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what is the 'o' and '9' level dunning? can any one please
specify the names of each 9 dunning level?
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Answer Posted / asit haldar
Accounts Receivable Process
Pls go through the page carefully, then you will
understand the Dunning level.
The Accounts Receivable process starts with the shipment of
the goods to the customer. When this occurs, the shipping
department automatically causes SAP to send a bill to the
customer by integrating customer master data with the
shipment data. This transaction also posts to the Accounts
Receivable subsidiary ledger and also to the reconciliation
account. The billing to the customer may be on paper or by
EDI.
This entry into the accounts receivable system sets up the
account for the terms of sale and also starts the clock
running for the dunning procedure.
When the customer pays the bill, which may be by check or
to a lockbox or by electronic transfer and EDI, the
remittance advice applies the cash paid to the open items
on the account.
Accounts Receivable Management with SAP
Accounting Organizational Structure
Some important concepts:
Client--A self contained unit for technical purposes.
Usually refers to the overall enterprise managed with SAP
Chart of Accounts--The list of accounts that are posted to
everyday.
Legal Entity--A unit with external reporting requirements,
usually a corporation.
Business Area--A subdivision of a Company Code along the
lines of the business, or a division. Used for internal
reporting and profitability analysis
Sales Areas: A sales area is a combination of sales
organization, distribution channel and division.
The Reconciliation Account and Subledgers:
The General Ledger records all G/L accounts. The Chart of
Accounts is used to organize these accounts. The Income
Statement and Balance Sheet are created from the General
Ledger
Individual G/L reconciliation accounts are recorded in
detail in the Subsidiary Ledgers and summarized in the
General Ledger. Important subledgers are maintained for:
Accounts Recievable--Customer Accounts
Accounts Payable--Vendor Accounts
Asset Accounting--Asset Accounts
The balance of the G/L accounts is automatically updated
when postings are made to a subledger.
The Purpose and Operation of the Reconciliation Account
The Reconciliation Account is managed as an ordinary
account in the G/L component.
As in all G/L accounts there are two areas which contain
master data:
A chart of accounts area
A company code specific area
The chart of accounts area consists of specifications that
are necessary for functions across company codes. The
company code-specific area contains data that may be
defined differently in each company.
In all reconciliation account master records, line item
display is deactiviated and a special entry is made to
indicate that the G/L account is a reconciliation account
The required reconciliation account is entered in the
master record of the customer account.
Master Data
The concept of master data is an important one in data
management. Although it may seem complex at first glance it
is the best method to eliminate duplication of data and to
ensure compatibility of data among transactions. Every
customer has master data associated with it. It is defined
only once and in only one location, although there is a
hierarchy of where that data is stored.
The customer master record is made up of three main areas
that contain the following information:
General Data including the customer's bank details [at the
client level]
accounting data [at the company code level]
sales data [at the company code level
Data that exists at the client level is available to all
company codes. Since numbers are assigned to accounts at
this level, a customer receives the same account number in
all company codes.
Individual company codes store their own information on
customers at the company code level.
Before you create a new customer master record, you should
check whether the customer already exists in the system.
Details on Master Records
Account Groups:
The Account group controls the numbering and screen layout
of master records
You can define several account groups for one account type
(D,K,S)
You must assign an account group to every master record.
Address and Communications:
On the first screen of the customer master record basic
data on the customer is listed. This includes addresses and
important numbers for communication. This data is entered
at the client level. Additional information can also be
entered at the company code level. To prevent a customer
from being created twice in your system, you need to
determine who in your organization is responsible for
creating new customers. Initial contact with a new customer
will probably be made by the Sales Organization and the
master record will need to be completed by the accounting
and finance functions.
Bank master data includes the following items to facilitate
payments to or from the customer by check or EDI.
Account Management and Reconciliation Account
On the next screen of the master record you store the
information that is relevant to accounting at the company
code level. This is a critical link between the sales data
and the general ledger systems.
Payment Transaction Data:
The following screen sets the parameters for the accounts
receivable administration of the customer. Payment term
groups are defined in the IMG and are assigned to this
account. Likewise, tolerance limits for over and under
payments of items are defined in the IMG and assigned to
the account. The days specified for check cashing time are
inmportant for the treasury and cash management modules.
There are also fields for payment methods and lockbox codes
which have been defined in the IMG and assigned to this
account.
Dunning Data:
The next screen shows the entries for setting up dunning
for the account.
Summary: Creating and maintaining customer master records
are of critical importance in SAP. New customer masters can
be created by using a reference from another account and
simply changing the relevant data. Much of the data can be
automatically filled in by a pattern created by a Group key
which can be selected at the beginning of the generation
process.
Dunning
Dunning is the process of methodically communicating with
customers to insure the collection of accounts receivable.
It follows the process that progresses from gentle
reminders to almost threatening letters as accounts become
more past due. SAP has automated this process. Law in each
country regulate the form that dunning can take. It is
generally unlawful to harasss or threaten consumers. It is
ok to issue firm reminders and to take all allowable
collection options.
The chart below shows the major factors in the dunning
configuration
The basic parameters for dunning are set up in the dunning
procedure. You can define several different kinds of
dunning procedures in the system
Only those customer that have a dunning procedure defined
in their master record are included in the dunning run.
Dunning procedures are maintained at client level. You can
set up and maintain forms individually for each company
code.
Defining dunning procedures:
Setting up dunning levels:
The dunning level is determined by the number of days in
arrears.
You can have the system print all items at a particular
dunning level.
You can specify a payment deadline which is copied to the
dunning text.
Dunning Charges:
Minimum Amounts:
This prevents the system from sending dunning notices for
immaterial amounts
Once the balance of a dunning level exceeds the minimum
amount, the corresponding dunning level is triggered and
the customer is dunned
Dunning Texts: You can define a form for each dunning level
or useone form for several dunning levels.
Once the dunning procedure is defined it can be assigned to
a company in its master data.
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