SAP-Credit-and-Collection-management.pdf

SAP Credit and Collection Management Vidar Greve Johannesson [email protected]

Agenda

1.SAP Financial Supply Management – Business Issues and value proposition 2.SAP Credit Management 3.SAP Collection Management 4.Summary

© 2011 SAP AG. All rights reserved.

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Does this Sound Familiar?

Copyright 2002 by Randy Glasbergen www.glasbergen.com


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Cash Flow Cycle

Order placed

Sale + Delivery + Invoice

Delivery + invoice

Actual payment date

Days In Inventory

Days Sales Outstanding

Days In Payables

Days In Receivables

time

(average time to payment of supplier)

Cash payment for inventory

(average customer payment time)

Expected payment date

Cash Flow Cycle © 2011 SAP AG. All rights reserved.

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Free Up Cash with SAP FSCM Companies have big potential to free up working capital by applying best practices 321 bn $

91 bn $

71 bn $

Painpoints in Order to Cash Cycle Cash application

18 %

Accessing information

18 %

Payment reconciliation

26 %

Managing customer behavior

28 %

Invoice presentment

29 %

Discrepancy resolution

47 %

49 bn $ 110 bn $

Current Working Capital

Payables Receivables Inventory Best Practice Working Cash NPV released from best practice: 211 bn USD Capital Source: McKinsey (sample of 24 corporate clients)

Source: Paystream Advisors, 2007 (percentage of highest pain scores)

With SAP Financial Supply Chain Management customers were able to •

Reduce the number of bad debt using SAP Credit Management

•

Reduce efforts and costs for invoicing using SAP Biller Direct

•

Reduce DSO through improved discrepancy resolution with SAP Dispute Management and SAP Collections Management


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Typical Barriers of the Order-to-Cash Cycle



Independent functions



Fragmented and inefficient



No coordination in collections/ dispute resolution



Paper-based and laborintensive



Inconsistent credit policies across divisions



Lack of standardization



Fragmented stand-alone systems

High Cost of Finance Operations High Bad Debt Risk



Poor insight into customer Credit risk



No insight into process bottle necks



No workflow or data management



Lack control over processes, workflow or prioritization



No integration with GL or AR systems


High DSOs

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Overcome Your Barriers by Optimizing the Order-to-Cash Cycle with SAP Barriers e l Insight & c Control y C h s a C - Organization o tr e d r O e Processes h t g n i z i m it IT Systems p O © 2011 SAP AG. All rights reserved.

Finance Strategies 

Monitor performance of financial processes



Implement financial controls and fraud detection mechanism



Control global credit risk



Establish greater cross-functional coordination Define global customer credit policies

 

Establish clear lines of ownership and escalation policies



Organize unstructured data and collaborate via workflows



Streamline labor-intensive processes via standardization and automation

SAP Solutions 

SAP CPM



SAP GRC



SAP Credit Management



SAP ERP Financials






SAP Dispute Management



SAP Collections & Dispute Mgmt



SAP Biller Direct



SAP Accounts Receivable



Straight-through payment processing



Utilize open standards to connect financial systems with customers, suppliers and banks



Enterprise Service Bundles



SAP Biller Direct

Integrate collections / dispute systems with accounting and AR systems



SAP ERP Financials



SAP NetWeaver/SWIFT integration



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Agenda

1.SAP Financial Supply Management - Introduction

2.SAP Credit Management 3.SAP Collection Management 4.Summary


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Agenda

1.SAP Credit Management – Introduction 2.User Interface of the Credit Manager 3.Master Data 4.Credit Rules Engine 5.Reporting & Mass Change


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Financial Supply Chain Management with SAP


Check Credit Worthiness

Issue Invoice

SAP Biller Direct


(Electronic Bill Presentment and Payment)

Forecast Cash

Finance Working Capital

Resolve Disputes

Collect Cash

SAP Collections Management

Settle & Pay

Reconcile

Order-to-Cash


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Credit Management – Business Facts Year 2007: approximately 129,822 corporate bankruptcies in Western Europe* Average delay in payments for Western Europe between 8 days and 21 days* Ineffective credit management in distributed sales systems Information needed for credit decisions is spread out all over the company

No credit history available when doing business with new customers Communication between sales, credit, and finance departments is very time-consuming

A customer is treated differently in different business units within the same company © 2011 SAP AG. All rights reserved.

