CEU+BAR Dispute+Management+Workshop v1

OTCAR103 Dispute Management

Dispute Management


Agenda

• Dispute Management Overview• Maintain Residuals and Dispute Cases• Non-Trade Related Claims Overview• Example: SD Process – Quantity (Damage)• Example: SD Process – Value (Freight)• Example: FI Process – Customer Penalty


Key Changes to Dispute Management

SAP ECC provides a Claim and Dispute Management application that allows McCain to track and direct trade related claims to their proper trade claim system (TPM or Vistex where applicable) as well as track and resolve non-trade related claims within SAP itself

McCain is moving to a single, centralized Dispute and Claim Management environment that is integrated with the SAP ECC (Enterprise Central Component). This system replaces various separate standalone systems and results in greater standardization for processing claims

SAP Customer Credit Checks are not affected by disputed residual items while they are in the resolution process


Key Benefits for Dispute Management

Standardized Dispute and Claim Management processes across the company allowing the company to share and implement best practices

An integrated claims system saves work by removing the manual step of recreating the disputed object in a separate system

Effectively monitor and control deductions claimed by customers

Improve Business visibility of Dispute Cases by root cause, including the most common non-trade spend-related claims: price discrepancies, transportation issues for overages, shortages and damages, warehouse issues as per Overages, Shortages and Damages (OS&D) claims


Dispute Management Overview

What is Dispute Management?

• It is an SAP application for tracking and resolving claims – primarily intended for Deductions but it is also used for Claim Notifications.

• It is the central repository for logging all customer claims.• Dispute Management is independent from but is integrated

with ECC Accounts Receivable.


Dispute Management Overview (contd.)

What is a Dispute Case?

• It is an electronic file for collecting relevant information about a claim and displaying that information in a structured form.

• A Dispute Case includes attributes such as• Reason for the claim• Customer making the claim• Status of the claim

• Amount Fields show the amount of the original claim and the credited, paid and written-off amounts.


Dispute Management – Dispute Case

The following screenshots displays a dispute case:


Dispute Management – Dispute Case

The following details are required to create a dispute case in the system:

• Title – Free form identifier field for the Dispute Case• Customer – Customer # and Name• Company Code – Company Code of the customer• Status – New, In Process, Valid, Invalid, Closed and Void• Reason – Reason code for the Claim• Processor – Dispute Analyst or Broker• Coordinator – Always Dispute Analyst• Customer Disputed Amount – Manual Amount entered for Claim• Notifications – Not used for Deductions• Currency – The currency of the Customer Disputed Amount


Dispute Management – Dispute Case (contd.)

The following details are also required to create a dispute case:

• Case Type – This will default to ZFD3 (McCain Configured)• External Reference – Customer’s Claim Reference # • Priority – (Optional) Low, Medium, High, Very High• Category – Claim Type (Deduction or Notification)• Escalation Reason – Used by Manager/Supervisor for Write-off• Person Responsible – N/A• Process Deadline – Optional – Date for completing a step in the resolution process• Planned Closed Date – Optional – Anticipated close date



All of the below subtotals are based on auto-postings – no manual postings:

• Original Disputed Amount – Amount of Residual at time of creation• Disputed Amount – Current Amount Outstanding or Uncleared Amount• Credited Amount – Amount cleared with a Credit Note. All valid claims are cleared using a Credit Note. This rule applies to trade and non-trade claims• Paid – Amount Paid back by the customer• Cleared Manually – Claims cleared by manually charging them off to a G/L

account• Auto Write-off – Claims cleared using the Dispute Management write-off

function• Currency – Auto-determined based on company code



All of the below subtotals are based on auto-postings – no manual postings:

• Created By – User (or batch job) that created Dispute Case• Changed By – Last user to update Dispute Case• Closed By – User that closed the Dispute Case• Created On – Creation Date• Changed By – Change Date• Closed By – Close Date

• Manually Entered:• Root Cause – Used for assigning a party at fault for Non-Trade Claims• Authorization Level – Security object – select your company code


Claim Category

Note …The deduction results in a Residual item. Then a Dispute Case is assigned to the Residual

• Claim Notification – Claim made prior to Deducting• Deduction

Customer claims are presented to McCain in two ways:

Recall that claim category is one of the attributes captured in the Dispute Case.


