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1. Objective and Scope

This OP describes how to manage all requests concerning doubtful customers. All the stages of a doubtful customer process have special procedures and specific postings are described in this procedure. Depending on the situation of each invoice, different actions are to be taken in the SAP system.

This operating procedure (OP) applies to the Receivables of Solvay Companies Worldwide.

2. Definitions

SBS: In the current document, "Solvay Business Services" will be replaced by its abbreviation "SBS".
OTC AR: Order to cash Accounts Receivable
OTC CM: Order to cash Credit Management
OP: Operating procedure
CAM: Country Account Manager
PI1: Factoring ERP SAP system
PF1: Local ERP SAP System
WP1: Local ERP SAP System

Scope

ERP

References

Attachments

REQUEST FORM (Doubtful-Provision-Write Off)

3. Doubtful procedure

If, for some reason, there is a risk of not collecting the payment regarding a receivable, the contract must be converted into doubtful status. The decision of putting a contract in a doubtful status belongs to Credit Management team, who should send their request to OtC AR mailbox to proceed as described in this OP.

Mandatory Requirements:

AR team will need to assure that the all requests follow the next requirements:

Template received
Exchange with business attached on the email content
Check if the customer is factored from more than one company (if yes, we need to assure that Credit Manager is considering the customer globally)

OtC AR team is only authorized to perform any posting regarding doubtful procedure when Credit Manager sends the attached template with all the information filled in REQUEST FORM (Doubtful-Provision-Write Off)

3.1 Customers assigned to Factoring

3.1.1 Convert an invoice into doubtful status

3.1.2 Receive a payment for a doubtful document

If a payment is received for a document which is settled with doubtful status, check the customer account to see if there is a provision created for it. If so the provision should be cancelled – follow the instruction in chapter 3.1.4. Cancel a provision.

Always confirm with CM if the payment can be applied, to which invoice(s) and attach the instructions.

Select the payment normally in FEBA/F-32 transactions and select the invoice to be cleared. In case the full amount is not paid use FB05 to leave the Residual amount with document type DO and Special GL D.

A doubtful contract does not appear on the reconciliation screen in FEBA/F-32 and FB05 transactions. Therefore, the special G/L indicator should be inserted with "O" or "D" in order to select the invoice (s). See below:

3.1.3 Create a provision

The instructions to create and cancel a provision should be received by the Credit Manager responsible.
We should perform one provision for each document
The instructions with the request should be attached to the posting

3.1.4 Cancel a provision

The instructions to create and cancel a provision should be sent by the Credit Manager responsible.
We should perform one cancellation of provision for each document
The instructions with the request should be attached to the posting

3.1.5 Write-off

The posting of write-off can only be done after instructions from the Credit Manager concerned
Before posting the Loss the provision has to be cancelled (If the provision wasn't created before, we should create it and cancel afterwards)
The instructions with the request should be attached to the posting

Transaction Z3F_FA_BAD_DEBT_WO in PI1 is customizied to work only with a debit balance, however there might be the need to apply the doubtful procedure in a credit balance, therefore these two situations are described below:

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.

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;

GBS Credit Management > Doubtful customers > worddavc32cd4762bf99e62519e312e6b58900b.png

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. See example below:

GBS Credit Management > Doubtful customers > worddavc11d71599348ecf0120f3a63d2e86353.png

Example with limit by document number:

In this case, only that document number will be displayed

GBS Credit Management > Doubtful customers > worddav832ed987c67d154e62ab68b81d84c5ff.png

GBS Credit Management > Doubtful customers > worddav8e3a285eb2372a2b05cab53eba072ff6.png

After selecting the lines concerned, choose

The loss will balance in local ERP automatically to the following accounts:

PF1 -

WP1 -

3.2 Customers not assigned to Factoring

3.2.1 Convert an invoice into doubtful status

3.2.2 Receive a payment for a doubtful document

If a payment is received for a document with doubtful status, the customer account must be checked to confirm if there is a provision created (document with Special GL indicator E). If there is a provision it should be cancelled – follow the instruction in chapter 4.2.4. Cancel a provision.

Select the payment in F-32 transaction with the company code inserted and select the invoice to be cleared. In case of APAC companies the Doubtful posting must be reversed first using FBRA and afterwards the payment is applied with the original invoice as normal practice.

A doubtful document does not appear on the reconciliation screen in FEBA or in F-32 transactions. Therefore, the special G/L indicator should be inserted with "d" in order to select the invoice (s).

3.2.3 Create a provision

The instructions to create and cancel a provision should be sent by the Credit Manager responsible.
We should perform one provision for each document
The instructions with the request should be attached to the posting

3.2.4 Cancel a provision

The instructions to create and cancel a provision should be sent by the Credit Manager responsible.
We should perform one cancellation of provision for each document
The instructions with the request should be attached to the posting

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.

GBS Credit Management > Doubtful customers > image2017-3-23 15:43:19.png

3.2.5 Write-off

The posting of write-off can only be done after instructions from the Credit Manager concerned
Before posting the Loss the provision has to be cancelled (If the provision wasn't created before, we should create it and cancel afterwards)
The instructions with the request should be attached to the posting