You are on page 1of 81

Industry Solution for Utilities

Finance for Contract Accounting (FI-CA)


Dorene Lee
04 April 2015

Topics
Overview
Contract Account
Document Types and Number Ranges
Account Determination
FI-CA Document
FI-CA Processes
Additional Document Functions
Account Balance Display

Proprietary and Confidential

SAP Industry Solution for Utilities

FI

Marketing
& Sales
External
Sales Systems

Financial
Accounting
Contract
Accounting
(FI-CA)

Maintenance
& Service Management

MM

Central
Business
Partner

PM/
SM

AM

ConsumptionExternal
Entry
Consumption
Entry
Systems
IS-U/CCS

MM

Assets &
Material Management
Proprietary and Confidential

Core components

3rd party systems

Device
Management

CO

Industry specific
components

Billing /
Invoicing

Services

SD

Customer
Care & Service

SD

GIS,
CAD,
SCADA

as an
integrated component
of the R/3 enterprise
information system

What is FI-CA
Contract Accounts Receivable and Payable (FI-CA) is an accounting
sub-ledger for processing large volumes of data
The Contract Account represents the customer account that is billed for
services provided by the utility
All financial transactions impacting the customer, such as invoicing,
charges and credit adjustments are posted as Documents in FI-CA, and
are reflected on the customer account balance

Proprietary and Confidential

What is FI-CA (cont.)


Each document in FI-CA is assigned a Reconciliation Key this is the
key which groups together all similar transactions of the day for transfer
to the General Ledger
At the end of each business day, after all other FI-CA batch processes
are completed, Reconciliation Keys are closed and their summary
records are transferred to the GL
Basic Enterprise settings in Financial Accounting and Controlling (FI-CO)
need to be set up to support FI-CA namely Company Code, Controlling
Area, Chart of Accounts, Cost Center Hierarchy, Fiscal Calendars

Proprietary and Confidential

Topics
Overview
Contract Account
Document Types and Number Ranges
Account Determination
FI-CA Document
FI-CA Processes
Additional Document Functions
Account Balance Display

Proprietary and Confidential

The IS-U House


TECHNICAL MASTER
DATA (House
Information)

BUSINESS MASTER DATA


Customer information)
Business Partner
A customer who has a
business relationship with
a utility.
May be a:

Contract Business
Partner
- Billable Customer

Contact Business
Busine
Partner
ss
- Contact Person
Partne

Prospective Business
r
Partner
Contract
Account
- Interested
TheCustomer
Contract Account
combines all contracts
that have the same
payment and credit
details.
Contract
An agreement
between the customer
(a Contract Business
Partner) and a utility to
provide a service (e.g.
electric, water, gas).
Proprietary and Confidential

Apartment Block = Connection Object

Apart
mt

Apartment 1 =
Premise
Contra
ct
Electri
city

Contra
ct
Accoun
t

Contra
ct
Gas

Install
atn
Electri
city
Meter
Install
atn
Gas
Meter

Device
Locati
on
Hallwa
y
Device
Locati
on
Basem
t

2
Apart
mt
3
Apart
mt
4

Move In/Switch/Transfer
A Move In occurs when a customer
(Business Partner) moves into a premise
or switches retailers and is supplied with
a service. The Move In links the Technical
Master Data with the Business Master
Data by allocating a contract to an
installation.
7

Connection Object
A building or property
linked to the supply
network.
Premise
A single unit (e.g.; an
apartment within a
building) that is supplied
with the relevant service.
E.g. - a residential home
would be set up as one
connection object with
one premise.
Device Location
The place within a
connection object where
devices (e.g. a meter,
curb valve, tap etc) are
installed.
Installation
An installation groups
together all devices of the
same division (electricity or
gas) that are allocated to a
premise. The installation
contains pricing data for
billing.

Contract Account
The Contract Account forms the basis for FI-CA in the SAP IS-U solution
It represents the customer account that is billed for services provided by
the utility
It contains all details required to manage customer-related financial
postings, e.g.

