SAP FSCM

Dispute Management
Introduction
SAP Dispute Management is used to capture invoices which have not
met customer requirements that result in non payments and which
eventually are converted into Disputes.
Disputes are resolved either by receiving payments from the customer
or the vendor crediting back to the customer if the dispute is found
genuine falling in purview of the business

Business Value:
Streamline dispute process
Cross Company dispute resolution
Track and settle disputes
Reduce Dunning Process
What is a Dispute in SAP?
Dispute could be any unfulfilled customer requirement that results
in non payment of the invoice amount billed by the vendor

SAP Dispute Management forms an integral part of SAP Financial

Supply Chain Management along with Collections Management,
Cash Management and Biller Direct

Also provides attributes for processing receivables-related dispute

cases

Dispute can be created for Open Item pending payment from the
Customer and also if the payment is short pay
SAP Dispute Management
What Is It?
SAP Dispute Management is part of SAP Financial
Supply Chain Management (FSCM)
SAP Dispute Management provides functions for
processing receivables-related dispute cases
It supplements the following process chains in the stage
between invoice and payment if there are discrepancies
with the customer:
> Sales Order Delivery Invoice Payment
> Contract Service Provision Invoice Payment
Pain Points of Disputed Invoices
High DSO (Days Sales Outstanding)
Difficulty in predicting cash flow
High cost of resolving these disputed invoices
Disputed invoices can indicate issues in the customer
relationship due to
Quality problems
Logistical problems
Pricing
Account relationship
Events that Lead to Dispute
Cases
Receivables-related dispute cases arise if customers do not pay
their invoices or deduct an amount that exceeds the difference
tolerated by the selling company
Reasons for dispute can be justified:
Trade promotion
Goods were damaged
Wrong price
Late delivery
Reason for dispute can be unjustified:
Customer is not able to pay
Wrong bank data
Identification of Dispute Cases
Basically, there are three stages when disputes can arise:
The customer informs the selling company about the
dispute interaction channel would be, for example, the
account manager or a call center
The customer makes a reduced payment the cash
accountant discovers this when processing incoming
payments
The customer does not pay the accounts receivables
accountant discovers the overdue item by checking the
open item list
Benefits of SAP Dispute
Management
SAP Dispute Management controls and streamlines the dispute case
process
As central component for handling dispute cases, SAP Dispute
Management enables cross-department dispute case resolution
SAP Dispute Management is integrated in financial but also in
logistical processes
SAP Dispute Management organizes and stores all information and
documents related to a dispute case
SAP Dispute Management includes sophisticated reporting
Detect quality issues
Control workload
Track dispute process
Process Flow: Create Dispute Case for
Incoming Payment
Deployment Scenarios
SAP Dispute Management can be set up in two
different ways

Customers with Accounts Receivables in R/3

Enterprise 4.7
One-System Scenario

Customer with Accounts Receivables in R/3 4.6C

Multiple-System Scenario
Integration with the Finance
Process
Disputed invoices typically become visible as there is integration
with SAP Financials module i.e., AR:

When Post incoming payments (Residual items get created)

Customer Line Item Display
Bank statement post processing (create residual item)

SAP provided standard program RFDM3000 is used for Automatic

creation of dispute cases for residual items created by lock box
file or electronic bank statement
UDM_WRITEOFF is the SAP standard program used to write off
dispute cases