Table of contents
1. Objective and Scope
The purpose of this document is to explain how to perform the internal controls for Accounts Receivable process.
The Internal Controls mentioned in this OP aims to ensure:
- Compliance with AR procedures
- Application of Process Expert's instructions and guidelines
- Assure the mitigation of financial risk in key tasks
This operating procedure (OP) applies to all EMEA companies and customer payments for invoices factored to Solvay SA. The only exception is related to control "Review of receivables not assigned to Factoring company" in which we analyze all Regions (EMEA, NAM and APAC).
2. Definitions
- SBS: In the current document, "Solvay Business Services" will be replaced by its abbreviation "SBS".
- CCT AR: Customer Credit & Trade Accounts Receivable team
- CCT CM: Customer Credit & Trade Credit Management team
Scope
ERP
References
Attachments
Use FL3N transaction in PI1 system to check the unallocated payments as below:
Select only the document type "TI" (transfers IN) and then search by "unallocated" in the text field. Example below:
Afterwards, for all the open payments we should do the follow-up by verifying if the item can be cleared, sending reminder or escalating to AR Process Expert if it is blocked for resolution.
For PF1 and WP1, the payments are posted on customer accounts by Finance team (automatic postings during the bank statements upload). Therefore Finance team should create a ticket to CCT in case of unallocated payment in which they are sure it is customer related. Regarding Poland (receivables not assigned to Solvay SA), as the cash allocation is all manual, a ticket in Freshdesk should be created to justify a possible unallocated.
- During the cash allocation, we should assure that for all TIs (transfer-in), which are really customer payments we are not able to identify the customer, we insert "unallocated" in the text field. For the remaining payments which we identify as Vendor reimbursements, Abbott payments and IS technical issues, we should have the justification in the text (ticket number) but it shouldn't mention unallocated.
- We should do the follow-up in a daily basis and the sending of the reminders should be adapted to the situation and time of the month (we should analyse case by case and assess which is the frequency which makes more sense).
On a daily basis the following file is updated:
Warning
- All cases should be justified with the reason and mention to whom it was escalated as below
- The image with the unallocated payments should be copied from the file and added to the daily email
Example:
3.1.1 Escalation procedure
For unallocated cases for more than three months and if no answer received or if is not enough to allocate the payment, the team member doing the controls should send an email to Accounts Receivables Process Expert, explaining the reason why it is being escalated (mention if no answer received, doubts, proposal). In case it is interco related or any technical constraint, a reminder should be sent to the company related or to IS.
3.2 Weekly review of Unmatched payments
The objective of this control is to assure that all non-matched payments equal or above 50.000,00 EUR have been analyzed and escalated. Therefore a list with all those items has to be justified by AR team.
This weekly control must be done on Thursdays.
In PI1:
Open FBL5N transaction and chose the following variant:
Execute 
The following screen appears
PF1 and WP1
This extraction should also be done for customers not assigned to Solvay SA. Therefore, enter in FBL5N and choose the following the companies according to this file:
For each of the unmatched amounts, AR team should update the file below and describe the reason of non-allocation and mention to whom it was escalated:
Example:
- The image with the unmatched payments should be copied from the file and added to the daily email
3.3 Monthly review of receivables not assigned to Factoring company
The principle is to have all customers/receivables from a company with convention with Solvay SA/Solvay SFA assigned to the Factoring company (Cc 0231/4044). Therefore, the objective of this control is to show evidence that customers not assigned have a valid reason in the "Long text" field for not assigning its receivables.
This control should be done one time per month on the D+2 in the two local systems assigning to Solvay SA/Solvay SFA: PF1 and WP1.
Open Z3F_FA_MD_REPORT transaction in local systems and choose the following variants in all systems:
Execute 
The following result is showned:
We can see a line per customer and in the "Long text" field it should be inserted the reason of not assignment to companies 0231/4044. The valid and justified main reasons are:
- Legal reasons (Ex. Italian law)
- Private persons
- Old doubtful
- Other local specificities
Other reasons from these ones should be analysed and discussed with Credit Manager and CAM.
This result should be extracted to excel as below:
Click on 
Execute 
Save the file in your desktop
Finally, add this excel file to the email with the remaining controls.
Example of the file:
3.4 Records of doubtful receivables and losses based only on a supporting document communicated by CM
For bad debt customers, we should provide the request in which AR team received the request to post a customer into doubtful status only if requested by Audit company. In this case, we should search in Freshdesk the request case and send it to the requester.
4. Reporting controls
The email should be send to the following addresses:
Process Expert Accounts Receivables | Claudrik.darnet@solvay.com |
OTC Manager | julia.cabrita@solvay.com |
Accounts Receivable team leaders: | Paula.simoes@solvay.com; Rafael.Lindoso@solvay.com and amporn.sae-tae@solvay.com |
Accounts Receivables team mailbox | solvay.ar@solvay.com |