* Source: Creditreform www.scensum.com. 12

SAP Credit Management – Focus




System to implement a company wide credit policy



Central credit management in a distributed system landscape



Monitor a customer‟s credit exposure in one central system



Customer scoring using own scoring rules creating new reports and queries



Automatically calculate and assign a customer-specific credit limit



Interface to external credit agencies



Web-based access to credit information for sales people



Distribute customer master data via Master Data Management (MDM)



Strategic credit analysis with predefined reports



Credit Manager Portal to speed up credit decisions



Improves productivity by automating credit decision process and focusing on the processing of exceptions

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How to Manage the Credit Risk ? Collect internal and external information about the customer Evaluate and classify the customer according to this information Assign a credit limit according to the risk assessment of the customer Collect information about the credit exposure of business transactions with this customer Ongoing monitoring of the credit limit usage Hedge business transactions for high risk customers Monitor early warning signs Plan sales and marketing activities for low risk customers

Compare credit portfolio with companies‟ strategic goals Share credit information with sales © 2011 SAP AG. All rights reserved.

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Default Probability Sets Risk Hedging Default Probability 30 %

Cash on delivery Letter of credit 20 %

Advance Payment Risk Class III

Check by ext. Credit Agency 10 %

Risk Class II

Invoice

Very Good © 2011 SAP AG. All rights reserved.

Risk Class I

= Customer

Very Bad

Score

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Treatment of Clients Depending on Sales and Default Risk Sales with client High Sales

Possible Actions: 

Lower sales prices



Reduce use of hedging instruments



… Customer A

Best Case Client: Customer C  Intensify Customer Relationship

Low Sales

Possible Actions: 

Reduce business with this customer



Change dunning procedure



Permanent credit risk monitoring Customer B

Possible Actions:  Increase sales prices  Increase use of hedging instruments … Customer D

High Risk © 2011 SAP AG. All rights reserved.

Low Risk

Risk of default

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Functional Overview Credit Limit Management 

Implement a company wide credit policy



Manage a customer credit profile



Central credit management in a distributed system landscape

Credit Case 

Credit case for structured processing of credit limit applications



Track status and result of credit limit applications

Credit Rules Engine 

Categorize customers by scoring rules



Automatically calculate and assign a customer-specific credit limit



Credit check rules



Model and implement own customer credit score cards

Credit Information 

Interface to external credit agencies



Input parameters for scoring rules



BW Content

Credit Manager Portal 


Role-based access to credit management information and analysis www.scensum.com. 17

Credit Limit Management Functions 

Manages the credit profile of a customer



Monitor credit exposure / limit in a central system



Web-Based access to customer„s credit profile



Rules Engine for implementing own scoring and limit rules



Scalable platform to use in B2B and B2C Scenarios



Score customers and vendors

Alert

Alert Credit Limit

Credit Exposure January

March February

April

Business Benefit 

Imlement company wide credit policy



Early identification of default risk



Reduce processing costs by automating credit decisions


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Credit Case Functions Virtual Folder to track credit applications A credit case contains       

Major customer master data & credit profile Status Organizational data Documents Orders Notes Inbox

A credit case can be sent from user to user It is linked to the customer credit data SAP Workflow Integration

Business Benefit Sales people can enter an application for credit limit change Track status of the application © 2011 SAP AG. All rights reserved.

Inform sales when decision is made

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Create Limit Application (Example) Customer exceeds credit limit frequently Sales assistant enters credit limit application (credit case)

Send credit case to financial analyst

Assign credit manager manually / automatically

Send workflow item to financial analyst

Send workflow item to credit manager

Send back credit case with financial data

Need more information?

yes

no Approve / reject credit limit application Change limit in

Close credit

Send notification to

master data (manually)

limit application

www.scensum.com. 20 sales assistant (workflow)


Creating Credit Limit Request Select Business Partner

Define details

Add note

Add Attachments

Review and save

Confirmation


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Integration Functions Central credit management in a heterogeneous system landscape Import exposure information from various systems Perform credit limit check in real-time Integrate services from external credit agencies into the credit decision process Distribution of customer master data by MDM

Business Benefits Minimal effort for connecting SAP and non-SAP Systems and low TCO due to XI Seamless integration of external services increases user productivity Real-time credit limit check guarantees consistent credit decisions Provide customer credit profile to other applications (e.g. CRM)


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Credit Manager Portal Functions 

Role based application providing analytical tools needed for quick credit decisions



Single point of access for all relevant credit information

 

Work lists inform the user about to-do‟s Platform to make credit information available for sales people

Business Benefits 

Improves user efficiency due to consolidation of various information sources



Improves communication between sales, credit and accounting department



Sales people can access credit information from customer site


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Credit Analysis Functions 

Company-wide monitoring of credit risk



Analysis of customer payment and order behavior



Alert on high risk customers



Risk structure analysis of the customer base by country / business unit / customer group

Business Benefits 

Proactive credit management



Identification of risks before customer gets insolvent



Hedging of high risk customers reduces unexpected losses



Aim marketing and sales activities to lowrisk customers



Drive price policy by a customer risk

category


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Integration with External Credit Agencies SAP Enterprise Portal Credit Manager Portal Real Time

SAP Credit Management D&B Creditreform XML

Real Time

External Credit Information System

SCHUFA

D+B

Creditreform


.......

Original XML Document is stored in the document management system that is used by the SAP Business Partner www.scensum.com. 26

Comparison R/3 Credit Management with SAP Credit Management R/3 Credit Management


Master Data

FI-AR Account

SAP Business Partner

FI Data

SAP Business Partner

FI-AR, FI-CA, others

Monitor Credit Exposure

Only for simple systemlandscape (1xFI, 1xSD)

Distributed system-landscape (multiple FI, SD and CRM systems)

Customer Scoring/Rating

Not available

Credit Rules Engine

External Credit Information (e.g. D&B)

Only through partner products

any XML based credit information service

Rule based definition of credit limits

Not available

Credit Rules Engine

Workflow

Only in SD

Create Workflow for any Credit Event

Analysis

Customer fact sheet

Credit Manager Portal (incl. BW Content) and OLTP reporting

Connectivity for non

Not available

PI Server

SAP-systems

Agenda

1.SAP Credit Management – Introduction

2.User Interface of the Credit Manager 3.Master Data 4.Credit Rules Engine 5.Reporting & Mass Change


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Work Center for SAP Credit Management – Modeling the Role of the Credit Manager Each Work Center represents a certain area of activity: 

Worklist



Processing of credit limit requests



Processing of blocked sales orders



Processing of blocked customers

Each work center provides access to a range of work lists, pre-filled reports and services appropriate to the tasks performed by the user. © 2011 SAP AG. All rights reserved.

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Worklist

Detailed Navigation = View Switch

User receives notifications on credit events (e.g. changes in risk class, score etc.)

Links launch applications in Activity Window (user can also start applications related to master data and mass data processing here)


User can view details and access directly the dialogue processing of business partner maintenance www.scensum.com. 31

Credit Limit Requests Overview Detailed Navigation = View Switch

Links launch applications in Activity Window


Pre-delivered default queries with customized values

User can access directly the dialogue processing of the respective request.

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Blocked Customers Detailed Navigation = View Switch

Links launch applications in Activity Window


Pre-delivered default queries with customized values

Action button leads the user directly to the exact location of the block information in the business partner master data

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Agenda

1.SAP Credit Management – Introduction 2.User Interface of the Credit Manager

3.Master Data 4.Credit Rules Engine 5.Integration with External Information Providers 6.Reporting & Mass Change


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Master Data in SAP Credit Management Credit data is a component of SAP Credit Management and is stored in SAP Business Partner. It consists of the credit profile data and credit segment data. The credit profile is used for the central storage of customer data relevant for risk assessment (scoring, risk class, external rating, credit check rule).

