Issue Date

31/05/2012

Document Name
Bad debt Write On/Off
Document Number
EU-FCM-TM-xxx
Location
Language
Europe
EN

Version
1.0

Document Type
Training Manual
Security Level
Non Confidential

APPROVALS
Owner
Annamaria Redliova

Job Title
Credit Analyst

Signed

Approval Date

Manager Approval
Esther Lozano

Job Title
Credit Manager,
Europe
Job Title
Credit Manager,
Europe

Signed

Approval Date

Signed

Approval Date

User Manager
Thomas Allmark

REVISION HISTORY
Version
1.0

1.

1.2

Release Date

New release

All

31/05/2012

Owner

This document provides specific instructions on how to deal with Bad debt Write
On/Off
The purpose of this SOP is to be used as a training manual/guide for new
starters in cash management

References
2.1.

3.

Sections Affected

Description and purpose

1.1

2.

Description of
change

This SOP will be grouped together with all the others and posted on CHEPs
Intranet

Roles and Responsibilities

Job Title

Responsibility

Document Controller

SOP System Administrator & Keeper

Process Champion

It is the responsibility of the Process

Champion to keep the process documentation
current and notify the audit team and
document controller of any changes in line
with the NCE process.
It is the responsibility of the team leader to
ensure that process compliance is maintained
and managed within the time lines governed
by the NCE process

Team Leader

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1.1 Bad Debt Write On/Off is used to clear old items on the customer accounts if their value is
over 100EUR/75 GBP.
Bad Debt should be claim only if they are insolvent (bankruptcy or administration). If customer is
with Debt collection agency (DCA) or Non active customer the adjustment on their current
account should be done by Credit note.
WORK INSTRUCTION:
A. Cash management will receive Bad debt write off/on form and authorisation by Service
request (SR) send through Siebel database (CMS) from Credit management.
B. First of all cash allocation clerk needs to check status of the customer (if insolvent etc.)
Secondly clerk needs to check if correct authorisation is provided, the metrics of the
authorisation is shown on the below link (information may vary):
T:\Finance\RIESGOS\Authorisation matrix

1.2

AUTHORISATIONS:
FINANCIAL DIRECTORS:
GB10,IE10
DE10,SCAN,BE10,NL10,AT10,CH10,IT10
FR10,FR70,TR10,
ES10,ES20,PT10,PT20
PL10,CZ10,HU10,SI10,SK10,GR10

Storah, Richard
Sdunzig, Volker
Letestu, Laurent
Moreno, Andres
Czapka,Marek

CREDIT MANAGERS:
SOUTH/NORTH

Thomas Allmark

CSC MANAGER:
SOUTH/NORTH

Thomas Castelain

AUTOMOTIVE FD

Sdunzig, Volker

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1.3 Check if correct form is provided with all information needed as correct amount, SR number,
Value of LEC and Reason of Explanation:

1. AR clerk will check Customer account in SAP, if amount mention in form is correct.
Amount of LECs invoices (Lost equipment invoice) will be separated of total amount of
write off as it needs to be posted on different GL account. For preparation of the posting
Bad debt write off/on we need to have legal information about VAT is claimable or not.
! In case that it doesnt match or some information are missing please contact the person who
proposed the Bad Debt Write On/Off. !

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1.4 PREPARATION OF THE POSTING:

Note: VAT ES10 and FR10 see below.
-

check customer account in SAP

Making the posting in SAP according to the attached template as shown in section
1.3
- Double-check:
1) VAT code, it is code which in SAP shows amount of VAT (for example GB10 VAT
code A1 17.5%)
2) count together amount of LEC invoices, find type of material in transaction VF03
Display Billing document and make calculation of VAT and net amount (if VAT is
claimable)
3) count together rest of the invoices and make calculation of VAT and net amount (if VAT is
claimable)
For example DE10 19%:
VAT
Total gross amount / 119 * 19
NET amount
Total gross amount / 1.19

1.4.1 Checking customer accounts and activity in Siebel

Setting up the query in Siebel:

1 Click on activities tab

2 - Change to all activities
3 - In queries field search for WQ CASHMANAGEMENT all queries sent to WQ Cash
management appears, you need to select by reason for bad debt write on/offs you
choose this reason

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4 SR number
5 - Activity number
6 - Activity comments
Checking for approvals and template in Siebel
Enter the Service request by double clicking the number and the following screen appears:

7
8

4 - SR number
7 Authorisation tab
8 Fields od approvals if the write on/off has the correct approvals it appears

this field

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in

4
7

9
7

4 - SR number
9 - Attachment field click on the attachment field and select the corresponding
attachment with the template, by double clicking on it the template oppens.

1.4.2 Checking the customer account for f Bad debt write on/offs

Enter SAP transaction:

FBL5N - Accounts Receivable Clerk - Europe -> Customer Line Items
Input data as follows:

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1
2

1 - Customer account no. (GID of the customer)

2 - Company code (introduce the corresponding CoCode Can be dismissed as
CA set up should allow the user to search for customers without this data)
3 Status - Line item selection search for open items
4 - Type - of the items for normal line items tick Normal items tab, in case you need
to write off deposit tick Special G/L transactions

Click on execute icon

Open line items on the account appear

1
7

5
6

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7
9

1 - Customer Account number GID

2 - Payment block M (post insolvency debt no.6) N (pre insolvency debt to be
written off no.7)
8 - Amount open on the account

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1.4.3 Posting of Bad debt write on/offs

After completing all the check-ups we can process the posting in SAP using
transaction F-02 Enter G/L account.

