If you regularly receive credit memo advice notes, you are probably familiar with the problem: SAP offers basic options in the standard system for checking the credited quantities and prices. However, the subsequent correction and document processing is unnecessarily cumbersome. In many companies, this leads to manual reports, high costs and unnecessary risks.
If you as a supplier receive credit advice notes from your customers, you know how important it is to check them carefully: even the smallest deviations in quantities or prices can lead to financial disadvantages, accounting errors or delays. Unfortunately, SAP standard functions often do not provide sufficient support to quickly and easily correct deviations in the credit memo process.
Before we go into the details: A few key terms are helpful so that we have a common understanding later on:
In most supplier-customer relationships Invoices These are documents issued by the supplier to the customer that invoice services or goods and their prices.
The situation is different in the credit note procedure. A Credit advice note is an electronically transmitted message that your customer sends you due to a goods receipt booking / goods receipt cancellation or a subsequent price change. With this message, the customer transmits the quantity received, the price stored in their system, the reference to the delivery received and the payment reference number.
Under a Price variance In the electronic credit note procedure, a deviation of the agreed price from the value stated in the credit note advice is to be understood. In the case of a Quantity deviation However, the quantity delivered differs from the quantity specified in the credit advice note.
There are various reasons why customers use credit notes instead of invoices, which go beyond simple error corrections. If an invoice is too high or contains incorrect items, a credit note can retroactively adjust the amount. Credit notes are also a common means of compensating for returns or damaged goods.
Another reason is Discounts and subsequent agreements such as quantity discounts or cash discounts, which are often not taken into account until later. In this case, the credit note enables an uncomplicated adjustment. In some sectors Self-billing distributed: The customer issues the invoice himself and sends it to the supplier by credit advice.
Especially in the Automotive industry it is common for OEMs to work with credit advice notes. The background to this lies in the process design: instead of having to check every supplier invoice, the OEM creates the invoice directly and gives the supplier the responsibility of checking it for accuracy. This creates an efficient process for the customer, while the supplier has to ensure the plausibility check.
SAP provides numerous functions for processing incoming and outgoing invoices that can also be applied to credit notes. The central process here is the Audit. Tolerance limits can be used to set how deviations are to be handled. In the event of a limit violation, a so-called disputed item can be created.
However, the real problem arises precisely at this point: the limits of the SAP standard are quickly reached during processing. Monitoring, checking and subsequent corrections have to be carried out manually by the specialist department.
Normally this leads to the following steps:
With a small number of disputed items from the credit memo procedure, you will have fewer problems. The real challenge arises with the number of steps you have to carry out in the event of discrepant credit advice notes:
These differences from the credit note procedure have a direct impact on you as a supplier. Financial risks arise, for example, when discrepancies in prices or quantities are not clarified quickly enough. Even a small price difference can add up to considerable sums for large quantities.
In addition Process inefficiencies. Incorrect credit advice notes must always be agreed with customers, corrected and reposted. This ties up resources in accounting and sales that would actually be needed for other tasks. If there is no consistent process in SAP for this, but a system break is necessary (e.g. Excel), the process becomes unnecessarily susceptible to errors.
Suppliers should take additional measures to avoid these risks. A first approach is Individual reports or additional programswhich can be used to monitor deviations more quickly and transparently.
Efficient are Add-ons and third-party toolswhich offer checking options and clear monitors. Fast and pre-programmed corrections and follow-up processes relieve users of even more steps. The frequency of errors is reduced and the majority of manual interventions are eliminated.
But technology alone is not enough: Trained employees and Clear responsibilities in the process are just as important. If you know exactly who checks which differences and how to proceed in the event of deviations, you can shorten processing times and reduce errors.
The electronic credit memo procedure in SAP makes it clear that standard functions are not always sufficient to protect suppliers from risks and additional work. Particularly in sectors such as the automotive industry, where credit advice notes are common practice, the responsibility for transparent data management, correct invoicing and verification lies with the supplier itself.
A lack of reconciliation, limited reporting and high manual effort are the biggest challenges. This can be remedied by individually supplemented checking processes, for example with the help of specialized add-ons, careful customizing, clean master data and clear internal responsibilities. Suppliers who implement these measures can not only minimize financial risks, but also make their processes more efficient.
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