Credit segments can map various areas of a company (such as sales area, countries, company codes). They are used for area-specific administration of credit limits (and their utilization) and to store information on the payment behavior of the customer. The corresponding credit segment data is used for credit checking when the order is created or on delivery within a company area. By using relationships you have the possibility of creating customer hierarchy.


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Business Partner in SAP Credit Management

Scoring Rule: Rules that define how a customer is scored (e.g. industry, D&B, legal form, country)

Credit Check Rule: Rules that define how a customer is credit checked (e.g. static / dynamic check, oldest open item …)


External Rating from D&B

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Relationship Higher-level credit management account of … Business Partner 4711 Segment 0000 Credit Exp.: 1.000.000 €

Total Credit Exposure: 3.100.000 €

Is the higher level credit management account of …

Business Partner 4712 Segment 0000 Credit Exp.: 1.500.000 € Is the higher level credit management account of …


Total Credit Exposure: 2.100.000 €

Business Partner 4713 Segment 0000 Credit Exp.: 700.000 €

Total Credit Exposure: 700.000 €

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Agenda

1.SAP Credit Management – Introduction 2.User Interface of the Credit Manager 3.Master Data

4.Credit Rules Engine 5.Reporting & Mass Change


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Credit Rules Engine Create scoring formula and credit limit formula by using the formula editor. Parameters (for example business partner data) and functions are used as input parameter. One scoring formula and several credit limit formulas (for each credit segment) are assigned to the rule for scoring and credit limit calculation, which is assigned to each customer in the credit profile. The risk class is determined directly from the score. In customizing, specific score ranges which do not overlap are assigned to each risk class. For the check rule, the system determines the steps which are taken to check the creditworthiness of a customer when a sales order is created. This may include the static check of the credit limit or the check of the highest dunning level. Customer-specific process chains in SAP Credit Management can be defined through events which trigger follow-up actions © 2011 SAP AG. All rights reserved.

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Calculate Internal Credit Scoring (Existing Customer) Customer Address

Birth Date

RegionAge GroupProfession Score ... ATL <20 Student 17 NYC 20-30 Student 18 ...

Profession

Sales Volume

Credit Information

Dunning

Sales Volume 1000 –

0

300 101 –

Score C: 17

5

Score D: 3

Mapped Score A:

10 ...

Dunning

Score DU

0

0

1

AAA = 50

Credit Agency II Mapped Score B: B+ B+ = 30

Score SV

301 – 1000

Credit Rules Engine Credit Agency I AAA

Payments

3 ...

IF (Black List Entry exists): S=0 ELSE S = (2*A + 3*B + 5*C 5*C)+/ 5*D) 10 / 15

Paym. (days after Due) Score PY 0

0

<5

4

<10

8

<20

15 ...

Score D = SV – DU – PY = 3

Black List © 2011 SAP AG. All rights reserved.

27.5 Int. Scoring S = 19.3 www.scensum.com. 43

Agenda

1.SAP Credit Management – Introduction 2.User Interface of the Credit Manager 3.Master Data 4.Credit Rules Engine

5.Reporting & Mass Change


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Reporting

Ad hoc reporting in SAP Credit Management Various reporting and analysis options are available in SAP Credit Management, such as creating warning lists, analyzing liability data for one or more customers, or logging the last order-related credit check for a customer Various mass changes are available in SAP Credit Management, such as calculating the creditworthiness, risk class, or credit limit for the first time for a number of customers


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Report UKM_MASS_DSP2 UKM_MASS_DSP2 – Report for Credit Segment Data: Credit Limit (current /calculated) + validity date Blocked Customers in SAP Credit Management Customers to monitor Resubmission Date Assigned Credit Analyst Plus all UKM_MASS_DSP1 Fields e.g. 80% for early warning list


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Report UKM_MALUS_DSP UKM_MALUS_DSP – Report for Credit Limit Utilization Credit Exposure (%) Credit Limit Still Available / Amount by which credit limit exceeded (absolute) Customer Credit Group Credit Analyst or Group Resubmission Date Blocked Customer in SAP Credit Management


