1. What is dunning?
The process of notifying customers/vendors that they have overdue items. There are varying levels that can be used by the client depending upon the business relationship with their customer.
2. What determines how often a customer can be dunned? Where is this configured?
Once an account has been dunned at a certain level, it must meet the criteria at the next level before it can be dunned again. These settings are configured in the dunning area and linked in the customer master.
3. What is a dunning area?
The dunning area is an optional unit in the organizational structure used to group customers/vendors for dunning and it can be based for certain policies or organizational units such as divisions.
4. To what is the dunning procedure assigned?
A dunning procedure can be assigned to a dunning area or to customer/vendor master records.
5. What are the 4 basic parameters of a dunning procedure? Discuss them.
1) Dunning level – Up to 9 dunning levels may be defined. A customer/vendor can only be dunned in a certain level if he has already been dunned in the previous level.
2) Minimum amount – A user defined overdue threshold amount of the total account balance that must be exceeded to reach a dunning level.
3) Dunning charges – These charges are used to cover postage and handling of the dunning letter. Dunning charges are not reflected in the G/L. You can define dunning charges for each dunning level.
4) Dunning text – A form written in SAPScript. It can be shared by more than one dunning level.
6. A customer has three items in arrears. Which open item determines the next dunning letter sent?
Assuming Dunning by Level is not selected, the item at the highest dunning level determines which dunning letter will be sent.
7. What is a grace period?
A grace period is the period during which an overdue item will not be dunned. An item, whose days in arrears are smaller or identical to the grace period, is treated as not due for the current notice.
8. What are minimum days in arrears?
Minimum days in arrears is the number of days overdue after which a dunning notice will be sent.