to prior executions of this BPP that were not run to completion. 4.3 Creating an Invoice Use This activity creates an invoice.SAP Best Practices Transaction code W23: Credit. Note the delivery number: _ . For more details. Choose the button Post Goods Issue and choose enter. In the Change Standard Order XXXX: Overview screen. If you receive this message. from the menu bar. 3. Procedure 1. choose Sales document → Deliver If there are past due invoices for this customer. see the section Release the Blocked Order in this BPP. enter the number of the delivery document entered above. If not. Result The delivery is created. Dispute. © SAP AG Page 10 of 20 . and Collections Management: BPP VA02 2.

This is done for demonstration purposes. 3. We create an outstanding receivable that will cause subsequent orders placed by this customer to fail the credit check during order entry. Result The invoice is created. Field name Payment Terms Description User action and values 0001 Comment Payable immediately Due net © SAP AG Page 11 of 20 . and Collections Management: BPP . On the Change Document: Initial Screen.4 Changing an Invoice in FI Use In this step you will change the payment terms and baseline date of the invoice so that it becomes past due. Dispute. Enter the necessary data. 4. Access the transaction using: SAP ECC Menu Transaction code Accounting → Financial Accounting → Accounts Receivable → Document → Change FB02 2. Procedure 1.SAP Best Practices 3. Note the invoice number: W23: Credit. Double-click on the customer line item CWSD1. Choose Enter. enter the necessary data: Field name Document Number Company Code Fiscal Year Description User action and values <Your invoice number> BP01 <Current year> Comment Your order number can be found on Sales Order screen. 4. 5.

and Collections Management: BPP <At least 60 days in the past> 6. Choose the Save button. On the Create Sales Order: Initial Screen. Enter any value> Comment Description User action and values OR BP01 01 01 Comment © SAP AG Page 12 of 20 . 5 Credit Process for a New Sales Order 5. Choose Enter. An outstanding invoice now exists which is past due and will serve as the basis for further processing in Credit Management. have been created. now attempts to place a new sales order. Procedure 1. Choose Enter for each warning message. 4.1 Creating New Sales Order Use The same customer.SAP Best Practices Bline Date W23: Credit. Result A sales order with subsequent follow-up activities (delivery and billing. You will receive warning messages indicating that the net due date is in the past. for example). enter the following data: Field name Order Type Sales Organization Distribution Channel Division 3. Enter the following data on the next screen: Field name Sold-to party PO Number Description User action and values CWSD1 <Reference number of the customer. and Collections Management. Dispute. who has an outstanding receivable that is past due. Access the transaction using: SAP ECC Menu Transaction code Logistics → Sales and Distribution → Sales → Order → Create VA01 2. Dispute Management.

7. choose Save. The order is saved. and choose there are several open items. Note the order number: _ . On the Customer List – Process Receivables screen. To prepare the customer contact you analyze his open items. Double-click on customer line for details. To save the sales order. 5. 8. Choose Execute. Result A new sales order is created. Dispute. W23: Credit. 6. Choose Enter. if Description User action and values CWSD1 BP01 Comment © SAP AG Page 13 of 20 . A dialog box informs you that the oldest item is overdue.2 Reviewing Customers Open Item Status to Prepare Contact Use A Credit Analyst reviews the open items for customer CWSD1. Procedure 1. enter the necessary data: Field name Customer Company Code 3. and Collections Management: BPP W23010 (HAWA) 10 EA The Plant is BP01 and the Shipping point is also BP01. To sort by days in arrears. Access the transaction using: SAP ECC Menu Accounting → Financial Supply Chain Management → Collections Management → Integration with Accounts Receivable Accounting → Edit Receivables (Old) FDM_COLL01 Transaction code 2.SAP Best Practices Material Order Quantity 5. Confirm this message by choosing Enter. select Header Arrear. Sort in descend order. 4. 5. but is blocked by Credit Management.

