Short Presentation Title - HighRadius...Process Overview Collections Management provides specialists with a complete picture the customer and proven strategies to maximize collection

Expert Information Session powered by Knowledge on Demand

Receivables Management

Kern Eaker

February 5, 2013

Confidential

© 2011 SAP AG. All rights reserved. / a KoD presentation 2 Confidential

Receivables Management overview

Receivables Management provides the ability

to:

reduce bad debt risk

comply with e-billing mandates

improve customer service

accelerate collections and reduce DSO

optimize cash flow and working capital levels

Receivables

Management

Credit Evaluation and

Management

Billing and E-Invoicing

Dispute Resolution

Collections Management

Accounts Receivable


Tied-up cash

High DSO, weak cash flow

AR tied up in disputes and

collections

Reactive approach to credit risk

Lack of visibility into exposure across portfolio

Poor insight limits ability to mitigate risk

Defaulting customers cancel sales

Higher cost of operations

Labor-intensive, manual processes

Inefficient re-keying of data

High training costs and labor inflexibility

Inefficient collections

Collections driven by aging spreadsheets

Long dispute resolution times

Lack of accountability

Slow processes

Weak IT infrastructure

Multiple systems, no data integrity

Extensive use of spreadsheets

No integration with GL for reporting

Multiple non-standard interfaces

Poor customer

service

Arbitrary and inconsistent

dispute processes

Fragmented customer care

Wasted expense

Reduced repeat business

Inefficient and Fragmented Processes Create Poor

Visibility and Contribute to Problems


Old Process for Managing Collections at most Co’s –

“The Swivel Chair Effect”

ERP


Collections Management Process Overview

Collections Management provides specialists with a complete picture

the customer and proven strategies to maximize collection amounts.

Process Steps

Identify

Overdue

Accounts

Prioritize

Collections

Generate

Worklists

Review dispute cases and overdue accounts

Receivables aging for customers

Collection specialist can create/renew

promise to pay

Determine which customers are to be

contacted

Determine the terms of

payment

Consider cash

discounts

Contacts valuated and prioritized according to

collection rules in a collection strategy

360 degree review of customer data to prepare call

3 2 1 Integrate

Data

Open and manage dispute cases

Process invoices individually or grouped

Automatically create customer Contact and

capture notes/results

Analyze results to

evaluate strategy effectiveness

4

Collections

Management

Generate aging reports, identify

overdue accounts and calculate

DSO

Automated Worklist Generation

Full integration of dispute and

credit information

Strategy-based prioritization of

collections


Collection Worklist

Aging of receivables per

selected customer

Link to business partner

Summarizes information concerning

- Customer account in Accounts Receivable

- Past collection activities

- Credit Management

Detail valuation of customer

per collection rule

Search for other business partner

SAP Collections Management is integrated into the SAP Shared Services

Framework:

Benefits:

Homogenous user interface in shared service center

Higher productivity of collection specialist

Higher transparency about customer facing communication

Integration into SAP Shared Services Framework

Integration of the collection worklist into

the Accounting Interaction Center

Telephony integration available in

Process Receivables

Contact persons can be called with two

mouse clicks

Full telephony functionality

Customer contacts from collection

activities are visible in the interaction

history in the Accounting Interaction

Center

In Process Receivables notes with reference to one or more invoices can be entered.

In addition resubmissions with reference to one or more invoices can be created.

Attachments may be added to resubmissions & notes:

Benefits:

Allow individual processing of invoices to collected.

Allow to handle situations in which neither a promise to pay nor a dispute case

would be appropriate

Document-centric collection

Notes & Resubmissions on Invoice Level

Promises to pay allow to enter multiple partial amounts with different “due dates” (=

promised for dates”):

Benefits:

Ability to react flexibly on customer situation

High degree of automation provided by the system, no manual work arounds

needed

Promises to Pay with installments

Amounts and dates flexible chosen by

the collection specialist

Amounts and dates defaulted from pre-

defined installment plan types.

System monitors automatically if

customer pays according to agreed

installment plan or not

Installments_demo111109/Installments_demo.htm

Correspondence and dunning functionality in available in Process Receivables with

one click:

Benefits:

Communication of collection specialist to customer broadened via written

documents, not just phone

No need for collection specialist to navigate to other transactions in the system

Higher efficiency and effectiveness of customer facing communication

Correspondence & Dunning

Individual dunning notes to customers can be sent out by collection

specialist

Dunning notes which have been sent out from Process Receivables view

are visible in customer contact log

FI correspondences (functionality of transaction FB12) can be requested

directly by collection specialist

SD invoice re-prints can be triggered directly by collection specialist

Customer contact logs can be send to customer

Flexible BADI framework allows to integrate project specific

correspondence requirements

SAP Collections Management can operate on FI-AR data from older R/3 systems or

non-SAP accounts receivable systems:

Connecting non-SAP systems and R/3 < 4.7 to SAP

Collections Management: Overview

Before EHP 5 SAP Collections Management could be connected to SAP

system down to release R/3 4.7

Now, FI-AR data from other systems (lower releases, non-SAP) can be

loaded into a substitute system (= own client in ERP 6.05 system)

SAP Collections Management can operate on this FI-AR data in the

substitute system, hence:

Prioritized worklists can be generate based on this data

Detail view on the single customer in “Process Receivables” view is available

Non-SAP

system

R/3 46.c or

lower

SAP ERP 6.05

with SAP Collections Management

and client for substitute system


18 Xcelsius Dashboards for Receivables Management with

Financial Analytics EHP5


SAP Collections and Dispute Management: Dispute

Resolution

Dispute Resolution

Collaboration and workflow

to resolve dispute cases

automatic generation of

disputes for underpayments

automated workflow and

escalations

monitoring for progress and

success of collections


Dispute Management: Lookup, Drilldown to Details


Drill Results: Business Partner details, Notes,

Attachments, Original Invoice, and more…


Dispute Resolution Process Overview

Dispute Resolution helps customers identify issues and disputes earlier

in the payment cycle and it helps supplier and vendors track and monitor

reasons that drive DSO.

Process Steps

Automated Dispute

Case Creation

Synchronize

Disputes with AR

Monitor Dispute

Cases

Generate electronic record of customer

dispute case

Summarizes and

organize all dispute-related data and documents

Create and view dispute cases from

financial transactions

Automatic update of

dispute cases by financial transactions

Link to financial and billing documents (and sales documents

Analyze and escalate dispute cases

Create notes, view an action log or link

documents to the case

Perform dispute case

analysis and monitor trends that influence dispute resolutions

3 2 1

Track Workflow,

Collaborate on Tasks

Correspond with customers

Assign workflow for sales teams or

collections agent to work with customers

4


Dispute Case Details

Notes Status

Action Log

Amount

fields

Customer

contact

Linked

Objects

Priority

Reason

Escalation

Customer

SAP Dispute Management is integrated into the SAP Shared Services Framework:

Benefits:

Homogenous user interface in shared service center

Higher productivity of dispute resolution team

Higher transparency about customer facing communication

Integration into SAP Shared Services Framework

Integration of dispute cases to be

processed into the Accounting

Interaction Center

Telephony integration available

Contact persons can be called with two

mouse clicks

Full telephony functionality

Customer contacts during dispute

cases resolution are visible in the

interaction history in the Accounting

Interaction Center


SAP Credit Management

Credit Evaluation and

Management

Proactive and predictive

credit evaluation platform

that

executes on a global credit

policy

performs credit checks during

key processes

evaluates blocked orders

analyzes risk exposure


Functional Overview

Credit Limit Management

Implement a company wide credit policy

Manage a customer credit profile

Centralize 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

Calculate and assign customer-specific credit limit automatically

Check credit 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


What’s new? Documented Credit Decision (DCD)

Legal requirements, for example, “Bundesdatenschutzgesetz”, Germany

• Negative credit decisions have to be documented for “natural persons”, e.g. individuals

• Relevant for consumers and companies which are legally incorporated via individuals

• Attribute values (state) of credit account at the point of time when the decision is taken have

to be retrievable & traceable at a later point of time

Audit & SOX requirements:

• Credit decisions which trigger an approval process shall be monitored

• Involved parties and their respective decisions have to transparent and documented

• Actions/decisions by users which overrule a negative credit decision proposed by the system

have to be retrievable at a later point of time.

Business requirements:

• The handling of credit blocked sales documents shall be done centrally in an efficient manner

in SAP Credit Management

• A “decision within seconds” approach to release a blocked sales document shall be supported

as well as a comprehensive analysis of the credit account before taking a decision.


DCD: Functionality

• A sales order which is entered in SD gets credit checked (existing functionality)

• In case of a negative credit check the sales order gets a status “credit block” (existing

functionality)

• In this case the system automatically creates a new object called “Documented Credit

Decision” (DCD) which is linked to the credit blocked sales order (new functionality)

• DCDs shall be processed by the credit analyst

• The DCD contains:

• Various attributes like priority, responsible credit analyst

• A snapshot of the credit account in order to document the exact state

• The log of the credit check

• Free notes & attachments

• An approval process is supported which describes who may approve the credit

decision / release the respective sales orders

• This new object shall document all facets of the credit decision.

