Table of contents 

By default the table of contents displays Heading 2 & Heading 3 (other levels can be added)

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 companies and customer payments for invoices factored to Solvay Financial America (4044) and reversal factoring for company 7424 in WP1.

Definitions 

  • SC: In the current document, “Service Center” will be replaced by its abbreviation “SC”.
  • OP: Operating procedure
  • SFA: Solvay Financial America
  • SSA: Solvay SA
  • CM: Credit Manager
  • DA: Doubtful invoice
  • NAM: North America (US; Mexico; Canada; Puerto Rico).
  • PE: Process Expert


Scope

1. Remove the icon(s) when not applicable

  

2. Add countries when the procedure is for a specific country (optional)

ERP

3. Remove the icon(s) when not applicable

  

References

 

4. Add the link to SAP procedures (when it exists)

Attachments

5. Add the link to attachments (to be stored in AODocs or GDrive) or external links  

INTERNAL CONTROLS

Daily review of Unallocated Payments

The control of the unallocated cash is done in order to ensure that no payment received is open on the sub-account without having been correctly addressed and escalated asking more details.

In PI1:

We have two transactions that should be checked. The first one is FEBA and the second one is FLB1.

FEBA – FORNA PAYMENTS: Open FEBA transaction and choose the following criteria’s:

Company code: 4044

House Bank: FORNA               

Statement date: Statement date of the payments

Statement status: 7

Execute 

 

 

Afterwards, click on each unallocated (red entries), click on the 900… document, choose  and go to the “Attachment list” to check the case number. Then, go to Fresh Desk and check if the case was correctly created and sent to the correct entity (Credit Manager, Collections Team and Treasury).

FLB1 - LOCKBOX: Open FLB1 transaction and choose the following criteria’s:

 DATE: Day of our last working day then execute .

Afterwards, click on each unallocated (red entries), click on the 900… document, choose  and go to the “Attachment list” to check the case number. Then, go to Fresh Desk and check if the case was correctly created and sent to the correct entity (Credit Manager, Collections Team and Treasury).

In WP1:

The cash allocation for Reversal Factoring Customers is all manual, we should check the G/L accounts and in case of an open item, a case number should be find on text field. Then, go to Fresh Desk and check if the case was correctly created and sent to the correct entity (Credit Manager, Collections Team and Treasury).

Open FBL3N transaction in 7424 and chose the following variant:

 Execute 

The following screen appears as below:

We should perform the same for 7651.

After we check the two systems, the report “Unallocated” should be retrieved from Fresh Desk as below:

Open Fresh Desk, go to Tickets Tab and choose the following criteria’s:

On a daily basis a google file is updated:

Note: Only authorized users can access the file.

 

Warning 

All cases should be justified with the reason and mention to whom it was escalated as below:

 

 

It should be done a print screen of the file and the image added to the email.

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.

Weekly review of Unmatched payments

The objective of this control is to assure that all non-matched payments equal or above 50.000,00 USD have been analyzed and escalated. Therefore a list with all those items has to be justified by the AR specialist and should be sent to SC Manager, AR Process Expert and to Cash Collector Team Leader (which should deploy to the cash collector if justified).

In PI1:

Open FBL5N transaction and chose the following variant:

 On field “open at key date” put the today’s date then execute 

The following screen appears as below:

In order to identify the collector responsible for each unmatched case, we should copy all the cases IDs, then go to UDM_DISPUTE transaction and choose the fields as per image below:

 

Paste the cases IDs then  a list of disputes will appear with the collector responsible for each case.

For each of the unmatched amounts, the AR specialist should update a google file and describe the reason of non-allocation and mention to whom it was escalated:

Note: Only authorized users can access the file.

It should be done a print screen of the file updated and the image added to the email.

Daily Review of Factoring Monitoring

All the assigned Receivables to SFA that do not have all the information or aren't correct can originate errors when are assigned and are displayed in Z3F_FA_OI_MONITOR transaction.

All the contracts assigned to 4044 are verified automatically by the system through 24 checking, described below:

The objective of this control is to check that all open entries are already handled and escalated to the proper entity. 

Run Z3F_FA_OI_MONITOR in the three local systems transaction: 

 Select Customers and Execute 

Remark: EMEA and BR customers should be excluded. 

The status of the entries should be yellow and the payment block X, meaning that the situation was already escalated through email. If it is red, it means that is open and it wasn't analysed. 

It should be done a print screen of the entries and added to the email. 

 

Warning 

The controller should check all cases pending for more than 15 days and do the follow up, checking if it can be solved and if not, to send a reminder.

 

 

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 OTC AR 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.

Reporting Controls:

The email should be send to the following addresses: