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SAP FI Dunning Procedure for Customer Outstanding Invoices

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I. INTRODUCTION

Purpose:

When the customer misses the payment for the outstanding invoice within specified payment due date. The dunning letter is generated via sap program and send at customer address for reminding the customer outstanding payment

Requirement:

The dunning system enables to trace liable customers who have not paid their open invoices within a given time span. It enables you to handle the process from, for example, sending a reminder to customers of their outstanding payments through to referring such customers to collections agencies.

The dunning system covers the following documents:

1. Open A/R invoices, including invoices that are partially credited or partially paid

2. Invoices that include installments

3. A/R credit memos

4. Incoming payments that are not based on invoices

II. CONFIGURATION:

1. Create Dunning Keys

We define dunning keys in this step. Dunning keys limits the dunning level of an item.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Basic Setting for Dunning > Define Dunning Keys

Tcode: N/A

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2. Define Block reason for Dunning Notices

In this step, we define the reasons for a dunning block under a key. The key can be entered in an item or in the account of a Customer master. Blocked items or accounts are not considered for the dunning run

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Basic Setting for Dunning > Define Dunning Block Reasons

Tcode: N/A

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3. Define Dunning Procedures

We can create Dunning text, Dunning level, Dunning Charges and Company code assignment in the dunning procedure

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

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4. Create Dunning Interval in days to Dunning Procedures

We determine at which intervals the allocated accounts are to be dunned for every dunning procedure. During every dunning run, the system then checks whether the run date is at least this number of days (14 days) since the date of the last dunning run.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure and click “Choose” Button

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5. Define  Dunning Levels to Dunning Procedures

In this step, we determine number of dunning level set up in dunning procedure.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure and click “Choose” Button

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6. Define  Dunning Charges to Dunning Procedures

In this step we add the dunning charge as per the dunning level. This is like an administration charge to dun the customer. Currency Euro is assigned during adding the dunning charge

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure, click “Choose” Button, and choose “Charges” button

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7. Define Minimum Amounts to Dunning Procedures

Minimum Amount are customized to charge the administration charge to customer with reference to dunning level

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure, click “Choose” Button, and choose “Minimum amounts” button

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8. Assign  Dunning Texts and forms  to Dunning Procedures

For inserting dunning forms, click Dunning Texts and assign the required forms for the dunning text with reference to dunning Level. In case the customer has different language and the form contains different language, then please follow the document attached to translate the source language to target language.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure, click “Choose” Button, and choose “Dunning Texts” button

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9. Define Dunning level  to Dunning Procedures

Click the dunning levels and input days in Arrears for each dunning levels.

Select Always Dun in legal dunning proc for not missing any dunning notices.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure, click “Choose” Button, and choose “Dunning Levels” button

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10. Assign Special indicator to Dunning Procedures

In this step, we have assigned Special Indicator Reserve for Bad Debt to dunning Procedure.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure, click “Choose” Button, and choose “Sp. GL indicator” button

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11. Assign Company Code to Dunning Procedures

We have assigned company code with reference to Dunning Level and not by Dunning area

Path: N/A

Tcode: OBVU

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12. Assign Sort Fields to Dunning Procedures

In this step, we assign Sort field K1 and Sort field P1 to Company code.

K1 will control the header content and P1 will control line item while printing the contents

Path: N/A

Tcode: OBVU

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III. PREPARATION OF CUSTOMER MASTER DATA FOR DUNNING PROCEDURES:

1. In this step, we insert Dunning procedures in the customer master (Correspondence tab).

2. We have to maintain the Language field in the customer master data (Address tab) to print the Dunning Notice as per there language, Dunning Text should also be maintained in reference to dunning level. So that the content of dunning notice will be different to dunning level.

3. For dunning run, this transaction should be performed by F150. This is a month end duty. Please insert Dunning date, Document posted up to date, Company code, Customer Number and save

a. In case we will specify the checks that are to be maintained by user before starting dunning the customer

– Dunning procedure should be maintained in customer master

– Verify in Customer master regarding Dunning block (Customer can’t be dunned if there is dunning block in customer master as well as line item)

– Verify in transaction FBL5N the customer Invoice should be overdue and Amount should be in debit balance and not in credit

– User should make sure the parameters are inserted correctly for Dunning date, Customer Number, Company code and Document posted till date

– Correct Printer should be inserted while printing the dunning notice

b. Dunning test for Credit Memo and Down payment

– Credit Memo

In the dunning run, we can offset existing credit notes with outstanding invoices. This affects the determination of the due date for payment and the dunning level. These are different for customer and vendor credit memos.

