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Dispute Management with SAP

Financial Supply Chain

Management

14/07/2010

Priti Parikh

Employee No: 255178 priti.parikh@tcs.com

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PREFACE

This document is prepared to help SAP Consultants for better understanding of Dispute Management with SAP Financial Supply

Chain Management.

For better understanding of the concept required screenshot has been

attached. Further utmost care has been taken to make it more users friendly & ready to use.

Priti Parikh

priti.parikh@tcs.com

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Table of Contents

Module 1: Dispute Management Overview .4

1.1 What is Dispute Case .5 1.2 SAP Dispute Management Process 11

Module 2: Dispute Case Creation..12

Module 3: Analysis of Dispute Case.19

Module 4: Dispute Case resolution..20

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Module 1 Dispute Management Overview

Invoice accuracy is a key focus area for any business and an integral part of invoice accuracy is how we manage the invoice dispute

process.

There are 3 fundamental benefits of the FSCM Dispute Module that supports the business needs:-

1) Accurate overview to both Customers disputed and outstanding

invoices

2) Facilitate quick resolution of the invoice dispute 3) Ability to register record root cause Departments and Root

Cause Reason on resolved invoice disputes

Merely registering the Root Causes from a data perspective will not fix the Root Cause, but strategic correction of the root cause can only be

obtained through analysis of the root cause data registered, facilitating the prioritization of the corrective actions that need to be taken to

achieve invoice quality.

SAP Dispute Management provides following Opportunities.

Control and streamline dispute cases Improve liquidity and cash forecast

Organize and store all information and documents with respect

to dispute cases Sophisticated tracking and reporting of dispute cases

Gain information about flaws in existing processes that frequently lead to disputes

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Topic 1.1 what is Dispute Case?

A Dispute Case is business object that:

Uses descriptive attributes to summarize the information at the header level (case attributes)

Links all of the documents and objects that are relevant to resolving a dispute case in an electronic file

Can be created manually or via batch job processing when a residual AR line item is generated

Key Terms

Residual Item A document is automatically created in SAP when a

payment is received that is over or under the invoice

amount.

Partial Payment A document is automatically created in SAP when a

payment is received that is under the invoice amount and

is partial settlement of an outstanding invoice amount

Reason The reason is a dispute case attribute and provides the

cause of the dispute case.

Status The current state of processing.

Previous Status The state of processing prior to closure of the dispute case.

Category An optional field that provides a more detailed reason code

for the dispute case.

Case ID Unique SAP generated identification number for the

dispute case

Root Cause Code Reason for claim resolution status. Relationship has also

been enforced with the reason code.

Coordinator Person responsible for monitoring, coordinating and taking

responsibility for processing of the dispute case.

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Processor Person currently assigned to the processing of the dispute

case, or responsible for the next step in the dispute case resolution.

Person Responsible Person to whom the dispute case is escalated to.

Key Contents of a Dispute Case:

Case Attributes

o Includes the Cause, Root Cause Code, Category, External

Ref., Processor, Status, etc.

Case Attachments

o Any relevant document can be attached to the dispute case

Example: Proof of Delivery (PODs)

Case Notes

o Created to document activities connected to dispute cases. Include internal and external notes i.e.

Description Concluding Remarks

Case Attachments

Case Log Case Notes

Case Attributes

Case Record

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Case Log

o Displays the history of actions performed on the dispute

case including: User and time/date stamp

New value vs. Old value

Case Record (Linked objects)

o Provides links to the dispute case and structured into corresponding fields

Includes: Business Partner

o Customer number and information Disputed Objects

o Open residual AR line items Resolved Objects

o Closed AR line item from original dispute

case (Invoice) Item Assigned during Clearing

o Closed AR line items offset against the dispute case (Credit Memo)

Dispute cases can be created from the following four transactions in Financial Accounting:

Document Display Document Change Line Item List Clearing Transactions

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Integration with AR Various fields contain information that is brought in from AR. The field

mappings are shown below. All updatable fields have been synchronized between AR and Dispute Management.

DM Field AR Field Cause Reason Code AR Document Date Document Date AR Posting Date Posting Date

AR Document Number Document Number AR Item Number Item Number External Ref Assignment ID Reconciliation Period Text Store Number Reference Key 1 Chargeback Number Reference Key 2 Ext. Reason Code Reference Key 3 Payment Ref. Payment Reference Check Number Reference

Reasons for Residuals All reasons for residual line items have an SAP A/R Reason Code. A/R

Reason Codes have been synchronized with Dispute Management Reason Codes. Please see below for a list of all applicable Dispute Management Reason Codes:

Dispute Management Reason Codes 060 Advertising 085 Billing Adjustments 110 Freight 150 Mis-shipment 180 Price Protection 190 Pricing 200 Rebate 220 Returns 300 Shortages 310 Unidentified 320 Vendor Compliance

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Categories Every reason code has a level below it called Categories. Categories are

used as extension to reason codes. An example of a reason code and category relationship is Shortage (reason code) and Box-lot Shortage (Category). Relationships are encouraged but not enforced. The various Categories for disputes are listed below: SAP Standard

Dispute Management Categories 0001 Base Pricing 0002 Box-lot Shortage 0003 Concealed Shortage 0004 Defective Allowance 0005 Discounts/Promotions 0006 Early/Late Ship 0007 EDI Errors 0008 EST 0009 Expedited 0010 Fill Rate 0011 Freight 0012 Freight on Returns 0013 Games 0014 Late Submissions 0015 Meeting Convention 0016 Miscellaneous 0017 Mis-picks/substitution 0018 Mis-Shipment 0019 Non-Receipt 0020 Overshipments 0021 Past Due Invoice 0022 POD Required 0023 POS Rebate 0024 Post Audit 0025 Pricing & Quantity Variance 0026 Pricing Variance 0027 Quantity Variance 0028 Refused Shipment 0029 Rental 0030 Rental Pricing 0031 SBT 0032 Supplemental Requests 0033 Unidentified 0034 VOD 0035 Volume Rebate

