Use

The valuation of the promise to pay consists of determining the level of fulfillment of the promise as a percentage between 0.00% and 100.00%. The system derives a status based on this level of fulfillment and your system settings.

Prerequisites

You defined the level of fulfillment above which the promise is considered to be fulfilled (or fulfilled with accepted variances). In Customizing for Contract Accounts Receivable and Payable (FI-CA), choose  Business Transactions Promise to Pay Define Specifications for Valuation of Promise to Pay.

In the Define Categories IMG activity, you entered a creditworthiness weighting for each category.

Features

The valuation takes place once the promise to pay is closed, normally a few days after the last partial payment is due. The valuation can lead to one of the following statuses:

Using the valuation data determined, the system decides whether the valuation is saved and the promise to pay closed or whether there should be a further check at a later date.

The system automatically sets the first check date when a promise to pay is created. The date is defined in event 0184. In the standard version, the system sets a date that is seven days after the due date of the middle installment.

During the check, the decision must be taken whether a further check is necessary at a later date, and the promise is open until then, or whether the promise is to be closed in its current status. This decision is taken in event 0189. In the standard version, a new check date is set if the old check date was not after the due date of the last installment; otherwise the promise is closed. In the standard version, the new check date is seven days after the due date of the last installment. If the date determined in this way is not in the future, the promise to pay is also closed.

Logic for the Valuation

In the valuation, the following is considered: How much of the promised amount has actually been paid, and how late the payments were. With regard to the delay in payment, in Customizing, you can define a number of tolerance days and what reduction in the valuation is made for each day in excess of these tolerance days. You define this for each company code.

If items that were included in a promise to pay are cleared in another way (for example, due to a reversal, transfer, clearing of credit memos), the business partner only has to pay a reduced amount to fulfill the promise to pay. In the valuation, these other clearings are used to reduce the oldest due dates of the promise to pay. A valuation is then made as described above using the reduced installments.

Write-offs are not other clearings, since they are not deemed to be a waiver of the receivable; instead, they reflect the opinion that the receivable will probably not be collected.

Valuation and Creditworthiness

For promises to pay that are not fulfilled, an entry can be made to the creditworthiness of the business partner. In the standard version, the system checks whether a creditworthiness weighting is specified in Customizing in case of non-fulfillment. You can specify the creditworthiness rating for each category of promises to pay. If a creditworthiness weighting is specified, a new creditworthiness record is created with this value and the total creditworthiness of the business partner is reduced. Using event 0188, you can change the creditworthiness weighting determined in the standard system.

Subsequent Changes to Valuation

As soon as a promise to pay is closed, all further payments, withdrawals, or other clearings no longer influence the valuation. Therefore, a promise to pay should not be closed too soon after the last due date; on the other hand, it must be possible to make an adjustment for promises to pay where the valuation is later determined to be incorrect. In particular, this should prevent a business partner receiving a bad creditworthiness where this is not justified.

With a special authorization, you can subsequently change the level of fulfillment and the status of a promise to pay manually. You have to justify the change with a comment. All subsequent changes are recorded. The creditworthiness is adjusted automatically.

Activities

For more information about scheduling and executing mass activities, see Functions for Scheduling Program Runs .