Account Determination ID a 2-character identifier that allows the same


transaction in the same company code and division to post to different GL
accounts
Payment Term determines the due date of the open item
Clearing Category drives the clearing rules
Interest Key contains interest calculation rules for open items
Collection Strategy determines the collection paths for customers

The SAP solution enables multiple services located at one or more


premises to be on a single contract account
Proprietary and Confidential

Contract Account (cont.)


Contract accounts in IS-U are synonymous with Business Agreements in
CRM
Typically business agreements are created in CRM, and the data
replication process is set up to replicate it into a contract account in IS-U
Default values and parameters need to be defined in the Business
Agreement Class in CRM and mapped to a template contract account in
IS-U

Proprietary and Confidential

Topics
Overview
Contract Account
Document Types and Number Ranges
Account Determination
FI-CA Document
FI-CA Processes
Additional Document Functions
Account Balance Display

Proprietary and Confidential

10

Document Types
Each possible document
type needs to be identified
Document types are based
on various transactions of
the utilitys business
functions, e.g. Invoice,
Payment
SAP provides a range of
standard document types
Additional ones can be
defined according to
business requirements

Proprietary and Confidential

11

Document Number Ranges


A number range needs to be provided for each document type
For documents posted via mass processes, additional number ranges
need to be provided
The number of number ranges for mass processing would depend on
the number of batch intervals per process e.g. if invoicing is expected
to run in 20 parallel jobs, 20 number ranges need to be provided

Proprietary and Confidential

12

Document Number Ranges (cont.)


Interval sizes need to be
considered based on the
expected volume of
transactions using each
range, and whether the
transactions will run via
mass processing
Typically, the number ranges
are prepared in a
spreadsheet and loaded
using load programs

Proprietary and Confidential

13

Topics
Overview
Contract Account
Document Types and Number Ranges
Account Determination
FI-CA Document
FI-CA Processes
Additional Document Functions
Account Balance Display

Proprietary and Confidential

14

Account Determination
All FI-CA document postings go through automatic account
determination, hence there is no need for the user to enter GL accounts
and cost objects at the time of posting
The account determination is driven by the combination of Company
Code, Division, Account Determination ID, Main Transaction and Sub
Transaction

Proprietary and Confidential

15

Company Code and Division


Company Code

Represents the legal entity for which a full set of financial statements are
produced
Defined in the Financial Accounting section of the Enterprise Structure

Division

Represents the service being


provided by the utility
Defined in the Logistics section
of the Enterprise Structure

Proprietary and Confidential

16

Account Determination ID
Account Determination ID (ADID)
A key that enables automatic account determination for postings at the
contract account or contract level
Typically aligned by the type of customer account, e.g. Residential,
Commercial, Government etc

Proprietary and Confidential

17

Main Transaction
Main Transaction
A 4-digit key that identifies the
type of transaction being posted,
e.g. Consumption Billing,
Miscellaneous Posting, Payments
Drives the Balance Sheet
account

Proprietary and Confidential

18

Sub Transaction
Sub Transaction
A 4-digit key that represents a further
segmentation of the Main Transaction,
e.g. Miscellaneous Posting is further
classified into Reconnection Fee,
Meter Installation Fee, Interest Waiver
The combination of Main and Sub
Transaction drives:
The P&L account
Taxability of the item
Business Area and CO account
assignments

Proprietary and Confidential

19

Sub Transaction (cont.)


