SAP Dunning Configuration

SAP Dunning configuration includes several steps and we will discuss each of them
in a separate section of this tutorial.

SAP Dunning Area

As noted in the previously mentioned tutorial, the Dunning area is the starting point
for understanding the Dunning process. Dunning Area is typically used by an
organization that requires Dunning for specific organizational units within a company
code, such as a profit center, sales organization, etc. A Dunning area is configured in
the IMG and assigned to a company code. This is the first step in SAP Dunning
configuration and is used as an overall grouping level when executing the Dunning
program. This step is optional and not required if SAP Dunning process is to be
carried out for an entire company code.

The IMG path to configure the Dunning area is as follows:

Transaction SPRO > SAP Reference IMG > Financial Accounting (New) > Accounts
Receivable and Accounts Payable > Business Transactions > Dunning > Basic
Settings for Dunning > Define Dunning Areas
IMG Menu Path for Dunning Area Configuration
Click on the execute icon to enter the configuration screen. Once in the configuration
screen, either click on the “New Entries” button or simply highlight an existing entry
and click on the “Copy As” button:
Dunning Area Configuration Screen
In this example, we will copy the entries from an existing company code to a new
company code:
Dunning Area Configuration Screen – Copy Existing Entries
Once your Dunning Areas are configured, save to a transport.

SAP Dunning Keys

The next basic setting to configure are Dunning Keys. These are used to limit specific
AR line items to a Dunning Level and/or to print them separately on Dunning Notices.

The IMG path to configure the Dunning Keys is as follows:

Transaction SPRO > SAP Reference IMG > Financial Accounting (New) > Accounts
Receivable and Accounts Payable > Business Transactions > Dunning > Basic
Settings for Dunning > Define Dunning Keys
IMG Menu Path for Dunning Keys Configuration
Click on the execute icon to enter the configuration screen. Once in the configuration
screen, click on the “New Entries” button or highlight an existing entry and click on
the “Copy As” button (same functions available as with Dunning Areas, so we will not
show the screenshot here).

Again, we will copy existing entries in this example.

Dunning Keys Configuration Screen – Copy Existing Entries
Once Dunning Keys are configured, save the table to your transport.

SAP Dunning Blocks

Dunning blocks can be used to prevent line items from being subject to Dunning.
They are configured as followed and either assigned at the specific invoice line item
level or at the customer master record level.

The IMG path to configure the Dunning Block Reasons is as follows:

Transaction SPRO > SAP Reference IMG > Financial Accounting (New) > Accounts
Receivable and Accounts Payable > Business Transactions > Dunning > Basic
Settings for Dunning > Define Dunning Block Reasons
IMG Menu Path for Dunning Block Reasons Configuration
Click on the execute icon to enter the configuration screen. Once in the configuration
screen, click on the “New Entries” button or simply highlight an existing entry and
click on the “Copy As” button (same functions available as with Dunning Areas, so we
will not show the screenshot here).

Again, we will copy an existing entry and give it a unique text.

Dunning Block Reason Configuration Screen – Copy Existing Entry
Once the Block Reason is configured, save the table to your transport.

SAP Dunning Procedure

Let’s talk about the role of the Dunning procedure in SAP Dunning configuration. As
previously noted, the Dunning procedure is where most of the control of SAP
Dunning process occurs. The procedure is configured to hold Dunning level interval
days, number of levels that apply to a particular procedure, Dunning charges (cost of
the reminder to the customer), minimum charges, whether or not interest is charged
and if so at what level, etc. The Dunning Procedure is assigned to each customer in
the company code correspondence tab in the customer master record (only one
Dunning procedure can be applied to a customer at a time). Keep in mind that
Dunning Procedures are company code independent.

The IMG path to configure a Dunning Procedure is as follows:

Transaction SPRO > SAP Reference IMG > Financial Accounting (New) > Accounts
Receivable and Accounts Payable > Business Transactions > Dunning > Dunning
Procedure > Define Dunning Procedures
IMG Menu Path for Dunning Procedures Configuration
Click on the execute icon to enter the configuration screen. Unlike previously
explained screens in which we copied existing entries, we will create our own new
entries, so click on the “New procedure” button.
IMG Configuration Screen for New Dunning Procedure
After clicking on the “New procedure” button, the following screen will appear. A brief
explanation for each setting we are using is given.
IMG Configuration Example of a New Dunning Procedure
Dunning procedure – assign a new and unique 4-digit ID.

Name – assign a meaningful name.

Dunning interval in days – assign the number of days that will trigger the
procedure; this is the number of days between each Dunning run.

No. of Dunning levels – this is the number of levels for the dunning procedure.

Min. days in arrears (acct) – Days in arrears which at least one item in the
customer account must have for a dunning notice to be created.

Line item grace periods – grace periods taken into consideration when calculating
Dunning notices due.
Interest indicator – this field is used to specify the interest indicator for items on the
customer master using this procedure.

