Accounts Payable – Outstanding Debts

Discover how a healthcare organization shortened the process to produce an AP debt overview from over a month to slightly over a day, ensuring data is actual and the report is native within SAP.

An Accounts Payable Outstanding Debt overview (or ‘AP Outstanding Debt’) is a vital accounting document that outlines the overall debt a business needs to pay (‘State of Debt’, so to speak). Read how a tedious, manual, inaccurate and inefficient process of producing an Accounts Payable Outstanding Debt (broken-down into CapEx and OpEx debt classification) has shortened from over a month (for each report) to a one-time effort of slightly over a day that could be reused any time.

Running the AP Outstanding Debt overview powered by RainbowSAP Suite assures it is native within SAP, unlimited in terms of the length of the overview’s period. For the office of the CFO, ultimately RainbowSAP turns the issuing of the AP Outstanding Debt report from a liability to an asset. Consequently, the healthcare organization is in an advantageous proactive position (rather than a reactive one) with regards to its debt management and financial risk policies.

Providing companies their full Accounts Payable Outstanding Debt that outline the financial liabilities towards suppliers is often a tedious, inefficient, long and ineffective process. Actually, AP Reports are perceived as a liability that is being generated only when there is no other choice, mostly due to complexities and to massive manual labor needed to invest in order to produce an Outstanding Debt Report, which is effectively outdated as early as the following morning. 

PAIN POINT: Producing an Outstanding Debt Report requires significant SAP processing-time bandwidth and resources, given the volume of data that needs to be sorted at any given timeframe, by the supplier (Vendor). It is even more challenging to run further analysis over Outstanding Debt data, such as the breaking down the data between CapEx and OpEx liabilities. Moreover, triggering a multiple-year outstanding debt report often results with very long processing time given the volume of data. Altogether, within a mid-sized organization, it might take up to one calendar month to produce a multi-year Outstanding Debt report, every single time it is demanded.

Companies face various challenges when producing AP outstanding debt reports, such as in the following cases, when:

  1. Processing of any financial transaction code as the baseline of the AP outstanding debt for a period longer than a few months
  2. Handling in-parallel both open invoices (MIRO as depict in FBL1N) and not yet invoiced services (MIGO as depict in FBL3N)
  3. Breaking down the financial records between CapEx (‘Capital Expenditures’) and OpEx (‘Operating Expenses’) 

Furthermore, since the Outstanding Debt Report is often exported to a spreadsheet, it is outdated and inaccurate from the moment it has been exported, it does not enjoy the authenticity and liability of SAP, and the control over the quality and credibility of the data as well as overall data security controls is rather limited. Once the Outstanding Debt Report has been created and exported to a spreadsheet, the organization no longer benefits from the SAP Authorization protocol, and hypothetically – there is no control over who received the files and whether the person is authorized to access it.

When it comes to S4/HANA, an App named ‘Debt and Investment Maturity Profile’ (App ID F3130) is available on SAP Fiori Apps Library, using the C_MaturityProfile CDS view. The availability of this standard Fiori App merely moves the starting point forward, thus may reduce some development work in comparison to the ECC version. However, once a user wishes to further breakdown the data by different categories (i.e. CapEx & OpEx) or add any column or input to the charts (let alone push automatically notification and alerts according to predefined rules) then there is a need to further develop the CDS. With RainbowSAP Suite, a user or a consultant could personalize the Outstanding Debt report without any development and in no-time, and provide access to the data for the end users through Fiori.

ACTION: Within slightly more than a day, a repetitive and automated AP Outstanding Debt Report has been created, presenting a 5-year summary (including the current year) of the AP Outstanding Debt Report, clustered by Supplier (‘Vendor’) and by expense type (Capital Expense and Operating Expense).

  • Standard SAP report FBL1N (Vendor Line Items) was used as the first baseline source of data. This report lists all of the suppliers who issued an invoice but were not paid.

For a predefined period, ending at a specific Key Date (e.g. 31.01.2020), by using Rainbow, the data was sorted as illustrated below, aggregated by Vendor:

Vendor Code Amount Amount CapEx Amount OpEx
Vendor 1 Amount 1 in $ C1
Vendor 2 Amount 2 in $ O2
Vendor 3 Amount 3 in $ C3 O3

 

  • Standard SAP report FBL3N (G/L Account Line Items) was used as the second baseline source of data. This report lists all of the suppliers who delivered their service or product but had not yet issued an invoice.

For a similar predefined period ending at the same specific Key Date as in (1) above (e.g. 31.01.2020), using Rainbow, the data was sorted as illustrated below, aggregated by Vendor:

Vendor Code Amount Amount CapEx Amount OpEx
Vendor 1 Amount 1 in $ C1
Vendor 4 Amount 4 in $ C4 O4
Vendor 5 Amount 5 in $ C5

 

  • Using Publisher Snapshot, the aggregated tables for the period captured in (1) and (2) above has been captured. The advantage of this action was that from this point on, each time an end-user is accessing the transaction, then it reads the structured data immediately from the background, with no delays created when usually reading the data all over from the source data on SAP’s Database.

 

  • LFA1 (Vendor) + LFB1 (Vendor + Company Code) tables provide the relevant Vendor (‘Supplier’) names. After combining both tables FBL1N and FBL3N into one table, as following, the AP aggregate table by Supplier is produced, as illustrated in the following table:
Vendor Name Total $ for Supplier (‘Vendor’) MIRO
(Incoming Invoice.
Source: FBL1N)
MIGO
(Incoming Goods. Source: FBL3N)
CapEx OpEx CapEx OpEx
Vendor 1  C1+C1 C1 C1
Vendor 2 O2 O2
Vendor 3 C3+O3 C3 O3
Vendor 4 C4+O4 C4 O4
Vendor 5 C5 C5

 

  • A functional button (‘Change Key Date’) has been added to Rainbow, where the end-user could enter a new key date, whenever he requires a new AP Outstanding Debt Report. This button triggers the following:
    1. Change of Key Date in FBL1N Variant
    2. Change of Key Date in FBL3N Variant
    3. Trigger an event to Publisher Snapshot

Outcome: Fresh, automated and updated AP Outstanding Debt Report, reflecting the status on the new Key Date, sorted by ApEx & OpEx, native within SAP.

RESULT: From a process that lasted over a month of manual labor, subject to errors and out-dated once completed, AP Outstanding Debt Report became an automated, native & protected SAP, on-demand process. AP Outstanding Debt report could now be used as an asset and as an important tool to proactively manage the accounting and the cash position of a company. Not only the AP Outstanding Debt Report has been provided within approximately a day, but it has also been automated in a way that various stakeholders in the company could trigger the request, assure a one-truth and a standardized view of this report, regardless of the person invoking the demand. 

Since AP Outstanding Debt Report is now native in SAP, the healthcare customer is protected by SAP’s Authenticity, liability and authorization protocol. Furthermore, the outcome of using RainbowSAP Suite permits the end users to personalize the data, split the data and run further analysis over the report, without any development or need to extract the data outside of SAP environment.