The Debit / Credit indicator
determines whether the
contract account is debited or
credited when a posting with
the main-sub combination
occurs
Additional settings can be
defined according to business
requirements:
Whether manual posting is
allowed
Dunning procedure (no
longer applicable for dunning
by Collection Strategy)
Interest Key
Dunning/Interest/Payment
locks

Proprietary and Confidential

20

Account Determination Main Transaction


Each possible combination of
Company Code, Division,
ADID and Main Transaction
needs to be mapped to the
appropriate Balance Sheet
account

Proprietary and Confidential

21

Account Determination Sub Transaction


Each possible combination of
Company Code, Division, ADID, Main
Transaction and Sub Transaction
needs to be mapped to the
appropriate P&L account
Tax determination code and additional
account assignments such as
Business Area and Cost Center are
also defined here

Proprietary and Confidential

22

Tax Code
Tax Codes drive the
automatic calculation of the
sales tax amount
Tax codes may be defined
as taxable or non-taxable
The Tax Rate is maintained
in the Financial Accounting
Global Settings
If Jurisdiction Code is used,
the tax rate needs to be
assigned for each defined
Proprietary and Confidential
23
Jurisdiction Code

Tax Account Determination


As with the account
determination for Balance Sheet
and P&L accounts, the Sales
Tax GL account needs to be
mapped according to the
defined tax codes

Proprietary and Confidential

24

CO Account Assignment
The CO Account Assignment
Key drives the automatic
determination of cost
accounting objects, e.g. Cost
Center, Order etc

Proprietary and Confidential

25

Account Determination Summary

Main
Account
Determinat Transaction
ion ID

Company Code Division

Sub
Transact
ion

4-character
2-character
2-character
4-digit
4-digit
identifier
identifier
identifier which
identifier
identifier
representing
representing
allows the
representing
representing
the legal entity
the service
same
type of
further
that has to
transaction in
transaction
segmentation
produce the
the same Co.
of transaction
balance sheet
Code & division
When
a
transaction
is
posted,
the above combination in FI-CA
and income
to post to
will
drive the derivation of different
the below
combination in FI-CO for
statements
GL
accounts posting
revenue/expense

Company Code

Proprietary and Confidential

GL Account

26

Business Area

Cost Center

Topics
Overview
Contract Account
Document Types and Number Ranges
Account Determination
FI-CA Document
FI-CA Processes
Additional Document Functions
Account Balance Display

Proprietary and Confidential

27

FI-CA Document
Transaction postings in FI-CA result in documents being posted on the
contract account
FI-CA documents may be posted manually or via mass processes
A FI-CA document consists of Document Header, Business Partner Item
and GL Item

Proprietary and Confidential

28

FI-CA Document Overview

Header

BP Item

GL Item

Proprietary and Confidential

29

FI-CA Document Header


The Document Header contains information pertaining to the whole
document, e.g. Posting Date, Document Type, Document Number,
Reconciliation Key, Origin Key and Administrative Data

Proprietary and Confidential

30

FI-CA Document BP Item


The Business Partner item contains information pertaining to the
customer, e.g. business partner, contract account and contract
In terms of GL account posting, this item posts to the Customer
Accounts Receivable account

Proprietary and Confidential

31

FI-CA Document GL Item


The GL item is the off-setting entry for the BP item
The GL accounts posted are typically revenue or expense accounts
Tax items are included if the charges are taxable

Proprietary and Confidential

32

Topics
Overview
Contract Account
Document Types and Number Ranges
Account Determination
FI-CA Document
FI-CA Processes
Additional Document Functions
Account Balance Display

Proprietary and Confidential

33

FI-CA Processes

Accounts
Receivable
Consumptio
n charges from
Billing/Invoi
cing
Miscellaneo
us Postings

Closing

Other
Processes

Security
Transfer
Deposits
to
Interest
General
Dunning
Ledger
Creditworthi
ness
Deferrals
Installment
Plans
Collection
Agency
Write-Offs
ACCOUNT
BALANCE DISPLAY

Transfer
Postings
Loans
Escheatm
ent

Payments

Credit &
Collections

Incoming
Payments
Clarificati
ons
Returns
Refunds

OPEN ITEM MANAGEMENT

Proprietary and Confidential

34

FI-CA Processes

Accounts
Receivable
Consumptio
n charges from
Billing/Invoi
cing
Miscellaneo
us Postings

Closing

Other
Processes

Security
Transfer
Deposits
to
Interest
General
Dunning
Ledger
Creditworthi
ness
Deferrals
Installment
Plans
Collection
Agency
Write-Offs
ACCOUNT
BALANCE DISPLAY

Transfer
Postings
Loans
Escheatm
ent

Payments

Credit &
Collections

Incoming
Payments
Clarificati
ons
Returns
Refunds

OPEN ITEM MANAGEMENT

Proprietary and Confidential

35

Consumption Charges
Consumption Charges are posted to the contract account via Invoicing
Consumption during the bill period is measured via meter reads, and the
billed amount is calculated via the Billing engine
For active contract accounts, Consumption Bills are posted according to
the customers bill cycle
However in certain situations a Manual Bill may be generated as well
A Final Bill is generated if a move-out has been processed for the
customer
Accounting Entries
Dr Customer AR
Cr Sales Revenue
Proprietary and Confidential

36

Miscellaneous Postings
Miscellaneous Postings are manually-posted charges and credits on the
contract account e.g. bill reprint fee, late fee waiver
Manual postings can be made in IS-U as well as the IC-Web
Automated postings are also possible through the use of enhancements,
e.g. service establishment fee, reconnect fee
As these postings are non-consumption charges, they may occur at any
time, hence they need to be due-date synchronized with the
consumption invoice due date
Accounting Entries
Dr Customer AR
Cr Other Revenue (i.e. by the respective types of charges)
Proprietary and Confidential

37

FI-CA Processes

Accounts
Receivable
Consumptio
n charges from
Billing/Invoi
cing
Miscellaneo
us Postings

Closing

Other
Processes

Security
Transfer
Deposits
to
Interest
General
Dunning
Ledger
Creditworthi
ness
Deferrals
Installment
Plans
Collection
Agency
Write-Offs
ACCOUNT
BALANCE DISPLAY

Transfer
Postings
Loans
Escheatm
ent

Payments

Credit &
Collections

Incoming
Payments
Clarificati
ons
Returns
Refunds

OPEN ITEM MANAGEMENT

Proprietary and Confidential

38

Incoming Payments
Incoming payments clear open receivables on the contract account
A clearing document is created for the paid open item with Clearing
Reason Incoming Payment
Payment Methods

Cheque
Cash
Debit/Credit Card
Direct Debit

Payment Channels

Mailed-in cheques mailed to the remittance center


Walk-in at payment locations cash, cheque, debit/credit card
External online banking
3rd Party Vendors
IVR payment by credit card over the phone
Direct Debit (ABP)

Proprietary and Confidential

39

Incoming Payments (cont.)


Incoming Payments are posted via

Payment Lot, Check Lot manual creation


Payment Lot Transfer interfaces from 3rd party vendors
Payment Run ABP payments
Cash Desk at the utilitys payment locations

Clearing
Allocation of payments to open items
Automatic clearing based on Clearing Rules
Manual clearing possible via Account Maintenance

Accounting Entries
Dr Cash/Check Clearing
Cr Customer AR
Proprietary and Confidential

40

Clarifications
Payments are routed to the Clarification list when they cannot be posted
to a contract account, possibly due to
Missing / incorrect account number
Payment flagged to be clarified
Posting lock on the contract account

The monies are held in a clarification account until the contract account
can be determined
Dr Cash/Check Clearing
Cr Clarification

Once the clarification case is researched and sorted out, it is posted to


the rightful contract account
Accounting Entries
Dr Clarification
Cr Customer AR

Proprietary and Confidential

41

Returns
Returns are payments that have been processed in the system but
subsequently need to be reversed
Typically returns may arise due to insufficient funds, closed accounts etc
Returns result in a clearing reset between the payment and open item
that was cleared
A clearing document is created for the returned payment document with
Clearing Reason Returns
The paid item reverts back to open status and proceeds along the
dunning path from where it left off

Proprietary and Confidential

42

Returns (cont.)
A return fee may be assessed on the contract account and a return letter
is sent to the customer
Returns are posted via
Returns Lot manual creation
Returns Lot Transfer interfaces from banks