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Report UKM_VECTORS UKM_VECTORS – Payment Behavior KPIs Total Sales Volume in last 12 months Gross Total of Cleared Items with Cash Discount Not Taken Gross Total of Cleared Items without Cash Discount Loss Av. Arrears with cash discount payments

Av. Arrears without cash discount payments


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Report UKM_COMMITMENTS UKM_COMMITMENTS – Display / Correction of Comm itment Data (Credit Exposure) Display of commitments, for example, by commitment type or credit horizon Detail view of commitment items (e.g. open items, open orders ) Due date of open items and open orders

Navigation


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Agenda

1.SAP Financial Supply Management - Introduction 2.SAP Credit Management

3.SAP Collection Management 4.Summary


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Agenda

1.SAP Collections Management – Introduction 2.Process „Collection of Receivables‟ 3.Process „Control Collections of Receivables‟ 4.Process „Data Synchronization and Creation of Worklist‟ 5.Analytics


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Financial Supply Chain Management with SAP


Check Credit Worthiness

Issue Invoice

Order-to-Cash

SAP Biller Direct (Electronic Bill Presentment and Payment)

Forecast Cash

Finance Working Capital


Resolve Disputes

Collect Cash


Settle & Pay

Reconcile

Collections Management – Important Business Issue Increasingly bad payment behavior 

Increasing Days Sales Outstanding (DSO)



No reaction on automatic correspondence like dunning



Financial situation influences customer relationship

Collections Management today is mostly a time-consuming, costly and

cumbersome process  Select and prioritize customers to be collected 

Search for account information



High volumes


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What Are the Business Objectives? Increase share of collected receivables 

Reduce Days Sales Outstanding (DSO)



Avoid write-offs



Increase payments on time

Decrease cost of cash collection Improve Customer Relationship Management  Retain valuable customers and convert difficult customers by providing the right interaction in delicate scenarios




Provide complete picture of customer history



Increase customer satisfaction

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How Does SAP Collections Management Help? SAP Collections Management provides collection strategies that allow to select and prioritize customers for the collection of receivables 

Collection strategies are the basis for the automatic creation of daily worklists for collection specialists.



Worklists ensure evaluation, identification, stratification and prioritization of customers according to collection strategy



Daily worklists improve user productivity and efficiency

SAP Collections Management offers special collection procedures to document and react on customer contacts 

Promise to pay agreements



Dispute cases (via integration with SAP Dispute Management)



Resubmissions



Customer contacts

Collection managers will find a variety of options to control the collection of receivables 

Define and adapt strategies



Maintain collection groups



Workforce management by reassigning worklist items and monitoring degree of worklist processing © 2011 SAP AG. All rights reserved.

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Agenda

1.SAP Collections Management – Introduction

2.Process ‘Collection of Receivables’ 3.Process „Control Collections of Receivables‟ 4.Process „Data Synchronization and Creation of Worklist‟ 5.Analytics


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Two Roles: Collection Manager and Collection Specialist Collection Group

Collection Specialist Collection Manager

Main Tasks: Define or adapt collection strategies

Collection Specialist

Keep collection groups up-to-date Adjust business partners Supervise collection process


Main Tasks (are all about processing the daily w orklist):




Prepare customer contact



Contact customer



Document customer contact www.scensum.com. 64

‘Data Synchronization and Creation of Worklist’ Process

Replicate Customer Master Data

Transfer Data from Accounts Receivable

Master data synchronization



Initial transfer



Periodic transfer



Contact persons



Selected transfer



Collections Management specific data




Create Worklists



Create worklist items



Distribute unassigned items

Monitoring



Monitor master data synchronization



Monitor parallel runs

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Functionality Supporting the ‘Collection of Receivables’ Process


Access Worklist

Prepare Customer Contact

Contact Customer

Automatically created



Key figures per worklist item



Promises to pay



Personalization



Valuation detail



Dispute cases



Search function



Due date grid



Resubmissions



Statistics



Invoice overview



Customer contact



Overview of customer account



Overview of past payments



Overview of past contacts



Check resubmissions




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Collection Worklist Each collection specialist gets a daily worklist containing all customers who should be contacted. Customers are valuated and prioritized according to collection rules in a collection strategy. Detail valuation of customer per collection rule