Public hol.cal.ID – this is used if a public holiday calendar is to be considered when

analyzing overdue items.

Ref. Dunning Procedure for Texts – use this field to reference form names from
another procedure that has the same number of levels.

Next, click on the “Dunning levels” button and complete field settings as required.
The screen will appear as follows and explanations for fields we are using in this
example will be given.

IMG Configuration Example of Dunning Levels within a Dunning Procedure

Days in arrears – this indicates the number of days in arrears that will trigger each
level.
Calculate interest? – check this field if you want to calculate interest for the
specified level.

Always dun? – use this setting for each level you want to Always Dun regardless of
whether or not a change has been made to a Dunning proposal; typically used at the
highest level of the procedure.

Print all items – use this setting if you want to print all open items for the customer
to give them a complete picture of their account balance.

Once the required settings on this screen are completed, click the “Charges” button.
This is where we can specify what the Dunning charge is for each level. These
charges are dependent on currency, so you will be prompted for a currency key when
you click this. The charges screen will appear as follows.

IMG Configuration Example of Dunning Charges within a Dunning Procedure

After completing this screen by entering the total open item amount and the required
charge for each level (can be either a fixed charge as in this case, or a percentage),
click on the “Minimum amounts” button. Again, this will be currency dependent. As
the button name indicates, this is where you set the minimum overdue line item
amounts that trigger each level and interest. An example of a completed screen will
look as follows.

IMG Configuration Example of Minimum Amounts within a Dunning Procedure

After completing this screen by entering the minimum amount (can be either fixed, as
in this example, or a percentage) and minimum interest amount for each level, click
on the “Dunning texts” button. As the button name indicates, this is where you set the
dunning text for each level. As noted earlier, each level can have a different text
which typically escalates in verbiage severity. You can use SAP standard delivered
texts, or you can customize your own to meet specific requirements. To see available
forms, click into the field and click the drop down. Select either an active standard
delivered form or custom form, depending on your business requirements. In this
example, for simplicity, we will use a standard for each level. Note: this will be
company code dependent, so a company code dialog box will appear prior to
entering this screen (not show here). Enter the company code you want and proceed.
An example of a completed screen using the same form for each level is as follows.
IMG Configuration Example of Dunning Texts within a Dunning Procedure
Once complete, click the green arrow to go back and save the completed
configuration to your transport.
IMG Configuration Example of a Newly Created and Saved Dunning Procedure
This completes SAP Dunning configuration required in the SAP implementation guide
to use the Dunning functionality.

Conclusion
These steps outline the basic configuration required to use the Dunning functionality
within SAP Financial Accounting Accounts Receivable, however, depending on
specific business requirements, other settings may be needed. Explore the help
features within the IMG to learn more as you proceed with SAP Dunning
configuration. The next steps, which will be outlined in later posts, will be to assign
the Dunning Procedure to customer master records, execute the Dunning program,
and change the Dunning proposal if required. Additional information will also be
provided on Dunning notices.

—
Former Member

Posted on May 3, 2013 6 minute read

SAP FI Dunning Procedure for Customer Outstanding

Invoices
FollowRSS feedLike
75 Likes 158,053 Views 66 Comments

I. INTRODUCTION
Purpose:
When the customer misses the payment for the outstanding invoice within specified payment due
date. The dunning letter is generated via sap program and send at customer address for reminding
the customer outstanding payment
Requirement:
The dunning system enables to trace liable customers who have not paid their open invoices within a
given time span. It enables you to handle the process from, for example, sending a reminder to
customers of their outstanding payments through to referring such customers to collections agencies.
The dunning system covers the following documents:
1. Open A/R invoices, including invoices that are partially credited or partially paid
2. Invoices that include installments
3. A/R credit memos
4. Incoming payments that are not based on invoices
II. CONFIGURATION:
1. Create Dunning Keys
We define dunning keys in this step. Dunning keys limits the dunning level of an item.
Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business
Transactions > Dunning > Basic Setting for Dunning > Define Dunning Keys
Tcode: N/A
2. Define Block reason for Dunning Notices
In this step, we define the reasons for a dunning block under a key. The key can be entered in an
item or in the account of a Customer master. Blocked items or accounts are not considered for the
dunning run
Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business
Transactions > Dunning > Basic Setting for Dunning > Define Dunning Block Reasons
Tcode: N/A

3. Define Dunning Procedures

We can create Dunning text, Dunning level, Dunning Charges and Company code assignment in the
dunning procedure
Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business
Transactions > Dunning > Dunning Procedure > Define Dunning Procedure
Tcode: FBMP
4. Create Dunning Interval in days to Dunning Procedures
We determine at which intervals the allocated accounts are to be dunned for every dunning
procedure. During every dunning run, the system then checks whether the run date is at least this
number of days (14 days) since the date of the last dunning run.
Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business
Transactions > Dunning > Dunning Procedure > Define Dunning Procedure
Tcode: FBMP
Choose the Dunning procedure and click “Choose” Button

