Objective and Scope

Objective

This local operational procedure (LOP) demonstrates processes and procedures to execute account receivable activities in SAFE declaration for legal entities in CHINA. This LOP provides instruction for users to perform recurring activities and reacting to expected scenarios.

Scope

This local operational procedure (LOP) applies to Accounts Receivable activities of CHINA entities:

*other China entities are under Cashier (Finance Local team) scope.

Reference Documents

Process Flow (shown in the process)

Definitions

• SBS: Solvay Business Services
• AR: Accounts Receivable
• LOP: Local Operating procedure
• SAFE: State Administration of Foreign Exchange (China)

Process Flows

1. Declaration for Foreign Incoming Payment

All foreign currency incoming payment requires to declare the incoming nature on SAFE (State Administration of Foreign Exchange) system within the defined deadline, according to China regulation.

Step:
After receiving notification from the bank, AR follows the below procedures:

1. Log in to the SAFE website;

URL: http://zwfw.safe.gov.cn/asone

It's required to insert Organization code, Username, and Password, but different legal entities require different Organization codes, Username,s and Password.
 

2. Go to "Data Declaration" and "Foreign Incoming Declaration";

   2.1) To entry a new declaration, select "Register Declared Information"

   2.2) To revise the previous declaration, select "Edit Declared Information", specify a range of periods and click "Inquiry"

3. Select transaction to be registered or revised by clicking at the declaration number;

4. Insert the information into required fields;

• Payer located country
• Is it advance payment?
• Does it belong to the free trade zone? (Yes/No)
• BOP code
• Incoming payment amount
• Transaction postscript

4. Click saving data.

2. Declaration for the 90 days Deferred Collection

Sometimes there could be a requirement from SAFE to declare for the 90 days (exclusive) deferred collection, currently, there is only company 7810 Solvay Hengchang (Zhangjiagang) Co., Ltd required to perform this task.

Step:
On a biweekly or monthly basis, AR monitor invoice issued from the defined customer accounts who have payment terms or DSO exceeded 90 days:
1. Open transaction FBL5N to check if there is any new invoice issued;

2. Put information into defined shared point.

   Customer Code:         SAP Customer Account Number
   Document No.:           Invoice Number
   Document Date:         Invoice Issue Date
   Amount in DC:           Invoice Amount
   PO:                             Customer Purchase Order (find from SAP's Document Header Text)
   Estimated Collection Date:   Invoice Due Date

3. Login to the SAFE website;
URL: http://zwfw.safe.gov.cn/asone
It's required to insert Organization code, Username and Password, but different legal entities require different Organization code, Username and Password.

Then follow below procedures to perform the declaration.

     3.1) Go to "Data Declaration", "Trade in Goods", "Trade Credit and Financing Report", "Deferred Collection Declaration" and "New Deferred Collection Declaration"

     3.2) Put PO Number in "Contract Number" and click "Inquiry";

     3.3) When the result is displaying, select item and click "New Entry";

     3.4) When there is a pop-up click "New Entry";

 

   3.5 Put information of "Estimated Collection Date" and "Declaration Amount", then click "Submit"

4. Update information in the same shared point.

5. Monitor invoice collection status and update in the shared point.

When "Actual Collection Date" is earlier than "Estimated Collection Date", AR need to go back to the SAFE system and revise the "Estimated Collection Date" that was declared earlier.