4/1/2023

Contract Accounting
Generated on: 2023-04-01 19:02:06 GMT+0000

SAP S/4HANA Cloud | 2302.1

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Factoring
To get cash quickly and so improve liquidity and the equity ratio, you sell receivables from your customers to a factoring
company (factor) during factoring. The apps described below are available for processing the individual process steps when
selling receivables to a factoring company (factor).

 Note
Contract Accounts Receivables and Payable only supports non-noti ed factoring. With this type of factoring, open
receivables of a company are sold to a factor without informing the paying business partner receiving correspondence
regarding receivables. All collection measures (such as dunning and submission to collections) continue to run.

The factor is represented as a business partner with a contract account and also posted to as such. It is therefore possible to
display the postings to the factor in the account balance. Dunning notices and interest calculations are also possible.

Prerequisites
You activate factoring for each company code in the con guration activity Set Up Company Codes for Contract Accounts
Receivable and Payable by setting the Factoring Active indicator. .

You con gure the system in the app in the following con guration activities:

De ne Factor

De ne Con rmation Reasons

De ne Transaction for Factor Posting

De ne Accounts for Factor Posting

Automatic G/L Account Determination for Writing Off Sold Receivables

Here, for example, you de ne for each factor how high the charges/commission are in percent and how high a possible
prepayment in percent made by the factor is (factoring as a short-term nancial instrument).

To establish communication with the factor by API, you have de ned a communication agreement for the communication
scenario SAP_COM_0663 (Finance - Contract Accounting Factoring Integration) in the Communication Agreements app.

Process Flow
The sale of receivables takes the following steps:

1. You select the open items that you want to offer to the factor for sale and transfer these to the factor.

2. The factor transfers its response to the quotation

by communicating acceptance or rejection of the purchase for each receivable. This response is stored in the SAP
system.

3. You process the factor’s response.

On rejection of purchase, it is only possible to enter management data to be able to display the history. When a purchase
is accepted, a receivable is transferred to a “Sold Receivables” general ledger account. Possible charges for
prepayments of the factor or the default risk (del credere) transferred by the factor are posted as commission.
Committed prepayments for purchased receivables may be posted by the factor.
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4. Processes such as clearing, reversal, write-offs or reversing clearing mean that the appropriate check status is set in the
receivables. In this way, a job run selects and recognizes these processes and appropriate follow-on postings are made to
G/L accounts and to the contract accounts of the factor.

You can display all postings and information for factoring in the Monitor Factoring Services app.

You can also display this information about a sold receivable from the account balance or from the document display.

Related Information
How to Create a Communication Arrangement

Offer Receivables for Sale

The Offer Receivables for Sale app selects receivables for sale to the factor. Only open receivable are selected, credit items are
not selected.

With the BAdI implementation Factoring: Edit/Exclude Item in Quotation in business context Contract Accounting: , you can
exclude certain receivables from the selection, for example, if you only want to select, or not select, items with particular main
transactions and subtransactions. Statistical receivables are not selected.

In the BAdI implementation, you can, for example, also offer only receivables for sale for which no automatic collection (payment
method in document or in the contract account/contract) is available.

With the BAdI implementation FI-CA Posting: Check Entire Document, Set Customer Fields in business context Contract
Accounting: Document that runs when the document is posted, you can set the Not Relevant for Sales status (FASTA status 9)
for document items.

If items are already contained in an earlier offer run, but were rejected afterwards, you can specify whether these items,
depending on the con rmation reason, are to be selected again. To do so, in the con guration activity De ne Con rmation
Reasons, de ne whether the con rmation reason allows a new offer.

The selection of the receivables is principally independent of the due date, enabling you also to sell the items before the due
date.

The data is transmitted to the factor by using the SOAP API Factoring – Offer Data.

You can also simulate the creation of the quotation. This could prove useful for checking the total number or total amount of the
receivables to be offered. Simulated data is deleted automatically during a repeated simulation (under the same run ID) or
during the execution of an update run after a simulation. You can also delete the simulation data explicitly by using the
Simulated Offer app.

Simulated data is displayed in the monitor on a custom header of its own (see Offer (Simulation)).

You can use the Reset Exclusion for Receivables app to reset the receivables that were excluded from offer (FASTA status 9).
These receivables are available for factoring again.

With the BAdI implementation Factoring: Reset Status 9 Process/Exclude Items in business context Contract Accounting:
Factoring, you can prevent the exclusion of a receivable from being reset.

 Note
For the Offer Receivables for Sale app and the Reset Exclusion for Receivables app, the following applies:

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For parallel processing, the system divides the data into ranges according to business partners.

If technical problems occur when transferring data to the factor, you can use the Send Offer Data Again app to resend the data
selected by a run.

