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Project ID:
Title:
Status:
BDAR2160
Accounting for Bad Debts and Writeoffs
Release:
Business Owner:
Team:
Author:
Data Created:
Created By:
Client Organization
This document requires pertains to the following components of the client organization:
Versioning
The following document versions have been released:
Version
Date
Description
Revised By
Approvals
This document requires the following approval signatures:
Name
Title
Signature
Date
Attachments
Notes
v1.0
Contents
1.
Document Details.....................................................................................................4
1.1
Overview....................................................................................................................................... 4
1.2
Process Model............................................................................................................................... 5
1.3
Process Steps............................................................................................................................. 13
1.4
1.5
Requirements.............................................................................................................................. 23
1.6
2.
Organizational Change...........................................................................................25
2.1
2.2
Business Benefits........................................................................................................................ 26
2.3
Business Realization................................................................................................................... 27
2.4
2.5
Enablers...................................................................................................................................... 28
3.
Design.....................................................................................................................29
3.1
3.2
Integration Considerations........................................................................................................... 33
3.3
Application GAPs......................................................................................................................... 34
3.4
3.5
4.
4.1
5.
5.1
Testing.....................................................................................................................36
Scenarios.................................................................................................................................... 36
Training...................................................................................................................37
Business Process Procedures..................................................................................................... 37
v1.0
1.
Document Details
1.1 Overview
This chapter identifies the document and the business environment to which it relates, describes the contents
of the document, and states its purpose.
Summary
Description
This document describes the system currently used by CLIENT to write-off bad
debts and accounting for bankruptcies. The freight and non-freight operations have
different procedures and this document details the standard procedures to be used
in SAP.
Triggers
Dependencies
v1.0
D e f e r r e d R e c e iv a b le s - R e f e r r e d t o C o lle c t io n A g e n c y / L e g a l
D e p a rtm e n t
In fo rm e d o f th e
d e c is io n t o
m o v e c u s to m e r
acco unt /
in v o ic e t o
d e fe r re d
C o m m e r c ia l
A R D ept
D e t e r m in e t h a t t h e
r e c e iv a b le s h o u ld b e
d e fe r r e d ( c o u ld b e a t
a n y tim e d u r in g t h e
tr a c in g p r o c e s s )
Is th e c u s to m e r
a f r e ig h t
c u s o tm e r?
Y es
D is c u s s
com m e
c o lle c t ib
c h a rg e
D e t e r m in e if t h e
in v o ic e s h o u ld b e
r e v e r s e d ( c le a r e d ) c o r r e c t io n o f e r r o r ;
c h a r g e b a c k a g a in s t
s a le s
R e s p o n d b a c k to
A R d e p t w it h in 5
b u s in e s s d a y s t o
s to p th e d e fe rre d
r e c e iv a b le p r o c e s s
H a s C o m m e r c ia l
r e s p o n d e d w i t h in
5 b u s in e s s d a y s
s it u a t io n w it h
r c i a l. A s s e s s
ilit y o f ty p e o f
(d e m u rra g e )
D id
C o m m e r c ia l
a g re e to d e fe r
Y es
N o
D o n o t s e n d to
c o lle c t io n
a g e n c y / le g a l
de pt
N o
S e t d u n n in g
b lo c k a t th e
c u s to m e r le v e l
N o
Y es
Is th e
r e c e iv a b le >
$ 2 5 ,0 0 0 o r a
m is h a p
Y es
Y es
N o
N o
Is th e
r e c e iv a b le >
$1 00
P aym ent
A p p lic a t io n ( g r o s s
p a y m e n t a g a in s t
c u s to m e r a c c o u n t;
c o m m is s io n
expense)
N o
R e v ie w o n - lin e t h e
p ro g re s s o f
c o l le c t io n a g e n c y /
le g a l d e p t o n a
q u a r t e r ly b a s is
D id C P R
r e c e iv e
chequ es?
