Accounts Receivable: Invoices, Incoming Payments and Dunning

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Receivables cheat sheet

• Billing invoices: terms from sales area data; AR invoices: terms from company code data.
• Partial payment: invoice and payment stay open. Residual: both cleared, new item for the rest.
• Use one agreed method for short payments, with reason codes.
• Tolerance = lower of amount and percentage; employee and customer groups both apply.
• Dunning procedure: levels (up to nine), interval, grace days, minimum amount, charges.
• Edit the dunning proposal before printing; block disputed items, not whole customers.
• Clear unapplied cash daily; it distorts aging, dunning and DSO.
• DSO = receivables ÷ credit sales × days; agree the formula before comparing.
• Test with the real clerk tolerance group and date-designed dunning data.