SAP Dunning: Procedures, Levels, and the Dunning Run Process (AR/AP Advanced Part 1)

Book: Financial Accounting in SAP S/4HANA Finance Simplified: Questions & Answers by Narayanan Veeriah | ISBN 978-93-65898-675

Chapter 17 continues AR/AP with the stuff that happens after invoices and payments: dunning, special G/L transactions, interest calculation, and how FI connects to SD and MM. Part 1 (questions 498 through about 523) is all about dunning. And honestly, this is one of the more operationally useful sections in the book.

What dunning does

Dunning reminds business partners about overdue open items. Transaction F150 runs the dunning program, which:

• Selects overdue items
• Determines dunning level per account
• Generates dunning notices from predefined forms
• Saves dunning history for the next run

You can dun customers and vendors (vendors with debit balances from credit memos). Cross-company code dunning combines partners across company codes. Customer-vendor clearing offsets balances when the same partner is both.

Configure in IMG, from the dunning application (Environment > Change Configuration), in master records (Correspondence > Dunning Data), or on documents (dunning block/key in Additional Data).

Basic settings: key, block, procedure

Three basic customizing objects:

Dunning key (company code independent): limits dunning level per item. “Print sep” checkbox prints items separately on the notice.

Dunning block reasons: block keys on line items or master records prevent selection. Remove the block when ready to dun.

Dunning procedure: controls the whole process. Standard procedures ship with the system or define your own. Controls:

• Dunning interval and grace days
• Number of levels (1 to 9; single level = payment reminder)
• Minimum amounts (absolute and percentage per level)
• Dunning charges per level
• Dunning texts and forms per level
• Special G/L transactions included

Dunning level: processing step determining notice tone and form severity. Up to nine levels. System calculates level from days in arrears. Example from the book: 15 days = level 1, 30 days = level 3, 45 days = level 4. Highest level per account drives the notice text.

Dunning area (optional): for dunning below company code level (sales division, sales org). Enter area and procedure in master record under Dunning Data.

The dunning run in three steps

Step 1: Parameters

Run date, identification, dunning date on notice (print Friday, date Monday), documents posted up to cutoff, company code, account restrictions, free selection (up to 8 criteria from BSID, KNA1, etc.). Schedule the run but do NOT select “Dunn.Print with Scheduling” if you want to edit the proposal first.

Step 2: Proposal

The program checks master dunning procedure and last dunned date, dunning blocks, open items posted by cutoff, overdue status with grace days, and dunning level per item. Then per account it verifies debit balance, minimum amounts, level increase since last run, new items at level 0, and repeat-dunning settings. Creates proposal list for editing.

Edit options: raise/lower levels (manual raise limited to one level per edit), block items/accounts/documents, preview sample printouts (max 10), review change logs.

Step 3: Print notices

Forms vary by dunning level. Legal dunning uses separate forms. System updates dunning level, last dunned, and related fields in master records. Optical archiving available during print.

Advanced dunning scenarios

Cross-company code dunning: assign reference company codes to a leading dunning company code (T047). One notice instead of separate ones per company code. Dunning blocks checked per company code individually.

Legal dunning: internal notice to legal department at highest level. Updates Legal Dunning Proc field in master. Program skips account unless “Always Dun in Legal Dunning Proc” is set or account moves again.

Local (decentralized) dunning: for head office/branch setups. Select Local Processing on customer correspondence tab. Notices go to branches, not head office. Branch master records get dunning updates.

One-time accounts: dunning procedure in master, but frequency from documents not master. Items grouped by address into single notices. Level updates on items, last dunned on master only.

Alternative dunning recipient: send notices to a third party. Maintain recipient account number in Dunning Recipient field.

Customer-vendor clearing in dunning: same dunning procedure required on both sides. Program uses customer master as relevant record.

Grouping open items: define grouping keys with a line item field (contract number, leased property ID, etc.) to generate separate notices per group value.

Dunning level determination detail

Items reach a level when arrears days fall between that level’s threshold and the next level’s threshold. When printing per dunning level (not highest level), separate notices go out per level.

Manual level changes: unlimited lowering, raising by one level only during proposal edit (unless program already raised this run). Payment method on line items affects dunning: items with incoming payment method get dunned only if payment-blocked.

Minimum amounts prevent dunning small balances at high severity levels. Items below threshold drop to next lower level for reassessment.

Part 2 covers special G/L transactions, down payments, item interest calculation, sales and purchase cycles, and the Fiori app catalog for AR/AP managers and accountants.

Previous: Accounts Receivable and Payable Part 2 | Next: AR/AP Advanced Part 2