SAP FICA Overview

Financial Contract Accounts and Receivable SAP FI-CA:

• SAP FI-CA is the response to market requirements for receivables management for mass data processing industries and for high system integration
• FI-CA covers all standard accounts receivable and payable functions. Although FI-CA provides new functions, process enhancements for account receivable management, and a high degree of flexibility in functions, it does not replace the SAP classical application FI-AR

FI-CA represents an alternative sub ledger for industries with

• Large volume of documents to process
• Large volume of business partners
• Industry- or customer-specific business processes that need to be
• seamlessly integrated into the customers' system architecture
• Component Industry Contract account Contract Explanation

Availability of FI-CA: Previously, FI-CA was only available in the following SAP industry solutions:

• IS-T Telecommunications
• IS-U Utilities
• IS-M Media
• IS-PS-CA Public Sector( This component is also known as PSCD)
• FS-CD –Industry solution for Insurance (Financial services collection and Disbursement)

The component was not available for customers outside of these industries Now FI-CA is also available as an industry-neutral version FI-CAX.

Technical Highlights of SAP FI-CA

Master Data Management in FI-CA

Business partner: A business partner is a customer within FI-CA The business partner contains central data such as name, address, and bank details All invoices and payments are posted to a contract account, which is assigned to a business partner

Contract Account: The contract account contains control information like payment methods, payment conditions, or dunning Procedures

Purpose of Contract Account

• Object for which open item accounting takes place
• Contains application-specific business partner data

Contract Object: A contract object is an optional master data object that can be assigned to a contract account and business partner the contract object allows for the segregation of receivables below the contract account

A single business partner can have multiple contract accounts in FI-CA In addition, SAP offers a third master data layer within FI-CA This third object is called contract or contract object The purpose of this object is to further distinguish the receivables within a contract account This is necessary if you need to group receivables from multiple contracts into one contract account and still want to separate the receivables.

One interesting feature within master data management is the ability to create user-defined fields or new tabs and combine screens using the Business Data Toolset (BDT) without any modifications BDT maintains and supports transaction data and master data.

The purpose and the functionality of the contracts vary within the different industry solutions; however, the concept is always the same See below table for a list of examples of contract accounts and contract combinations within the different industry solutions.

Document Structure

Documents structure in FI-CA is structured with the minimum number of fields required with repetitive structures for installments, sub-items for partial payments this gives the following benefits:

• Reduced memory space required for storing open and cleared items
• Enables high performance processing of critical business transactions –posting, dunning, payment

Following are the Parts of FI-CA document

• The document header contains general data for the accounts receivable/payable document such as: the document number, document category, document date, posting date, currency, and reconciliation key Data on the person making entries and on the origin are stored in the administrative data of the document header.
• Data relevant to posting is stored in the business partner items: Data on the partner/contract, general ledger data (receivables account), data on the receivables amount, specifications on the due date, dunning and clearing data, cash management and forecast data, and other data.
• Information on offsetting posting is stored in the offsetting item This normally means the line items for revenue posting(s) and the tax posting line items.
• Offsetting items and tax lines are created automatically, so only the business partner items must be created.

Parallelization of mass data processing

Parallel processing is used to reduce time for processing large volume processes by splitting. Parallel processing can be used for mass processes like 

• Payment run
• Dunning notices
• Correspondence Print
• Mass calculation of interest
• Generation of Bills

Openness for Enhancements

In SAP FI-CA there is a new concept Events Using Events standard process enhancements is possible without modification

Event: Time at which an open interface exists - customers can use the option of creating and activating additional or alternative algorithms in their own function modules Events can be managed using transaction FQEVENTS,

Key Functions in Business Transactions

Key Functions in FI-CA:

1. SAP FI-CA covers all standard accounts receivable and payable functions.
2. In addition, critical business transactions for mass data processing have been improved and new functions have been implemented.

The following section gives a brief summary of the most important new and enhanced functions in comparison to the traditional SAP FI-AR in each of the following areas:

1. Posting and Documents

2. Payments

3. Returns

4. Dunning

5. Installment Plans

6. Deferral

7. Write-Offs

8. Submission to External Collection Agencies

Documents and Posting

• Represents a business transaction that results in the update in sub-ledger and general ledger accounting

• The business view of a document shows

1. 1. Document header

1. 2. Document items relevant for sub-ledger accounting (open item)

1. 3. Document items relevant for general ledger accounting

Specific Features:

Posting:

1. Documents are automatically imported from an operational SAP or non-SAP System
2. Documents can be entered and posted manually

Cross-date posting:

1. Specific documents can be posted for several dates(Receivables with recurring dates, such as installment plans)

Cross-company code posting

1. The company code is recorded separately for each line item, and not in the document header
2. This enables the user to enter items for several company codes in one document, so that a cross-company code document can be posted

Statistical items:

1. Reflect a receivable or payable in the contract account that should initially not be visible in the general ledger
2. Do not contribute to the balance of the document
3. Do not result in an update in the general ledger

• Used, for example, for:

• Deduction and down payment requests

• Statistical outstanding charges

• Installment plans

Mass changes:

The following data can be changed for several line items at once

• Payment data
• Dunning data
• Due date data
• Locks

Payments

Purpose

To create and process incoming payments

Specific Features

Payment lots:

• Groups of payments that are to be processed together (e.g.: all incoming payments contained in one bank statement)

• Lots are created by entering the data from incoming checks or bank transfers, either manually or using programs for fast input

• Using an extensive assignment algorithm (clearing control), the system processes the payment lots and assigns the payment to the related open item

• Over-payments can be posted as payments on account; underpayments are posted as partial payments

Clarification account:

