Automatically Create Dispute Cases for Customer Payments Received Through the Lockbox

  • by Chirag Chokshi, Associate Director, SAP Financials, SITA Corp.
  • April 27, 2011
Learn the requisite configuration, master data setup, and transactions to enhance automation of creating a dispute case for lockbox data processed for incoming payments from customers.
Key Concept
Reason codes are keys that explain the difference between invoice amount and payment amount. The dispute case is the central object in SAP Collections and Dispute Management. Lockbox is a popular mechanism in the US and Canada for customer payments, whereas European countries use Electronic Bank Statements (EBS).

Imagine a scenario in which company FSCM Prototype, Inc. has decided to conduct transactions such as customer payments and dispute management quickly on a mass basis in the SAP system for a customer, ABC, Inc. For these tasks, the SAP system provides various functionalities, such as Electronic Bank Statements (EBS) and lockbox for processing a payment document and a standard SAP-delivered program for creating dispute cases automatically.

Note
Payment transactions in the US and Canada are made almost exclusively in the form of checks. To process these payments quickly, banks offer lockbox services where customers can send their payments directly to the bank (lockbox). The bank deposits the checks and sends the check deposit information to the payee via electronic file transfer.

In my example FSCM Prototype, Inc. uses lockbox to manage a short payment received from ABC, Inc. FSCM Prototype, Inc. uses lockbox to manage customer payments and SAP Collections and Dispute Management to manage customer dispute cases. ABC, Inc. is one of the customers of FSCM Prototype, Inc. In this example, ABC, Inc. sends a short payment owing to a customer dispute. Payments are received in short when the amount is less than the invoice amount because the customer has a dispute and has reduced the payment by the disputed amount. With automation of mass creation of dispute cases, an organization can focus on handling and resolving disputes rather than spending time on administrative tasks such as creating dispute cases. Timely and efficient resolution of dispute cases results in improved customer satisfaction, thereby increasing revenue for an organization.

SAP provides a standard program to create dispute cases, but to create dispute cases automatically, FSCM Prototype, Inc. needs to configure it in accounts receivable (FI-AR) and SAP Collections and Dispute Management.

I’ll show you the step-by-step configuration of the FI-AR and SAP Collections and Dispute Management, the customer master data, and the business process used to create dispute cases for the check payments applied through lockbox. This article includes an example of how you can automate dispute-case creation from lockbox, and at the end of the article, I mention EBS.

Chirag Chokshi

Chirag Chokshi is associate director of SAP Financials at SITA Corp. He has worked on SAP Financials since 2001 and specializes in implementing the Financial Accounting and Controlling modules along with their integrated areas for companies in industries such as consumer products, the chemical process industry, pharmaceuticals, the public sector, and industrial machinery and component manufacturing. He has worked on various complex projects, including global rollouts, greenfield implementations, and SAP system upgrades. In addition, he has developed various pre-configured solutions with a focus on SAP Financials. 


See more by this author


Comments

6/6/2016 1:19:52 PM
Nabeel Nasir

Automatic creation of dispute case thru EBS is not possible. Please see SAP OSS Note 124655 - Non-supported electronic bank statement functions.

Thanks

Please log in to post a comment.

To learn more about subscription access to premium content, click here.