Customer Claim Types and SAP

Customer Claim Types SAPTrade

(Vistex)Billing and Account Receivables

(ECC)

Claim Notification

Non-Trade Related

Trade Related

Dispute Case

Deduction

Deduction

Non-Trade Related

Trade Related

Dispute Case

Dispute CaseTrade related

ClaimDeduction

Trade related Claim

Invoice

Invoice,

The following flowchart displays the customer claim types:


Agenda



Dispute Case End-to-End Process

ClaimClaim Type

Deduction or Notification

Dispute Case Creation

(new)

Investigation and Validation

ResolutionTransaction

Clearing Open Items and Closing the Dispute

Case

Regardless of whether claim is a notification or a deduction, it needs to be tracked, validated, cleared, and closed.

The off-line steps for Classifying and Validating claims are essentially the same as Pre-SAP.


Claims Managed by McCain

• Damage • Shortage• Overage • Price discrepancy • Freight discrepancy • Cash discount discrepancy

Non Trade Related(logistics or pricing

errors)

• Vistex Claim – Deduction • Vistex Claim – Invoice Claim

Trade Related(Price deals,

allowances, rebates, and promotional or

contract agreements)

SAP system for McCain manages two broad categories of claims:


Instructor Demonstration

F-32 - Splitting Residuals into multiple Residuals

Scenario:Claim investigation shows that $6,000 Residual is actually made up of 3

deductions as follows:

1. $3,000 – Damage 2. $2,000 – Trade Deduction3. $1,000 – Customer Penalty

Residual needs to be split into 3 new residuals with dispute cases.



F-32 – Creating a Rebill

Scenario:After investigating a Dispute Case, it is determined that this claim is

Invalid (i.e. customer mistakenly deducted twice for same claim).

Create a Rebill for the full amount of the residual.



F-32 – Assign Credit Memo to Residual

Scenario:

Assign a Debit Residual ($3,000) to a Credit Note ($2,000) and create the resulting new residual into a ReBill.


Agenda



Non-Trade Related Claims - Overview

To resolve Valid Non-Trade Claims there are two process flows:

• Sales and Distribution (SD) Process (Order Types)• Return Orders – ZRE• Credit Memo Quantity – ZCQ• Debit Memo Quantity – ZDQ• Credit Memo Value – ZCV• Debit Memo Value – ZDV

• Financial (FI) Process• FI Credit Memo• FI Invoice


Sales and Distribution (SD) Process

All ‘Invoice’ or ‘Order’ related claims (returns, refusals, overages, shortages, damages, freight, pricing etc.) are cleared using the SD process.

• Use the Decision Tree to assist in selecting the correct SD Order Type

• As a rule, always ‘Create with Reference’ to Invoice for:• ZRE – Returns• ZCQ – Credit Memo Request – Quantity• ZDQ – Debit Memo Request – Quantity

• Always Create WITHOUT Reference for:• ZCV – Credit Memo Request – Value• ZDV – Debit Memo Request - Value


Standard Order (SD to FI)

Sales & Distribution Module Finance Module

Accounting Document

COPA

BillingDocument

DeliveryOrder

The following flowchart displays the Standard Order process.


SD Process – Returns

Sales & Distribution Module

V.23

Finance Module

Accounting Document

COPA

BillingDocument

DeliveryReturn Order

The following flowchart displays the Standard Order – Returns process.


SD Process – Debit/Credit Memos

Sales & Distribution Module

V.23

Finance Module

Accounting Document

COPA

BillingDocument

Debit/CreditRequest

The following flowchart displays the Standard Order – Debit/Credit Memo process.


Financial (FI) Process

All other valid non-trade claims that are not ‘Invoice’ or ‘Order’ related are cleared via the FI Process.

• In legacy system, any claims that were previously coded to a G/L, will now use FI Process to clear• FI Process follows the same steps for all FI claims but Analyst will select different G/L account and cost center based on claim reason


FI Credit (FV75)/FI Invoice (FV70)

Finance Module ONLY – No SD

FBVO

Posted Accounting Document

Parked DocumentFV75/FV70

The following flowchart displays the FI Credit – FI Invoice process.


