Cancel Customer Risk for Draft Payments

This instruction explains how you cancel the risk that collected or discounted customer drafts could be rejected retroactively by the bank due to non-sufficient funds. The purpose is to present an updated customer risk value when reviewing the accounts receivable balance file.

The activity affects only drafts meeting these two requirements:

They are reported as reconciled
A user-defined number of days for risk cancellation is passed after due date.

This activity is usually carried out as a part of the company’s daily routines and run as a batch job.

Outcome

The customer risk for drafts previously accepted by the bank is canceled.

The list printed includes the following information: Payer, customer number, due date, accounting date, voucher number, currency, currency amount, account amount, bank, status, new status, and remittance number.

Review the adjusted customer risk in ‘Accounts Receivable. Display Balances’ (ARS225) for credit monitoring purposes. This is provided you use a column template containing value type 42 = ‘Customer risk not canceled’ defined in ‘AR Inquiry Column Template. Open’ (ARS066/F).

The risk amount cancelled is deducted from the accumulated amount of remitted and reconciled drafts in the customer risk master file (OCURSK).

The remittance status for the drafts is set to 45 = ‘Customer risk canceled’ in ‘Customer Draft. Display’ (ARS280).

Account entries are created provided that the draft was remitted to be discounted and the draft accounting method for risk cancellation is selected for the division in ‘Settings – General Ledger’ (CRS750/F).

Before you start

The starting conditions listed in Managing Customer Credit must be met.
Collected and discounted customer drafts must be reconciled against the bank statement in ‘Bank Remittance. Reconcile Payment’ (ARS350).
A number of days for risk cancellation must be defined. This is done either for the customer group to which the customer/payer belongs in ‘Customer Group. Open’ (CRS145), or for the bank account used when remitting the draft in ‘Bank Account. Open’ (CRS692). If a number of days is entered for the bank account, this overrules any number of days entered for the customer group.
For drafts creating account entries at risk cancellation (see above), FAM function AR88 must be defined in ‘FAM Function. Open’ (CRS405).

Follow These Steps

Start ‘Customer Risk Cancellation. Create’ (ARS330/E).
Enter the run date for the cancellation (required).

The date would normally be the current day. Any drafts with a risk cancellation date (due date + number of risk cancellation days) before this date are included in the activity.
Enter a report text to be printed on the report. Press Enter.