Configuration – Dunning
Amit R Punwatkar. ES SAP Practice Infosys Technologies Ltd., Pune Phase II September, 2008
Configuration – Dunning Procedure
Revision History Version # 1
Modification Date
Author
September, 2008
Amit R Punwatkar
Reviewed By Sameer Drolia
Reviewed Date October 2008
Description Dunning procedure configuring and running / scheduling the dunning program
Project Details : P & G (PGWI2SNS) Target Audience : SAP FICO Consultants Keywords : Dunning Procedure and Dunning program execution
Declaration I hereby declare that this document is based on my personal experiences and / or experiences of my project members. To the best of my knowledge, this document does not contain any material that infringes the copyrights of any other individual or organization including the customers of Infosys.
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Configuration – Dunning Procedure
TABLE OF CONTENTS 1.
Introduction .........................................................................................................................4
2.
Illustration for understanding the dunning concept ...............................................................4 Dunning Configuration: .......................................................................................................5 Dunning Intervals: ...............................................................................................................6 No. of dunning levels: ..........................................................................................................6 Line item grace periods: .......................................................................................................8 Dunning Charges: ................................................................................................................8 Minimum Amount: ..............................................................................................................9 Dunning Text: .................................................................................................................... 10
3.
Assigning dunning procedure to customer master ............................................................... 11 Terms of payment: ............................................................................................................. 12
4.
Pre-requisites for successful dunning letter generation. ...................................................... 14
5.
Dunning Run...................................................................................................................... 15 Dunning Proposal : (T-Code – F150) : ............................................................................... 15
6.
Printing dunning Letters – .................................................................................................. 27
7.
Changing the dunning proposal: ......................................................................................... 33
8.
References ......................................................................................................................... 43
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Configuration – Dunning Procedure
1. Introduction This BOK explains about the dunning letters or reminder letters which is sent to customers for their overdue balances after a certain level has reached. It can defined as “the process of methodically communicating with customers to ensure the collection of accounts receivable”. It follows the process that progresses from gentle reminders to almost threatening letters as accounts become more past due. SAP has automated this process. It also depends upon the laws in each country which regulates the form that dunning can take. It is generally unlawful to harass or threaten consumers. It is ok to issue firm reminders and to take all allowable collection options. Through scheduling the dunning program we will be to send reminder letters to the customer. program is done in the dunning procedure.
Setting the parameters for scheduling the dunning Steps involved in configuring the dunning letters is
configuring the dunning procedures in T-Code FBMP and scheduling automatic dunning run on the schedule dunning run due dates (F150); based on which reminder letters will be generated and sent to the customer/s. With the help of this BOK, users can modify the dunning levels, according to their requirements with this configuration steps.
The requested letters are spooled and printed. Typically, dunning letters are printed automatically and is possible to print dunning letters individually and on demand. The print request is sent to the spool system. Following this, the dunning letters are printed on the selected printers.
2. Illustration for understanding the dunning concept Before we understand what is dunning procedure and how to schedule the automatic dunning run we should be able know at what level is the dunning configured. The following chart depicts them.
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Configuration – Dunning Procedure
Dunning Configuration:
Dunning will be better understood by way of an example. For e.g. we have invoiced to a customer. The terms of payment states that customer’s payment becomes due immediately (i.e. payment terms are “payment due immediately”). However on delivery of the goods the customer fails to pay his dues. We are assuming as per company’s policy the customer will be sent reminder letters after a period 15, 30 and 45 days to pay his bills. Also we are assuming that we are not charging any interest on the outstanding or dunning charges for the letters. Dunning letters are generated as per the elapsation of certain days as configured in the dunning procedure and it depends upon the payment terms.
Path: IMG -> Financial Accounting-> Accounts receivables and payables-> Business transactions -> Dunning -> Dunning Procedure -> define dunning procedure. (T-Code is FBMP) Click on New Procedure. Assign a name. Set the parameters as required.
Set the Dunn Procedure and Name of the dunning procedure. Specify the dunning interval in days, no. of dunning levels, minimum days in arrears and reference dunning procedure for text.