Aging of receivables per selected customer

Link to business partner

Assign items Refresh worklist Display completed items Search for other business partner

Summarizes information concerning   


Customer account in Accounts Receivable Past collection activities Credit Management

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Main Features of the Collection Worklist Automatic creation of worklists based on collection strategies Summarized information per customer regarding Customer account in Accounts Receivable Past collection activities Credit Management data Detailed information per customer about 

Valuation according to collection strategy



Aging of the customer‟s receivables (due date grid)

Personalize worklist by setting as default Search function (view other customer account or other worklist) Navigation to business partner master from the worklist Statistics about degree of worklist processing


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Worklist as Starting Point for Customer Contact 1

Select worklist item and view data Maximum amount to be collected

2

View valuation of customer according to collection strategy

3


View aging of customer ’s receivables

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‘Process Receivables’ Function – Main Area During Contact To contact the customer, the collection specialist navigates from the selected worklist item to the „Process Receivables‟ function. This function offers detailed customer information and supports various collection activities.

Navigation


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Process Receivables – Invoices (Open) On the „Invoices‟ tab page the collection specialist gets an overview of all open invoices of a customer in a collection segment. Per invoice the status is displayed including the amount invoiced, open amount, disputed amount, amount promised to pay, state of promise etc.

Customer Data

View invoice history of selected invoice

View promises to pay per selected invoice

View dispute case(s) per selected invoice Customer Contact Person

Display or print billing document in PDF format


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Example – Printing Invoice in Worklists


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Process Receivables – Past Payments The overview on past payments allows collection specialists to check past payments of the customer he or she is contacting. The payment history lists all invoices that have been fully or partially paid by the selected payment.

Payment History for selected payment

All documents related to the payment are highlighted © 2011 SAP AG. All rights reserved.

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Process Receivables – Promise to Pay The overview on promise to pay shows all promises to pay that were given for the open invoices displayed on the „invoices‟ tab. You can navigate to the details of a selected promise to pay, change or withdraw a promise to pay. View promise to pay


Change promise to pay

Withdraw promise to pay

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Process Receivables – Dispute Case The overview on dispute case shows all dispute cases that are related to the open invoices listed on the „invoices‟ tab. You can navigate to a selected dispute case and – if you have the authorization – process the dispute case. Furthermore, you can display which invoices are assigned to the dispute case. Navigate to selected dispute case


View assigned invoices

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Collection Activities – Documenting Customer Contact The collection specialist has the following possibilities to document his or her collection activities Create promises to pay Create dispute cases Create resubmissions Document the customer contact itself


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Promise to Pay Process Hello Mrs. Brown, did you recognize that invoice 4711 has been overdue since 4 weeks?

Hello Mr. McFee, thank you for reminding me. We will pay the full amount by Wednesday next week.

Collection Specialist Tom McFee

Accounts Payable Manager Sue Brown

Promise to Pay Promised amount Promised to date Promised by Note Invoice reference …

Tom McFee enters promise to pay in the system © 2011 SAP AG. All rights reserved.

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Promise to Pay in SAP Collections Management Customer promises to pay one or several invoices Collection specialist creates promise to pay 

Creation possible for one or several invoices



Promise is traced on single invoice level

Collection specialist renews promise to pay  Existing promises can be renewed 

Renewed promises get higher promise level

Promises to pay are updated by incoming payments State „kept‟ if incoming payment equals promised amount State „partially broken‟ if payment amount is smaller than promised amount

Promises that are not kept get state ‘broken’ Customers with broken promises will automatically appear on the worklist if defined so in the collection strategy © 2011 SAP AG. All rights reserved.

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Create Promise to Pay The collection specialist can create a promise to pay in the system for the selected invoices. The total of all open amounts is proposed by the system as promised amount. If the promised amount is less than the proposed amount, the promised amount can be distributed to the invoices.


