SAP Financial Supply chain Management (FSCM) Solutions Presented by Vikram Gollakota
About HighRadius
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Founded by a team with an extensive background in SAP and financials process automation
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Specialize in Cash Application, Collections, Deductions and Credit Management
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Provide Accelerators to SAP FSCM modules (to fill SAP gaps)
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Provide Hosted Software-as-a-Service (SaaS) Solutions
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Ranked among fastest growing technology companies in Houston in 2008, 2009 & 2010
About HighRadius
•
Founded by a team with an extensive background in SAP and financials process automation
•
Specialize in Cash Application, Collections, Deductions and Credit Management
•
Provide Accelerators to SAP FSCM modules (to fill SAP gaps)
•
Provide Hosted Software-as-a-Service (SaaS) Solutions
•
Ranked among fastest growing technology companies in Houston in 2008, 2009 & 2010
Partial List of Customers
HighRadius Product Lines
SAP FSCM Accelerators
ReceivablesRadius SaaS Products
Dispute Resolution Accelerator
POD & Claims Automation
Credit Memo Approval
Deductions Management
Credit Debit Matching Engine
Trade Promotions Settlement
FSCM Correspondence Automation
Cash Application Automation
Cash Collections Forecasting
Document Management
Credit Decision Accelerator for SAP
Credit Data Aggregation
FSCM Modules At-A-Glance
Receivables Management
SAP Credit Management
FSCM Credit Management
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Overview
New Module from SAP as a part of FSCM Suite. Latest version is FSCM Credit Management 6.0 Enhancement package 4. This is independent module and not an upgrade for SD Credit Management (FD32). According to SAP this will eventually replace SD Credit Management.
FSCM Credit Management vs. FI-AR Credit Management SAP
Description
Credit Checking. Integrate SAP and Non SAP Systems for a centralized Credit Management. Integrate external credit rating agency information.
Credit Sore and Limit Calculations. Workflow. Decoupled Risk Assessment to Credit Checking. Standard BI content and Portal Access for reporting and analysis
FSCM Credit Management
FI-AR Credit Management
SAP Credit Management Business Partner Overview
A Business Partner can have many roles For example (Credit Mgmt, Collections Mgmt etc)
Business Partner Master Data (UKM_BP) similar to Customer Master Data (FD01). If Customer Master exists in FD01, Auto synchronization process available for BP to be created / updated upon Customer creation / change
Various Identification Numbers of the customer like DUNS number, Legacy Customer Number, Ticker Symbol etc can be configured and stored here.
Tax Number and other legal identifications of the customer can be stored here. VAT Number, US Tax Identification Number etc
Scoring Rule computes Credit Score / Credit Limit
Risk Class is derived from the credit Score above
Check Rule defines Credit Checking Rules. For example Dynamic Credit Check, Oldest open item etc
Integrate External Agency Rating information. For example D&B Cap, D&B Financial Strength, Moody’s etc
Info Categories are available to store additional information like Credit Insurance, Negative Events etc
Credit Segment = Credit Control Area Credit segments are required for calculating the credit limit and enable you to carry out detailed checks at business partner level.
Credit Limit / Exposure and Utilization %. Can take you to a detailed view
Double click to get to the transaction details
Double click to get to the transaction details
Additional Information which will effect the credit decision an be added here. For example Security, Seasonal increase in limit etc
Payment Behavior key figures are fields that summarize the customers payment history
Information Available on this Screen: 1. Dunning Data 2. Oldest Open Item Data 3. Last Payment Data 4. Key Figures (DSO, Sales of the last 12 months, Highest Sales in last 12 months etc)
A business partner relationship represents the business connection between two business partners and is characterized by the business partner relationship category.
Some of the Relationship Categories that are important for Credit Management are 1. Higher-level Credit Management Account of 2. Lower-level Credit Management Account of 3. In Credit Management is managed by 4. Has Contact Person
SAP Credit Management Credit Checking
Credit Checking
Credit Check Rule is a set of conditions that are checked during “Order to Cash” process to determine if the process can continue without a block
Credit Check Rules can be assigned to the BP irrespective of the Risk class. For example a High Risk Customer having a “Cash in Advance” Payment Terms can have “Limited Credit Check”
Credit Checking
A Credit Check Rule consists of Check Steps each step consists of parameters that must be fulfilled for order processing to complete
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Definition
Credit Checking
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Standard Checks
Standard Check
Explanation
Statistical Check of Credit Exposure
Static check includes total exposure of all Open Orders, Delivery, Billing and Open AR. It can also considers “Collaterals” and “Credit Insurance”.
Dynamic Limit Check with Credit Horizon
Dynamic check includes total exposure of all Open Orders (with in a Horizon period of days), Delivery, Billing and Open AR. It can also considers “Collaterals” and “Credit Insurance”.
Check for Maximum Document Value
Maximum Document Value, can be defined for each Segment.
