That Assignment indicator in SAP Business One marks a receivable that has been assigned (ceded) to a third party - typically in the context of Factoring.
An assignment indicator marks a receivable as assigned.
Basics: An assignment (assignment of receivables) is the transfer of a receivable from one creditor (assignor) to another creditor (assignee). This is often done to obtain liquidity, for example through factoring or to collateralise loans.
The assignment indicator is used to Accounting system clearly identify a claim as assigned.
Function and effects:
- Identification: It enables a distinction to be made between assigned receivables from the original debtor and non-assigned receivables.
- Accounting: Depending on the type of assignment (genuine or non-genuine), this has an impact on the assignor's balance sheet. In the case of a genuine assignment, the receivable is removed from the balance sheet as the default risk and the responsibility for collection are transferred to the assignee. In the case of a non-genuine assignment, the receivable remains on the assignor's balance sheet as the assignor continues to bear the risk.
- Receivables management: The indicator signals that the payments for this claim are no longer to be made to the original creditor, but to the assignee. It prevents the assignor from inadvertently collecting the claim himself or selling it on.
- Reporting: For reporting and the Liquidity planning it is essential to be able to distinguish between assigned and non-assigned receivables.
The system uses this indicator to ensure the correct accounting treatment and presentation of the receivable.
Meaning
- Assignment of claims: Transfer to factoring companies
- Dunning block: Assigned receivables are excluded from the dunning process
Use in SAP Business One
The assignment indicator informs the accounting department that the claim is being settled via the assignee.