Accounting Entries
Dr Customer AR
Cr Return Fee

Proprietary and Confidential

43

Refunds
Credits on the contract account may be refunded to the customer
Credits may arise due to over-payment by the customer, a released
security deposit or a credit adjustment
In most utilities, credits are refunded if the contract account has been
final-billed (i.e. inactive account), while credits on active accounts are
used to clear subsequent receivables
Refund requests are typically approved via an approval workflow
Once approved, the Payment Run processes the outgoing payment, and
a refund cheque is created in Check Management

Proprietary and Confidential

44

Refunds (cont.)
A clearing document is created for the open credit with Clearing Reason
Outgoing Payment
Accounting Entries
Dr Customer AR
Cr Refund Clearing

Proprietary and Confidential

45

FI-CA Processes

Accounts
Receivable
Consumptio
n charges from
Billing/Invoi
cing
Miscellaneo
us Postings

Closing

Other
Processes

Security
Transfer
Deposits
to
Interest
General
Dunning
Ledger
Creditworthi
ness
Deferrals
Installment
Plans
Collection
Agency
Write-Offs
ACCOUNT
BALANCE DISPLAY

Transfer
Postings
Loans
Escheatm
ent

Payments

Credit &
Collections

Incoming
Payments
Clarificati
ons
Returns
Refunds

OPEN ITEM MANAGEMENT

Proprietary and Confidential

46

Security Deposits
Security Deposits are business-determined amounts of money held by
the utility to cover any possible losses due to unpaid receivables
Security Deposits may be in the form of cash or non-cash, e.g. personal
guarantee, bank guarantee, letter of credit
Interest can be calculated on security deposits and paid to the customer,
depending on regulatory or business requirements
Security deposits are released if the customer maintains good payment
behavior or when the customer moves out
Released security deposits result in an open credit on the contract
account, which may either be refunded or used to clear open receivables

Proprietary and Confidential

47

Security Deposits (cont.)


A Security Deposit request is a statistical item, i.e. it does not post to the
GL, until the deposit is paid
The credit amount for the paid deposit is prevented from clearing other
receivables, until the deposit is released
Accounting Entries
Security Deposit Request
Dr Customer Deposits (Statistical Key H)
Paid Security Deposit
Dr Cash/Check Clearing
Cr Customer Deposits
Interest on Security Deposit
Dr Interest on Security Deposit
Proprietary and Confidential

48

Interest
Interest on receivables can be assessed when the customer does not
pay by the stipulated due date
Interest key, interest rates and calculation rules need to be defined
To prevent interest assessment, an Interest Lock may be assigned on
the open item or the contract account
Accounting Entries
Dr Customer AR
Cr Interest Receivable

Proprietary and Confidential

49

Dunning
The collection of past due receivables is managed via the Dunning
process
It encompasses a series of steps, typically from a Reminder Notice
progressing to Disconnection
Dunning comprises two parts i.e. Dunning Proposal and Dunning Activity
Dunning Proposal identifies which items are eligible to be dunned, groups
them into dunning groups and determines the associated collection step to
be executed for the groups
Dunning Activity performs the execution of the collection step determined by
Dunning Proposal

Proprietary and Confidential

50

Dunning (cont.)
The Collection Strategy defines the utilitys specific business rules for
collections and determines the collection paths for customers, e.g.
For low risk customers
Reminder Notice at 3 days past due if debt is greater than RM300
Disconnect Notice at 15 days past due if debt is greater than RM500
For high risk customers
Disconnect Notice at 7 days past due if debt is greater than RM300

To prevent dunning, a Dunning Lock may be assigned on the open item


or the contract account
There are no accounting entries arising from Dunning, unless charges
are automatically posted via Dunning run (e.g. Late Payment Charges)

Proprietary and Confidential

51

Creditworthiness
Creditworthiness is a numeric score assigned to customers based on
their payment history
Creditworthiness points may be assessed manually as well as
automatically, via various credit-related transactions e.g. Returns,
Dunning, Write-offs
Each credit-related transaction is assigned a value, e.g.
Return
2 points
Reminder Notice 3 points
Disconnect Notice
5 points

