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Implementing FSCM:Tips, Tricks, and
Lessons LearnedJeff Hirsch
SAP America
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What We’ll Cover …
Introduction
Dispute Management
Credit Management
Collections Management
Wrap-up
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“FSCM is Like a Box of Chocolates …
… you never know what you’regonna get.”
That is, until you dig downto uncover hidden secrets.
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In This Session … (Topics)
Dispute Management
Why you should create most dispute cases automatically
Avoid problems when closing cases automatically
Some things you may not know about correspondence Use SAP NetWeaver® Business Intelligence (BI) reports to manage
the dispute resolution process
Credit Management
Best practices for calculating credit scores and credit l imits
Integrate businesses with different credit polic ies
Manage large customers with credit hierarchies
Collection Management Integrate Collection and Credit Management through business
partners
How collectors can use Dispute Management to improve their
effectiveness
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What We’ll Cover …
Introduction
Dispute Management
Credit Management
Collections Management
Wrap-up
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Best Practices for Creating Dispute Cases
Create dispute cases automatically for deductions
Deductions created in lockbox processing
Deductions created by cash applier UNLESS cash applier canadd useful information
Dispute cases are created and immediately routed toCoordinator/Processor for action
Ensures that no deduction is overlooked
Build in a minimum threshold – only deductions over $50,for example
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Report for Automatic Creation of Dispute Cases
SAP Note 925827 enables case creation f rom
ANY residual item
SAP Note 925827 enables case creation from
ANY residual item
TransactionFDM_AUTO_CREATE
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Avoid Problems in Closing Cases
The case can be closed automatically when the disputed item isfully cleared
This configuration will change the status to 30 “ Closed”
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The Secret is in the Status Profile
The Status Profile identifies the various status values that can beused, as well as the rules for changing status
The Low and High columns define the allowable range
e.g., to change the status to 50 (Voided), the status must be between
10 (New) and 20 (Being Processed)
Don't
Forget
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The Problem …
GOTCHA!
An incoming payment tries to clear the disputed item when thecase status is 10 (New)
The Status Profile will not allow the status to be changed from 10to 30 (only status 20 is allowed)
Result: The item cannot be cleared because the case status
cannot be closed
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The Solution …
Allow the closed status to be set from ANY earlier status value
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Enhancing Correspondence
Did you know …
You can add additional recipients?
You can add attachments?
You can control which forms are proposed?
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Enhancing Correspondence (cont.)
Apply SAP Note 888620
Enables you to add attachments before correspondence is sent
Configuration:
For each form type, define the “ Processing Time” as “ Processingusing selection report”
Setup:
Schedule program RSPPFPROCESS (transaction SPPFP) to run inthe evening – this program sends the correspondence that wascreated earlier
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Configure Processing Time
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Manually-Created Correspondence
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Additional Recipient and Attachment Are Added
Additional
recipient
added Attachment
uploaded
from PC
ActionDetails
button
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Letter and Attachment as Received
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Controlling Choice of Manual Correspondence
Requirement:
You want the choice of correspondence to be determined by specificattributes in the case
For example: You want the Claim Denial letter to be proposed only when the case
status is set to “ To Be Collected” and the disputed amount is greaterthan $100
Configuration: Define a “ Schedule Condition” to test the case attribute(s)
Assign the Schedule Condition to the specific correspondence typesand methods
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Example of a Schedule Condition
Example:
User Status = 25 (To Be Collected) AND
Disputed Amount > 100 AND
Currency = USD
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Assign the Condition
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Status is “To Be Collected”
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Use the BI Dispute Management Reports
Dispute Management includes standard BI content that just needsto be activated
The standard content puts the “Management” in “ Dispute
Management” Evaluate the process of resolving disputes
Identify possible bottlenecks in the process
Evaluate and adjust workloads
Quantify the root causes of disputes Identify customers abusing the deduction
Enhance the reporting ODS with new case attributes as required
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Enhance Reporting by Adding Tracking Attributes
Evaluate your dispute resolution process.
Do you have multiple phases in the process?
For example:
A central person determines who owns each dispute and assigns thecoordinator/processor
Invalid deductions are charged back to the customer, but there may be asignificant time before repayment
Enhance the case attributes by adding newtracking fields and BAdI code to fill them in.
For example:
Date Referred when Coordinator has changed
Date of Chargeback when case status is changed to Chargeback
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Time Grid: Drill-Down to Customer
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Example: Values and Life
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Example: Time-Based Sorting
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What We’ll Cover …
Introduction
Dispute Management
Credit Management
Collections Management
Wrap-up
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R/3 Credit Management vs. SAP Credit Management
Any XML-Based Credit
Information Service
Only Through Partner
Products
External Credit
Information (e.g., D&B)
Credit Rules EngineNot AvailableCustomerScoring/Rating
Distributed System-Landscape (Multiple FI,SD, and CRM Systems)
Only for Simple
System-Landscape
(1xFI, 1xSD)
Monitor CreditExposure
FI-AR, FI-CA, OthersOnly FI-ARFI Data
SAP Business Partner FI-AR AccountMaster Data
SAP CreditManagement
R/3 CreditManagement
R/3 C dit M t SAP C dit
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R/3 Credit Management vs. SAP CreditManagement (cont.)