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Configuration – Dunning Procedure
Dunning Intervals: This determines at which intervals the allocated accounts are to be dunned for every dunning procedure. It is basically the minimum time gap between which the dunning runs will be scheduled. i.e. The dunning level 2 will be schedule after a gap of 7 days from the first dunning run. This is called as dunning intervals. Dunning interval is defined in the Dunning procedure. No. of dunning levels: Dunning levels should be decided in accordance with local credit policy and practice. There are 9 maximum levels which can be set for sending the reminder letters to the customers. Dunning procedure – Explanation
The basic parameters for dunning are set up in the dunning procedure. Several different kinds of dunning procedures can be defined in the system
Only those customers that have a dunning procedure defined in their master record are included in the dunning run.
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Configuration – Dunning Procedure
Dunning procedures are maintained at client level. However one can set up and maintain SAP forms individually for each company code. Dunning Levels: Letters can be formulated on the following lines: Level 1: Polite letter. Level 2: Polite yet firm reminder Level 3: possibility of collection proceedings and so on…. Specify the number of days for the various dunning levels. In our example we have assumed that to be 15, 30 and 45 days.
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Configuration – Dunning Procedure
Line item grace periods: Grace periods per line item which are taken into consideration during determination of the due date for the dunning run. We have excluded the following items from our example and they appear in the screen shot as blank. This is just for information purpose.
Interest indicator: An entry of interest calculation indicator here is done if dunning interest is to be calculated for this account.
Total due items from dunning level: Dunning level from which all the due items in an account are totaled.
Min. days in arrears (acct): Days in arrears which at least one item in this account must have for a dunning notice to be created.
Next Tab Dunning Charges: The dunning charge can be printed on every dunning notice. If one has specified the dunning charge as a percentage, a fixed dunning charge cannot be issued at the same time and vice versa. If Dunning charge is maintained in percent, then the percentage is multiplied by the total of all overdue items in a dunning notice. If the dunning notice only contains items in one currency, this is the dunning currency. If the dunning notice contains items in different currencies, the dunning currency is the local currency. In our example we have not used any dunning charges.
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Configuration – Dunning Procedure
Next Tab Minimum Amount: This prevents the system from sending dunning notices for immaterial amounts. Once the balance of a dunning level exceeds the minimum amount, the corresponding dunning level is triggered and the customer is dunned. Minimum amount in value or in % age terms can be defined for which the dunning letter should be generated can be defined in the “Minimum Amount” tab. In our case we have assumed minimum 10 INR for the 3 levels which we have defined and minimum % age as 1% of the total amount outstanding.
Next Tab
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Configuration – Dunning Procedure
Dunning Text: •
One can define a SAP form for each dunning level or use one form for several dunning levels. (These forms names are normally assigned by the ABAP team).
•
The Dunning texts are maintained at company code level.
•
Business to decide on dunning level and letter and decide on the format
Have set all the parameters in the procedure, you will be required to save the dunning procedure now. Click on save
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Configuration – Dunning Procedure
3. Assigning dunning procedure to customer master Only those customers that have a dunning procedure defined in their master record are included in the dunning run. In order to generate the dunning letters as per the procedure as set above, will be required to assign it to the customer. Go XD02 (i.e. Customer master data) and assign that dunning procedure in correspondence tab of Company code.
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Configuration – Dunning Procedure
Terms of payment: The amount of the open item will be become overdue based on the terms of payment set for the customer. Dunning letters are generated based on the dunning level reached as set in the dunning procedure. As in our example it is 15 days, 30 days and 45 days for respective dunning levels.
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Configuration – Dunning Procedure
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Dunning Program
4. Pre-requisites for successful dunning letter generation. a. Creation of dunning procedure. b. Assignment of dunning procedure to customer master data. c. Terms of payment in the master data of the customer and the line item level needs to be same. d. Open items present in the customer account with the line item status as overdue. To successfully dun the open item into dunning run the item should have exceeded the minimum elapsed period. e. Minimum number of days has elapsed between two dunning runs.
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Dunning Program
5. Dunning Run Customer Ledger Extract: Customer should have open items in its account
Dunning Proposal : (T-Code – F150) : Path: Easy Access > Accounting > Financial Accounting > Accounts Receivable > Periodic Processing > Dunning.
