Doubtful customers

In order to convert a receivable to doubtful for a customer to Factoring, we should use transaction Z3F_FA_Doubtful in PI1 and follow the steps below:

Select the option "Doubtful and Provision" and add the customer account and execute .

(Company codes 0231 and 4044 are already selected)

Select the items to be converted to Doubtful and in case the items should be provisioned as well add the amount in column "Provision Amount".

In case there is no Provision to be booked leave the amount blank, or in case the provision is not for 100% add the amount to be provisioned provided by Credit Team.

Then press save .

It will ask you to attach the excel file with the instructions provided by Credit Management - it only accepts Excel format.

This will attach the justifications to all postings done.

The items selected will now appear in green.

And confirmation of the posting done.

On customer account there are now the Doubtful items (DO documents with special GL indicator D) and respective provisions created (E1 documents with special GL indicator E).

Special GL indicator D = GL account 2270000000

Special GL indicator E = GL account 2271000000

Note that there was one document (invoice 0270611109540) for which there was no Provision created as the amount was zero in the selection done.

You can also see the attachment in all the postings.

See example (payment already on account)

Since there will be a residual that should remain in Doubtful use FB05 with payment dates (if not possible, use 1st day of the month)

Document type: DO              Cc:0231             Currency: of invoice

Reference: Invoice Reference 

Doc Header text: Ticket with the instructions of CM

Press Enter

Process open items with Special GL indicator D or O (some older items might have O - Check the customer account to confirm)

Select the item in Doubtful to be cleared and the partial payment

Use the Residual items tab to add the residual amount and reason code AR 

Simulate.

There will be 3 lines, for the payment, for the item cleared and for the residual Doubtful which will have the same data as the original Doubtful.

Save.

On the account there will be the new line for the residual.

In some situations it might be required to apply a partial (so that the payment is also visible on customer account) Using also FB05, the same selections and fields as explained for residual.

Select the two items (payment was already open on customer account) 

And use the "Partial Pmt" tab to associate the payment to the respective invoice.

Save .

Here the partial payment (with special GL indicator D) associated to the invoice.

Transaction Z3F_FA_DOUBTFUL.

There is the possibility to create the Provision in case it was not immediately created in step "Doubtful and Provision" or to increase the provision amount if not fully provisioned.

To do so select the option "Provision", add the customer account and process .

This will show only the items that are already in Doubtful.

Select the item you want to provision and press save .

Add the attachment.

The document was posted.

Remark: In case you select a document that is fully provisioned (or the amount you insert exceeds the total amount of the Doubtful) there will an warning message which will not allow to proceed.

Transaction Z3F_FA_DOUBTFUL.

There are 3 options to cancel or reduce a provision, depending on the scenario.

• Reduce Provision orig BFC flow - To be used when it is necessary a correction, usually in the same period or in case the other 2 options are not applicable (transaction flow F25);
  
  
• Reduce Provision by Write Off - when the debt is considered unrecoverable and the account should be closed (Transaction flow F35), the full amount of provision must be cancelled:
  
  
• Reduce Provision by Payment - When customer pays the full amount or partially (Transaction flow F36), reduction should be equal to what was paid.

In any of the cases processing mode is the same.

Select the option according to the scenario, add the customer account and process .

Select the provision that should be cancelled or reduced (check if the amount is correct and) and press save.

Add the attachment.

The document was posted.

Here the the Original provision and Cancellation on account (E1 Docs).

To complete the action use F-32 to clear both items.

Special GL indicator "E" must be selected.

Select both items and save .

In case of Partial reduction by Payment the amount of provision must be adjusted.

Select the Provision related with the item that was paid and adjust the amount.

For the example, consider the customer paid 500,00 EUR for invoice 02706111009517 and 1.000,00 EUR for invoice 02706111010275.

Hit Save .

On customer account you can see the Partial Payments previously recorded (see chapter 3.1.2 Receive a payment for a doubtful document) and the reduction of the Provision. There will be always two lines, one for the Original Provision and another for the Reduction.

E.g

DO 6111000508 - Original Doubtful;

DO 6111000512 - Partial Payment;

E1 7700004371 - Original Provision;

E1 7700004376 - Provision Reduction;

Only for Debit balance

Use Z3F_FA_DOUBTFUL transaction and select the option "Bad Debt - Write Off".

Press  to continue.

You can search by customer number or document or run the transaction with no info in the fields and it will show all open doubtful contracts.

Special GL Ind: D (or O for some older cases)

You can search by customer number or document or run the transaction with no info in the fields and it will show all open doubtful contracts.

Special GL Ind: D (or O for some older cases)

Example without selection options:

In this case all customers having doubtful contracts will be open and it is possible to select the items by selecting the line. However two validations are defined in the transaction:

• All the documents selected must belong to same customer;
• All the documents selected must have same currency;

Example with limit by customer number:

In this case, transaction will give us all the documents related with the customer selected. Thus, the user should select the ones which are to be posted as loss. 

Example with limit by document number:

In this case, only that document number will be displayed.

 After selecting the lines concerned, choose 

Debit / Credit balance using FB05:  

Enter in FB05 in PI1 system transaction.

Fill the fields as below:

Document Date and Posting date: Request date

Document Type: DO

Insert customer number and Special G/L ind. "D" or "O". 

Select the item in Doubtful / Invoice or CN

Go back 

Use Posting Key 40 for Debit Balance and account 6420000000

Or

Use Posting Key 50 for Credit Balance and Account 7420000000

Enter.