N o
W rite - o ff re c e iv a b le
Y es
C o lle c t io n
A gency
C r e d it D e p t
S end cheque/
le t t e r in d i c a t in g
s t a t u s & in v o i c e
f o r c o m m is s io n
R e c e iv e
c u s to m e r
a c c o u n t / ite m
C a n c e l c r e d it
Le gal D ept
L a s t S a v e d : J u ly 1 0 , 1 9 9 7
d r a w in g 2
1 1 :5 9 A M
A re th e re a n y o th e r
c la im s o u t s t a n d in g
fo r th is c u s to m e r ?
R e c e iv e
c u s to m e r
a c c o u n t / it e m
Y es
C P R a il P r o je c t
P age 1 of 1
v1.0
D e f e r r e d R e c e iv a b le s - R e f e r r e d t o C o lle c t io n A g e n c y / L e g a l
D e p a rtm e n t
C o m m e r c ia l
A R D ept
T a k e a c tio n o n
a c c o u n ts th a t th e
c o lle c t io n a g e n c y
h a s n o t b e e n a b le
t o g e t r e s u lt s
I s t h is a c c o u n t t o b e
s e n d to a n o th e r
c o l le c t io n a g e n c y ?
N o
I s t h is a c c o u n t t o
b e fo rw a r d e d to
t h e c o lle c t io n
a g e n c y le g a l
d e p t?
N o
I s t h is
a c c o u n t to
b e fo rw a rd e d
t o C P R le g a l
d e p t?
N o
Is th e
r e c e iv a b le
$2 50 o r
le s s ?
Y es
Y e s
Y es
Y e s
S h a d o w in d ic a t e s n e x t s t e p s r e q u ir e d .
W r it e - o f f r e c e iv a b le
N o
Is th e
r e c e iv a b le >
$2 5 0 a nd <
$ 5 0 ,0 0 0 ?
N o
A s s is ta n t
C o n t r o lle r
a p p r o v e w r it e o ff
Y es
J
M a nag e r
a p p r o v e w r it e - o f f
J
W r ite - o ff r e c e iv a b le
C o lle c t io n
A gency
C r e d it D e p t
L a s t S a v e d : J u ly 1 0 , 1 9 9 7
d r a w in g 3
1 2 :0 0 P M
C P R a il P r o je c t
P ag e 1 o f 1
v1.0
D e fe r r e d R e c e iv a b le s - B a n k r u p t c y
C u s to m e r
C u s to m e r Is in
fin a n c ia l
d if f i c u lt y
AR D ept
C u s t o m e r is in
fin a n c ia l
d if f i c u lt y
Legal D ept
T ru s te e /
R e c e iv e r
C u s t o m e r is in
fin a n c ia l
d if f i c u lt y
C u s t o m e r is in
fin a n c ia l
d if f i c u lt y
C r e d it D e p t
Is th e c u s to m e r
b a n k ru p t?
N o
Y es
H a s th e c u s to m e r
a p p lie d fo r A s s ig n m e n t
in B a n k r u p t c y
( p ro p o s a l) o r C h p . 1 1
in U S A ?
Yes
N o
A s s e s s th e
s itu a tio n to
d e te r m i n e if
c r e d it s h o u ld
b e c a n c e lle d
D o not cancel
c r e d it
C ancel
c r e d it
H a s th e
c u s t o m e r f ile d
under C C A A ?
Y es
C a n c e l c r e d it
R e v ie w c r e d it.
U p d a t e if
r e q u ir e d .
B lo c k b illin g
N o
L a s t S a v e d : J u ly 1 0 , 1 9 9 7
d r a w in g 4
1 2 :0 0 P M
C P R a il P r o je c t
Page 1 of 1
v1.0
D e fe r r e d R e c e iv a b le s - B a n k r u p tc y
C u s to m e r
A R D ept
Lega l D ept
T ru s te e
C r e d it D e p t
H a s le t t e r fr o m
tru s te e b e e n
r e c e iv e d ?
Y e s
Is C P R a
s e c u re d
c r e d it o r
N o
N o
D o e s th e
c u s to m e r h a v e
a n y o u t s t a n d in g
r e c e iv a b le s ?
