1 advanced sap collections management - best practices copyright © 2011, highradius corporation....

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Advanced SAP Collections Management - Best Practices

Copyright © 2011, HighRadius Corporation. All rights reserved.

Presented By:

Sashi NarahariAugust 15, 2011

CRF SAP User Group

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Agenda

• FSCM Overview• Collection Management Overview• Collections Best Practices

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FSCM Modules At-A-Glance

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Receivables Manageme

nt

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SAP FSCM Collections ManagementOverview

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SAP Collections ManagementOverview

Define collection strategies / rules

Define work item assignment to users / groups

Monitor and reallocation of workload

Incoming / Outbound collection calls

Process daily worklist based on prioritization

Record customer contact and follow up

Collection Supervisor Collection Specialist

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Collections Management: Collection Specialist

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Double-Click to open customer work item

Collections Management: Collector’s Worklist

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Review open items to be collected

Collections Management: Invoice Summary

Default Customer Contact readily

available

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Review payment history

Collections Management: Payment History

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Review open and closed dispute cases

Collections Management: Dispute Cases

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Record promise for payment or customer contact at the invoice

level

Collections Management: Promise-to-Pay

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Promise for payment has been recorded

Collections Management: Promise-to-Pay

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Record customer contact resulting in completion

of the work item

Collections Management: Customer Contact

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Work item completed

Collections Management: Completed Item

Collections Management: Resubmission

Create a Follow-up reminder on

specific invoices

Collections Management: Resubmission

Summary of all Follow-Ups

Collections Management: Notes

Select invoice and enter invoice specific notes

Collections Management: Notes

Summary of all Notes

Collections Management: Correspondence

Several Correspondence Options available

Email contact notes and log

directly from SAP to customer

Collections Management: Correspondence

Select a set of invoices

Collections Management: Correspondence

Select the specific type of

correspondence or letter to send

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Collections Management: Collection Manager

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Data available for Collection Strategies

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Collections Strategy Definition

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Collection Rules within the Collection

Strategy

Collections Management: Collection Strategy

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Conditions within a Collection Rule

Collections Management: Collection Strategy

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TextAutomatic

Prioritization of Customer Work

Items

Collections Management: Collection Strategy

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Priority is determined by the valuation of each

collection rule

Collections Management: Collection Strategy

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Collections Best Practices

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Collections Best Practices

Customer SegmentationAutomated Correspondence‘Invoice-Level’ CollectionsCollect on ‘Clean Receivables’Blocked Order Based Collections

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Customer Segmentation

• By Size– Large Accounts– Small & Medium Businesses (SMB)

• By Payment Behavior (Days Beyond Terms)– Fast Pay, Medium Pay, Slow Pay

• By Risk Category– High, Medium, Low

• Sales Volume – High, Medium, Low

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Automated Correspondence for SMB

• Gentle Reminders, Past-Due Notices, Demand Letters (Standard SAP A/R Dunning)– For most SMB Customers– Except for ‘Fast Pay’ or ‘High Sales Volume’

• Include Invoice Copies, POD Copies for 2nd and/or 3rd level Dunning (Requires Enhancements to FSCM)

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Slow or Med Pay SMB Collection Strategy

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Advanced Correspondence

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Advanced Correspondence Automation

Selection criteria: type of letter, attachments and

method of communication

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Advanced Correspondence Automation

Highlight AR line items to be included in correspondence

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Advanced Correspondence Automation

Cover Letter

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Advanced Correspondence Automation

Invoice Attachments

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Advanced Correspondence Automation

POD Attachment #1

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Advanced Correspondence Automation

POD’s attached to the Invoice AR line item

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Invoice-Level Collections

• Dunning might not work for Large Customers• Most large business have automated AP

systems and are not paying because there is a ‘issue’ with the invoice

• Invoice-Level Collections similar to Disputes• First perform root cause analysis based on

history what the reasons for ‘issues’ are– EDI Transmissions, Disputes (Pricing Errors,

Shortages etc)

• Create ‘Dispute Case’ for ‘problem invoices’

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Create Disputes for Invoices

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Total Amount Past Due – Total of all overdue items in FI-Accounts Receivable Items with Open Promise to Pay – If there items with an open promise to pay, or items with

a future payment promised on date, these items will be excluded from the ‘To Be Collected’ amount

Dispute Cases not in a ‘To Be Collected’ Status – All open dispute cases, which have not been updated with a status that is mapped to the ‘To Be Collected’ in collections management, will be excluded from the ‘To Be Collected’ amount

Items with a Current Dunning Notice – If a line item in FI-Accounts Receivable has recently been dunned, this amount will be excluded from the ‘To Be Collected’ amount.

Items Arranged for Payment – All amounts that are (a) collected with a debit memo procedure or (b) where the account statement balance contains a payment notification from the bank will be excluded from the ‘To Be Collected’ amount

BAdI: Amount To Be Collected: Can be used to enhance the to be collected amount calculation

To Be Collected Amount Calculation

‘Clean’ Receivables

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Use ‘Collectable Amount’ in Strategies

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