Reversals

4. Reversals 

Reversals guidelines

There are two cancellation transactions that can be used to reverse the documents:

• FBRA – When the reversal already includes cleared items. Ex: A payment (DZ) was already cleared with invoices
• FB08 – When the reversal does not include cleared items. Ex: An open payment (DZ) on customer's account

There are two reversal reasons depending on the period:

• 01 code – If the document is reversed during the current opened period
• 02 code – If the document is from a period that is already closed

4.1 Bank transfer reversal

Due to a wrong clearing between a payment and one or more invoices, sometimes it is needed to cancel a matching on customer's account. In order to reverse the erroneous reconciliation, it is necessary to know the following items:

• Document type «700…. » which corresponds to the reconciliation item on customer's account;
• Document type «870.... » which corresponds to the reconciliation item of the bank sub-accounts (if  the sub-account was reconciled already)

4.1.1 Local Payment reversal

There might be the need to reverse payments which were received in local bank accounts. In this case, there are three situations of local cash application which can trigger a reversal:

• Finance team download the bank statements and leave the payment open on customer account or clear it with the invoice
• AR team does a manual posting in customer account following information in Bank site 
• Finance team inform us that a payment was received and we clear the bank account with customer account (ex. Procter and Gamble)

In the case above, the payment was allocated by Finance team in G/L account 5080900000 and we have cleared the G1 (payment) with the invoices in customer account.

In case we need to reverse, we should reverse document 2510139708 in FB08 transaction which will re-open the invoices and the DZ and then it is possible again to clear other invoices.

If the wrong clearing is due to a clearing in a wrong customer, then we should use FBRA transaction in order to cancel the DZ. In this case, the payment should be allocated again in the correct customer account using FB05 transaction.

4.2 Reconciliation invoice/credit note reversal

There is an automatic job which runs in all customer accounts to clear invoices vs credit notes which have the same assignment. The principle is that all these clearings are correct as based on the assignment number which corresponds to the order number.

Therefore these reversals should be limited to the cases in which the customer pays an invoice which was already cleared by a credit note or if there are more than one invoice or credit note with the same assignment which might have been assigned after and that the system cleared the wrong documents.

In case customer pays an invoice already cleared by a credit note and in order to have the same open accounting items as the customer for audit purposes, we should reverse this clearing and leave the credit note open to be deducted by the customer in other payment.

This section explains the steps that should be followed to reverse the reconciliation.

4.4 Cheque reversal

The cases for reversing a clearing with a cheque should be rare as normally we receive the information regarding the invoices in advance. However, in case of insufficient funds on customer bank account, we should proceed the same way as for bank transfer reversal explained in the chapter related (the only difference is the document type of the cheque is DK).

4.5 Misdirected payment reversal

A misdirected payment is a payment received in local bank accounts for a customer assigned to SOLVAY SA (CC 0231) or Solvay Finance America (Cc 4044).

In case of a wrong clearing, we might need to reverse the document. The reversal that needs to be done depends on the necessary correction:

1. The customer's account is correct, just the wrong invoice was cleared, we should make a reset only using FBRA transaction and then clear the DT document that became open on the customer's account with the correct invoice using transaction F-32.

     2. The clearing was done on the wrong customer's account, the reversal to be done is different (the example below):

First of all using transaction FBRA we should reset the 7000029074 document that is clearing these items:

The document that needs to be reset can be found as follows:

Double click on the DT document, press  button and double click on the first line:

In this window you can see the document that needs to be reset:

After the document is reset, the next step is to fully reverse the clearing on customer's account. It can be done using transaction FB08. The document to be reversed is 7000029073:

The next step is to go to transaction FB05 and make the posting between the correct customer's account and G/L account of misdirect payments:

Once this is done, we should clear the item that was reset in the first place with the new item generated on the G/L account 5080930000.

4.6 Direct debit reversal

For direct debits there is an automatic job through F110 transaction which clears the invoices which are due and create a file which is then handled by IHB team (bo.ihb@solvay.com). In case of unpaid, we would need to make the necessary corrections in customer account.

An unpaid in direct debit can be detected through three ways:

• Negative amount in Feba transaction
• Credit Manager/ Business or Cash Collections team request
• During sub-accounts reconciliation detecting a debit movement

4.7 Draft reversal

We have manual and automatic drafts for France (Traites) and Spain (Pagarés and Recibos). For this payment method, we might receive an unpaid from a customer due to several reasons: customer didn't agree with the debit for some reason; a credit note was created after the amount was sent to the Bank; liquidity issues, etc.

4.8 Pagarés reversal

The reversal related to unpaid of pagarés depends on the fact if we receive a TO on G/L account or not:

• If we receive a TO document, we should only reset the DE document using FBRA transaction.
• If we do not receive a TO or TI document, we should reverse all generated documents 76600..., 76400... and 76100... using FBRA and FB08 transactions.

4.9 RIBA reversal

RIBA is a payment method used only for Italian customer for which there is an automatic job running through F110 transaction which will clear in customers' accounts all the invoices due within 1 month. The invoices will be cleared with a DY and a positive DY will stay open until due date of the invoice is reached.

For this payment method, we might receive an unpaid from a customer due to several reasons: customer didn't agree with the debit for some reason; a credit note was created after the amount being sent to the Bank; liquidity issues, etc.

The process of the unpaid in RIBA is fully automatic. There is one file received in SAP with the information of the RIBAs unpaid.

See example below Freshdesk ticket number 698973:

If all the documents have ✔ it means that the reversal was done successfully and nothing needs to be done further by AR team.