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1 Advanced SAP Collections Management - Best Practices Copyright © 2011, HighRadius Corporation. All rights reserved. Presented By: Sashi Narahari August 15, 2011 CRF SAP User Group

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Page 1: Sap Fscm Collections Management

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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

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Collections Management: Resubmission

Create a Follow-up reminder on

specific invoices

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Collections Management: Resubmission

Summary of all Follow-Ups

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Collections Management: Notes

Select invoice and enter invoice specific notes

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Collections Management: Notes

Summary of all Notes

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Collections Management: Correspondence

Several Correspondence

Options available

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Email contact notes and log

directly from SAP to customer

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

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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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