Typically, a time-dependent weighting factor is applied on each


creditworthiness assessment, e.g.
0-12 months weighting factor = 2
13-24 months
weighting factor = 1
> 24 months weighting factor = 0
Proprietary and Confidential

52

Creditworthiness (cont.)
The system re-calculates the overall Creditworthiness score dynamically,
by totaling all creditworthiness events multiplied by the weighting factor
in the configured timeline, e.g.
Reminder Notice in Feb 2012:

3 points x 0 = 0

Return Cheque in Jun 2013: 2 points x 1 = 2


Reminder Notice in Mar 2014:3 points x 2 = 6
Disconnect Notice in Apr 2014:

5 points x 2 = 10

Overall Creditworthiness in July 2014

= 18

The Creditworthiness score may be used as an input into various


decisions, e.g. determination of collection step (dunning), eligibility for
security deposit release, eligibility for installment plans etc
There are no accounting entries arising from Creditworthiness
assessment

Proprietary and Confidential

53

Deferrals
A Deferral is an extension of payment due date granted to customers
who are unable to meet the original due date
Eligibility for deferral and the number of days allowed are driven by
business rules
The deferral date is entered on the open item
Dunning can be configured to ignore the open item until the deferral date
is passed
Deferrals can be entered in IS-U as well as the IC-Web
There are no accounting entries arising from a Deferral

Proprietary and Confidential

54

Installment Plans
An Installment Plan is a payment arrangement that distributes open
items over several due dates in future
It enables the customer to make their payments in smaller amounts over
a longer period of time, e.g. for a consumption bill of RM300 that falls
due on 5 July 2014, the following installment plan is granted
Installment 1 RM100 due on 5 July 2014
Installment 2 RM100 due on 5 Aug 2014
Installment 3 RM100 due on 5 Sep 2014

Similar to deferral, eligibility for and length of the installment plan are
driven by business rules
Installment Plans can be created in IS-U as well as the IC-Web

Proprietary and Confidential

55

Installment Plans (cont.)


Dunning and payment runs pick up each installment as they fall due
Installment Plans may be deactivated manually or automatically via
dunning run when the associated collection step is reached
Once deactivated, the remaining receivables that formed the installment
plan revert to their original due date
Accounting entries
Dr Customer AR (Statistical Key R)

Installment 1 Due Date 1

Dr Customer AR (Statistical Key R)

Installment 2 Due Date 2

Dr Customer AR (Statistical Key R)

Installment 3 Due Date 3

Proprietary and Confidential

56

Collection Agency
Past due receivables can be handed over to an external collection
agency if they remain unpaid despite all measures taken to collect them
Collection agencies used by the utility need to be set up as business
partners
Typically receivables submitted to the collection agency are that of finalbilled accounts
There are 2 parts to the process, i.e. release of the receivables and the
actual submission to the collection agency
Release this step sets a flag on the open item, and may be executed
manually or automatically via Dunning and Write-off transactions
Submission this step creates a file containing the released items, which is
sent to the collection agency through an interface
Proprietary and Confidential

57

Collection Agency (cont.)


Collection agency determination can be made manually as well as
automatically, using an enhancement
For submitted items, subsequent updates can be sent to the collection
agency, e.g. paid by the customer, reversed, written-off etc
Submitted items can be recalled and placed with another collection
agency after a period of time, depending on business rules
There are no accounting entries arising from submission to the collection
agency

Proprietary and Confidential

58

Write-Offs
Write-Offs involve the removal of uncollectible receivables from the
contract account onto a write-off expense account
A clearing document is created for the written-off open item with Clearing
Reason Write-off or Mass Write-off
Typically written-off receivables are that of final-billed accounts
If a written-off item is subsequently paid, the write-off can be reversed
and then the debt is cleared against the payment
Criteria for write-off e.g. minimum amount, collection step etc are
determined by business rules
Accounting entries
Dr Write-off Expense
Cr Customer AR

