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Define Reason Codes

In this step, you define reason codes, per company code, for handling payment differences in the form of

• Residual items

• Partial payments

• Postings on account

Reason codes come about, for example, if the cash discount period was exceeded, if cash discount was taken when net payment was due or simply if there is a computer error at the customer's.

Per reason code, you determine:

• In which company code it is valid

• Which correspondence type (payment notice to the customer) is connected to it

• Short text and long text of the reason code

Finally, you can set the A indicator (= charge off difference) for each reason code. This means that the payment difference is charged off using a separate G/L account. You define this G/L account in the General Ledger Implementation Guide in the "Create G/L accounts" step. For more information on this, read the chapter "Define accounts for payment differences".

If you do not set the indicator, then a new item is generated in the form of an outstanding receivable in the customer's account.

Standard system

In the standard system, the reason codes 050 to 060 are delivered with the accompanying correspondence types. This means that you can send a specific payment notice to the customer for an incoming payment if there is just one reason code. For more information on this, read the chapter on "Control the automatically generated payment notices.

Activities

Define your reason codes or check the ones delivered in the standard system and change them if necessary.