Y e s
N o
L a s t S a v e d : J u ly 1 0 , 1 9 9 7
d ra w in g 5
P r o v id e f o r , if
n o t a lr e a d y , a n d
c o n t in u e to
tra c e
Y e s
W r ite o f f e n t ir e
b a la n c e . W h e n
c a s h is r e c e iv e d ,
re c o r d a g a in s t b a d
d eb t e xp en se.
F o llo w u p w it h
th e tr u s te e to
d e t e r m in e w h y
C P R is n o t o n
t h e lis t
D o n o t h in g
1 2 :0 1 P M
C P R a il P r o je c t
P age 1 of 1
v1.0
D e fe r r e d R e c e iv a b le s - B a n k r u p t c y
C u s to m e r
A R D e p t
L e g a l D e p t
T r u s te e
G
C r e d it D e p t
C a n c e l c r e d it
B lo c k b illin g
H a s le t t t e r
fr o m tr u s te e
b e e n
r e c e iv e d ?
Y e s
Is C P R a
s e c u re d
c r e d ito r
Y e s
N o
N o
D o e s th e
c u s to m e r h a v e
a n y o u ts t a n d in g
r e c e iv a b le s ?
Y e s
N o
L a s t S a v e d : J u ly 1 0 , 1 9 9 7
d r a w in g 7
P r o v id e f o r , if
n o t a lr e a d y , a n d
c o n t in u e t o
tra c e
W r i te o f f e n ti r e
b a la n c e . W h e n
c a s h is r e c e iv e d ,
r e c o r d a g a in s t b a d
d e b t e x p en se .
F o llo w u p w it h
th e tru s te e to
d e t e r m in e w h y
C P R is n o t o n
t h e lis t
D o n o th in g
1 2 :0 1 P M
v1.0
D e f e r r e d R e c e iv a b le s - B a n k r u p t c y
C u s to m e r
AR D ept
Legal D ept
T ru s te e
C r e d it D e p t
Y es
S h o u ld C P R
s e ll th e
r e c e iv a b le
Y es
N o
A p p ly p a y m e n t
a n d w r ite o ff th e
r e m a in in g
b a la n c e
R e c e iv e c a s h
In d ic a te th a t
r e c e iv a b l e is
d e fe r re d a n d
1 0 0 % p r o v id e d
fo r. C o n tin u e to
tr a c e .
R e c e iv e le tte r
fr o m tr u s te e /
r e c e iv e r o n t h e
r e s u lt s o f t h e
p ro p o s a l
W a s th e
p ro p o s a l
a c c e p te d
Y es
N o
N o
L a s t S a v e d : J u ly 1 0 , 1 9 9 7
d r a w in g 8
1 2 :0 2 P M
S h o u ld C P R
s e ll th e
r e c e iv a b l e
N e g o t ia te d lo n g te rm p a y m e n t
a g re e m e n t
W r it e - o ff r e c e iv a b le
C P R a il P r o je c t
P age 1 of 1
10
v1.0
D e fe r r e d R e c e iv a b le s - N e g o tia te d L o n g - te r m P a y m e n t A g r e e m e n t s
C u s to m e r
A R D ept
C a ll to in fo r m
C P R c o ll e c t i io n
s p e c ia lis t th a t
cannot pay.
M a k e a n o ffe r
w it h c r e d it
m anager
F r o m 'D e f e r r e d
B a n k ru p tc y '
I
M ake
r e c o m m e n d a t io
n a s to w h e th e r
c r e d it s h o u ld b e
c a n c e ll e d
A ssess w hat
c u s to m e r c a n
pay
Is th e b a la n c e to
b e d e fe r r e d <
$ 1 0 , 0 0 0 a n d w i ll
b e p a id in 6
m o n th s .
Y es
C o lle c t io n
s p e c ia lis t
m a k e s d e c is io n
to c a n c e l c r e d it
U p d a te
c u s to m e r
m a s te r fo r
tr a c in g te r m s
a n d p a y m e n ts
S e n d le tte r to
c o n fir m .
