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

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Automatic Cash Application

Raimondo Saiu

Credit Manager EMEA – PPG Industries Europe

Agenda

• Introduction PPG Industries

• Background Bank Reconciliation Process

• Hanse Orga’s 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 ERP’s – 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 Orga’s 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 ?

raimondo.saiu@ppg.com

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