Fill the amount, Business area and Cost Center fields and Save the posting. 

In order to convert a receivable to doubtful for a customer not assigned to Factoring, we should use transaction FB05 and follow the steps below:

Document date: Today's date
Type: See below the document types distribution by center:

Company code – Company code of the invoice
Currency – Currency of the invoice

Reference: Invoice Reference

Doc. Header Text: Ticket Number

Then click on "Choose open items", insert customer number and select the invoice which should be posted in doubtful status.

Then go back and insert the following data as below:

PstKy: 09
Acccount: Customer Number
SGL Ind: D

Click on Enter

In the following screen insert the informations below: 

Amount: Invoice amount
Due on: Today's date
Assignment: Document number
Text: Doubtful_Customer number_ Invoice number

Click on Save

Checking the customer account, you can check that the invoice is now with the special indicator D and it is posted in 2270000000 g/l (41100300 in WP1)

See example below:

Select the invoice as below:

Save 

Open FB05 transaction in local system

The fields should be filled as below: 

Document and Posting date: Request date
Document type – See below the document types distribution by center:

Currency – Currency of the invoice
Reference - Doubtful
Doc. Header Text – Ticket XXXXX
PstKy: 19
Account: Customer Account
Special GL Indicator: "E" 

Click on Enter. The following screen pops-up:

Fill the fields as below: 

Amount 
Business area: In PF1 insert the BA of original document 
Due on: Due date of Invoice 
Assignment: Document number
Text: Doubtful_ Document number

Pst Key: 40                                                                                         Account: 6330000000 for PF1 and 98340400 for WP1

Then press Enter to add:

Transactn Type: 
AR Pledg. : NO

Then press enter again.

Amount, Assignment and Text field should be filled with the same info as in the previous screens.

For the cost center field for WP1, we can use the following file:

https://docs.google.com/spreadsheets/d/1TD7tjzABrAuybKEwR4UVOwiA0fqZ1Xcu8xPwEdhwvA0/edit#gid=0

In case of doubts or if you cannot find the cost center, please send an email to CAM according to the list below: 

http://teamsites.solvay.com/sites/DCFI-CC-GAC/Lists/List%20of%20Companies%202008/AllItems.aspx

For the cost center for PF1, we should check transaction KS03 - Display cost center or press directly the search button 

Choose "CHEF" and 

Cost Center: *d*850 (3 first digits of the business area)
Cost Center category: r 

Then choose the one for the company code you are posting and the one with fewer digits. Example:

Check the line items by simulating and save.

Open FB05 transaction

The fields should be filled as below:

Document and Posting date: Request date
Document type – See below the document types distribution by center:

Currency – Currency of the invoice
Reference - Doubtful
Doc. Header Text – Case XXXXX
PstKy: 09
Account: Customer Account                                                               Special GL indicator: "E"

Press Enter.

Fill the fields as below:

Amount
Business area: In PF1 insert the BA                                                             Due On: Due date of Invoice
Assignment: Document number
Text: Doubtful_ Document number

Pst Key: 50                                                                                                   Account: g/l account 6331000000 for PF1 and 98340450 for WP1   

Then press Enter.

Transactn Type:

• Flow 25  : if the original provision was booked within the same fiscal year and the reverse is for the total or partial amount of the provision
• Flow 35  : for the reversal when we book in loss the invoices (we will never have payments from the customer)
• Flow 36  : for the reversal when the customer paid invoices or a credit note is issued.

AR pledg. Ind. : NO

Press Enter.

Amount, BA, Assignment and Text field should be filled with the same info as in the previous screen.

For the cost center field for WP1, we can use the following file: https://docs.google.com/spreadsheets/d/1TD7tjzABrAuybKEwR4UVOwiA0fqZ1Xcu8xPwEdhwvA0/edit#gid=0

In case of doubts or if you cannot find the cost center, please send an email to CAM according to the list below: 
http://teamsites.solvay.com/sites/DCFI-CC-GAC/Lists/List%20of%20Companies%202008/AllItems.aspx

For the cost center field for PF1, we should check transaction KS03 - Display cost center or press directly the search button 

Choose "CHEF" and 

Fill the fields below:

Cost Center: *d*850 (3 first digits of business area)
Cost Center category: r

Then choose the one for the company code you are posting and the one with fewer digits. Example:

Check the line items by simulating and save.

Afterwards clear the provision Entries using F-32.

Special GL Indicator: "E"                                                                              Currency: of the document

Select the documents and Save.

Open F-32 transaction in local system with special indicator "D" 

Enter

Select the invoice

Go back 

Insert Posting Key 40 and the g/l account for the loss according to the SAP system:

PF1 - 

WP1 - 

Then click on Enter

Insert * in the Amount field, the business area related (for PF1) and the cost center.

Save  

For the cost center field for WP1, we can use the following file: 

https://docs.google.com/spreadsheets/d/1TD7tjzABrAuybKEwR4UVOwiA0fqZ1Xcu8xPwEdhwvA0/edit#gid=0

In case of doubts or if you cannot find the cost center, please send an email to CAM according to the list below:

http://teamsites.solvay.com/sites/DCFI-CC-GAC/Lists/List%20of%20Companies%202008/AllItems.aspx

For the cost center for PF1, we should check transaction KS03 - Display cost center

Choose "CHEF" and 

Cost Center: *d*850 (3 first digits of the business area)

Cost Center category: r

Then choose the one for the company code you are posting and the one with fewer digits. Example: