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Optimise the invoice-to-cash cycle: Improve visibility and control over cash - Automatic Cash Application Raimondo Saiu Credit Manager EMEA PPG Industries Europe

Automatic Cash Application - UK & Ireland SAP Users Group · PDF fileAutomatic Cash Application Raimondo Saiu Credit Manager EMEA – PPG Industries Europe . ... • Hanse Orga is

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  • Optimise the invoice-to-cash cycle: Improve visibility and control over cash

    -

    Automatic Cash Application

    Raimondo Saiu

    Credit Manager EMEA PPG Industries Europe

  • Agenda

    Introduction PPG Industries

    Background Bank Reconciliation Process

    Hanse Orgas AutoBank

    Business Case

    Results & benefits

  • Introduction PPG Industries

    PPG Industries is a Pittsburgh based global supplier of paints, coatings, chemicals, optical products, specialty materials, glass and fiber glass.

    Private houses Millau Bridge, France Ponte Vecchio,

    Florence, Italy

    Stade de France Oil tanker

  • Introduction PPG Industries

    More than 100 legal entities in EMEA

    Two main ERPs Oracle & SAP

    Multiple different organizational and Sales & Finance structures

    Both centralized and decentralized finance departments

    Customers varying from individual painters to OEMs

    Direct sales via a network of more than 400 owned service centres and almost 3,000 independent wholesalers.

  • Background Bank Reconciliation

    Completely decentralized cash application and collection process

    Only partly electronic, different levels usage of and experiences with standard SAP in the various subsidiaries.

    Manual reconciliation of open items very time consuming. Knowledge not maintained/transferred, no best practices set up

    or shared via the ERP Result: In general, a low automatic clearing rate to the final target

    account (customer/vendor document, GL JE)

    SAP matching improvements required ongoing IT support

    No positive impact on credit & collection process

  • Hanse Orgas AutoBank

    Hanse Orga is an SAP service partner with their own name space in SAP

    AutoBank for SAP is fully integrated into SAP (no interfaces needed)

    AutoBank consists of two modules: - AutoKonto, posting bank statement data - AutoAvis, posting payment advices Unlimited posting rules - Using main rules and sub rules - Using all information on the bank statement - Filtering bank statement information (bank fees, data, FX,

    discounts, invoice data, ordering bank etc) - Maintained by the users!!!

  • AutoBank Business Case

    Business case performed in three countries with large number of bank transactions: France, Belgium and The Netherlands.

    Different problems existed in these countries:

    France: incomplete electronic bank statements, many cheque payments

    Belgium: missing information on electronic bank statements, incomplete information given by customer, number ranges in text (500110/111/112 etc)

    Netherlands: many payment advices, incomplete information, number ranges in text

  • AutoBank Business Case

    With regards to the AutoAvis module, remittance advices were looked at separately:

    France & Belgium: not enough volume, not enough invoices, limited time spent on remittance advices. Not enough benefit to implement AutoAvis for these entities.

    Netherlands: large number of advices received by mail, fax, post and EDI, many invoices per customer (up to 6000 invoices p/m), a lot of processing time required.

  • Project Implementation Roadmap

    Business Blueprint documenting the process, coding & bookings

    Review internal process & bank statements with consultant & business

    The matching rules creation & testing is done as part of the key-user training

    Wrap-up training with users after go-live

    Business

    Blueprint

    Business

    Case

    Implemen-

    tation

    Preparation

    GO-LIVE

    GO-LIVE &

    Support

    Project

    preparation

  • Results France automatic matching rate

    SAP: 26%

    AutoKonto: 91%

    Belgium automatic matching rate

    SAP: 25%

    AutoKonto: 90%

    Netherlands automatic matching rate

    SAP: 75%

    AutoKonto: 88%

    AutoAvis: 98%

  • Results

    Higher automatic matching rate, in general only exceptions were:

    Double payments, payment of credit notes by customer

    Customer deductions

    New customers without any information/reference

    Rejected drafts/checks

    More efficient manual postprocessing

    Immediate rule creation/testing by users

  • Post-processing

  • Automated Process

    Additional steps:

    All bank information available is included in the electronic bank file

    Centralized electronic bank files to one source Payment terms & conditions (for example discount terms)

    correctly entered in ERP Stimulate customers to provide more details Stimulate customers to send remittance advices in a standard

    electronic format Review your reconciliation process and specific accounts

  • What did it bring us

    Most immediate benefits were found in process efficiency

    Implemented now in more than 25 company codes, covering bank accounts in almost all European countries

    Implemented AutoBank Next Generation for our Oracle entities

    Reduced the unapplied cash, enabling the collection team to contact the customer with accurate data (and sooner!).

    Enabled Treasury Department to have a more accurate liquidity forecast.

    Cost savings achieved through process centralization

  • Questions

    Thank you for your attention!

    Any questions ?

    [email protected]

  • Additional Slides

    Additional Slides

  • Previous process

    Import routine

    Posting step 1

    USER-EXIT

    Posting step 2

    MultiCash

    Manual post-processing

    Import of bank

    statements in different

    country formats Posting from bank

    account to bank sub-

    account Possibility of exit into

    user exit

    Posting from bank

    sub-account to

    corresponding target

    account Manual assignment of

    unassigned items

    Posting Bank Statement Data

  • AutoBank for SAP

    Posting Bank Statement Data

    AutoBank for

    SAP

    SAP R/3

    OI data Posting data

    Electronic

    bank statements Archive data

    Automatic posting

    of bank statements in SAP

  • AutoBank for SAP

    USER-EXIT AutoKonto for SAP

    Posting step 2

    Manual postprocessing

    Payment

    methods

    Main rules

    Sub rules

    Foreign

    exchange

    Cross-CC

    No. intervals

    Filter principle

    Posting Bank Statement Data

    Multiple clearing

  • AutoBank Business Case

  • AutoBank Business Case