Accounts Receivable (FI-AR) is the sub-ledger for what customers owe. Structurally it mirrors payables, but because the money has to be collected rather than paid, it adds two concerns of its own: credit and dunning.
How receivables arise
As with payables, there are two routes. Sales of goods and services come through SD billing; anything else is posted directly in FI.
| Route | Code | Document type | When it applies |
|---|---|---|---|
| SD billing | VF01 | RV | Normal sales involving an order and a delivery |
| Direct FI posting | FB70 | DR | Proceeds from an asset sale, miscellaneous income, anything outside the sales process |
Clearing
Clearing is the core activity in FI-AR: when money arrives, working out which invoices it settles and closing those open items.
Clearing stamps the items with a clearing document number and date and removes them from the open items list. The receivables balance is always the sum of what remains open.
| Code | Use |
|---|---|
| F-28 | Post an incoming payment and clear in one step |
| F-32 | Clear an already posted payment against invoices |
| FBL5N | Customer line item display, switching between open and cleared |
| FBRA | Reset a clearing |
When the amount does not match
Payments rarely match invoices exactly. Bank charges get deducted, a discount is taken, or only part is paid. SAP offers three ways to deal with the difference.
- Within tolerance: if the difference is inside the configured limit by amount or percentage, it is written off automatically to a P&L account and the item clears. This is how bank charges are usually absorbed.
- Partial clearing: only the amount received is applied, and the original item stays open for the remainder. History against each invoice stays easy to follow.
- Residual item: the original item is closed in full and a new open item is created for the difference. Managing what is left becomes simpler, but the link to the original invoice weakens.
Credit management
Credit management compares a customer credit limit against current receivables and open orders, and stops transactions that would exceed it. The check happens in SD at order entry, so it depends on FI and SD being integrated.
Orders over the limit are blocked automatically and cannot progress to delivery or billing until a credit controller reviews and releases them. Blocked orders are listed with VKM1 and similar transactions.
Dunning
Dunning sends reminders to customers who have not paid by the due date, escalating through levels as the debt ages.
| Level | Days overdue | Tone | Additional action |
|---|---|---|---|
| 1 | 7 | Request for confirmation of payment | โ |
| 2 | 21 | Reminder | โ |
| 3 | 45 | Final notice | Interest on arrears calculated |
| 4 | 60 | Notice of legal action | Trading suspended, credit blocked |
Dunning runs through F150. A dunning procedure assigned on the customer master controls how far escalation goes and how often runs may occur. Customers who should not be dunned are given a dunning block.
Each run updates the dunning level and last dunned date on the customer master, so the following run automatically selects the next letter up the ladder.