Run on : Identification :
Put the date which will be after the minimum elapsed period. You can give any ID as you wish.
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Dunning Program
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Dunning Program
Dunning Level 1 : Put the date which will cover the minimum elapsed period. We have taken 3rd as it crosses the 17 days mark for dunning level 1.
Provide the company code/s for which you want to set the dunning levels and also the customer number from and to.(In our example it is for one customer and single co. code)
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Dunning Program
Free Selection: How to use it and the result is separately covered under the topic changing dunning proposal at point 7. Additional Log: To trace the dunning level a log needs to be created.
Save the parameters by clicking on the status tab or enter
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(tick mark)
Dunning Program
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Dunning Program
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Dunning Program
Click on Schedule. It will prompt for the output device. Enter locl
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Dunning Program
Click / Check on Start Immediately
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Dunning Program
Running
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Dunning Program
Click on Tick mark
. Dunning schedule will get completed.
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Dunning Program
This indicates that the dunning proposal has been saved and can be further processed for printing. If however, if you wish to change the dunning proposal thus created you have to change it before you process it further for printing. Any changes to dunning proposal should be necessarily done before scheduling them for printing. Once schedule for printing, dunning proposal cannot be changed. How to change the dunning proposal is separately covered in the topic changing dunning proposal.
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Dunning Program
To check whether the dunning proposal has got the correct entries you need to check the Log entries. i.e. Click on Dunning log to see the dunning log. Whether the open item has been selected and desired dunning level has been reached.
level 1
Letter has been generated
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Dunning Program
6. Printing dunning Letters – Click on Dunning printout: Start immediately
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Dunning Program
Click on Tick mark
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Dunning Program
Menu Bar System Own spool requests.
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Dunning Program
Check the box below and display glasses to view the form of dunning letter generated.
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Dunning Program
Dunning Letter Level 1. : Polite letter
The similar procedure has to be followed for dunning level 2 and dunning level 3 with the period being as per the minimum elapsed days from the overdue date. (first time when it was overdue.)
Dunning Level 2 and Dunning Level 3 has been generated and displayed for reference purpose.
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Dunning Program
Dunning Level 2 : Polite yet firm reminder
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Dunning Program
Dunning Level 3 : possibility of collection proceedings and so on….
7. Changing the dunning proposal: Changes in the dunning proposal is required in cases where supposed the proposal has automatically run as per schedule and it came to our information that the customer has already given the check for one line item, in such cases, you need not dun that particular line item at the time of printing. You can exclude that particular line item by changing the proposal. Following screen shots will give you a better idea on how to change the dunning proposal.
As also mentioned I am reiterating it again that dunning proposal can be changed only at the stage where dunning print out request has not been made. i.e. at the following stage.
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Dunning Program
Click on Change
and execute
Following screen will appear. Click on Execute
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Dunning Program
Select on line item which you want to exclude from the dunning proposal and click on dun lock.
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Dunning Program
You will be prompted for the following reason. Select on the dunning block and you will be prompted with the following reason codes for blocking the line item.
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Dunning Program
Different reasons for blocking the line item.
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Dunning Program
Select the appropriate reason code and save
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the entry.
Dunning Program
Click on Copy
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Dunning Program
After changing the following window will appear.
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Dunning Program
Free selection in the dunning proposal. How to use it. Is used when you to have exclude particular open line items of the customer. Suppose I have to exclude the credit memos and line items having text as training, I will include the following thing in free selection tab. (Note that BSID is the table name and SGTXT is the field name in that table where customer accounting document is maintained). This free selection tab is not used in our dunning proposal however the following screen shot is just for information on how to use the free selection tab). This is free selection tab was used in another dunning run. Giving here for reference.
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Dunning Program
Result of the above free selection. At the proposal stages click on Dunning Log
Customer open line items list is displayed.
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Dunning Program
Credit memos excluded
In the above list you can see exclusions of credit memos due to the free selection criteria used at the time of dunning proposal.
8. References www.help.sap.com www.sdn.sap.com/irj/sdn
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