Proprietary and Confidential

59

FI-CA Processes

Accounts
Receivable
Consumptio
n charges from
Billing/Invoi
cing
Miscellaneo
us Postings

Closing

Other
Processes

Security
Transfer
Deposits
to
Interest
General
Dunning
Ledger
Creditworthi
ness
Deferrals
Installment
Plans
Collection
Agency
Write-Offs
ACCOUNT
BALANCE DISPLAY

Transfer
Postings
Loans
Escheatm
ent

Payments

Credit &
Collections

Incoming
Payments
Clarificati
ons
Returns
Refunds

OPEN ITEM MANAGEMENT

Proprietary and Confidential

60

Transfer to General Ledger


All financial transactions occurring in FI-CA are grouped together in
Reconciliation Keys
The Reconciliation Key is a unique identifier for each business
transaction for each day, e.g. invoicing, miscellaneous postings,
payments, write-offs etc
A Reconciliation Key may be created manually or automatically during
the first posting for the day or during the relevant batch job
The naming convention for Reconciliation Keys needs to be defined
All transaction details are kept in FI-CA (sub-ledger), and only the
summary totals by Reconciliation Key are transferred to the General
Ledger

Proprietary and Confidential

61

Transfer to General Ledger (cont.)


Each Reconciliation Key needs to be closed before transfer to GL can be
performed
Closing the Reconciliation Key prevents further postings to the particular
key, thus ensuring that the values cannot be changed
At the end of each business day the following take place in Batch
Reconciliation Keys are closed
Summary totals in FI-CA are transferred to the General Ledger

As a result of the transfer, FI documents are posted in FI-CO


Accounting entries and posting dates in FI-CO are the same as in the
source documents in FI-CA

Proprietary and Confidential

62

FI-CA Processes

Accounts
Receivable
Consumptio
n charges from
Billing/Invoi
cing
Miscellaneo
us Postings

Closing

Other
Processes

Security
Transfer
Deposits
to
Interest
General
Dunning
Ledger
Creditworthi
ness
Deferrals
Installment
Plans
Collection
Agency
Write-Offs
ACCOUNT
BALANCE DISPLAY

Transfer
Postings
Loans
Escheatm
ent

Payments

Credit &
Collections

Incoming
Payments
Clarificati
ons
Returns
Refunds

OPEN ITEM MANAGEMENT

Proprietary and Confidential

63

Transfer Postings
Transfer Postings are used to move open items from one contract
account / contract to another
Items associated with contracts can only be transferred to a contract of
the same division
A clearing document is created for the transferred open item on the
sender account with Clearing Reason Transfer Items, and a new open
item is posted on the receiver account
Some examples of transfer posting scenarios
Transfer of final bill debt from an inactive to an active contract of the same
customer
Transfer of misapplied payments

A transfer posting is purely a FI-CA transaction i.e. there is no impact to


the GL
Proprietary and Confidential

64

Loans
Some utilities may offer loans to customers if they need to buy devices
related to the service being provided, e.g. energy saving equipment
A lump sum amount is disbursed to the customer, who will then repay
the loan amount in several installments over a period of time
The system supports loans with zero or fixed interest rates
When a loan is created, the system creates
The loan document this represents the monies being disbursed
The repayment plan this specifies the installment amounts and due dates
for the loan repayment
The interest document this specifies the interest amounts due for each
installment

Similar to Installment Plans, Loans may be deactivated manually or


automatically via dunning run when the associated collection
step is reached

Proprietary and Confidential

65

Loans (cont.)
Accounting Entries (example loan amount RM600 payable in 3
installments with interest of RM3 with every installment)
Loan Created
Loan Document:
Dr Loan AR

RM 600

Cr Loan AR

RM 600

Repayment Plan:
Dr Loan AR

RM 203 (Statistical Key R)

Dr Loan AR

RM 203 (Statistical Key R)

Dr Loan AR

RM 203 (Statistical Key R)