SAP Fiori Implementation Information

For information about implementation, see SAP Fiori Apps Reference Library for the following apps:

Offer Receivables for Sale

Send Offer Data Again

Reset Exclusion for Receivables

Receive the Factor’s Response

The factor returns a response by SOAP API (Factoring – Answer Data). The response contains a return reason for each
individual receivable.

You have de ned these return reasons under Finance Contract Accounting Factoring De ne Return Reasons .

The con rmation reason determines whether the receivable was accepted (sold) or rejected (no sold). If the receivable was not
accepted, it is possible to determine whether a repeat offer is allowed. Additionally, a corresponding con rmation reason is to
be de ned for an acceptance (successful sale).

If there are several responses to the same receivable as part of the sequence “offer - response - repeat offer - repeat
response”, a different run ID is to be used for every response.

The system saves all offers and responses. You can display these in the dialog of the factoring data, for example, from the
document display.

For test purposes or for cases in which the answer of the factor has been lost, with the corresponding authorization (values 170
and 171 in the restriction type Process Function Key), you can also manually enter a response from the Monitor Factoring
Services app (Response tab page).

Receivables that are offered for sale and for which no response from the factor has yet been processed, that is, no acceptance
or rejection is known yet, are not collected in the payment program.

Process Response of Factor

After the response of the factor has been received, you process this with the Process Response of Factor app. The selection is
made using one of the following options:

The run ID of the offer run

By business partner, contract account, document number, and factor ID

In the event of a positive response about the acceptance on the part of the factor (sale), you can de ne a prepayment for the
factor in the system con guration. In this case, the system creates a receivable (debit posting) for the factor, using the
transactions de ned in the system con guration (see Finance Contract Accounting Factoring De ne Transaction for
Factor Posting ). If a commission is also set, this posting of charges is either separately posted as a credit posting (using the

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transactions for the credit posting from the named system con guration) or the total of both postings is posted net. You make
the setting for each factor in the Posting Mode eld under Finance Contract Accounting Factoring De ne Factor .

For the G/L account items of the sales document, the required accounts are determined from the system con guration under
Finance Contract Accounting Factoring De ne Accounts for Factor Posting :

Account for Sold Receivables

Adjustment Account for Sold Receivables

Clearing Account for Prepayments

Expense Account for Sale of Receivables

For expense posting (if a commission has been speci ed), you can also specify a CO account assignment key. De ne these under
Finance Contract Accounting Posting and Documents De ne CO Account Assignment Keys . Depending on the
company code, segment, and pro t center, you can de ne which account assignment (such as cost center and pro t center) is
to be set.

 Note
Note that for every account assignment (such as to the business area) to be transferred from the sold item to the factor
posting, it is also possible, for example, to nd a cost center that is assigned to this business area by using a CO assignment
key.

If a receivable was accepted for sale, the following steps are executed:

The status of the responses is set to Processed.

The posted document is recorded as a posting.

In the sold receivables, the status is changed from Offered to Sold.

The factoring data is changed from Offered to status Sold.

If a receivable was not accepted for sale, the following steps are executed:

The status of the responses is set to Processed.

In the sold receivables, the status is changed from Offered to Rejected.

The factoring data is changed from Offered to status Rejected.

The app has a simulation mode. In the test, it is recommended to output a detailed log by selecting the log level.

For parallel processing, the system divides the data into ranges according to business partners.

SAP Fiori Implementation Information

For information about implementation, see SAP Fiori Apps Reference Library for the Process Response of Factor app.

Forward Clearing Information to the Factor

Clearing and clearing resets for sold receivables must be reported to the factor so that the appropriate transfers can be
executed. To do this, you use the Send Update to Factor app. The following clearing information is determined for sold
receivables:

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Payments (for example, payment run, payment lot. or account maintenance)

Clearing reset

Returns

Write-offs

Reversal

For these, a check status is used in every sold document item that contains the following values:

Item is not relevant for factoring

Item is to be checked

A clearing or a clearing reset occurred.

Item is not to be checked

Item is either still open or cleared and clearing has already been reported

Item is not to be checked

The item is only offered and not yet sold.

With sold receivables, clearing in general leads to a reversal of the posting to the general ledger accounts “Account for Sold
Receivables”and “Clearing Account for Sold Receivables” (con guration step De ne Accounts for Factor Posting). In addition to
this, depending on the business transaction, further postings in the general ledger and postings in the contract account of the
factor are created.

Incoming payments that are assigned to sold receivables lead to the corresponding credit postings in the contract account of
the factor, if prepayments have been made. The offsetting posting is made to the general ledger account “Clearing Account for
Prepayments” (con guration step De ne Accounts for Factor Posting). Additionally, commission is paid out to the factor.

