The Accounts Receivable application component of SAP system handles and manages financial transactions and accounting data of all customers. It is fully integrated with Sales and Distribution component through account determination. Customers are treated in the system as subsidiary accounts. Logically, monitoring should be done at customer level. Transactions to each customer is unique, hence necessitate individual recording and monitoring.

Each customer account is link with a general ledger account. The general ledger account must be a reconciliation account for account type D (customer). This allows all postings to customer transfer simultaneously and seamless to the Accounts Receivable g/l account. Good thing is, the subsidiary accounts and the reconciliation g/l accounts are always balanced; hence, no reconciliation activity needed to tally the balance.

Customer Master

• The customer master pertains to information about the customer which remain unchanged over an extended period of time. It controls how transactions and data are processed by the system for the company. Do remember that each customer must have a master data created in the system. Otherwise, you can not do business with the customer in the system.

Customer Account Group

• Just like the G/L account group, the purpose of the customer account group is to manage and organize huge numbers of customer accounts in the system;
• Normally, customers with the same business functions are assigned to one account group;
• The number range for customer master is determined also by the account group;
• The account group also determines the fields (required, optional, diaplay, or suppress fields) for the entry screen when creating or changing customer master.

Customer Master Data

Customer master data is grouped into three parts:

General Data

• This gives basic information about a customer such as customer name, address, TIN, payment transactions information, contact persons and communication. General data applies to all company codes using the customer. For example, change in customer name.

Company Code Data

• This gives information specific to individual company code. Example of information under this area are reconciliation accounts, sort key, terms of payment, payment method, and correspondence. Any change on company code-specific data won’t affect other company codes.

Sales Area Data

• Information on this area is relevant and applies to the sales organizations and distribution channels of the company. Example of information under this area are order processing, billing, shipping info and terms of payment.

To create customer master, you can use transaction code FD01 or XD01. The difference of the two is that, if you use FD01 the Sales Area Data screen won’t appear. So you can create only customer information on the general and company code data. Whereas, if you use XD01 all the above 3 areas appears and you need to fill up the required and necessary information.

Business Transaction Processing

• Basically, transactions involving customers are downpayment, invoice postings, downpayment clearing/application, credit memo, dunning and incoming payment. Each of the said transaction types use different document types e.g. customer invoice is DR, incoming payment is DZ. Each transaction posted in the system creates a unique document number.
• If the business processes in the company require approvals and authorization , then the document parking functionality can be used. The encoder can park the data of the invoice. The approver do the final posting of the transaction. During document parking, the balances of the accounts are not updated.
• Customer account can be monitored easily. Outstanding (open items) are segragated from those already collected (cleared items).
• The SAP system provides dynamic reporting for customer accounts in the system which greatly help the collection and accounting department manage data of customers.

Reporting

• SAP delivers readily available to use reporting in Accounts Receivable application component. Example; diplay customer account balance, display line items, customer aging report, due date analysis, and etc.
• Drilldown reporting is standard in SAP system. There is an online trail of information from the current document to the original source document(s).