T e m p la te s to b e
d e v e lo p e d b y
le g a l
d e p a r tm e n t.
S ig n th e le tte r
a n d r e tu r n to
C PR
In fo r m m a n a g e r
o f d e c is io n
P u t in c u s to m e r
file
N o
M anager
m akes
d e c is io n
S h o u ld th e
le g a l d e p t b e
in v o lv e d ?
N o tifie d o f
c u s to m e r
p ro p o s a l
C r e d it D e p t
R e c e iv e c a s h . N o b a n k r u p tc y p r o c e s s ; t r a c in g
p r o c e s s . Y e s - c a s h r e c e ip t s
a n d p a y m e n t a p p lic a tio n
p ro ce s s
No
P e r f o r m c r e d it
r e v ie w f o r in p u t
o n th e d e c is io n
Y es
N o tifie d o f
c u s to m e r
p ro p o s a l
C o m m e r c ia l
P r o v id e in p u t
o n th e d e c is io n
In fo r m
C o m m e r c ia l o f
d e c is io n
Legal D ept
W r ite le tte r
T ru s te e
L a s t S a v e d : J u ly 1 0 , 1 9 9 7
d r a w in g 9
1 2 :0 2 P M
C P R a il P r o je c t
Page 1 of 1
11
v1.0
W r ite -O ffs
AR D ept
C re a te w rite o ff e n try
C o m m e r c ia l
L a s t S a v e d : J u ly 1 0 , 1 9 9 7
d r a w in g 1 1
1 2 :0 3 P M
C P R a il P r o je c t
P age 1 of 1
12
v1.0
Application
TCode
Menu Path
Current Process
The current process for accounting for bad debts and writeoffs are documented below. These processes
have been standardized and are illustrated in a process flowchart after the description of the current process.
The impact of the new standardized processes on SAP design are described in the previous section.
Description
Non-Freight Treatment
Freight Treatment
Standard Process
same as non-freight.
Reduced Settlements
Outstanding Waived for
Business Reasons
Currently in non-freight,
reduced settlements and
outstanding waived
items for business
reasons are recorded as
a bad debt (presumably
to the appropriate cost
center). Should these
write-offs be coded back
13
v1.0
Description
Non-Freight Treatment
Freight Treatment
Standard Process
against revenue / costs
that are being recovered;
thereby moving these
costs that are due
operational decision
above the line (person
responsible for the
decision will be
evaluated on why the
initial item had to be
changed)?
14
v1.0
Description
Non-Freight Treatment
Freight Treatment
Standard Process
DR. Cash
DR. Allowance for Dbtfl
Acct
CR. Bad Debt Expense
CR. Customer Account
15
v1.0
Description
Non-Freight Treatment
Freight Treatment
Standard Process
industry specific (set a
specific $ allowance for
historically high risk
industry groups)
items with collection
agencies or legal (100%
allowance for items
referred)
16
v1.0
Description
Non-Freight Treatment
Freight Treatment
Standard Process
the receivable is greater
than $250 and less than
$5,001, then the
managers approval is
required. If the receivable
is > $5,000 and <
$250,000, then the
Directors approval is
required. If > $250,000 the
Comptrollers approval is
required.
business decision to writeoff the receivable. This
may occur if the operations
/ engineering/ commercial
cannot substantiate the
charges or have made the
decision to reverse the
charges as a gesture of
good faith (the receivable
is due from a heavy
volume/CURRENCY
customer).
negotiated settlements
bankruptcies if CLIENT is
not a secured creditor.
The basis of this decision
is that CLIENT does not
trace bankrupt accounts
and technically the
creditors do not receive
much.
We do trace bankrupts
depending on
circumstances.
Where does the cost go
to?
By making the approval
limits higher than in the
current process, managers
can concentrate on those
receivables that require
their attention. To monitor
the receivables being
written-off, a report will be
created in SAP in the
format of a continuity
schedule.