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The various Status involved in Dispute Management are: Dispute Management Status

o New (10), when a dispute case is created o In Process (20), when work on a dispute case begins o Closed (30), when cash is applied against the residual a/r line item o Cancelled/Void (50), not commonly used, when a dispute is

cancelled or must be voided Claim Status (Open statuses), if the dispute case is in open the status

can manually be changed to: o Approved (22) Acceptance of the dispute claim o Denied (21) Rejection of the dispute claim o In Process (20) When the claim is still being worked on o Threshold Adjustment (23) Claim is automatically written off via

dispute management (automatic) o Settlement Write off (24) Claim is written off via reconciliation

settlement (manual) Previous Status (Closed statuses), captures the status of the dispute

case prior to closure (primary function is for the reporting of closed dispute cases):

o Approved (22) Acceptance of the dispute claim o Denied (21) Rejection of the dispute claim o Threshold Adjustment (23) Claim is automatically written off via

dispute management (automatic) o Settlement Write off (24) Claim is written off via reconciliation

settlement (manual)

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Topic 1.2 SAP Dispute Management Process

The Dispute Management process begins with receiving a dispute from a customer. During cash application a residual line item must be created. Once the residual line item is created in the system, generation of the case will begin. If a customer withdraws the dispute case the process will end there. More commonly the dispute will continue and research will begin. Depending on need the various research methods will be conducted. Next a decision must be made on whether to deny or approve the claim based on the research conducted. If the claim is denied, correspondence must be sent to the customer. If the claim is approved a credit must be issued. The final step is reporting on dispute cases based on all steps of the dispute management process.

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MODULE 2: DISPUTE CASE CREATION

Dispute cases are created from the generation of residual A/R line items

i Cash application i Internal Offsets i A/R Line Item Display

Dispute cases can be created manually from accounts receivable i At the time of residual line item creation i From the A/R line item display

Dispute cases will primarily be created via batch processing to be scheduled according to business rules

Dispute cases can be created based on residual line items resulting from the four different methods of cash application:

o One at a time o En masse FDM_AUTO_CREATE (Scheduled Batch job)

Dispute Cases on Open Residual Line Items When an open residual item occurs a dispute case must be created for the line item. There are two ways to create the dispute case; one at a time or en masse.

One at a time o Creating a dispute case on open residual line items one at a time is

best used when only one or a few line items exist. This is the only transaction that will be exercises in training since it will be the only used by end users.

Mass Creation o Creating dispute cases on open residual line items en masse is

best used when there are multiple line items that need dispute cases. This transaction will be done in the background and therefore will not be discussed further in this course.

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Creation of dispute Case via Manual Cash Application F-28 Enter the transaction by typing in F-28 in the command bar or use the menu path: Accounting Financial Accounting Accounts Receivable Document Entry Incoming Payment

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Click on Create Dispute Case button. Then Pl input Necessary inputs & dispute Case will be created when you post document

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Display Dispute Cases FBL5N or FB03 Enter the transaction by typing in FB03 in the command bar or use the menu path: Accounting Financial Accounting Accounts Receivable Account Display/Change Items Note: You can display Dispute Cases using FBL5N as well. Scenario: You need to display dispute cases.

Double Click on Line item one to Create Dispute Case

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& then Input Parameters & Dispute Case is created with unique dispute case ID

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View Dispute Case Data

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MODULE 3: Analysis of Dispute Case

Analysis to Determine Dispute Case should be approved or denied.

Key elements are

Splitting Dispute Cases Attaching Documents

Inserting Notes Changing attributes

Splitting Dispute Cases After a dispute case has already been created and analyzed a dispute case may be split for the following reasons:

Dispute case is related to more than one reason code Partial approval/denial of the claim

Attaching Documents Documents pertaining to the dispute case can be attached to the case in SAP for documentation purposes. Various types of documents can be attached such as customer claim documentation and Excel files containing research / title information.

Inserting Internal and External Notes Notes that are relevant for the dispute case can be written directly into the system. Once notes are created they will be saved in the system but changes can be made to notes but the user who entered the notes or others is the option is allowed. Dispute case notes documents the processing of a dispute case

i Description Describes why customer is disputing the item and is displayed on the claim denial correspondence

i Internal Notes For internal use only i Concluding Remark Describes claim resolution and is also displayed

on the claim denial correspondence

Change dispute case attributes Dispute case attributes can either be changed one at a time or in mass. The benefit to one at a time is for ease when inside of a single dispute case or when a low volume of dispute cases must be changed. The benefit for changing attributes in mass is for speed and efficiency when changing high volume amounts of dispute cases at a single time.

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MODULE 4 : Dispute Case Resolution

Denial Enter Reason

Select Cause Select Category

Change status to Denied Enter notes

Send Denial Correspondence

Approval Enter Reason

Select Cause Select Category

Change Status to Approved

Issue Credit Offset Credit

Write off

Enter Reason Select Cause

Select Category Change Status to Settlement write off

Issue Credit Offset Credit

There are two types of write off:

1. Automatic

Requires no work as it is done in the background 2. Manual

Write-offs due to reconciliation settlements. Reason, Cause, Category, Status = Settlement write off