Interest Document:

Proprietary and Confidential

66

Loans (cont.)
Accounting Entries (cont.)
Loan Disbursed
Dr Loan AR

RM 600

Cr Cash/Check Clearing

RM 600

Loan Installment Paid


Dr Cash/Check Clearing
Cr Loan AR

RM203

Dr Loan AR

RM3

RM203

Cr Interest Receivable

Proprietary and Confidential

RM3

67

Escheatment
Escheatment is the process of moving un-cashed refund cheques or
monies in the clarification list to state authorities after a specified period
of time
State authorities to whom monies are escheated need to be set up as
contract accounts
At the start of the escheatment process, letters are sent to customers
last known address informing them of the un-cashed cheques or monies
that will be escheated by a certain date
Once the escheatment date arrives, the escheatment execution takes
place
The refund cheque is voided
A payable is created for the contract account of the state authority
There is no change on the customer contract account
Proprietary and Confidential

68

Escheatment (cont.)
The credit on the State contract account will be processed as an
outgoing payment
Accounting Entries
Escheatment Execution
Dr Refund Clearing
Cr Customer AR [State Contract Account]
Payment Run
Dr Customer AR [State Contract Account]
Cr Refund Clearing

Proprietary and Confidential

69

Topics
Overview
Contract Account
Document Types and Number Ranges
Account Determination
FI-CA Document
FI-CA Processes
Additional Document Functions
Account Balance Display

Proprietary and Confidential

70

Additional Document Functions


Document Reversal
Account Maintenance
Reset Clearing

Proprietary and Confidential

71

Document Reversal
Document Reversal clears the original document
A clearing document is created for the reversed open item with Clearing
Reason Reversal
Reversals using the FI-CA reversal transaction are not possible for some
document types, as these need to be reversed at the source transaction

Invoice
Security Deposit
Installment Plan
Budget Bill

Proprietary and Confidential

72

Account Maintenance
Account Maintenance performs manual clearing for individual contract
accounts
Items to be cleared may be manually selected, hence overriding the
defined clearing rules
A clearing document is created for the open item with Clearing Reason
Account Maintenance

Proprietary and Confidential

73

Reset Clearing
Reset Clearing serves to break the clearing between an open item and
its clearing document
Once a reset clearing has been executed, the status of the cleared item
reverts back to open, e.g. a paid item goes back to being unpaid
Reset clearing is used in cases of misapplied payments or posting errors

Proprietary and Confidential

74

Topics
Overview
Contract Account
Document Types and Number Ranges
Account Determination
FI-CA Document
FI-CA Processes
Additional Document Functions
Account Balance Display

Proprietary and Confidential

75

Account Balance Display


All financial postings on the contract account are viewable as line items
on the Account Balance Display
Selection criteria can be used to limit the items being displayed, e.g.
open items, cleared items or both
Information that needs to be displayed can be determined using Line
Layout Variants, e.g.

Contract Account
Contract
Division
Main Transaction
Sub Transaction
Due Date
Amount
Clearing Document
Clearing Date

Proprietary and Confidential

76

Account Balance Display (cont.)


Drilldown capabilities in the Account Balance Display enable users to
look at the details of the source documents
The Environment menu enables access to additional details e.g. master
data, source items for installment plans, document changes, etc
Customer Service agents would view the Account Balance Display on
the Account History in IC-Web
The Account History in IC-Web is a replica of the Chronology tab of the
Account Balance Display

Proprietary and Confidential

77

Account Balance Display in IS-U Example

Proprietary and Confidential

78

Account History in IC-Web Example

Proprietary and Confidential

79

Summary
What we have learnt
Contract Account
Document Type and Number Ranges
Account Determination
FI-CA Document
FI-CA Processes
Accounts Receivable, Payments, Credit & Collections, Closing, Other
Processes

Additional Document Functions


Document Reversal, Account Maintenance, Reset Clearing
Proprietary and Confidential

80

Questions

Proprietary and Confidential

81