Starting point

Accounts receivable, i.e. the amount owed to a business for the sale of goods and services, make up a third part of the balance sheet total of German companies, thus being the most significant part of a company’s current assets. It is therefore essential that this item is represented correctly on a company’s balance sheet.

There are three accounting standards for drawing up balance sheets in Europe and America:

• HGB (German Commercial Code; regional standards)
• IFRS (International Financial Reporting Standard)
• US-GAAP (Generally Accepted Accounting Principles)

A European Union directive stipulates that, starting from 2005, corporate entities must use IFRSs to prepare their consolidated financial statements.

Challenge

Determining the requirement for value adjustment and communicating with the auditors involves a great deal of manual effort.

Flat-rate individual value adjustments in particular tend to give companies a hard time:

• The sheer number of open items makes a correct assessment of your accounts receivable practically impossible
• Certain customer items are valuated using a flat rate (items > 90 days will be adjusted using a flat rate of x %, ...)
• Considerable manual effort
• The whole process is handled in a non-SAP environment (e.g. Microsoft Excel)
• High effort involved in communication processes with the auditors

This makes it practically impossible to monitor the risks arising from your accounts receivable portfolio on a continuous basis throughout the year. Unable to identify current risks, you will have an increased number of accounts requiring value adjustment or suffer bad debt losses.

Solution

 

SOPLEX VA – the SAP value adjustment management software by SOPLEX

This SAP solution determines your requirement for value adjustment on a daily basis and according to a set of fully customizable criteria defined by you.

• Implements your value adjustment policy
• Rules can be set on a company-code-specific basis
• Integration of all relevant SAP modules (FI, CO, ...)
• Integration of all relevant SAP add-in software (e.g. SOPLEX CI, SOPLEX CS, SOPLEX BI ...)
• Allows you to run reports on the value adjustments carried out
• Value adjustment is posted in SAP
• Interfaces to other systems, such as SAP BW, dispute management …, can be implemented

Features

SOPLEX VA – solvency-based, automatic value adjustment with SAP

• Adherence to the accounting standards set out in the HGB, IFRS, US-GAAP
• Fully customizable set of rules
• Use of all internal data (payment behaviour, …)
• Use of all external data existing in SAP (business information, …)
• Requirement for value adjustment is determined automatically for each open item
• Value adjustment is posted on different levels (e.g. G/L account, customer, vendor, ...)
• Report for automatic update of value adjustments (balance – allocation – utilization – cancellation)
• Value adjustments that are not required will be cancelled automatically
• Back-testing procedures automatically validate the rules defined by you
• VA info system – reports by the click of a button

Business impact

SOPLEX VA, an SAP solution and proactive risk management tool, provides an automatic and ongoing overview of all your accounts receivable items whose value requires adjusting, thus enabling you to organize follow-up processes.

• Adherence to the accounting standards HGB, IFRS, US-GAAP
• Automatically analyzes and assesses your accounts receivable portfolio
• Calculation of ratios (value adjustment index, value adjustment category ...)
• Comprehensive reporting tools

SOPLEX VA does not only reduce the effort involved in value adjustment procedures. It also gives you reliable information on the actual value of your accounts receivable portfolio. Moreover, its automatic processes allow you to determine your requirement for value adjustment at any given time.

Technology

SOPLEX VA is add-in software for SAP

• Own namespace
• Programming language ABAP/4
• No modification of the SAP system
• Implementation via SAP transports
• Multilingual versions
• No additional hardware required
• No third-party software required
• SAP authorization concept
• Easy to implement