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SAP FI · Lesson

Accounts receivable

Quick answer

AR is the finance end of order-to-cash: SD billing posts the receivable, AR then collects it, and receipts post to bank accounting.

Key takeaways

  • AR records customer invoices (often from SD billing), applies incoming payments, manages overdue receivables through dunning, and…
  • Customer invoices: from SD billing or direct FI.
  • Incoming payments & clearing: matching receipts to invoices.
  • Watch out: Unapplied/mis-applied cash, receipts not cleared to invoices.

What AR does

AR records customer invoices (often from SD billing), applies incoming payments, manages overdue receivables through dunning, and keeps the customer sub-ledger reconciled to the G/L. It ensures the organisation collects what it is owed and that receivables are accurate.

Key processes

  • Customer invoices: from SD billing or direct FI.
  • Incoming payments & clearing: matching receipts to invoices.
  • Dunning: reminders for overdue amounts.
  • Credit management links to reduce risk.

Integration

AR is the finance end of order-to-cash: SD billing posts the receivable, AR then collects it, and receipts post to bank accounting. It reconciles to the G/L and links to credit management to control customer risk. Clean customer master (BP) is essential.

Common pitfalls

  • Unapplied/mis-applied cash, receipts not cleared to invoices.
  • No dunning, overdue receivables ignored.
  • Ignoring credit management, over-exposure to risky customers.

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Check your understanding

  1. Which statement is true of Accounts receivable?

    • A. It ensures the organisation collects what it is owed and that receivables are accurate.
    • B. As a database, SAP HANA is a full, ACID-compliant relational database with standard SQL plus advanced…
    • C. A BAPI (Business Application Programming Interface) is a standardised, stable method for accessing SAP…
    Show answer

    A. It ensures the organisation collects what it is owed and that receivables are accurate.

    Covered in the “What AR does” section of this lesson.

  2. Which of these also applies to Accounts receivable?

    • A. Expecting Fiori to replace all GUI, config and long-tail transactions remain in GUI.
    • B. Stepping blindly instead of breaking on the message/exception.
    • C. It reconciles to the G/L and links to credit management to control customer risk.
    Show answer

    C. It reconciles to the G/L and links to credit management to control customer risk.

    Covered in the “Integration” section of this lesson.

  3. Which part of the Learn SAP curriculum covers Accounts receivable?

    • A. SAP Fiori
    • B. SAP FI
    • C. SAP navigation
    Show answer

    B. SAP FI

    This lesson sits in the SAP FI section of the Learn SAP course.

Frequently asked questions

What does the term Accounts receivable refer to in SAP?

Accounts Receivable (AR) is the FI sub-ledger for managing what customers owe the organisation, recording customer invoices, receipts, and dunning, and reconciling to the general ledger. It is the finance side of order-to-cash.

What is another point to note about Accounts receivable?

AR is the finance end of order-to-cash: SD billing posts the receivable, AR then collects it, and receipts post to bank accounting.

What else is worth knowing about Accounts receivable?

AR records customer invoices (often from SD billing), applies incoming payments, manages overdue receivables through dunning, and keeps the customer sub-ledger reconciled to the G/L.

What tends to go wrong with Accounts receivable?

Unapplied/mis-applied cash, receipts not cleared to invoices. No dunning, overdue receivables ignored. Ignoring credit management, over-exposure to risky customers.
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