Clearing and Closing

The clearing and closing of a Valid Claim will be accomplished through one of the following appropriate activities:

• Assign Credit to residual item (Debit)• For all Debit Notes: Send to customer and apply incoming payment to Debit


Clearing and Closing (cont’d)

The clearing and closing of an Invalid Claim will be accomplished through one of the following appropriate activities:

• Deduction (Re-bill): • Full payment from customer• Credit Note after further supporting documents are provided• Written off


Non-Trade Related Claims - Examples

Three methods for clearing claims with Credit Notes:

• Sales and Distribution Process - Quantity Related (Damage)• Sales and Distribution Process – Value Related (Freight)• Finance Process (Customer Penalty)

Damage Claim

Customer Penalty Claim

Freight Claim


Agenda



SD Process – Quantity (Damage)

Scenario: Valid damage claim with no physical return of the goods

• Customer deducts for 50 CS of product that they claim were damaged• Residual exists with reference to the Invoice• McCain ultimately determines that this deduction is a valid claim• No goods are returned because the customer disposed of the product• Dispute Analyst uses Credit Memo Request Quantity (ZCQ) created with

reference to the original invoice to clear the deduction • Dispute Manager will approve the ZCQ request • Billing Due List creates the Credit Memo• Dispute Analyst attaches the Credit Memo to the Dispute Case• Dispute Analyst assigns the Credit Memo to the Deduction

• Dispute Case automatically closes



UDM_DISPUTE: Update Dispute Case

Scenario:

The customer has deducted and therefore a residual item exists in their customer account with a dispute case assigned to the residual.

Go to UDM_DISPUTE to update the following details:

• Status to ‘In Process’• All mandatory fields – Then Save• Record a note that confirms that Damage noted on POD• Update Status to ‘Valid’• Exit Dispute Management



Create Credit Memo Request – Quantity

Scenario:

The Customer’s claim is determined to be valid (POD notes the damage). The Dispute Analyst creates a Credit Memo Request – Quantity with reference to the invoice for the number of damaged cases.



Delete Billing Block

Scenario:

Dispute Manager approves the claim and removes the Billing Block – V.23.



Billing – Create Credit Memo

Scenario:

Run the Billing Due List (Order Related transactions only) and create the actual credit memos.



Attach Credit Note to Dispute Case – UDM_DISPUTE

Scenario:

Dispute Analyst enters the Dispute Management application – UDM_DISPUTE – to attach the Credit Note to the existing dispute case already attached to residual item.



Assign Credit Memo to Residual

Scenario:

Since the residual item (deduction) and credit memo now share a common dispute case ID, the Dispute Analyst can now assign the two documents to each other and clear them from the Customer A/R account.



Validate that Claim Updated and Closed – UDM_DISPUTE

Scenario:

Dispute Analyst navigates to Dispute Management application – UDM_DISPUTE – to validate that the dispute case status is now Closed.


Agenda



SD Process – Value (Freight)

Scenario: Valid Freight claim notification (prior to deduction)

• Customer deducts the Amount of Billed Freight sent on McCain Invoice

• Customer claims that Billed Freight applied incorrectly to a CPU order

• Dispute Analyst determines claim is valid and updates dispute case• Dispute Analyst creates Credit Memo Request Value (ZCV) (not

created with reference)• Dispute Manager approves the ZCV request • Billing Due List creates the Credit Memo and financial postings• Dispute Analyst attaches the Credit Memo to the Dispute Case• Dispute Analyst assigns Credit Memo to Residual• Dispute Case automatically closes




Scenario:



• Status to ‘In Process’• All mandatory fields – Then Save• Record a note that confirms that Billed Freight applied in error• Update Status to ‘Valid’• Exit Dispute Management



Create Credit Memo Request - Value

Scenario:

The Customer’s claim is determined to be valid (transportation group confirms that order was CPU). The Dispute Analyst creates a Credit Memo Request – Value for the amount of the freight surcharge incorrectly applied.



Delete Billing Block

Scenario:

Dispute Manager approves the claim and removes the Billing Block – V.23.



Billing – Create Credit Memo

Scenario:

Run the Billing Due List (Order Related transactions only) and create the actual credit memos.



Attach Credit Note to Dispute Case

Scenario:

Dispute Analyst enters the Dispute Management application – UDM_DISPUTE – to attach the Credit Note to the existing dispute case already attached to residual.




Scenario:




Validate that Claim Updated and Closed – UDM_DISPUTE

Scenario:



Agenda



Process a Customer Penalty Claim

Scenario: Customer charges McCain for late delivery

• In the customer penalty claim scenario, you will learn what happens when the customer claims for credit due to a discrepancy in the delivery process.

• In this scenario, the discrepancy results in the customer penalizing McCain. Such discrepancies are resolved through creation of an FI Credit Memo which is not an Order Type but an Accounting transaction.


Process a Customer Penalty Claim (contd.)