5. Define  Dunning Levels to Dunning Procedures

In this step, we determine number of dunning level set up in dunning procedure.
Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business
Transactions > Dunning > Dunning Procedure > Define Dunning Procedure
Tcode: FBMP
Choose the Dunning procedure and click “Choose” Button
6. Define  Dunning Charges to Dunning Procedures
In this step we add the dunning charge as per the dunning level. This is like an administration charge
to dun the customer. Currency Euro is assigned during adding the dunning charge
Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business
Transactions > Dunning > Dunning Procedure > Define Dunning Procedure
Tcode: FBMP
Choose the Dunning procedure, click “Choose” Button, and choose “Charges” button

7. Define Minimum Amounts to Dunning Procedures

Minimum Amount are customized to charge the administration charge to customer with reference to
dunning level
Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business
Transactions > Dunning > Dunning Procedure > Define Dunning Procedure
Tcode: FBMP
Choose the Dunning procedure, click “Choose” Button, and choose “Minimum amounts” button

8. Assign  Dunning Texts and forms  to Dunning Procedures

For inserting dunning forms, click Dunning Texts and assign the required forms for the dunning text
with reference to dunning Level. In case the customer has different language and the form contains
different language, then please follow the document attached to translate the source language to
target language.
Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business
Transactions > Dunning > Dunning Procedure > Define Dunning Procedure
Tcode: FBMP
Choose the Dunning procedure, click “Choose” Button, and choose “Dunning Texts” button

9. Define Dunning level  to Dunning Procedures

Click the dunning levels and input days in Arrears for each dunning levels.
Select Always Dun in legal dunning proc for not missing any dunning notices.
Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business
Transactions > Dunning > Dunning Procedure > Define Dunning Procedure
Tcode: FBMP
Choose the Dunning procedure, click “Choose” Button, and choose “Dunning Levels” button

10. Assign Special indicator to Dunning Procedures

In this step, we have assigned Special Indicator Reserve for Bad Debt to dunning Procedure.
Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business
Transactions > Dunning > Dunning Procedure > Define Dunning Procedure
Tcode: FBMP
Choose the Dunning procedure, click “Choose” Button, and choose “Sp. GL indicator” button
11. Assign Company Code to Dunning Procedures
We have assigned company code with reference to Dunning Level and not by Dunning area
Path: N/A
Tcode: OBVU

12. Assign Sort Fields to Dunning Procedures

In this step, we assign Sort field K1 and Sort field P1 to Company code.
K1 will control the header content and P1 will control line item while printing the contents
Path: N/A
Tcode: OBVU
III. PREPARATION OF CUSTOMER MASTER DATA FOR DUNNING PROCEDURES:
1. In this step, we insert Dunning procedures in the customer master (Correspondence tab).
2. We have to maintain the Language field in the customer master data (Address tab) to print the
Dunning Notice as per there language, Dunning Text should also be maintained in reference to
dunning level. So that the content of dunning notice will be different to dunning level.
3. For dunning run, this transaction should be performed by F150. This is a month end duty. Please
insert Dunning date, Document posted up to date, Company code, Customer Number and save
a. In case we will specify the checks that are to be maintained by user before starting
dunning the customer
– Dunning procedure should be maintained in customer master
– Verify in Customer master regarding Dunning block (Customer can’t be dunned if there is dunning
block in customer master as well as line item)
– Verify in transaction FBL5N the customer Invoice should be overdue and Amount should be in debit
balance and not in credit
– User should make sure the parameters are inserted correctly for Dunning date, Customer Number,
Company code and Document posted till date
– Correct Printer should be inserted while printing the dunning notice
b. Dunning test for Credit Memo and Down payment
– Credit Memo
In the dunning run, we can offset existing credit notes with outstanding invoices. This affects the
determination of the due date for payment and the dunning level. These are different for customer
and vendor credit memos.
The dunning program assumes that credit memos are always due on the baseline date, unless they
have been given a specific due date or are invoice-related. This means that credit memo dunning is
not affected if you enter only one payment term manually in a line item.
For invoice-related credit memos, the dunning level is taken from the invoice, provided this is
contained in the dunning proposal. All other credit memos due are assigned to the highest dunning
level determined so far for the account they belong to. This means that these credit memos are
cleared with the oldest invoices.
– Down payment
We can take down payments into consideration during the dunning run. When defining the dunning
procedure we must specify which down payment types are included in the dunning run. To do this, we
specify the special G/L indicators for these down payment types. The dunning program treats a down
payment received as a credit memo and reduces the receivables by the amount of the down payment.
Since down payments are only included in the dunning run in exceptional cases, each down payment
item contains a field for the dunning block. The system sets this block automatically. The down
payment also contains a due date field, which the system automatically fills with the document date.
You can change these fields with the document change function.
III. EXAMPLE DUNNING LETTER: (German language)