It is possible to notify information about the payment for sold receivables to a factor by using an API (Factoring – Clearing
Data). Clearing resets for sold receivables are recognized accordingly and the previous postings for payment are reset. In the
same way, returns for paid sold receivables are processed. This means that the previous postings for the payment are reset. If a
new receivable item arises for returns because, for example, a clearing can no longer be reset because the posting period is
already closed, this is also taken into account. Clearing resets and returns can be noti ed as reset payment amounts in the le.

When a sold receivable is written off, the factor bears the default risk. This means that the factor pays the payment amount to
the company. The system posts the corresponding receivables to the contract account of the factor. If the factor has made a
prepayment for the sold receivable, this is deducted form the system during the receivable posting. The corresponding
offsetting posting is made to the general ledger account “Clearing Account for Write-Offs of Sold Receivables” (con guration
step Automatic G/L Account Determination for Writing Off Sold Receivables). The factor may be informed about the write-off
by using API Factoring – Clearing Data.

If a sold receivable is reversed, the prepayment made by the factor is paid back to the factor. Additionally, commission is paid
out to the factor by default. The system posts the corresponding credit items for both transactions to the contract account of
the factor. It is also possible to reverse the commission paid to the factor. To do so, when de ning the factor in Customizing,
choose No Commission During Reversal (con guration step De ne Factor). In this case, the factor is not paid any commission
and the expense posting for the commission is paid back again to the general ledger account “Expense Account for Sale of
Receivables” (con guration step De ne Accounts for Factor Posting). Information about the reversal of sold receivables can be
transferred to the factor by using the API Factoring – Clearing Data.

For the receivable and credit items in the contract account of the factor, de ne the appropriate main and subtransactions in the
system con guration under Finance Contract Accounting Factoring De ne Transaction for Factor Posting .

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The app has a simulation mode. In the test, it is recommended to output a detailed log by selecting the log level.

 Note
Special Features for Returns

Returns can arise after a payment and a subsequent noti cation from the bank about the unsuccessful collection of payment
owing to insufficient funds in the account. Returns can also arise after a payment by check that has not been covered after
being deposited at the bank.

If you choose the returns mode Reset Payment, the item cleared by payment is opened again. A corresponding check status
is set and the Send Update to Factor app reports the issue correctly to the factor.

If you choose the New Receivable Derived from Payment returns mode, a new open receivable results. This automatically
adopts the factoring data from the old receivable, where a reference to the original receivable is created in the factoring
data. If the new receivable is cleared during further processing, this is determined and reported under the identi cation of
the old receivable. Only this is known to the factor.

 Note
Special Characteristics of Write-Offs

The write-off of a sold receivable is not a genuine write-off with a tax adjustment, since the cash is not lost or posted, but is
paid by the factor. For this reason, you need to de ne a different account determination in the system con guration. To do
this, choose Finance Contract Accounting Factoring Automatic G/L Account Determination for the Writing-Off of
Sold Receivables .

For parallel processing, the system divides the data into ranges according to business partners.

If technical problems occur when transferring data to the factor, you can use the Send Clearing Information Again app to resend
the data selected by a run.

SAP Fiori Implementation Information

For information about the implementation, see SAP Fiori Apps Reference Library for the Send Update to Factor and Send
Clearing Information Again apps.

Monitor for Factoring

You can display all data for the business processes of factoring in the Monitor Factoring Services app (factoring monitor).

The life cycle of the sold receivables is evaluated on tab pages. Each tab page represents a process and you can select the data
independently by using selection criteria.

Monitor Factoring Services App Tab Pages

Tab Page Display

Overview Amounts in the balance accounts (accounts corresponding to

Customizing of Contract Accounts Receivable and Payable)

Offer (Simulation) Receivables that were offered in the simulation run (Offer
Receivables for Sale app)

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Tab Page Display

Offer Receivables that were offered in update runs (Offer Receivables

for Sale app)

Response Responses that already exist in the system

Processing Receivables that were posted in processing runs of factor

responses (Execute Response of Factor app)

Buyback Receivables for which a buyback request was created

Buyback - Response Responses to buyback requests that already exist in the system

Buyback - Processing Buyback requests that were posted in processing runs of factor
responses (Execute Response of Factor app)

Clearings Receivables that were posted in clearing runs (Send Update to

Factor app)

Totals Totals on different hierarchy levels

Document History Receivables history

Factoring in the Document Display and in the Account Balance

The factoring status for the document item is displayed in the document display on the Basic Data tab page. You can use the
Data for Factoring button to call the detail data for factoring. The detail screen contains the following:

Basic Data

This is data on the factor, status, percentage values, and amounts.

Offer

Data on the run in which the receivable was offered. This includes data on the reversal run if the offer was cancelled.

The factor’s response including the con rmation reason

Processing

This is data for the run in which the answer has been processed, for example, the document number of the document
that was posted when the sale was successful.

Postings

They contain a list of all postings with regard to the sold receivable. Postings arise during the sale and the noti cation of
clearing information.