Scenario: Customer charges McCain for late delivery

• Customer deducts 500.00 as a penalty for a late delivery• Dispute Analyst updates dispute case – UDM_DISPUTE – In process• Dispute Analyst determines claim is valid and updates dispute case• Dispute Analyst uses FI Credit Memo to resolve claim because this charge is

independent of the product quantity and pricing• Dispute Manager posts the FI Credit Memo to the Financials• Dispute Analyst attaches the Credit Memo to the Dispute Case• Dispute Analyst assigns the FI Credit to the residual• Dispute Case automatically closes




Scenario:



• Status to ‘In Process’• Enter values in all mandatory fields – Then Save• Record a note that confirms that Carrier was late• Update Status to ‘Valid’• Exit Dispute Management



FI Credit Memo – Parked Doc - FV75

Scenario:

The Customer’s claim is determined to be valid (transportation group confirms that McCain carrier arrived late). The Dispute Analyst creates an FI Credit Memo for the amount of the penalty charged by the customer.


FI Credit Memo – Parked Doc - FV75

Scenario:

The Customer’s claim is determined to be valid (transportation group confirms that McCain carrier arrived late). The Dispute Analyst creates an FI Credit Memo for the amount of the penalty charged by the customer.

Hands-on Exercise

You have 30 minutes to complete this exercise.



Post FI Credit Memo (FBV0)

Scenario:

Dispute Manager reviews the FI Credit Memo and the claim file and posts the FI Credit Memo.



Attach Credit Note to Dispute Case

Scenario:

Dispute Analyst enters the Dispute Management application – UDM_DISPUTE – to attach the FI Credit Note to the existing dispute case already attached to the residual.




Scenario:




Validate the Updated and Closed Claim – UDM_DISPUTE

Scenario:



Questions?

?


New Terms in Dispute Management

Term Description

Claim A financial demand for an amount due. A claim can be submitted to McCain by Customers in the form of a notification (i.e. phone call, email, invoice, etc.) or a deduction

Dispute An unsettled / unsolved claim where both parties, customer and company are in disagreement regarding a particular transaction

SAP Dispute Case An object within the SAP ECC Dispute Management application where the details of a claim or disputed item are documented and categorized

Claim Notification A notification that is received when the customer presents McCain with a claim prior to deducting

Deduction A short payment against an invoice. The difference between the payment amount and the invoice amount is the deduction amount

Customer Invoice Claim

A claim that is received when the customer presents McCain with an invoice that levies a charge against McCain


New Terms in Dispute Management (cont’d)

Term Description

Trade vs. Non-Trade Claims

Trade related claims are mostly related to price deals, allowances, rebates and other promotional and contractual agreements. Non-trade related claims are related to logistics and pricing errors.

Return Orders A type of Sales Order for the return of goods by the business partner

Credit Memo Request – Quantity

A sales order type used to request a reduction in the customer AR account for product quantity discrepancies or damage. The request is not delivery relevant but it may involve an Inventory adjustment as a subsequent process. It is not yet a Credit Memo

Credit Memo Request – Value

A sales order type used to request a reduction in the customer AR account for value-related discrepancies (i.e. pricing, freight errors). The request is not delivery relevant and it will not involve an inventory movement. It is not yet a Credit Memo


New Terms in Dispute Management (cont’d)

Term Description

Debit Memo Request – Quantity

A sales order type used to request an increase in the customer AR account for product quantity discrepancies (typically overages). The request is not delivery relevant but it will involve an Inventory adjustment as a subsequent process. It is not yet a Debit Memo

Debit Memo Request – Value

A sales order type used to request an increase in the customer AR account for value-related discrepancies (i.e. pricing, freight errors). The request is not delivery relevant and it will not involve an inventory movement. It is not yet a Debit Memo

Miscellaneous FI Invoice

An accounting document that increases the customer AR account for non-inventory items, services or miscellaneous charges

Miscellaneous FI Credit

An accounting document that decreases the customer AR account for non-inventory items, services or miscellaneous charges


Roles and Responsibilities

Role Responsibility

Dispute Analyst Keeps track and resolves all disputed items whether they be notifications or deductions.

Dispute Manager Approves/declines claims submitted by Dispute Analyst and allocates Dispute Cases to Dispute Analysts.

Other Stakeholders Customers, McCain Inventory and warehouses, Carriers and third-party warehouses.


Business Process Flow – Claim and Dispute Management

Documents

CEU+BAR Dispute+Management+Workshop v1