10
13
14
11
12

15

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16

9 - Document date - the day, when the posting is done

10 - Document type SA for write on/offs
11 - Reference WRITE ON / OFF
12 Doc.Header Text BAD DEBT WRITE OFF
13 Company code -copy from the template
14 Currency - -copy from the template
15 - Posting key -copy from the template
16 - Account - -copy from the template

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Press enter

17
8
18
9

19
20

20
1

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21

17 - Amount - copy from the template

18 - Cost Centre copy from the template
19 - Text BAD DEBT WRITE ON / OFF /GID/SR NUMBER
20 Pstky Posting key copy from the template
21 Account -copy from the template

31.05./2012

Press enter and copy the next line item from the template

22
23

24
25

26

27

22 - Amount - copy from the template

23 - Tax code copy from the customer account (FBL5N invoice tax code)
24 - Filed determinate tax base needs to be always ticked
25 Text by adding ++ we copy the text of the previous line item
26 - Pstky posting key - copy from the template (07 for write on/17 for write
off)
27 Account GID of the customer -copy from the template

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Press enter and copy the next line item from the template

28

29

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28 - Amount by adding * we calculate the whole total of the write off

29 Text by adding ++ we copy the text of the previous line item

31.05./2012

Simulate the document and the following screen appears with all line items. The C (credit)
and D (debit) balance needs to come to 0 as it is shown below.
If the amount is 0 press the post icon and post the write on/off

After posting the Write on/off you need to clear the customer account

1.4.4 Clearing of customer account

For clearing of the account you use ftransaction F-32

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F-32 - Accounts Receivable Clerk - Europe -> Clear Customer

30

31

Page 13 of 18

30 - Account - copy from the template

31 - Company Code copy from the template

31.05./2012

Press enter and by selecting the correct line items get the balance of the account to 0 not
assigned field to be 0

If the amount comes to 0 (1,2 cent difference is allowed) post the document.
Once the account is cleared you need to close the activity and send notification to the
requester in Siebel as shown below.

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1.4.5 Closing of the Siebel activity

Once the activity is closed click on

Page 15 of 18

ikon and send the notification e-mail as shown below:

31.05./2012

Click on the ok icon and the e-mail pops up in outlook.

QUICK GUIDE:
BAD DEBT WRITE OFF: (need credit on account)
Reference: WRITE OFF
Doc. Header Text: BAD DEBT WRITE OFF
Line items:
40 64010 WRITE OFF NET amount
40 31650 VAT (code) VAT amount
17 Customer GID - GROSS amount)
Text: A/C . BAD DEBT WRITE OFF
Cost center for pallet DE1PAFIN01
- for auto DE1AUFIN01
ES1PAFIN06 (ES10) and PT1PAFIN03 (PT10).
BAD DEBT WRITE ON: (need debit on account)
Reference: WRITE ON
Doc. Header Text: BAD DEBT WRITE ON
Line items:
Pstky 50 64035 WRITE ON NET amount
Pstky 50 31650 VAT (code) VAT amount
Pstky 07 Customer GID - GROSS amount)
Text: A/C . BAD DEBT WRITE ON
Cost center for pallet DE1PAFIN01
- for auto DE1AUFIN01

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DIFFERENCE OF POSTING OF VAT

FR10
If there is Tax code is B2 you will use in your posting ZF (19.6%) and you have to
always check GL, most of the time it will be 31665 (not 31650) difference is that
you are doing reversal of the original posting of VAT.
ES10/PT10
Use 31668 accounts to post VAT for Iberia.
IT10
When a customer is not paying the open invoices for several reasons we have 2
options:
1. write off the amount open with a general ledger journal entry, closing
the customer account balance against the P&L 64010. In this case the
Vat should be booked as a loss as it is not recoverable anymore.
2. Raise a credit note to close the customer account balance, with Vat
included only if the invoice we are crediting is not older than one
year. If we are crediting for the previous years the vat code to use is II
fuori campo Iva with zero rate. Otherwise you will raise a credit note
with 20% of Vat as the original invoices. This option is applicable when
we reach an agreement with the customer, and the credit note will be
sent to him in order to have the same figures in both accountability
system, our and the one of the customer.
Now, to amend the mistakes in the Vat book you have to do exactly the
opposite entries in general ledgers you've done in the previous months, then
enter the new journal entry for bad debt without Vat
GR10
The posting for the WRITE OFF should not include VAT. Based on legislation, we
cannot deduct VAT for the WRITE OFFs. Vat should be booked as a loss, against
the P&L 64010 as it not recoverable anymore.

New starter in reporting team will be trained on this process within first month of start date

I. Training Matrix
Name

Page 17 of 18

Job Title

Scope

Target Date

31.05./2012

New Starter

Credit Analyst/Credit

New starter

Within one month of start date

Controller

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