History of factoring data

The data is linked together trough forward navigation so that you can, for example, call the document display or also the
program runs.

In the account balance, you can include the elds FASTA (current status of receivable in factoring) and PASTA (check status for
clearing information in factoring) in line layout variants (see con guration activity De ne Line Layout Variants for Account
Balance.

In this way, the factoring status of the line item is displayed in the list and, provided you have speci ed this in the settings for
the account balance under Settings Further Settings: Double-Click Field Sensitive , double-clicking on this eld

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immediately starts the display of the factoring data in the dialog.

In the document header screen for the sales document, you can use the Sold Items button to display all items that were sold
with this sales document (in account balance form).

Clearing Processes in Factoring

In the general clearing processes, there are no restrictions regarding clearing of sold receivables. Since only undisclosed
factoring is supported, the selling company still takes on responsibility for payment and clearing. For this reason, the sold
receivables, like other receivables, can also be cleared. In the processing of open items, a sold receivable is therefore neither
blocked nor speci cally indicated. Functions for collection, such as dunning, submission to collection agency, creation of an
installment plan, deferral, and installment plan) are also possible for sold receivables.

Delete Simulated Offer

The Delete Simulated Offer app deletes simulation data and/or statistical data from the offer run that you schedule with the
Offer Receivables for Sale app.

If you execute a new simulation after a simulation (with parameters that may have been changed), the simulation data and the
statistical data of the rst run are deleted automatically.

If the parameters of a simulation run are changed and saved, the simulation data and the statistical data are also deleted
automatically.

If simulation data was created and the run was not changed or started again afterwards, you can delete the created simulation
data or statistical data separately or together using this app.

SAP Fiori Implementation Information

For implementation information, see SAP Fiori Apps Reference Library for the Delete Simulated Offerapp.

Reverse Offer
You can use the Reverse Offer app to reverse the offer of a receivable for which no factor’s response has been received.

In the simplest case, if you want to cancel a complete offer, select the run ID of the offer as the selection parameter in the
reversal run. To do this, specify a reversal reason that you de ned in the system con guration under Finance Contract
Accounting Factoring De ne Con rmation Reasons .

The reversal reason is used in documentation and is displayed in the display of the factoring data.

Offered receivables that were reversed can be selected again afterwards for submission. In the document item, the status
reversed only speci es that the document item has already been offered once and the offer was then reversed.

The information is transferred by using the API Factoring – Offer Reversal Data.

If technical problems occur when transferring data to the factor, you can use the Send Reversal Information Again app to send
the data selected by a run again.

SAP Fiori Implementation Information

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For information about the implementation, see SAP Fiori Apps Reference Library for the Reverse Offer and Send Reversal
Information Again apps.

Buy Back Receivables

You can buy back open receivables that you sold to a factor from the factor.

Prerequisites
A prerequisite for the buyback is the complete processing of the sale of the receivable, that is:

1. You have transferred an offer for the receivable to the factor.

2. The factor has accepted the offer and sent you a corresponding response.

3. You have received the answer of the factor.

4. You have processed the factor’s response.

If you want to buy back receivables for which the customer has made a partial payment in the meantime, an additional condition
for buyback is that you have forwarded the corresponding clearing information to the factor before the buyback (see Forward
Clearing Information to the Factor).

Key Features
You can designate receivables for buyback either individually or en masse.

You can view individual receivables for buyback either in the Change Document app or in the Monitor Factoring Services
(Monitor) app.

To do so, in the Change Document app in the Data for Factoring frame, choose Buy Back for the items you want.

In the Monitor Factoring Services (Monitor) app, choose Select for Buyback on the Processing tab page for the items
you want.

You use the Buy Back Receivables from Factor app to select the receivables to be bought back en masse.

Using the selection criteria of the run, you can either buy back all receivables of a speci c offer run or select individual
receivables for buyback using individual selection criteria, such as factor ID, document number, or buyback reason.

When you execute the run, the system generates a buyback request.

For parallel processing, the system divides the data into ranges according to business partners.

The data is transmitted to the factor by using the SOAP API Factoring – Buyback Data.

Receivables that meet the speci ed prerequisites and that you intend to use for the buyback receive the status Scheduled for
Buyback (A).

You process the response of the factor with the Process Response of Factor app. The data is transmitted by using the SOAP API
Factoring – Buyback Answer Data.

With the BAdI implementation Factoring: Exclude Items During Buyback Request in business context Contract Accounting:
Factoring, you can exclude particular receivables from the selection.

If technical problems occur when transferring data to the factor, you can use the Send Buyback Information Again app to send
the data selected by a run again.
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SAP Fiori Implementation Information

For information about the implementation, see SAP Fiori Apps Reference Library for the Buy Back Receivables from Factor and
Send Buyback Information Again apps.

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