17
v1.0
Description
Non-Freight Treatment
Freight Treatment
Standard Process
The accounting entries for
a write-off are:
DR. Bad Debt Exp - Writeoff
CR. Customer Account
Accounting entries for tax
recovery are taken at time
of write-off IF a reserve is
not created for the item. If
a reserve is created then
recovery takes place when
the reserve is removed.
If a written-off amount is
recovered, then
DR. Cash
CR. Bad Debt Exp - Writeoff
If write-off included taxes
then recovery must reverse
that condition based on
tax rate in effect on original
invoice.
Referral to a
Collection Agency /
Legal Department
Collection Specialist
outlines a plan of
action based on
circumstances
surrounding each
case
Plan is reviewed for
approval at appropriate
level based on policy
guidelines
Commercial is advised
of plan and given time
to comment, object, etc.
Companys decision is
relayed to the customer
If situation is still not
18
v1.0
Description
Non-Freight Treatment
Freight Treatment
Standard Process
We monitor results
Process item based on
results of agencys
efforts
Pay out fees for the
service as required.
The item remains in
A/R for the duration but
is classified as type 6
once given to the
agency or legal.
19
v1.0
Description
Non-Freight Treatment
Freight Treatment
Standard Process
Collection Specialist
obtains
documentation to
confirm bankruptcy
status
If the customer is
bankrupt and has not
filed under government
protection, the situation
will need to be assessed
to determine if credit
should be cancelled. In
other words the decision
to cancel or maintain
credit is dependent on
the insolvency protection
sought and obtained
through COUNTRY and
COUNTRY laws. For
example, CCAA status is
generally accompanied
by a court order forcing
conditions, including
credit, upon suppliers.
Amounts subsequently
recovered from accounts
previously written-off (or
written-down) should be
credited to the allowance for
doubtful account. Also
where a bad debt previously
written-off is recovered,
7/107th of the amount
recovered must be added to
the G.S.T. payable.
To write-off accounts
(Uncollectible)
Dr. Allowance for Doubtful
accounts R09AC3
Dr. GST Payable
R511C3
Cr. Accounts Receivable
C/R07DA3
Bankruptcies
A debtor (either an
individual or firm) faces
bankruptcy, when it is
financially insolvent , i.e. it
has liabilities in excess of
$1,000 and is unable to
meet its debt obligation as
they come due. An insolvent
debtor may voluntarily file
for bankruptcy by making an
assignment, or its
creditor(s) may force the
insolvent debtor into
bankruptcy by petition
through the courts for a
receiving order.
An alternative to bankruptcy
is when an insolvent debtor
makes a proposal (or
proposal for arrangement).
This allows the debtor to
extend time for repayment
of some or all of the debt.
When one of the above
mentioned situations occurs,
a Trustee is assigned to the
case. The Trustee has the
ability to seize, foreclose, or
repossess the secured
20
v1.0
Description
Non-Freight Treatment
Freight Treatment
Standard Process
Filing Procedures
All bankruptcies over
$500.00 are handled by the
Revenue Accounting
Department in Montreal. For
insolvent debtors with
balances less than $500.00,
please submit for write-off
(see write-off procedures).
When you are faced with the
above mentioned situation
during the collection
process, you must:
Obtain the name and
address of the Trustee
handling the bankruptcy
including the list of secured
and unsecured creditors
Ensure that CLIENT
Company is listed among
the creditors
Contact the Supervisor
Credit in the Revenue
Accounting Department to
ensure they have a record
of the bankruptcy in
question. If they have no
record obtain all pertinent
documentation from the
Trustee and forward to the
Supervisor Credit
Forward to the Supervisor
Credit, a statement of
account , listing all bill(s)
outstanding including bill(s)
which may have been
previously written-off,
ensuring the statement is in
balance with our records,
and it includes copies of all
the bill(s) in question
monitor files as
required depending on
circumstances and
chances of recovery.
