The document discusses the SAP system's capabilities for automatically dunning overdue business partner accounts. It allows setting up dunning procedures that define dunning levels, notices, and other attributes. The system can dun customers, vendors and one-time accounts. It handles credit memos, cross-company dunning, and special cases like alternative recipients. Configuration is needed in the SAP IMG, master records and document posting to use automatic dunning.

1. Dunning
Purpose:
Sometimes your business partners may fall behind on payments. You can send them a payment
reminder or a dunning notice to remind them of their outstanding debts.
The SAP System allows you to dun business partners automatically. The systemduns the open
items from business partner accounts in which the overdue items create a debit balance. The
dunning program selects the overdue open items, determines the dunning level of the account
in question, and creates a dunning notice. It then saves the dunning data determined for the
items and accounts affected.
You can use the dunning program to dun both customers and vendors. It may be necessary to
dun a vendor if he or she has a debit balance as a result of a credit memo. If a customer is also a
vendor, you can offset the account balances against one another.
Implementation Considerations
If you wish to use the automatic dunning procedure, you have to make settings in the following
places before using the system and while it is operational:
● In Customizing for Financial Accounting (IMG)
● In the master data for your customers or vendors
● When you post documents
Once you have decided in which countries you wish to use the automatic dunning procedure,
adjust your settings to meet the country-specific business requirements. In the USA, for
example, debtors are not usually dunned. In Customizing, you can make company code-specific
settings so that the fields for dunning are hidden for the company code USA.
You use the following attributes to control the dunning program, and you can configure them
according to the needs of your company:
Dunning procedure
The dunning procedure controls how dunning is carried out by the system. You can define
as many dunning procedures as you like.
Dunning level
The dunning levels are calculated based on the number of days open items are in arrears.
You can also have the systemcalculate the dunning levels based on the dunning amount
or a percentage paid (sales-related dunning level determination).
You can determine more than one dunning level per dunning procedure.

2. Dunning areas
A dunning area is an organizational unit within a company code used for the dunning
process.A dunning area can be a division or a sales organization. You assign a dunning
area to an open item when you are posting. You can dun items separately by dunning
area.
Features
The SAP System allows you to use either the automatic dunning program, which duns all
overdue items in accordance with your selection criteria, or, if required, you can dun individual
customers or vendors
You have the following options and functions for dunning:
Payment deadline,
interest on arrears,
and dunning charges
You can enter a specific payment deadline in the dunning notice, as well as
interest on arrears and dunning charges (both calculated by the dunning
program).
Dunning currency If all the open items in an account have been posted in the same currency -
either local currency or a foreign currency, the dunning program uses this
currency. Otherwise, the dunning program uses the local currency of the
company code. The items are displayed in document currency in the
dunning notice, and the totals in local and foreign currency.
Cross-company code
dunning
You can combine the overdue items for one customer or vendor from
several company codes in one dunning run, and issue the items in one
dunning notice.
Dunning for head
office/branch
relationships
If your customer or vendor has both a head office and branch offices,
dunning notices are sent to the head office. However, you can also send
dunning notices to the branch offices.
Dunning one-time
accounts
You can dun a one-time account just like any other business partner
account. All the items for a one-time account that have the same address
are grouped into one dunning notice. Whilst the dunning date and dunning
level are written to both the account master record and to the item itself,
the dunning interval is determined solely by what is written to the item,
not the account master record.
Dunning history The dunning history provides you with information on all of the dunning
runs you have executed and the dunning notices you have sent (overdue
items, dunning totals, and so on). If required, you can also select by
account type, company code, and/or customer or vendor.

3. Special Functions in Dunning
You can carry out a variety of special functions for dunning. Some of these vary from the
standard transaction and require separate settings and entries.
The following topics contain a description of the various special functions:
1) Dunning Credit Memos
2) Grouping Open Items Under Grouping Keys
3) Cross-Company Code Dunning
4) Legal Dunning Proceedings
5) Local Dunning
6) Dunning One-Time Accounts
7) Customer and Vendor Clearing
8) Alternative Dunning Recipient
Dunning Credit Memos
Use
In the dunning run, you can offset existing credit notes with outstanding invoices. This affects
the determination of the due date for payment and the dunning level. These are different for
customer and vendor credit memos.
Features
Customer Credit Memos
The dunning program assumes that credit memos are always due on the baseline date, unless
they have been given a specific due date or are invoice-related. This means that credit memo
dunning is not affected if you enter only one payment term manually in a line item.
If you want the dunning program to take payment terms into account, you must either
reference the credit memo to an invoice, or enter a credit memo with a specific due date. For
the latter, enter a V in the field for the invoice reference. The credit memo is due once the
baseline date and the maximum number of days specified have been exceeded.
The following applies for determining the dunning level:
 For invoice-related credit memos, the dunning level is taken from the invoice, provided this
is contained in the dunning proposal.
 All other credit memos due are assigned to the highest dunning level determined so far for
the account they belong to. This means that these credit memos are cleared with the oldest