If no contact person is maintained. Enter the following data: Field Title Reason Category Priority Data Any title 0001 = Late delivery 0002 = Shipping Medium . Choose . choose contact person.3 Customer Contact The Credit Analyst calls the customer to inquire about the outstanding receivable. The customer contact person you have chosen will be the default contact person for all promises to pay and dispute cases you create. choose language English. . Result You have reviewed your customer’s open items and have been alerted to an outstanding item which warrants attention and follow up action. 5. and select Get Contact Person to select a customer contact person to create a new (with double-click). 7. Details of this interaction with the customer are documented in a Dispute Case.SAP Best Practices W23: Credit. © SAP AG Page 14 of 20 . Select the invoice and choose 2. Double-click on your new contact person to select it. The customer informs the analyst that the delivery was late and is withholding payment because he feels that he should not have to pay the freight charge. Select gender and title. Procedure 1. 6. Refresh the contact person window by choosing list. 8. enter last name and first name. and enter your own e-mail address. and Collections Management: BPP You can adjust the layout to your requirements by choosing the button a. Dispute. The new contact person appears in the 9. Choose Save to save the new contact person.

4. Choose Save. Procedure 1. payment delays can be prevented. Thus. Enter the following data: Field Promised Data Invoice amount – freight Promised For Note Any date in the future Any 3. If necessary adjust layout using the button. View the update of the field Disputed in the invoice list.SAP Best Practices W23: Credit. Result You have now created a dispute case in Collections Management. Dispute. Select the invoice and choose The selection of multiple invoices is possible by pressing the control key at the same time. User to clarify the issue (for demo purposes it can be your own user) User responsible (for demo purposes it can be your own user) Process Deadline Any date in the future Coordinator Long text 3. 5. and Collections Management: BPP Processor Person Respons. 2.4 Creating a Promise to Pay The customer agrees to pay the invoice minus the freight charge while his dispute is being investigated. The information regarding the dispute is now available for immediate follow up action to resolve the dispute as soon as possible. Choose and select Get Contact Person to select a customer contact person (with double-click). Yourself Describe issue and ask next processor to clarify it. Choose Save. 4. © SAP AG Page 15 of 20 .

5 Releasing Blocked Order Pending resolution of the customer’s disputed claim. View how the amount promised and the level have been updated. 4. Choose Execute. You remove the sales order block manually by accessing following path: SAP ECC Menu Transaction code Accounting → Financial Accounting → Accounts Receivable → Credit Management → Exceptions → Blocked SD documents VKM1 2. On the Blocked SD Documents. Description User action and values BP01 001 Comment (or press CTRL-F10) to release the blocked order. The status of the corresponding invoices has been immediately updated. enter the necessary data: Field name Credit control area Credit representative group 3. Procedure © SAP AG Page 16 of 20 . Dispute.6 Posting Incoming Payment The customer submits payment for the invoice amount minus the freight charge and the payment is posted. 5. Choose Save. Choose the Release 6.SAP Best Practices W23: Credit. and Collections Management: BPP 5. Select the blocked document in the display by clicking the checkbox 5. Result You have now created a promise to pay for the disputed invoice. Result The block on the sales order due to the credit check violation is removed and the sales order is clear for delivery. 5. The order is not released from block until you click Save. it is decided that the blocked sales order can be released for further processing. Procedure 1. at the left of the line.