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Create Dispute Case The collection specialist can create a dispute case for the selected invoices. The total of all open amounts is proposed by the system as disputed amount. The collection specialist can enter all necessary information such as dispute reason and a note.


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Resubmission Collection specialists can set a resubmission for a customer. They can enter a note and a resubmission reason. The customer will re-appear on the worklist at the resubmission date. It is also possible to suppress a customer from the worklist until the resubmission date. Create resubmission

Overview of existing resubmission

First line of note Suppress customer from worklist until resubmission date


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Create Customer Contact The collection specialist can document the outcome of the whole customer contact. Dispute cases, promises to pay and resubmissions created during the contact will be automatically assigned. A default note is set by the system and can be enhanced by the specialist. Controls if worklist item remains on worklist or will be removed

Default note automatically created by the system


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Agenda

1.SAP Collections Management – Introduction 2.Roles and Processes 3.Process „Collection of Receivables‟

4.Process ‘Control Collections of Receivables’ 5.Process „Data Synchronization and Creation of Worklist‟ 6.Analytics


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Functionality Supporting the ‘Control Collection of Receivables’ Process

Collection Manager

Define Collection Strategies



Collection rules



Collection strategy


Adjust Business Partner Master Data

Maintain Collection Groups



Collection group



Business partner



Collection profile

Supervise Collection Process



Allocate worklist items



Control statistics

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Collection Strategies Collection strategies comprise company-specific rules for coll ecting receivables Collection strategies have the following purpose




Determine which customers are to be contacted in Collections Management (basis for automatic worklist creation)



Prioritize customers on the collection worklist



Define the currency in which the amounts are to be displayed on the worklist



Determine the time intervals of the aging of receivables per customer in a segment (due date grid)



Define the type of integration with dunning in Accounts Receivable Accounting



Determine the influence of the terms of payment on Collections Management (consideration of cash discounts) www.scensum.com. 88

Data Sources for Collection Rules SAP Accounts Receivable

Open Item Data Dunning Data  Payment Data  Customer Data  




Dispute Case Data

Promise To PayData Contact Data  Resubmission Data 




 

Risk Class Credit Limit Utilization

SAP Credit Management © 2011 SAP AG. All rights reserved.

www.scensum.com. 89

Maintain Collection Strategy The collection manager decides on the kinds of collection rules customers are to be contacted. The corresponding collection rules are assigned to the strategy. Per rule the collection manager enters the relevant parameters and the valuation points a customer receives when he fulfills the rule. Determines structure of Due Date Grid

Enter parameters of collection rule


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Allocation of Worklist Items to Collection Specialists The collection manager can view all worklist items assigned to his or her collection groups. The worklist items are allocated automatically to the collection specialists. The collection manager can re-allocate worklist items among specialist of one group. (Example: A collection specialist will not be able to finish his or her worklist during the day.)

Worklist items of all collection groups

Reallocation only possible to other specialists of the same collection group


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Supervise Progress of Worklists Processing The collection manager can view the worklist statistics of all collection groups he or she is responsible for. The statistics show the total number of worklist items, the number of open worklist items, the number of completed worklist items where the contact person was reached and the number of completed worklist items with an unsuccessful contact. Number of open worklist items

© 2011 SAP AG. All rights reserved. © SAP AG20 09. All ri htsres erved./ Pa e

No. of completed worklist items where the customer was reached

No. of completed worklist items where the customer was not reached

Total number of worklist items

www.scensum.com. 97

Agenda

1.SAP Collections Management – Introduction 2.Roles and Processes 3.Process „Collection of Receivables‟ 4.Process „Control Collections of Receivables‟

5.Process ‘Data Synchronization and Creation of Worklist’ 6.Analytics


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Functionality Supporting the ‘ Data Synchronization and Creation of Worklist’ Process

Replicate Customer Master Data   

Transfer Data from Accounts Receivable

Customer /Vendor Integration



Initial transfer



Periodic transfer

Create „Collections Management‟ role



Selected transfer

Change collection segment data


Create Worklists



Create worklist items



Distribute worklist items

Monitoring



Monitor master data synchronization



Monitor parallel runs

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Complete Business Partner Master Data