The dunning program assumes that credit memos are always due on the baseline date, unless they have been given a specific due date or are invoice-related. This means that credit memo dunning is not affected if you enter only one payment term manually in a line item.

For invoice-related credit memos, the dunning level is taken from the invoice, provided this is contained in the dunning proposal. All other credit memos due are assigned to the highest dunning level determined so far for the account they belong to. This means that these credit memos are cleared with the oldest invoices.

– Down payment

We can take down payments into consideration during the dunning run. When defining the dunning procedure we must specify which down payment types are included in the dunning run. To do this, we specify the special G/L indicators for these down payment types. The dunning program treats a down payment received as a credit memo and reduces the receivables by the amount of the down payment. Since down payments are only included in the dunning run in exceptional cases, each down payment item contains a field for the dunning block. The system sets this block automatically. The down payment also contains a due date field, which the system automatically fills with the document date. You can change these fields with the document change function.

III. EXAMPLE DUNNING LETTER: (German language)

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      66 Comments
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      Author's profile photo Former Member
      Former Member

      Good work Julie, very detailed document !

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you Venkat!

      Author's profile photo Former Member
      Former Member

      Hi Julie,

       

      Just came across your document..Very well done!

       

      Question: When we run F150, we get the following message once job complete:

      "298 dunning notices generated, of which 121 are to be sent,

      121 dunning notices printed (cust. 121, vendor 0)"

       

      121 letters are printed.

      What does the 298 dunning notices generated represent?

      What could be the cause for the difference between the number of generated notices and printed notices?

      Please respond.

      Thanks.

      Colette J.

      Author's profile photo Partha Sarathi Samantaray
      Partha Sarathi Samantaray

      Hi Julie,

       

      Is there any setting to have only one line item selected for Dunning level 1, irrespective of the minimum amount and days of arrears?

       

       

       

      Regards

      Partha

      Author's profile photo Erwin Leitner
      Erwin Leitner

      Hello,

       

      Great!

       

      Fine thank you.

      all the best

      Erwin

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Hi Erwin,

      Thank you very much.

      Author's profile photo sreehari tokala
      sreehari tokala

      Good work nice document with full details . it will be help full to Fresh consultants. you have done nice job.

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you Sreehari.

      Author's profile photo Marssel Vilaça
      Marssel Vilaça

      Good content, Jullie. As always!

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you Marssel...

      Author's profile photo Deepa FI
      Deepa FI

      Nice work julie....very informative document.

       

      Thanks

      Deepa

      Author's profile photo Former Member
      Former Member

      Hey Julie,

       

      Nice document. Can you please also guide about the e-mail send to customer, do the functional consultant have to do any config for the same.

       

      Thanks !!

       

      Raavi

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Hi Raavi,

      Thank you for your reading.

      I'm not sure about Email sending program of SAP standard.

      In my client, we customize the program to get data from table MHNK, and call function module REPRINT_DUNNING_DATA_ACCOUNT to generate Dunning letter spool. Then send to email address which is maintained in Customer master data.

      Author's profile photo Erico Mattos
      Erico Mattos

      Very nice!

       

      Thanks!

      Author's profile photo Devi Giri
      Devi Giri

      Hi Julie,

       

      Very well written document!  Have you implemented automating the Dunning outputs?  Currently we have configured to schedule Dunning job daily in the background that will print.  However we have a requirement to automate the Dunning output to Print And/or Fax And/or Email to customers.  Our ABAP developer is trying to enhance user exit F150D001, however unable to achieve the requirement we have.  Any suggestions/guidance you can provide will be helpful.

       

      Thank you in advance,

      Devi

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Hi Devi,

      We don't implement automating for outputs, we customize one program to run manually.

      You can create a new thread in forum to get the help.

      Thank you for your reading.

      Julie

      Author's profile photo Sattaiah Gundu
      Sattaiah Gundu

      Hi Julie,

       

      Really very good work. GREAT

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you so much Sattaiah!

      Author's profile photo Shobhnath Singh
      Shobhnath Singh

      Hi Julie,

       

      Well written docucments.

       

      very nice Julie..

       

      Thanks,

      Shobhnath

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you for you comment Shobhnath!

      Author's profile photo Shobhnath Singh
      Shobhnath Singh

      Its my pleasure Julie

      Author's profile photo Former Member
      Former Member

      Hi julie

      great job

      i must appreciate your work its really helpful

       

      Thanks 

      Mohit

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you very much Mohit!

      Author's profile photo Former Member
      Former Member

      Good Resource for All. Many Thanks.

       

      Best Regards,

      Naresh K.

      Author's profile photo Former Member
      Former Member

      Hi Julie

       

      I am new to SAP Community, it is really good material for beginners.

      Thanks

       

      Wajahat

      Author's profile photo Former Member
      Former Member

      Hi Julie,

       

      It is really wonderful document and useful to many of the FI consultants who is going to implement Dunning.

       

      Thanks

      Aditya

      Author's profile photo Former Member
      Former Member

      Good Explanation.. !

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank all for  your comment!

      Author's profile photo Former Member
      Former Member

      Hi Julie,

      Really great work done and this will help for me a lot because am new to this community. I want to ask you to share how exactly balances of vendor and customer would be done, Can you please send me with this kind of document if you don't mine.

       

      Regards,

      Surya

      Author's profile photo Former Member
      Former Member

      Hi Julie,

      Good Document with Detail Explanation.

      Author's profile photo Shihab MS
      Shihab MS

      Good Work...........

      Author's profile photo Ranu Eugene
      Ranu Eugene

      Hi Julie,

      Very nice and detailed document.

      It is very helpful Doc.

       

      Thanks For Sharing.

      Keep up the Good Work .

       

      Best of luck.

       

       

      Regards

      Eugene.

      Author's profile photo Former Member
      Former Member

      Very descriptive and well written document. Good job and thank you for posting

      Author's profile photo Former Member
      Former Member

      Hi Julie,

      Thanks for sharing the configuration with screen shots; makes it a lot easier for everyone to understand.

       

       

      Thanks again,

      Jay

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you for you comment, Jay!

      Have a good day!

      Author's profile photo Former Member
      Former Member

      Thanks Julie, you as well!

      Author's profile photo Lakshmi Sama
      Lakshmi Sama

      Hello Julie,

       

      Nice document. Thanks for sharing your knowledge and keep sharing

       

      Thanks & Regards,

      Lakshmi S

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Many thanks, Lakshmi!

       

      Julie

      Author's profile photo Former Member
      Former Member

      Very Informative!

       

      Thanks Julie. Keep Sharing

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you for your reading

      Author's profile photo Former Member
      Former Member

      Hi Julie,

       

      That was really helpful and informative. I look forward to also digesting your other work.

      Author's profile photo Rohtas Sharma
      Rohtas Sharma

      Hi Julie

      Really helpful brief document...

       

       

      Thanks

      Author's profile photo Former Member
      Former Member

      Hi Julie,

      This document is very detail . I'm studying it now. Thank you for your sharing.

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you very much for you reading, guy!

      Hope you always keep passion to SAP...

       

      Regards,

      Julie

      Author's profile photo Former Member
      Former Member

      Hi Julie, The document is very helpful.

      Author's profile photo Former Member
      Former Member

      Hi Julie,

       

      Thanks for sharing this document. very helpfull.

       

      I have one question that I could not find in the document. Is it possible in SAP to send a dunning letter with all the invoices included so not only the past due items. At this moment the statement contains only the 1 day past due invoices and we want to add the 0 days (today) also to the statement.

      Author's profile photo Former Member
      Former Member

      Hi Julie,

       

      It's is very good document & self explanatory...

       

      Thank for utilizing more time on this documentation

       

      Regards,

      Tirumala

      Author's profile photo Former Member
      Former Member

      Very Nice Jullie, Did as you have mentioned,

       

      Its showing as Dunning Job ...... -1 was scheduled successfully

       

      but not getting output in SP01.

       

      What can be the error

      Author's profile photo Former Member
      Former Member

      Hi Julie,

      very helpful document, thanks a lot for sharing

       

      Regards,

      Sanja

      Author's profile photo Former Member
      Former Member

      Hi Julie

      Really good configuration document.

      Many many thanks for sharing.It will help the beginners.

      Keep on sharing and God bless U.

       

      Soumya Ranjan

      Author's profile photo Sattaiah Gundu
      Sattaiah Gundu

      Hi Julie,

       

      Really its good.

       

      Thanks & Regards

      Sattaiah Gundu

      Author's profile photo Basappa Allannavar
      Basappa Allannavar

      Hello,

       

      Very useful.

       

      Regards,

      Basappa

      Author's profile photo Nagabushan Reddy
      Nagabushan Reddy

      Hi Julie,

       

      Thanks for the dunning steps, they are great.

       

      Where is the different language document? you did not attach here, can pl email me? bushanreddy@gmail.com

       

      Thanks

      Bushan

      Author's profile photo Former Member
      Former Member

      Hello Julie

       

      Very nicely step by step explanation of the Dunning process.

       

      Thanks

      Author's profile photo Former Member
      Former Member

      very clear all steps about dunning

      Author's profile photo Miguel Lopes Silva
      Miguel Lopes Silva

      Hi,

      Anyone can tell if it is possible to automatically post the same interest during the dunning procedure.

       

      Thank you in advance.

      Author's profile photo Former Member
      Former Member

      Hi Julie,

       

          Very detail oriented document. Good job!!

       

      Regards,

      Syrus Hossain

      Author's profile photo srilatha o
      srilatha o

      Hi Julie,


      Good, its is very detail and clear document . good job

      Author's profile photo Former Member
      Former Member

      Hi Julie,

       

      Its Nice Document it's very helpful

       

       

      Best Regards,

      Chand

      Author's profile photo Sharad Vishnoi
      Sharad Vishnoi

      Hi Julie,

       

      Very well written document.

       

      If you can update whether, Dunning amount can be picked in the Invoice of the next month. As per project requirement, on every invoice, system should check the penalty/dunning amount and the same should be printed on to the invoice.

       

      regards,

      Sharad

      Author's profile photo Praful Jain
      Praful Jain

      Very Good Explanation

      Author's profile photo Former Member
      Former Member

      Hi Julie

        The information you posted is really good and explanatory. The only Problem I see here is the Assignment of Dunning Procedure to Company Code. You mentioned T-Code being OBVU which is wrong I checked it twice. the only T-Code I could find to assign Dunning Procedure to Company Code is F8R2. Kindly Check. There is also an option to assign Company Code to Dunning Procedure under FBMP itself where it asks you to create a new Company Code which is nothing but assignment only. Kindly reply if you find any discrepancy in my statement.

       

      Regards

      Sudeep

      Author's profile photo Steve Oswald
      Steve Oswald

      Julie,

      Very informative and helpful article. Thank you so much!

      I do have a question regarding the interaction between Dunning Interval and Days in arrears.

      The company I work for is moving toward implementation, and they are concerned about letters going out too soon, based on invoice due dates and dunning periods.

      Our current configuration is set with a Dunning Interval of 21 days, and Days in arrears of 30, 51, 72 and 93 for the four dunning levels.

      Could you give an example of when Dunning letters would be produced based on the following configuration:

      Payment Terms:  Due by end of Next Month
      Invoice Date:  6/1/2016
      Dunning Date:  10/20/2016

      No payments in between invoice and Dunning Date.

      The way that I read the configuration, the invoice on 6/1/2016 is late on 8/1/2016, and so the letters would be generated on 8/30/2016, 9/21/2016, 10/12/2016, and then 11/2/2016.

      Do those dates sound right?

       

      Thank you!
      Steve Oswald

      Author's profile photo Former Member
      Former Member

       

      Hi All,

      thanks for your help.

      I have a problem: dunning date and level are not updated in line items after run of dunning procedure; tables MNHK and MNHD, however, are updated.

       

      Can you help, please?

       

      Thks in advance.

       

      Michele.

       

      Author's profile photo Former Member
      Former Member

       

      Hi All,

       

      sorry, I didn't run the print! Now it's working.

       

      Thanks,

      Michele.

      Author's profile photo SASMITA PALLAI
      SASMITA PALLAI

      Understandable!