Accounting
CR appropriate agents
suspense, etc
DR appropriate bad
debt expense
DR appropriate
deferred accts
collectible
CR appropriate
bankruptcy provision
Recovery of taxes
(GST, PST, HST) is
taken only when no
provision is established
or when the provision
taken is reduced to
zero.
When policy indicates
item should be
removed from deferred
accounts collectible CR
that account and DR
bankruptcy provision as
required
21
v1.0
Description
Non-Freight Treatment
Freight Treatment
Once confirmation is
received from the
Supervisor Credit, they will
perform the following
Journal entry for the amount
referred to them:
Standard Process
correct question is Will
CLIENT have a high
probability of recovery.
This occurs when we are a
secured or preferred
creditor or when as an
unsecured creditor, a
proposal , intent to file a
proposal or a Chapter 11
filing occurs.
22
v1.0
Inputs
Outputs
Customers
1.5 Requirements
This chapter lists all user requirement specifications that will be met through the design and construction of
this process / process variant.
Project ID Title
Title:
Description:
Dependencies:
Technical
Review:
Title:
Description:
Dependencies:
Technical
Review:
Category
Release
Geo(s)
Application
Status
Select Value
Select Value
23
v1.0
Type
Opportunities
24
v1.0
2.
Organizational Change
This chapter identifies anticipated changes to the organization and related benefit resulting from the
implementation of this process / process variant.
Title
Status
Type
Select Value
Program
Business
Related
Accountability Accountability BEN
Select Value
Title:
Description:
Title:
Description:
25
v1.0
Status
Select Value
Select Value
Title:
Description:
Key Capability:
Probability
Description:
Key
Dependencies:
Title:
Description:
Key Capability:
Probability
Description:
Key
Dependencies:
Type
Occurrence
Category
Range
Probability
26
v1.0
VALUE
High
BASELINE
Value
BASELINE
Source
BENCHMARK
Client
BENCHMARK
External
Title:
Calculation
Rationale:
Key Value
Assumptions:
Title:
Calculation
Rationale:
Key Value
Assumptions:
27
v1.0
Baseline
Target
Tolerance
Business
Owner
Title:
Description:
Assumptions:
Formula:
Title:
Description:
Assumptions:
Formula:
2.5 Enablers
Related Related
BEN
OCI
Title
People
Process
Technology
People
Process
Technology
Type
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Description
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3.
Design
This chapter identified early design decisions made to support this process / process variant, anticipated
integration points with other processes / functional areas and anticipated Application GAPs / Data Standards /
Regulation and Control Objectives that will have to be addressed in the Realization Phase..
Decisions
In SAP when recording Write/offs the Posting With Clearing Transaction (F-30) will be used. The following
fields will be populated:
Document Type: Z8 Write/off
Ref. Document: Internal Document file number
Header Text: Write/off Type, e.g. BAD DEBTS, SETTLEMENT, BANKRUPTCY, etc.
Posting Key: 11
GL Account: 12900
Tax Code: Must be the appropriate tax code to recapture the tax included in the invoice(s) being written off.
Example if GST is to be recovered, i.e it was included in the invoice being written-off tax code SD would be
used.
Tax Jurisdiction: The corresponding tax jurisdiction of the invoice(s) being written-off
Text: The reason for the write-off and/or any appropriate remarks
Allocation: The SAPs Customer Master Number
Description
This section of the BDD is divided into 6 subsections:
Current Processes
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Reduced Settlements
as soon as it is known that an account is uncollectible it should be written off or written down to
its estimated realizable value. To do so prepare the write-off form (see appendix # 5) and
explanation and submit along with complete file to the Senior Collection Clerk (this excludes
accounts which are to be referred to the Law department for collection, see Referral to Law
Department procedures).
the Senior Collection Clerk will review the file and either approve for write-off and/or write down to
$1.00 and make recommendations on the write-off form and pass on to the Assistant Manager
for his/her approval. If not acceptable the Senior Collection Clerk will return the file to the
Coordinators for further handling.
the Assistant Manager will make recommendations and approve and pass on to the Manager
and/or return the file for further handling.
