Collection Authorization 

This is written authorization that can be revoked at any time, issued by a paying party to a payment recipient to collect due amounts that are receivable by means of a debit memo from his/her account (such as telephone bill, insurance premiums, electricity).

Unlike a direct debit order, the paying party does not need to check for an order in the collection authorization procedure (based on collection authorization).  For this reason, collection authorization is not represented separately in Account Management.

The collection procedure (posting debit memos that are to be cashed) is the same as the procedure for a direct debit order.

Unlike a direct debit order, a paying party has a period of six weeks to raise any objection to and to return debit memos that are presented in a collection authorization procedure, if the account was debited without authorization, or if the paying party does not agree with the debit.

Possible return reasons include:

·         Insufficient funds in the account to be debited.

·         The debit cannot be assigned because the details on the paying party are not unique.

·         The debit cannot be assigned because the account of the paying party does not or no longer exists.

Debit collection based on collection authorization is the debit procedure most used for mass debit transactions. There is also a debit collection procedure based on a direct debit order. For more information on this procedure, see the SAP Library, under Direct Debit Order.