4. invoices. Sometimes the credit memos may cause the dunning level to be reduced. The
dunning level is updated in the item but has no effect on dunning level determination.
Vendor Credit Memos
Vendor credit memos without an invoice reference, vendor credit memos with a specific due
date, and vendor invoices are all dealt with in the same way as customer credit memos.
Vendor credit memos however receive the same dunning level as the invoice to which they
belong. Ensure that the invoice is also selected for the dunning run. Otherwise the vendor
invoice is treated as a customer receivable.
Grouping Open Items Under Grouping Keys
Use
Grouping keys allow you to group together those customer or vendor open items that are to be
dunned together.
One possible use of grouping keys is in the Financial Assets Management application
component, where you may have to generate a dunning notice for several open items for a
rented property, all of which have the same contract number.
Prerequisites
Define the required grouping key in customizing for Financial Accounting under Accounts
Receivable and Accounts Payable à Business Transactions à Dunning à Dunning
Procedure à Define Dunning Groupings.
Define the required grouping key in the master record of the customers or vendors for whom
you want to group the open items.
To do this, in the vendor or customer master record, select Company code data
Correspondence and enter the required grouping key in the Grouping key Field.
Features
When you define a grouping key, specify a maximum of two fields from table BSIK (vendors) or
table BSID (customers). The dunning program checks the corresponding fields in each business
partner's open items. If each of these fields has been assigned to the same grouping key, the
customer or vendor items are summarized in one dunning notice.
Cross-Company Code Dunning
Use
You can use cross-company code dunning to combine overdue items from several different
company codes in one dunning run. The overdue items for business partners that exist in
several company codes are dunned with a single dunning notice. This eliminates the need to
send a customer a separate dunning notice for each company code.

5. You can also carry out cross-company code dunning for individual dunning notices. The same
prerequisites apply as for the automatic dunning run.
Prerequisites
If you wish to carry out cross-company code dunning, you must assign the relevant company
codes to a common dunning (or leading) company code. The dunning procedure assigned to the
business partner in the dunning company code is used. The dunning frequency and dunning
blocks are checked individually, not just in the dunning company code.
If a date has been specified for an account in the dunning company code, which marks it for
inclusion in the legal dunning procedure, this also affects the dependent company codes.
You can assign the relevant company codes to the appropriate leading company code in the
dunning program.
You make the settings in the Accounts Payable or Accounts Receivable menu
under Environment à Maintain configuration à Company code data. Enter the dunning company
code indicator for those company codes that are to be included in cross-company code
dunning.
If for example, you summarize company codes 0001, 0002, and 0003 for cross-company code
dunning, defining 0001 as the leading company code, you can also dun subsets from company
code 0001 across all the company codes.
If you enter company codes 0002 and 0003 under Parameters on the dunning screen, only
documents from these company codes are summarized and dunned using the dunning
procedure from company code 0001.
Legal Dunning Proceedings
As soon as an account has reached the last dunning level, you can issue an internal dunning
notice. You define the text for this internal dunning notice in the form for the last dunning level.
You then send this dunning notice to the legal department, which in turn initiates legal dunning
proceedings. The legal department enters the date on which the legal proceedings were
initiated in the master record of the account. This field (Legal dunning proceedings) is located in
the company code-specific area of the master record of your business partner,
under Correspondence.
In Germany, legal dunning notices are only issued for the sum total of all due payments that
have been dunned at least three times. In other words, the legal notice covers those items that
have reached dunning level 3. To display this total separately in the legal notice, use the
field Total of due items by dunning level, found in the dunning procedure specifications. The
entry you make in this field determines the dunning level above which all due items from a
single account should be totaled. For legal dunning proceedings, enter a 3. A total is then
created for all items that have a dunning level greater than 3.
An account for which legal proceedings have been initiated is not included in the dunning run
until a new open item is posted and the end of the dunning interval is reached. The legal
department is informed of all postings to the account with an internal message. For this to

6. apply, you have to define a form in the field Legal dunning proceedingsunder Dunning texts in
your dunning procedure.
You can use a separate form or your standard form. You must store the text for the internal
message in the standard form under text element 520 (dunning text for legal dunning
proceedings).
The dunning level in the master record and item is not changed during the dunning runs. The
dunning program only updates the date of the last dunning run.
Local Dunning
Use
For a head office with two branch offices, items are normally posted to the head office account.
The head office therefore receives all the dunning notices with overdue items from the branch
offices.
You can however carry out decentralized dunning, so that dunning notices are sent directly to
the appropriate branches.
Prerequisites
You have selected the field Decentralized processing in the master record of the head office.
Features
The systemdetermines the overdue items for each branch.
The dunning procedure used is that defined in the master records of the branch accounts. If you
choose decentralized processing, note that dunning data is updated in the master record of the
branch account and not in that of the head office account.
Dunning One-Time Accounts
Use
You can dun a one-time account just like any other customer account. The dunning program
determines the master data required from open items.
In contrast to normal accounts however, the dunning frequency for one-time accounts is not
checked in the master record but for each individual document.
Prerequisites
In the master record of the one-time accounts, enter the required dunning procedure and all
additional settings for dunning.
Procedure
Carry out the activities for the dunning process as usual.
Result
Items that have the same address in a one-time account are grouped together in one dunning
notice. The dunning date and the dunning level are only updated in the item, not in the master
record.

7. As for normal accounts, the dunning date is updated in the master record for one-time
accounts; the dunning level however, is not updated.
Customer and Vendor Clearing
If you dun customers who are also vendors and want to clear the items, the dunning program
lists both the overdue customer items and the overdue vendor items in the dunning proposal,
and determines a joint balance.
When you dun a customer who is also a vendor, only the master record information of the
customer is relevant.
The items can only be cleared if the same dunning procedure has been defined in the standard
dunning area for both customer and vendor.
Alternative Dunning Recipient
Use
If you do not want to send the dunning notices to the customer or vendor that owes the
receivable in question, you can send the dunning notice to an alternative recipient.
Prerequisites
Ensure that you have created a master record for the business partner to be dunned and for
the alternative dunning recipient. Enter the account number of the alternative dunning
recipient in the field
Dunning recipient under Correspondence in the company code-specific area of the customer or
vendor to be dunned.