Payments requiring clarification are posted to separate interim accounts and must be processed manually

A repayment can be initiated for payments which cannot be assigned to an open item

Payment program:

• Enables the creation of outgoing and incoming payments.
• Determines the open items to be paid according to the selection criteria entered for the payment run, and according to the due date of the open items
• Selects the payment methods and the appropriate bank.
• Posts the payment document and clears the open items or creates payment orders In case of payment orders, posting and clearing take place as soon as the order is confirmed with the bank statement.
• Provides the data for the payment media.
• Will be processed in parallel processes to reduce the overall runtime

Returns

Purpose

To process bank returns that may occur as part of collection procedures, check deposits, or outgoing payments

Specific Functions in FI-CA

Automatic returns processing

• Returns are processed automatically -original receivables or payables are reopened.
• Alternatively, new receivables can be posted
• Generation of any further postings that are necessary due to taxes or charges
• Automatic start of follow-up activities

Charging of bank fees

• Bank fees and any additional charges can be charged to business partners
• Charges can be posted either statistically or to the general ledger

Follow-up activities

• Changes in the item
• Changes in the contract account
• Setting a deferral date, a dunning lock, or payment lock for the reopened receivables
• Workflow connection
• Creation of information for the clerk
• Correspondence for the business partner

Activities can be defined dependent on

• Return reason
• Creditworthiness
• Tolerance group
• Number of returns

Return history

• All relevant data is recorded in a return history
• Referred to when determining creditworthiness

Dunning

Purpose

To remind business partners that their payables are overdue and to request payment

Specific Features in FI-CA

Dunning activities

Assignment of any number of dunning activities to the various dunning level, for example,

• Printing a dunning notice
• Termination of a contract
• Activating a lock

Dunning charges

• Option of calculating dunning charges using an extensive charges procedure
• The calculation rules can be specified dependent on currency and creditworthiness
• The charges and interest can be posted either statistically or to the general ledger

Dunning history

• Dunning-relevant data for each item is recorded in a dunning history
• The dunning history is referred to when determining the dunning level of an item
• The dunning history can be used at any time to provide information about the individual dunning activities

Dunning run reversal

• A dunning run can be reversed completely
• The system reverses either the whole run or the items that were not successfully posted and notes the relevant entries as being reversed in the dunning history
• Additionally, the system determines and resets the charges and interest posted during the dunning activity run and resets the creditworthiness for the customer in question

Dunning run for installment plans

• Alternative dunning run can be processed for installment plans
• Automatic deactivation of an installment plan when a certain dunning level is reached can be specified

Parallelization

  Parallel processes are used to achieve the best possible performance.

Deferral

Purpose

To defer payment for business partners who cannot keep up their payment obligations

Specific Features in FI-CA

Deferral date

• The deferral date is noted in the open item in addition to the due date
• No dunning notices are sent and no payments are collected during the agreed deferral period
• Once the deferral date has passed without payment being made, the open item is dunned with the original due date and bank collection is executed again

Deferral history

• Deferral history is kept in the document

Installment Plan

Purpose

• To arrange payment by installments for business partners who cannot keep up their payment obligations

Specific Functions

Structure

• The installment plan divides source items into several installment receivables that have a due date in the future
• The installments are posted statistically in FI-CA and are cleared when payments are made. With every installment cleared, an corresponding part of the original receivables is cleared as well
• The individual installment is included in the dunning and payment run

Installment plan set up

• Individual installments and their due dates are specified in the installment plan
• Charges can be levied for an installment plan
• The document number of the installment plan is recorded in the original receivables, which ensures that there is a link between the original receivable and the installment plan

Interest calculation

• Interest can be calculated on the installment plan

Installment plan processing

• Installments plan can be changed manually
• Due dates and the amount of installments can be changed
• New installments can be added to an active installment plan
• Original receivables will be cleared (partly) automatically, whenever an installment is cleared. Therefore, all original receivables will be cleared as soon as the last installment of the installment plan has been cleared

Deactivating an installment plan

• The installment plan can be deactivated manually
• The original receivable becomes active again and the link between the original receivable and the installment plan is deleted
• A deactivated installment plan cannot be reactivated, and no further payments can be assigned to the installment plan

Installment plan history

• The history is updated automatically for every installment plan

  Can be used to determine the source items on which an installment plan is based

Write-off

Purpose

• To write off open receivables and credits of a business partner because receivables cannot be collected or payables cannot be disbursed

Specific Functions

Automatic posting

• Written off line items are cleared and a write-off document is posted to the gain or loss accounts defined in Customizing
• Additionally, rules that specify how the tax adjustment should be made are defined in Customizing

Check rules

• Check rules determine whether and which open items can be written off (to a certain percentage) automatically
• The rules are defined with the help of a function module and allow the implementation of customer-specific requirements

Reverse write-off

• Write-off documents can be reversed, meaning that the receivables or payables become open again

Parallelization

• Write-off activities can be processed in a mass run
• Documents to be written off can be selected according to various parameters
• A simulation run can be executed before the update run for monitoring purposes

Submission to external collection agencies

Purpose

Release and submission of receivables to external collection agencies as well as management of the submitted receivables

Specific Features in FI-CA

Release and submission of receivables

Integrated release and submission of receivables while processing

• Dunning
• Write-off/mass write-off
• Manual indicator for collection order
• General submission

Receivables submission management

Managing submitted receivables in separate management

Processing incoming information

Incoming information from the collection agency can be transferred to the system -the processing depends on the way the agency forwards the information:

• In a file: Interest, charge requests, and collected payments are posted automatically
• By letter or telephone: The information has to be posted manually

Comparison of Functionalities in SAP FI-AR and FI-CA