b. Depending on the user’s defaults. d. Choose Save to post the document. Select the tab Res. some items may be selected. Note the order number: _ . and then to deactivate all items. 7. Choose Save to post the document. Choose Enter to confirm messages. enter the necessary data: Field name Document Date Type Company Code Currency Account in Bank Data screen Amount Account in Open item selection screen 3. Confirm by choosing yes. When you exit the transaction you are asked. Choose c. Result You have now posted an incoming payment for the invoices the customer promised to pay. 10. and Collections Management: BPP 1. 9.item and select only the invoice for Double-click on the net amount of this invoice. 6.SAP Best Practices W23: Credit. © SAP AG Page 17 of 20 . If you are asked to correct a line item. Dispute. double-click on the residual item line. 5. Double-click on Residual items field. enter payment term 0001 (due immediately). 8. if you want to exit editing. On the Post Incoming Payments: Header Data screen. CWSD1 Description User action and values <Today> DZ BP01 USD 113016 (Invoice amount) – (freight) = promised amount Comment 4. Choose . If that is the case: a. Access the transaction using: SAP ECC Menu Transaction code Accounting → Financial Accounting → Accounts Receivable → Document Entry → Incoming Payments F-28 2. and a text.

Choose and select from File. Access the transaction using: SAP ECC Menu Transaction code Accounting → Financial Supply Chain Management → Dispute Management → Dispute Case Processing UDM_DISPUTE 2. Enter a RMS ID. Choose 15. and start the selection with . and double-click on the node Various in order to link an existing document to the dispute case. Dispute. An analyst responsible for handling disputes regularly checks the dispute organizer and processes the Dispute Cases that are assigned to him. Select a document (a letter in MS-Word. to display the folder structure of the dispute case. Expand folder Various. The document is now © SAP AG Page 18 of 20 . Choose 6. and double-click on this line. Choose UDM_Dispute (Just necessary for first login). use Dispute Management → Cases → Find WSD Dispute Cases instead. 11. 3. If your User-ID is not the processor of the Dispute Case. and Collections Management: BPP 5. Choose to get back to the dispute case. for example) from your computer. Now you see the whole folder 8. 12. 4. In the dialog box. 5. Choose structure (case record). 10.7 Clarifying the Dispute and Documenting the Resolution Use The shipping department finds out that the customer complaint was justified and accepts the deduction. Procedure 1. to enter a note about actions taken. Select SAP Dispute Management → Cases →My WSD Dispute Cases. open the folder Documents and double-click element type Documents with Template. . 13. 9. Choose to change the dispute case. and choose uploaded to the SAP Dispute Management system. Choose 7.SAP Best Practices W23: Credit. ensure that you are in Change mode. If you cannot see it. to get back to the folder structure. Select the dispute case for the freight charge. Enter a short description for the new document. and read the instruction given by the dispute clerk. 14.

You get information that the write-off has been © SAP AG Page 19 of 20 . 22. to return to the dispute case overview. and choose the value Approved for Automatic Write-Off.SAP Best Practices W23: Credit. Select the attribute for field Escalation Reason. Choose Save. Select internal note. 21. On the Automatic Write-Off of Dispute Cases screen. Choose started. (You could now assign another user as next processor. and choose the value Shipping Department Error. Dispute. Set the status to In Process. Access the transaction using: SAP ECC Menu Accounting → Financial Supply Chain Management → Dispute Management → Periodic Processing in Dispute Case Processing → Automatic Write-Off of Dispute Cases UDM_AUTOWRITEOFF Transaction code 2. Procedure 1. Result You have now resolved the dispute and documented your decision. Choose Save. Select the attribute for field Root Cause Code. 17.8 Writing off and Closing the Dispute Case Use In this procedure you will write off the remaining disputed amount of the dispute case. but for simplification reasons you can also leave your User ID here). 23. to start the write-off program. and enter your comment. 20. and Collections Management: BPP 16. enter the necessary data: Field name Case Type Escalation Reason Case ID Description User action and values ZFDM WO <Your case ID> optional Comment 3. 5. Choose 18. 19. Return to the main menu.

Result You have now written off the remaining amount and closed the dispute case. you can see the status of this background job and further information (log etc) via menu path ‘System – Own jobs’. 4.SAP Best Practices W23: Credit. If necessary. Dispute. Go back to the main menu. and Collections Management: BPP The write-off program is always started as a background job. © SAP AG Page 20 of 20 .