Chapter 21

Dunning
Dunning is the process of notifying customers that an
unpaid obligation has become past due.

Chapter Objectives
– Understand the functionality and configuration of a
Dunning Procedure and how it is executed in the
Dunning Program.
– Understand the Organizational Structure of Dunning
Levels within a given Dunning Program and how
parameters can be set for each of them.
– Understand how to send dunning correspondence to
customers and vendors through Dunning Letters.
– Run the Dunning Program.

4.6fi_21.1 Dunning
 Dunning
Organizational Structure related to Dunning:
Client
CLAA

Company Code Company Code

CCAA CCBB

Dunning Area Dunning Area Dunning Area

DA01 DA01 DA02

The Dunning Area is an optional unit in the Organizational Structure used

to group Customers / Vendors for dunning. Each Dunning Area can represent
different dunning policies or Organizational Units responsible for dunning.

4.6fi_21.2 Dunning
 Dunning Procedure
The Dunning Procedure contains the configuration of a Dunning Program.
The Dunning Procedures can be tied to Dunning Areas or to a
Customer / Vendor master record.

Dunning Procedure Dunning Program

Configuration Execution

Dunning Minimum Dunning Dunning

Levels Amounts Charges Texts

Basic Parameters of the Dunning Procedure

4.6fi_21.3 Dunning
 Configuring the Dunning
Procedure

Frequency for running

Days in arrears after which a

Dunning Notice will be sent

Items that are overdue less or

equal to the grace period will
not be dunned (works like a
bonus period)

Grace Period Minimum Days in Arrears # Days in Arrears

0 1 2 3 4 5 6 7 8 9 10 11 12
4.6fi_21.4 Dunning
 Selecting Open Items to be
Dunned
Grace Period: 4 Days
Minimum Days in Arrears: 8 Days
Items:
Due Amt. Status
1) -6 1,500 Not Overdue
2) +3 350 Within Grace Period
3) +6 800 Within Min. Days in Arrears
4) +10 5,400 Overdue 10 Days

Result:
Items 3 and 4 will be dunned. You will dun the account for
Item 3 because there is another item that is overdue more than
the minimum days in arrears.
If Item 4 did not exist, then item 3 would not be dunned.

4.6fi_21.5 Dunning
 Dunning Levels

4.6fi_21.6 Dunning
 Selecting the Dunning Level

Overdue Old New Level

=
Item Level Old Level + 1

The Dunning Letter

4.6fi_21.7 Dunning
 Minimum Amounts
Minimum Amounts define an overdue threshold of the total Account
Balance, which must be exceeded to reach a Dunning Level.

• Minimum Amount
Dunning
Level • Minimum Percentage
• Minimum Amount for Interest

Example:
Total Account Balance: USD 25,000,00
Configuration of Dunning Level 1: Min. Amount = USD 15.00 and Min. Percentage = 5%
Dunning Balance Level 1: USD 500.00

Will be dunned? No, because USD 500.00 >= Min. Amount but USD 500.00 < Min. %

4.6fi_21.8 Dunning
 Dunning Charges
For each Dunning Level, it is possible to define an amount to be
charged if the minimum amount for dunning is exceeded.
A Dunning Charge is used to cover the postage and handling
of Dunning Letters.

Dunning Charge:
Static amount to be charged

Dunning
Level Dunning Charge %:
Percentage to be applied to
the total of all overdue items
in the Account to determine
the Dunning Charge

4.6fi_21.9 Dunning
 Dunning Texts

Dunning Dunning
Level Form

A form is set up using SAPScript and can be

shared by more than one Dunning Level.

4.6fi_21.10 Dunning
 Sending Correspondence to
Customers / Vendors

Pre-Defined
Action Trigger

Correspondence

4.6fi_21.11 Dunning
 Assigning the Dunning Procedure
in the Master Record

•Master Record
•Company Code Data
•Correspondence Tab

4.6fi_21.12 Dunning
 Running the Dunning Program
Step 1: Set Parameters
The Dunning Program examines the open items of
a Customer / Vendor and, if overdue items exist,
produces the appropriate notice.

Dunning Date
Documents Date
Company Code,
Range of Customer /
Vendor Numbers

4.6fi_21.13 Dunning
 Running the Dunning Program
Step 2: Run the dunning program immediately or in batch
mode

Dunning can be started

at a specific date and time
or it can be started
immediately.

Dunning notices can be created

immediately after the dunning
run. If this parameter is set it
is no longer possible to change
the dunning proposal manually
or to delete it.

4.6fi_21.14 Dunning
 Running the Dunning Program
Step 3: Create and analyze Logs
It’s possible to create an additional log to analyze
the dunning run.

A range of customer
and vendor accounts
has to be specified

4.6fi_21.15 Dunning
 Cross Company Code Dunning

This feature enables users to create one

dunning notice that covers business partners
that exist in different company codes.
Likewise, data that would normally be spread
over several company codes (and hence
several correspondence letters) can now be
grouped into one correspondence letter.

4.6fi_21.16 Dunning
 Dunning Block Reasons/
Dunning Key

Dunning Block Reasons are used to block a Customer / Vendor or an

item from being dunned.

The user specifies the Dunning Block Identification and a Description.

Dunning Keys are used to mark items that should not trigger a higher
Dunning Level.
The user specifies the Dunning Key Identification and the Maximum
Level that can be triggered.

4.6fi_21.17 Dunning
 Incoming Payment

• A payment coupon may be

attached to a dunning letter or
account statement.

• Payment coupons can also be

printed in a separate spool on
dedicated forms.

4.6fi_21.18 Dunning
 Chapter 21 - Dunning
Chapter Summary
• Key Terms:
– Dunning
– Dunning Area
– Dunning Procedure
– Grace Period
– Dunning Level
– Minimum Amount
– Dunning Charge

4.6fi_21.19 Dunning
 Chapter 21 - Dunning
Chapter Summary
• Key Terms:
– Dunning Letter
– Dunning Program
– Dunning Block Reason
– Dunning Keys

4.6fi_21.20 Dunning