Report: Assign/Change Business Partner Collection Profile

Create ‘Collections Mgmt’ business partner role

Assign collection profile

Assign collection group different to default group (optional)

Assign collection specialist (optional)

Report: Change Business Partner Segment Data


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Agenda

1.SAP Collections Management – Introduction 2.Roles and Processes 3.Process „Collection of Receivables‟ 4.Process „Control Collections of Receivables‟ 5.Process „Data Synchronization and Creation of Worklist‟

6.Analytics



Analytics in SAP Collections Management (as of SAP Enhancement Package 1) Analytics for SAP Collections Management enable you to control and optimize your collection activities Analytics for SAP Collections Management comprises the following analysis scenarios: 

Analysis of worklists



Analysis of customer contacts



Analysis of invoices and promises to pay



Analysis of open items linked with organizational units of Collections Management



Analysis of Worklists Business value: 

Measure performance and productivity of collection groups/collections specialists



Measure effectiveness of collection strategies

Main key figures: 

Number of worklist items



Number of completed worklist items



% Completed worklist items



Amount to be collected



Amount processed (including amount promised to pay and amount disputed)

Main characteristics:  Collection specialist




Collection group



Collection segment



Collection strategy www.scensum.com. 107

Analysis of Worklists – Daily Collection



Analysis of Worklists – Daily Collection



Analysis of Customer Contacts Business value: Measure performance and productivity of the collection specialists Main key figures: 

Number of customer contacts



Amount promised during the customer contact



Original disputed amount of dispute cases created during contact

 

Number of promises to pay created during contact Number of dispute cases created during contact



Number of resubmissions

Main characteristics:




Contact date



Contact result



Contact type



Collection group



Collection specialist



Collection segment



Collection strategy



Business partner www.scensum.com. 110

Analysis of Invoices and Promises to Pay Business value: Measure effectiveness of collection activities and volume of invoices managed in SAP Collections Management Main key figures: 

Amount promised



Amount paid (referring to promise to pay)



Amount invoiced



Amount paid (of invoice)



Number of invoices



Number of promises to pay



% Kept / % Broken



True DSO



Days in arrears





Promise to pay level / Promise to pay state



Invoice number



Document date



Payment date (of invoice)

Customer


Analysis of Open Items Linked with Organizational Units of Collections Management Business value: Due date analysis for organizational units of SAP Collections Management, ability to plan ahead Main key figures: 

Overdue for more than 90 days



Overdue from 61 to 90 days



Overdue from 31 to 60 days

 

Overdue from 1 to 30 days Due within 30 days



Due within 30 to 61 days



Due within 61 to 90 days



Due within more than 90 days





Collection segment



Collection group



Collection specialist



Business partner


Due Date Analysis



Agenda

1.SAP Financial Supply Management - Introduction 2.SAP Credit Management 3.SAP Collection Management

4.Summary



SAP Credit Management – Summary Customer Challenges 

Takes too long to evaluate credit



Inconsistent methods and policies



No global view of exposure



Evaluations hold up sales orders

SAP Functionality

Benefits



Analyze risk and set policy quickly



Faster credit decisions



Consistent evaluation and policy





Global view of credit exposure

Lower costs and resource demands



Automatically update exposure throughout customer lifecycle



Reduce bad debt write-offs



Reduce sales order delays



SAP Collections Management – Summary Challenges  Inconsistent  Labor

intensive and long cycle times

 Inconsistent  High

account prioritization collection strategies

costs of collections

 Increase

bad debt risk

Benefits

Functionality  Rules-based

collections strategies

 Improved

collections rates

 Prioritization

via worklists

 Reduced

bad debt expense

 All

relevant information at a glance

 Proactive

targeting of “late pays”

 Streamline

collections and reduce operating costs

 Reduce


DSOs


Thank you For more information feel free to contact:

Vidar Greve Johannesson [email protected] www.scensum.com



SAP-Credit-and-Collection-management.pdf

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