Table of contents

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

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 bad debt template.xlsx 

3.1 Customers assigned to CICC 

4.1.1 Convert an invoice into doubtful status

 

In order to convert a receivable to doubtful for an assigned customer to CICC, we should use transaction F103 and choose the following variant:

Afterwards, insert the following fields: 

  • Customer account
  • Document Number

Then click on . The following screen appears:

This transaction only creates a batch input. To post this conversion on the customer's account, this batch must be executed.

Open transaction SM35: 

In this screen select the line of the batch to be executed (the line has text: SAPF103 and has your user in "Created by" field).

Click on the  button and the following screen appears

Select the "Background" option, press on the  button and then press Enter several times until the batch status changes into "Processed" 

On customer account the invoice is transferred from g/l 2200000000 to 2270000000 - Doubtful trade receivables and a DO document will be open with a special indicator "O" as below: 

The information will be replicated automatically to local ERP (WP1 or PF1) and posted on customer account with special g/l indicator "D" under accounts 2270000000 if PF1 and 41100300 if WP1. 

4.1.2 Receive a payment for a doubtful document

If a payment is received for a document which is settled with doubtful status, local system should be checked before clearing it since a provision can be already created in local system. This should be cancelled – follow the instruction in chapter 4.1.4. Cancel a provision. 

Select the payment normally in FEBA or F-32 transactions and select the invoice to be cleared.

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

See example

 

On customer account, the DO will be cleared with the DZ (or AB) document. 

4.1.3 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

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 – Case XXXXX
PstKy: 50
Account: 2271000008 for PF1/ 49100300 for WP1

Click on Enter. The following screen pops-up: 

Fill the fields as below:

Amount
Business area: In PF1, insert the BA of original document
Assignment: Document number
Text: Doubtful_ Customer number_ Document number 
Then click on  and insert as below:
Transactn Type: 
Partner: Customer number (local system)

 

Then debit g/l account 98340400 for WP1 and 6330000000 for PF1 as below: 

 

Amount, Cost center, 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 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:

4.1.4 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

 

 

 

 

 

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 – Case XXXXX
PstKy: 40
Account: 2271000008 for PF1/ 49100300 for WP1

Fill the fields as below:

Amount
Business area: In PF1, insert the BA
Assignment: Document number
Text: Doubtful_ Customer number_ Document number 
Then click on  and insert as below:
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.

Partner: Customer number (local system number)

Then credit g/l account 6331000000 for PF1 and 98340450 for WP1 as below:

Amount, BA, Cost center, 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

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:

4.1.5 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: 

Debit balance

Use Z3F_FA_BAD_DEBT_WO transaction:

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;

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:

Example with limit by   document number:

In this case, only that document number will be displayed

After selecting the lines concerned, choose 

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

PF1 - 

WP1 - 

Credit balance:  

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. "O". Select the invoice:

Go back 

Use Posting Key 50 with Account 7420000000

Enter

 

Fill the amount, Business area and Cost Center fields and Save the posting. This will be replicated to local system.

 

4.2 Customers not assigned to Factoring

4.2.1 Convert an invoice into doubtful status

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
Currency

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)

 

4.2.2 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).

See example below:

Select the invoice as below:

 

Save 

4.2.3 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

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: 98340400 for WP1 and 6330000000 for PF1

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.

4.2.4 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

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.

4.2.5 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

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:

4.3 Doubtful procedure for items with recourse from old Factoring Companies 5763/5976

For documents from old Factoring codes 5763/5976 with recourse (meaning financial responsibility on affiliate side) or never assigned to CICC, the procedure to follow is to clear as loss in Cc 5763 (check old procedure for 5763) and have the invoice in doubtful status and a provision created in affiliate as below:

4.3.1 Convert an invoice into doubtful status

In order to convert a receivable to doubtful, we should use transaction FB05 and follow the steps below: 

Document date: Today's date
Type: S1 in PF1 and SB in WP1
Company code
Currency

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

4.3.2 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

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:

Company code
Currency – Currency of the invoice
Reference - Doubtful
Doc. Header Text – Case XXXXX
PstKy: 19
Account: Customer number
SGL Ind: M 

Click on Enter


Fill the fields as below:

Amount
Bus. Area
Due on: Request date
Assignment: Document number
Text: Doubtful_ Customer number_ Document number 

Then Debit g/l account 6330000000 as below:

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

For the cost center in PF1, we should check transaction KS03

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:

4.3.3 Cancel a Provision

  • The instructions to create and cancel a provision should be received 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
  • In case we are not able to find the provision in the g/l accounts

2271000008 and 6330000000 for PF1 and 49100300 and 98340400 for WP1, we should request CAM confirmation if the provision was created and if yes, ask in which g/l account. Follow this link to find the correspondent CAM: http://teamsites.solvay.com/sites/DCFI-CC-GAC/Lists/List%20of%20Companies%202008/AllItems.aspx

 

 

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:

Company code
Currency – Currency of the invoice
Reference - Doubtful
Doc. Header Text – Case XXXXX
PstKy: 09
Account: Customer number
SGL Ind: M 

Click on Enter

Fill the fields as below:

Amount
Bus. Area
Due on: Request date
Assignment: Document number
Text: Doubtful_ Customer number_ Document number

Then credit g/l account 6331000000 as below:

Fill the fields as below: 
Amount
Bus. Area
Cost center
Assignment: Document number
Text: Doubtful_ Customer number_ Document number 

For the cost center in 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:

4.3.4 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

Before the write-off, we should clear the provision with the cancellation in F-32 as below:

Special GL M selected.

Save 

Afterwards, 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: