SAP Receivables Management Glossary
- A/P credit memo
A posting that partially or fully reduces the balance of payables.
- A/P invoice
An internal document that creates a journal entry and updates the inventory if a goods receipt PO has not been issued. This document cannot be changed or deleted once it has been saved in SAP Business One.
- A/R invoice and payment
A transaction used for cash sales to one-time customers. The customer has to pay the full invoice amount immediately.
- A/R reserve invoice
A request for payment before the delivery of items to a customer. A reserve invoice is used when a company is concerned about the credit worthiness of its customers.
- Business Area
Business area is a separate area of operations or responsibilities of organizational units of financial accounting that is used for internal and external reporting . Different divisions of each business with in a legal entity are created as Business areas for reporting of each operational areas. So Financial statements can be created for each business area and this financial statements can be used for internal reporting purpose.
- Business Partner
A person, an organization, group of persons, or groups of organizations in which a company has a business interest.
- Collection Groups
Collection groups are groups of collection specialists that contact the customer for payment of open receivables.
- Collection Segments
Collection segments group SAP Accounts Receivable and SAP FSCM Credit Management data together by grouping company codes and credit segments into one collection segment.
- Collection Strategy
Grouping and prioritization of collection rules. For collecting receivables with component SAP Collections Management , a collection specialist’s work list is created based on a collection strategy.
- Collection Worklists
Worklists form the basis for a systematic processing of due and overdue receivables. They are created automatically based on collection strategies and are prioritized worklists for collection specialists.
The collection manager can manage the worklists of his collection group. He can assign the worklist items to the collection specialists both manually and automatically
- Collections Unit
A collection specialist contacts customers to collect due and overdue receivables using the component SAP Collections Management. The work lists for a collection group are created based on the same collection strategy.
- Collective Credit Memo
Credit memo with purchase order reference that refers to multiple purchase orders.
- Credit account
An account that allows buyers to obtain goods or services without paying for them until a later date.
- Credit Card Management
A structure that stores the information on all the credit card vouchers received by the company through incoming payments documents. This data contains the date of the receipt, the credit card voucher number, the deposit status, and so on.
- Credit checks
Credit Check is used for deciding whether a sales order should be soft blocked or not. Credit Checks will be done based on credit check rules that are updated from rules and check rule in ‘Credit Profile’ of general data of a business partner.
- Credit Limit
This indicates the maximum permissible limit that a business partner can use as credit while placing orders. Credit limit is maintained at a credit segment level.
- Credit Score
Credit score is an easy method for comparing the credit performance of all business partners. A higher credit score suggests better credit worthiness of the business partner.
A standardized range of credit scores is maintained (e.g. 0-100), and all business partners have scores within this range. The range of scores is further divided into risk classes. For example, a score of 0-30 may be given a high risk, score of 30-70 given a medium risk, and score of 70-100 given a low risk. More risk classes may be defined according to business needs.
- Credit Segment
Organizational unit of SAP Credit Management that you can define as required, for example, by product type or business area.The credit segment groups the business of a company from the view of credit assignment and control. Credit segments are required for calculating the credit limit and enable you to carry out detailed checks at business partner level. When you define a credit segment, you also decide on each currency in which all credit-relevant checks are to be carried out.
- Credit Used
Total of receivables, special G/L transactions relevant to the credit limit and outstanding order value. This is the total credit exposure in the credit segment currency. Percentage credit exposure is also given. These fields are updated from credit exposure and utilization % in ‘Credit Limit and Control’ of credit segment data of a business partner. This will be Updated as Credit Exposure on A/R side and Credit Used on FSCM side.
- Credit worthiness
The creditworthiness of a business partner provides information on the business partner’s payment history and influences the selection of activities for dunning and/or returns and also the calculation of charges. Various different business transactions, such as returns, dunning notices, and write-offs update the creditworthiness in the system automatically. You can also transfer a credit worthiness record from external systems or manually.
- Currency Code
A code or symbol that identifies a type of currency. In SAP Business One, a symbol or combination of alphanumeric characters and symbols may also be used, for example, US$.
- Customer (A/R and S/D)
A business partner from whom receivables are due for, among other things, goods delivered, services performed and rights transferred, and/or a business relationship exists, involving the issue of goods or services. Used for grant sponsors, employees for direct benefit billing and county appropriations.
- Customer Contact
Customer contact is recorded despite successful or unsuccessful contact with the customer and can record in both inbound and outbound calls.
- Customer Receivables
The amounts owed that have not yet been paid by a customer.
- Customer-Disputed Amount
Individual or total amount that a customer has disputed with reference to invoices, credit memos, and over payments.
- Debit Memorandum
A document given to an account holder by an enterprise which states that the account balance has been decreased as a result of factors other than a cash withdrawal or a written check being cashed in. Debit memorandums can arise as a result of bank service charges or bounced check fees. A debit memorandum is typically sent out to bank customers along with their monthly bank statements. Also known as a “debit memo”, for short. It is the adjustment procedure that occurs following a business’s valid complaint against another business.
- Dispute Case
Describes and supports the resolution process for receivables-related disputes with a business partner. A dispute case can arise in the following cases, for example:
• Outstanding payment
• Payment that cannot be assigned
- Dispute Case Processing
Used to process receivables-related dispute cases. Together with the process integration, Dispute Case Processing represents the component SAP Dispute Management in an accounting component, for example, Accounts Receivable Accounting
- Dunning (A/R)
Provides the ability to evaluate accounts receivable and send notifications of invoices that are past due. Dunning incorporates many parameters, but normally the length of time an invoice is overdue is key to determining which notices to send.
- Financial Management Area
SAP defines a financial management area in R/3 as the organizational unit within an institution used to represent budgeted and actual revenues and expenses.
- Payment Behavior
A payment behavior summarizes the credit-relevant data used for calculating the score and the credit limit in SAP Credit Management by business partner and credit segment.
- Processing Receivables
This function provides extensive options for displaying and processing the receivables-related data of a customer. It shows the open invoices, incoming payments, promises to pay, dispute cases, customer contacts, and re-submissions. If you configure your collection strategy accordingly, you can use the promise to pay as a criterion for creating the worklist.
- Profit Center
A profit center is an organizational unit in accounting that reflects a management-oriented structure of the organization for the purpose of internal control.
- Promise to pay
Documents a customer’s agreement to pay an invoice. Each promise to pay is assigned to exactly one invoice and there can only be one promise to pay for each invoice that is not confirmed.
A resubmission is created when the collection specialist wants to set a reminder to follow up with the customer on a particular date.
- Risk Class
The system can determine the risk class of a business partner from the partner’s risks score automatically or you can define it manually. You can also change the risk class determined automatically in the business partner master data record. In this case, the manual change overwrites the risk class determined automatically. Based on the risk score, the risk class is determined.
- Risk Score
The possibility of a loss on which a claim may be filed. The score can be calculated automatically or you can enter it manually. Automatically, the score is calculated by the system if you have defined a formula for calculating the score in the rule concerned. With the help of this risk score, we can get an idea about the customer credit worthiness.
- SAP Biller Direct
SAP Biller Direct allows you to issue a bill electronically, which is sent to the customer by a link to a server provided by the biller, or by attaching the file directly as an e-mail attachment. SAP Biller Direct enables you to conduct Web-based invoice presentment, account display, and payment processing.
- SAP Collections Management
SAP Collections Management allows you to evaluate, identify, split cost components, and prioritize accounts from a risk management and customer relations point of view. Furthermore, it supports proactive processing of receivables and enables process optimization and automation for large numbers of open items.
- SAP Credit Management
SAP Credit Management provides tools to evaluate the creditworthiness of customers using internal rating policies and external credit data, and enables quick and consistent credit decisions.
Organizations can use SAP Credit Management to reduce delays in payments, non-payments, and process costs.
- SAP Dispute Management
SAP Dispute Management allows you to resolve disagreements between the vendor and the customer quickly and efficiently, taking into account the customer’s existing financial obligations. It allows you to analyze the problem and the reasons for the outstanding amount, and provides a starting point for an organization to establish a quality management concept, reduce DSO, and increase customer satisfaction.
- SAP Receivables Management (Formerly FSCM)
SAP Receivables Management (Formerly FSCM) is therefore an integrated approach to increasing the transparency, control, and supervision of all processes linked to the flow of capital, the result of which is (for example) a reduction of working capital, an increase in cash flow projection, and a reduction of process costs.
The sequence and evaluation of conditions needed to complete a business process. This is an electronic function monitored by the workflow manager within SAP.