05 financialmgt scen overview en us

8/6/2019 05 FinancialMgt Scen Overview en US

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SAP Best PracticesFor Water Utilities

Scenario Overview:Customer Financial Management



¥ SAP AG 2005, Scenario Overview: Customer Financial Management/ 2

Customer Financial Management

Customer financial management contains financial transactions

and processes inherent to a water utility. They belong to theContract Accounts Receivable and Payable (FICA) ±

a subledger accounting system, which interfaces with

Financial Accounting (FI).

The preconfigured processes belong to following two scenarios:

1. Receivables and Collections Management

2. Reconciliation & Closing




Process Overview

Scenario1: Receivables and CollectionsManagement

Payment Process

Returns

Refunds

Deposit Management

Dunning Creation

External Collections

Deferral and Installment plan

Write-off

Misc. Document Posting

Lien processing

Calc Customer Credit Worthiness

Scenario2: Reconciliation & Closing

Daily reconciliation




Process overview: payment

Create Reconciliation Key

Create one lot per cashier

Receive customer payment

Post

Balance cash lot

Close check and cash lot

Create payment lot

Enter bank data in lot header

Enter for each payment

Selection criteria

Payment amount

Save batch

Close and Post Batch

Close Reconciliation Key

End

Batch paymentCash Desk payment

Rework the clarification list

Our best Practices

support following

payment processing:

1. Payments at the

cash desk

2. Batch payment

processes

3. Lock-box payments

4. Direct debit process




Process overview: returns

The Returns transaction allows

the utility to process returneditems which have beendeposited as part of theincoming payment process.The return function will:

Apply returned payments to the

contract account

Pass returned fund charges to thecontract account

Generate returned check notificationsto the contract account automatically

Upon completion of the return lot, thesystem generates a letter to thecustomer, updates the customer¶screditworthiness, and updates thecustomer¶s return check history.

Processing returned checks

Identify th

or C

Identify ori

payment D

Created r

lot

Enter all r

Into the

Post ret




Process overview: refunds

The refund process allows the

utility to remit amounts tocustomers which arise from:

Refund overpayments

Refund credit from application of

deposit

Refund security deposits at the

request of the business partner

Processing refunds

Create c

list

Analyze c

for refu

Code credWith outg

Payment

Initiate pa

run




Process overview: deposit management

Security Deposit Management refers to the processes involved

with collecting and tracking security deposits required fromcontract partners who are a poor credit risk. These processes

allow the utility to collect security deposits from those customers

who represent a risk to the utility, and refund the deposit when it is

determined that it is no longer required.

Deposit Management will include the following processes:

Security deposit request

Payment of security deposits

Manual refund of security deposits

Refund of security deposit with final invoice

Refund of security deposit for exhibiting good payment




Process overview: dunning

The following dunning procedures existin this best practices:

01- Active customers

02 - Final Accounts

03 - Installment plan

04 - Special active customers with a lien

process, used for active sewer only accountand supply guarantee water account, sincedisconnection of water is not an option here,only a lien can be placed.

05 - Final Accounts liens are filed for unpaidbalances.

06 - Special active customers without a lienprocess; this procedure is used for activesewer only account and supply guaranteewater accounts that are not be disconnectedand will NOT have a lien filed against thepremise.

Dunning procedure 01

Le-Add

-Sen

- Ad

Lev

-Send

- Ad

Lev

-

- Ad




Process overview: external collection agencies

The processing of items delivered

to a collection agency includes thefollowing components:

Release of the item for submission to acollection agency

Determination of collection agency

Submission of the item to the collectionagency

Recall of submitted items

Information for collection agencies

Payments received from agencies

Process flow:

Release items so they can be

submitted to collections

(collection agency selection

included)

Submit items to agency

Information for collection agencies

Process payment received from

agencies

Reports of collection agency

effectiveness

End

Error?Recall

submitted items




Process overview: lien placement

To accommodate the collection of outstanding receivables, a water

utility company may request theissue of a lien on a premise withthe local municipality to prevent thelegal transfer of the propertyownership (title) until theoutstanding receivables are settled.

Because liens are imposed onproperty, it is the legal owner of theproperty who is impacted.

In most cases, at least threeparties are involved in theprocessing of a lien: the water company; the local municipalityand the customer.

The lien process can be used for active and final accounts to collectpayment after the customer hasmoved out.

Process flow:Identify Lien eligible Accounts

using open item evaluation list

Manually review accounts andchange DP if necessary

Send Warning Letter toProperty Owner

Release lien to municipality

Request lien placement

RecordJudgment number and docket

date in premise

End

Payment?Recall

lien from city

Inform owner via letter the judgment number

Payment Processing

Recordlien release date in

premise




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