Check for Maximum Dunning Level
Maximum Dunning Level
Check for Age of Oldest Open Age of the Oldest Open Item Item Check of Payment Behavior Index
DSO
Check Checking
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Rules Summary
SAP FSCM Credit Checking can be enabled to integrate with both SAP and non-SAP instances New Credit Check steps can be customized by adding custom rules and also make them configurable This will switch off SD credit check
SAP Credit Management Credit Scoring
Scoring Rule computes Credit Score / Credit Limit
Credit Score
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Scoring Formula Example
1. If Customer is in Negative List Set Score = 0 and exit 2. If Customer is in Positive List set Score = 100 and exit 3. If Customer has a Foreclosure, Bankruptcy or any other negative characteristics Set Score = 0 and exit 4. Normalize external rating and add it to final score 5. Normalize Legal form and add it to final score 6. Normalize Industry and add it to final score 7. Normalize country and add it to final score 8. Normalize age of country add it to final score 9. Normalize Net Profit Margin and add it to final score 10. Normalize Equity Capital add it to final score
Score Formula: Define Steps , each step has a condition and points that can be assigned. All these points can add up to a credit score
Credit Score
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Limit Formula Example
1. If Credit Score = 0 Set the Credit limit = 0 2. If Credit Score > 0 and <= 40 set the credit limit = (MAX_SALES in last 12 months)*0.5 3. If Credit Score >= 40 and <= 60 set the credit limit = (MAX_SALES in last 12 months)*1.0 4. If Credit Score >= 60 and <= 90 set the credit limit = (MAX_SALES in last 12 months)*1.5 5. If Credit Score > 90 set the credit limit = (MAX_SALES in last 12 months)*2.0
Score Formula: Define Steps , each step has a condition and Limit subsequently credit limit can be calculated and assigned.
SAP Credit Management Credit Workflow
These events can trigger workflow’s, calculate the credit score / credit limit etc. For example External agency has downgraded the Customer and the information has updated in the BP. In this event we can configure the system recalculate Credit Score and start a workflow to have the Credit Analyst review the customer’s account
Credit Case and Credit case attributes.
Approval Steps for the Credit Case
SAP FSCM Collections Management
SAP Collections Management Roles & Responsibilities
Collection Manager
Define collection strategies / rules Define work item assignment to users / groups Monitor and reallocation of workload
Collection Specialist
Incoming / Outbound collection calls Process daily worklist based on prioritization Record customer contact and follow up
SAP Collections Management Collection Manager
Work Item Prioritization
When should a customer be contacted for payment? How do you prioritize customers that should be contacted for payment?
Monitor & Reallocation of Workload
Work Item Assignment
How do you categorize your customers for collection activities? How do you assign and distribute work items to collectors?
Monitor collector performance Reallocation of workload through reassignment or temporary reassignment of work items
SAP Collections Management Collection Strategy
Collection Rule 1
Collection Rule 2
30 Points
High Risk Class Item greater than 30 days past due Amount to be collected greater than $0.01 No successful contact within 5 days
20 Points
Collection Strategy
Collection Rule 4 10 Points
Collection Rule 3 15 Points
Credit limit utilization is greater than 95%
Dunning level is greater than 2 Amount to be collected greater than $0.01
Collection Rule 5 20 Points
There are broken promises to pay
There is a resubmission due
SAP Collections Management Demonstration: Collection Manager Role
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Collection Rules within the Collection Strategy
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Conditions within a Collection Rule
Text Automatic Prioritization of Customer Work Items
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Priority is determined by the valuation of each collection rule
SAP Collections Management Collection Specialist
Access Worklist
Review prioritization of customer work items Check degree of worklist processing Review customer-level information
Record Customer Contact
Contact Customer
Review customer work item Receivables, payment history, dispute cases, promise to pay, notes and contact person
Create promise to pay to record invoice-level customer contact Create dispute case for disputed items Create resubmission for customer follow up
SAP Collections Management Demonstration: Collection Specialist Role
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Double-Click to open customer work item
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Review open items to be collected
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Review payment history
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Review open and closed dispute cases
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Record promise for payment or customer contact at the invoice level
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Promise for payment has been recorded
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Record customer contact resulting in completion of the work item
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Work item completed until worklist is regenerated
SAP FSCM Dispute Management
SAP Dispute Management Centralize Information
Amounts Priority Customer Contact Reason
Attachments
Dispute Case Object Status
Notes
Customer SAP Documents
Action Log
SAP Dispute Management Dispute Case Processing
Dispute Case Creation
Automatic creation from incoming deductions
Research
Manual creation from open AR line item
Manual creation for prededucted claim notifications (CustomerDisputed Objects)
Dispute Case Closure
Resolution
Identify reason code
Update attributes, notes and attachments
CrossDepartmental collaboration
Credit Issuance for valid claim Generate Correspondence for collection of invalid claim Write-off of uncollectable claims
Automatic closure based on clearing activity in accounts receivable
SAP Dispute Management Demonstration: Processing of a Dispute Case
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Creation of Dispute Case
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Input selection criteria and hit search
Double-Click to open dispute case
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Click on reduce attributes button to input notes
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Select note type
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Input notes and click on copy
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Click on increase attributes button to change dispute case attributes
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Update attributes and send to Andy in the Logistics Department
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Double-click to open dispute case
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Click on the notes button
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Review notes
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Attach POD to dispute case
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Input internal notes and return to analyst in the deductions department
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Double-Click to open dispute case
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Review notes
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Review attachments
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Update status and root cause code
Update Concluding Remark notes for correspondence
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Generate Claim Denial Correspondence
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Display Correspondence
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Claim denial correspondence
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Status automatically updated to closed
Amount re-paid by the customer
SAP Biller Direct
Dispute Invoices Online
Enter Dispute Details
Customer Master Administration - Contact Info
Customer Master Administration - Bank & Credit Card