• Similar to sales orders, DCDs can also be created for delivery documents

Ne

w fu

nc

tion

ality


DCD: Technical Foundation

Case Records

• Contain attributes, notes, attachment and linked objects

• A set of functions which are available during the processing of case records can be defined

• Workflow support

• Flexible and open for customer-specific enhancements / adoptions

• Alignment and positioning of attributes on the screen

• Extension by customer-specific attributes

• Extension by additional functions

• Numerous BADIs (=“spots for user exits”) are available

• Cases Records are already used in SAP Credit Management (credit limit requests) and SAP

Dispute Management (dispute cases) Configuration experts / consultants with experience

in these modules do not need to learn a new technique / concept


DCD: Credit Check

* Applies for deliveries, too.

As usual, the credit check is executed when a sales order* is entered / changed:

New feature: The credit analyst in charge of this account

(defined in SAP Credit Management via a business

partner relationship) is shown in the popup. This allows

the person who processes the sales order to contact the

credit analyst immediately – especially when processing

is time critical.


DCD: Detail (I)

Info about customer,

sales document and

amounts,…

Info about processor,

priority, categorization,

status,…

Timestamps, users,…

Possibility to enter

notes. Certain notes

(ex.: details of failed

credit checks) are

generated by the

system

The layout of the DCD

is highly configurable,

but can contain:


DCD: Detail (II)

Possibility to switch between notes area and view on

linked objects (sales document, snap shots, attached

documents, related documented credit decisions)

The snapshot is a PDF form. It shows the

state of all relevant attributes of the credit

account at the point of time when the

credit check was executed. For each re-

check an additional snapshot is created.

When the sales document is released, a

snapshot is created, too.

Consequently at a later point of time, the

details as to why a credit check was

negative and under what circumstances a

sales document was released by the credit

analyst can be clearly and easily audited.


DCD: Functionality

• Drill down to linked objects (sales document, snapshot)

• Possibility to add notes & attachments

• Possibility to initiate a credit re-check of the referenced

sales document or to release / reject it

• Drill down to credit account (profile tab, segment tab) and to

linked credit accounts ( shows credit accounts linked in a

hierarchy an their limits / limit utilization)

• Drill down to detail log of the credit check

• Drill down to the ‘Process Receivables’ view, provided SAP

Collections Management is available to get a detailed

overview of the customer’s outstanding receivables or in

order to contact the customer and to record promises to pay,

for example.

• Drill down to pending credit limit request concerning this

customer

• Through configuration additional functions can be added

easily to the detail view


Credit Evaluation and Management Process Overview

Credit Evaluation and Management provides all stakeholders a

complete picture of potential customer credit rating and status and

facilitates and effective credit policy that mitigates customer credit risk

and improves collection rates.

Process Steps

Define

Credit Policy

Perform

Credit Check

Evaluate

Blocked Orders

Implement a company wide credit policy

Manage a customer credit profile

Centralize credit management in a

distributed system landscape

Process credit limits

Track status and result of credit limit applications

Categorize customers by scoring rules

Calculate and assign customer-specific

credit limit automatically

Check credit rules

Block or hold orders if customer exceeds credit standards and

rules

3 2 1

Evaluate Risk

Exposure

Model and implement own customer credit

score cards

Interface to external

credit agencies

Input parameters for

scoring rules

4


Billing and E-Invoicing Process Overview

Billing and Invoicing provides customers a service to see their account

balance, look at their bills, credits or payments. Customers can initiate

payments or download bills into their accounts payable system.

Process Steps

Create Bills and

Invoices

Present Bills and

Invoices

Electronically

Enable

Customer, Self-

Service Inquiry

Generate electronic invoice from back-end

sales, billing and accounting system

Initiate invoicing process with customer

Display invoice documents in PDF or

XML format to customers

Customers can see all of their bills and credit

notes on the internet

They can download bill

data in PDF or CSV format

Customers can select various payment methods

3 2 1

Receive Payments

Electronically

Customers can initiate payments or download

bills into their accounts payable system

4


What is Biller Direct (EBPP) ?

Electronic: Electronic delivery and receipt using the Internet

and customer or supplier portals

Bill: Display of Bill, payments and credits

Presentment: Presentation of account information via the

Internet

&

Payment: Initiate payments, receive invoice and payment

status information

EBPP represents a way of presenting and delivering invoice and account

information electronically from the biller to the customer.


What are the Goals of Biller Direct (EIPP) ?

Cost savings

Through non-paper invoice processing, archiving, and streamlining of business

processes

Improved customer contact

Through rapid communication between biller and recipient and provision of

self-service functions

Quality assurance

By avoiding manual errors in bill entry

Marketing instrument

Improved use of bills for sales and marketing purposes


© SAP AG

2011. All rights

reserved. / Page

33

List of Open Bills

Customers can see all

of their bills and credit

notes on the internet

They can display the

documents in PDF or

XML format

They can download bill

data in PDF or CSV

format

They can select various

payment methods

© SAP AG

2011. All rights

reserved. / Page

34

Integration with Dispute Resolution Capability of SAP Collections and

Dispute Management

Customers can create

dispute cases for both

partial payments or the

entire invoice

They can select

a reason code and

download or upload

documents

An initial note for the

dispute management

department can be

entered

They can select a

contact person out of

the customer contact list

The dispute

management

department can reply to

the customer

© SAP AG

2011. All rights

reserved. / Page

35

Customers can Update Their Own Master Data

Customers can

display and

change their

address, bank or

credit card data

They can modify

their notification

preferences

They can grant or

withdraw

automatic debit

authorizations


BI Content for SAP Biller Direct

Query 0BD_DS01_Q0001 – Event Log Analysis

Shows the number of users who accessed SAP Biller Direct

Shows what these users did, and how many times they did it

Query 0BD_DS01_Q0002 – Peak Analysis

Shows the number of active users (segmented by hours of the day)

Query 0BD_DS01_Q0003 – Top N User

Shows the top n user (number of log-ons) per day / week

Query 0BD_DS01_Q0004 – User Analysis

Shows the number of log entries per user

© SAP AG

2011. All rights

reserved. / Page

37

BI Content for SAP Biller Direct –

Sample Reports

Query 0BD_DS01_Q0004 –

User Analysis

Query 0BD_DS01_Q0002 – PeakAnalysis


FSCM Benefits and ROI

Reduce Time to Resolution for Disputes

Reduce days sales outstanding (DSO)

Improve payment processing

Improve exception handling

Provide collaboration across business partners including logistics and

financial partners

Track financial documents from order entry through reconciliation

Reduce overall transaction costs

Reduce Billing Costs


SAP Biller Direct at SONY UK

SONY UK runs SAP Biller Direct

Enables self-service for dealer network

Rapid implementation: 30 days

Reduces call center volume for account

status by 30%

Enables greater focus on cash collections

and dispute resolution

“SAP Biller Direct augments our dealer portal with invoicing and account management capabilities. Now, our dealers have better visibility of account status and ability to make payments electronically. This has enabled our customer accounts team to focus their time on collections and dispute resolution, which will ultimately have a positive impact on cash flow.”

Matthew Jepp, General Manager, Finance, SONY UK


Supporting Requirements for the Single European

Payment Area (SEPA)

Customers or business

partners are provided self-

service screens to maintain key

bank data fields as required by

SEPA

International Bank Account

Number (IBAN)

Bank Identifier Code (BIC)

The IBAN data field is

presented in all relevant user

interfaces

The IBAN field is available in all

relevant export files.


SAP is a Leader in Financial Management

With Proven Customer Value

Industry leaders are leveraging SAP to address high-value financial management scenarios

Industry Business Scenarios Select Customers

Financial Excellence

Financials, Controlling, HR

Invoice to Cash

Responsive Supply Networks

Collaborative Demand & Supply Planning, Logistics &

Fulfillment Management, Manufacturing Network

Planning & Execution

Superior Customer Value

Optimize Sales & marketing Investments, Sales

Execution

Product & Service Leadership

Continuous Product Innovation, Integrated Product

Development

Marketing and Consumer Insights

Brand & Category Mgmt,

Strategic IT

NetWeaver Exchange Infrastructure, BI, Portal, MDM

http://www.fonterra.com/

http://www.campina.com/

http://www.pg.com/

http://www.swarovski.com/

http://www.heineken.com/

http://www.nestle.com/

http://www.kelloggs.com/

http://www.generalmills.com/

http://www.bat.com/

http://www.henkel.com/

http://www.kelloggs.com/

http://www.generalmills.com/

http://www.bat.com/

http://www.henkel.com/

http://www.hochland.com/

http://www.ajinomoto.com/

http://www.nike.com/

http://www.diageo.com/

http://www.floridacrystals.com/


Proven Customer Value with SAP

Customers are realizing substantial value with SAP solutions for receivables management

processes

Reduced DSOs by three days

Reduced bad debt write offs by 10%

Reduced the number of dispute cases by 17%

Shortened time to resolve disputes by 29%

Achieved and maintained a 100% Customer retention rate

Experienced a corollary 5% productivity improvement in credit and receivables

Achieved 20% to 50% reduction in bad debt risk, and 20% to 40% faster

access to information

10% to 20% reduction in time needed to collect credit information and enter

data prior to a sale

Questions & Answers

Documents

Short Presentation Title - HighRadius...Process Overview Collections Management provides specialists with a complete picture the customer and proven strategies to maximize collection