Customer receivables are checked for correctness during year-end closing in cooperation with internal or external auditors.
Carla received the following mail from Jennifer, internal auditing department:
Customer Balance Confirmation
Carla has some questions for Jennifer because she's doing this task for the first time, so she calls her.
Carla: Hi Jennifer! Thank you for offering to help me. I just wanted to ask you a couple of questions.
Jennifer: No worries! How can I help?
Carla: What's the difference between a balance confirmation and a balance request?
Jennifer: With a balance confirmation, we tell the customer how much they owe us and ask for a response. With a balance request, we ask the customer to tell us how much they owe.
Carla: And why did we change the procedure this year?
Jennifer: We changed things because not enough customers responded to balance requests. Hopefully, the ratio will increase again this year.
Carla: Good to know.
Jennifer: Oh! Also, balance notification is another option where the customers only reply if they disagree with the balance.
Carla: Thanks for letting me know!
Jennifer: No worries - we were all new once. By the way, could you check if our current reply address is correct? We moved to the company campus last year, so we should double-check our details.
Carla: Yes, of course. Everything looks good on my side. So, how do we create a new business partner for another reply address?
Jennifer: Good question. Create a new business partner with the business partner categories Organization or Group.
Carla: Thanks, Jennifer. I will let you know when I schedule the Balance Confirmation in the SAP system.
Jennifer: Perfect. If you have any further questions, feel free to reach out!
There are three ways to send letters:
- Balance Confirmation: Ask for confirmation of specific amounts and a reply, irrespective of whether the amounts correspond.
- Balance Notification: Tell the customers the amounts to be confirmed. Keep in mind that they only reply if they disagree with the balance.
- Balance Request: Ask the customer for the amount in our account.
To reconcile our accounts, we contact customers to fix any mistakes.
In SAP S/4HANA Public Cloud, the reply address must be a business partner of the category Organization or Group. To create the letters, use the Customer Balance Confirmation job template in the Schedule Accounts Receivable Jobs Fiori app.
In SAP S/4HANA, set the reply address in customizing when using the Create Balance Confirmation – For Customers app.