submit the account for write-off approval using the write-off form (see appendix # 5) to the Senior
Collection Coordinator for proper approval and/or other approvals (see Authority for write-offs)
once proper approval has been received enter the account in the on-line referral to either Dun &
Bradstreet and/or Creditel as indicated in the write-off form. A copy of the referral form must be
filed with the customers file
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forward copies of all pertinent details, including statement of account, copies of bill(s),
correspondence etc. to the collection agency to which the account was referred
process a credit entry in the AR System to remove the balance outstanding which must be equal
to the amount written-off
process a journal entry in GL System crediting account R07DA3 and debiting account R09AC3
and the proper tax account (see Bad Debts Tax Procedures)
annotate the file as having been referred to a collection agency and file in the collection agencies
section
Tax Procedures:
The Company is entitled to deduct from the G.S.T. payable, 7/107th of the amount written-off in respect to
taxable supplies on which tax has been remitted. The adjustment for bad debts must show up as part of the
adjustments on the G.S.T. return and should be included in the reporting period in which the bad debt is
written-off.
Amounts subsequently recovered from accounts previously written-off (or written-down) should be credited to
the allowance for doubtful account. Also where a bad debt previously written-off is recovered, 7/107 th of the
amount recovered must be added to the G.S.T. payable.
The business designs arise out of the standardized processes.
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enables the collection specialists to have a complete view of the customer account (ie: current receivables,
deferred receivables, and provisions made for this customer).
Decision: To provide a complete view of the customer account, any provisions made specifically to the
customer account will shown on the account. The originating invoice will then be on the same screen and
can be easily accessed.
The provision can be recorded manually or automated. Since all receivables sent to the collection agency or
legal department are deemed to be uncollectible, the dunning block field will be populated manually by the
collection specialist with the value indicating that the receivable is sent to a third party. This dunning block
field can be used to trigger the automatic recording of the provision via an ABAP program that will run on a
nightly batch.
GST is recoverable at the time when the receivable is written-off, and should not be pursued if a provision
has been created for the receivable. Only when no provision exists should taxes (GST, PST, HST, etc) be
recovered.
Decision: To reduce the number of manual entries to record the specific provision, an ABAP will be written to
perform the entries. GST will be recoverable at the time of write-off.
3. Business Design - General Bad Debts
A general provision for doubtful accounts is calculated by applying a percentage based on past experience to
the all receivables To be completed with calculation.
NOTE: From a freight perspective we have not been informed of any decision / agreement which would alter
the current method of establishing a general provision.
4. Business Design - Write Offs
Receivables will be written off when the receivable is not collected by the collection agency or legal
department or when it is determined that the customer is bankrupt and the prospects for recovery are
essentially nil.
The write-off will be processed by a group which is separate from the individuals who have authority to writeoff in order to provide control and security to the transactions. There are two ways to write off the receivable:
manual entry and clearing or automatic clearing
General Note
Current freight treatment involves separate accounts for each of the entities associated with CLIENT. Nothing
in this document suggests this will change, however, it was our understanding entity receivables would in the
future be purchased so all would be under the CLIENT entity name.
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Title
Standard Configuration
Procedural Work-Around
Report
Interface
Conversion
Enhancement
Form
Workflow
Portal
SOA Composite Application
Standard Configuration
Procedural Work-Around
Report
Interface
Conversion
Enhancement
Form
Workflow
Portal
SOA Composite Application
Title:
Description:
Resolution
Rationale:
Business
Organization
Impact:
Title:
Description:
Resolution
Rationale:
Business
Organization
Impact:
Application
RICEF
Priority
Select Value
RICEF
Complexity
Select Value
Select Value
Select Value
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Data Name
Existing Standards
Indicator
Security Considerations
Regulation ID
Regulation Name
Control Objectives
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4.
Testing
4.1 Scenarios
This chapter identifies any process scenarios that might be used to test this process / process variant for
accuracy.
Project
ID
Title
Description
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5.
Training
Title
Description
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