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Advanced SAP CollectionsManagement - 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

Management

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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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Text

Double-Click to open

customer work item

Collections Management: Collectors Worklist

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Text

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

C ll i i

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Record promise for

payment or customer

contact at the invoice

level

Collections Management: Promise-to-Pay

C ll i M P i P

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Promise for payment has

been recorded

Collections Management: Promise-to-Pay

C ll ti M t C t C t t

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Record customer contact

resulting in completion

of the work item

Collections Management: Customer Contact

C ll ti M t C l t d It

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Work item

completed

Collections Management: Completed Item

C ll ti M t R b i i

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Collections Management: Resubmission

Create a Follow-up

reminder on

specific invoices

C ll ti M t R b i i

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Collections Management: Resubmission

Summary of all

Follow-Ups

C ll ti M t N t

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Collections Management: Notes

Select invoice and

enter invoice

specific notes

Collections Management: Notes

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Collections Management: Notes

Summary of all

Notes

Collections Management: Correspondence

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Collections Management: Correspondence

Several

Correspondence

Options available

Collections Management: Correspondence

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Email contact

notes and log

directly from SAP

to customer

Collections Management: Correspondence

Collections Management: Correspondence

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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

Credit Limit

% Utilization

Credit Exposure

Risk Category

Master Data orOperational Datawhich can be addedto collectionsmanagement

Aging

Amount Dunning Level

Amount Dunned

Disputed Amount

Dispute Case Status

Payment Data

Broken Promise to

Pay Number of Promise

to Pays

Promise to PayAmount

Customer Contacts

ResubmissionsCollections

Data

Open AR &Dispute

Mgmt Data

Credit DataOther Data

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BasicRules

CollectionRules

CollectionStrategy

Collection Strategy for

Higher Risk Customers

High to Medium Risk and

greater than 80% CreditLimit Utilization

Valuation: 15 points

Risk Category

Credit Limit Utilization

Past Due Invoices Over 15

days Past Due & Dunned

One or More Times

Valuation: 20 points

Dunning Level

Documents by posting key

and document type

Individual Items Overdue

Since N Days

Resubmission Due for the

Customer

Valuation: 5 points

Resubmission Due for the

Customer

Collections Strategy Definition

Collections Management: Collection Strategy

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Text

Collection Rules

within the Collection

Strategy

Collections Management: Collection Strategy

Collections Management: Collection Strategy

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Conditions within a

Collection Rule

Collections Management: Collection Strategy

Collections Management: Collection Strategy

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TextAutomatic

Prioritization of

Customer Work Items

Collections Management: Collection Strategy

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 Segmentation

Automated Correspondence

Invoice-Level Collections

Collect 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

A t t d C d

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Automated Correspondencefor 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 3rdlevel Dunning (Requires

Enhancements to FSCM)

Slo o Med Pa SMB

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Slow or Med Pay SMBCollection Strategy

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Advanced Correspondence

Advanced Correspondence Automation

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Advanced Correspondence Automation

Selection criteria: type of

letter, attachments and

method of communication

Advanced Correspondence Automation

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Advanced Correspondence Automation

Highlight AR line

items to be included

in correspondence

Advanced Correspondence Automation

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Advanced Correspondence Automation

Cover Letter

Advanced Correspondence Automation

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o po o o

Invoice Attachments

Advanced Correspondence Automation

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p

POD Attachment #1

Advanced Correspondence Automation

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p

PODs 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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TotalAmountPast Due

Items withOpen

Promise toPay

DisputeCases not in

a To Be

Collected

Status

Items witha CurrentDunningNotice

ItemsArranged

for Payment

Amount To

Be

Collected

Total Amount Past DueTotal of all overdue items in FI-Accounts Receivable

Items with Open Promise to PayIf 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 Collectedamount

Dispute Cases not in a To Be Collected StatusAll 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 NoticeIf 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 PaymentAll 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

Use Collectable Amount in

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Use Collectable Amount inStrategies

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