SAP NetWeaverXI Server
Not AvailableConnectivity forNon-SAP Systems
Credit Manager Portal(incl. Fact Sheet andSAP BW Content)
SAP Analytics (6.0)
Customer Fact Sheet Analysis
Create Workflow forany Credit Event
Only in SDWorkflow
Credit Rules EngineNot AvailableRule-Based Definitionof Credit Limits
SAP CreditManagement
R/3 CreditManagement
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FI-AR Account vs. SAP Business Partner
FI-AR Account
Limited data – mostly to supportthe credit check
Single role (customer)
Fixed design
SAP Business Partner
Central repository
Can be shared with other
applications using SAPBusiness Partner
Extensible design
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A Multi-Division Business with Different
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A Multi-Division Business with DifferentCredit Policies
Example:
Acme Chemical Company has two divisions:
Petrochemicals – high-volume, low-margin
Credit Policy: Very tight monitoring Fine Specialty Chemicals – low-volume, high-margin
Credit Policy: Generous
Solution:
Define each division as a Credit Segment
Use different formulas to calculate credit limit for eachCredit Segment
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Example: Evaluating a Common Customer
Credit Segment
Petrochemicals
Credit Segment
Fine Specialty Chemicals
Customer:Whizzo Manufacturing
Credit Score = 84
High-MarginFormula
Limit = $800,000
Low-MarginFormula
Limit = $150,000
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E t l C dit Hi h D fi d b R l ti hi
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External Credit Hierarchy Defined by Relationships
Customer 4711Customer 4711Segment 0000Segment 0000
Exposure: $1,000,000Exposure: $1,000,000
Total Exposure: $700,000
Total Exposure: $3,100,000
Customer 4712Customer 4712Segment 0000Segment 0000
Exposure: $1,500,000Exposure: $1,500,000
Customer 4713Customer 4713Segment 0000Segment 0000
Exposure $700,000Exposure $700,000
Total Exposure: $2,100,000Is higher credit
account of …
Is higher creditaccount of …
Is higher credit account of …
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Multi Level Credit Checking
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Credit ManagementERP Customer
Multi-Level Credit Checking
Customer Electronics Inc.
East
Business Partner Electronics Inc.
East
Customer Electronics Inc.
Central
Customer Electronics Inc.West
Business Partner Electronics Inc.
Central
Business Partner Electronics Inc.West
A/R SummaryCredit Exposure
Business Partner Electronics Inc.Credit Account
CreditLimit
PaymentBehavior
PaymentBehavior
PaymentBehavior
A/R SummaryCredit Exposure
A/R SummaryCredit Exposure
Credit Master Data
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Credit Management
Credit Master Data
Business Partner Electronics Inc.
East
Business Partner Electronics Inc.
Central
Business Partner Electronics Inc.West
Business Partner Electronics Inc.Credit Account
Calculate ScoreDetermine Risk
Class
CalculateCredit Limit
External Credit Info
A/R Summary
A/R Summary
A/R Summary
C o p y S c o r e t o
L o w e r L e v e l B
P s
CalculateCredit Limit
CalculateCredit Limit
S u m m a r i z e C r e d i t L i m
i t s t o H i g h - L e v e l B P
What We’ll Cover
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What We’ll Cover …
Introduction
Dispute Management
Credit Management
Collections Management
Wrap-up
Collections Management Master Data
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Collections Management Master Data
The Collector’s Worklist uses the Collection Business Partnermaster data
A new Master Data Synchronization function in ECC 6.0 createsthe Collection Business Partner from the ECC A/RCustomer Master
Master Data Synchronization
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Collections Management Accounts Receivable
Master Data Synchronization
Customer Electronics Inc.
Customer group KUNA
Business Partner Electronics Inc.
Role “ Gen. BP (000000)”Role “ CVI: FI Customer
(FLCU00)”
• Title and names• Search terms• Standard address• Bank details• Company code-specific data• …
Leading customer master datafor Collections Management
Customer/Vendor
Integration
Customers with Multiple A/R Accounts
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Collections Management Accounts Receivable
Customers with Multiple A/R Accounts
Customer Electronics Inc.
East
Business Partner Electronics Inc.
East
Customer Electronics Inc.
Central
Customer Electronics Inc.
West
Business Partner Electronics Inc.
Central
Business Partner Electronics Inc.
West
Business Partner Electronics Inc.Credit Account
Credit Management
Manage Credit at Credit Account Level
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Manage Credit at Credit Account Level
Collections Management
Business Partner Electronics Inc.
East
Business Partner Electronics Inc.
Central
Business Partner Electronics Inc.
West
Business Partner Electronics Inc.Credit Account
Credit Management
• Credit Score• Risk Class• Credit Limit• Credit Check
Risk Class(From Credit Account)
Risk Class(From Credit Account)
Risk Class(From Credit Account)
Collection
Strategy
Missing Documentation
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Missing Documentation
Frequent reasons given to collectors for non-payment ofan invoice:
“ I never received the invoice”
“ I need a copy of a Proof of Delivery”
How does the collector respond?
After completing the call, the collector:
Obtains the missing documentation
Prints it out
Stands in line at the fax machine to send it to the customer
A Better Solution
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Use Dispute Management to create a case
Select reason:
Invoice copy needed
Proof of Delivery needed
Assign the collector as the Coordinator and Processor
At end of day, the collector processes worklist
Use the Correspondence function to attach copy of missingdocumentation and email or fax it to customer
In addit ion to improved efficiency, you get statist ics that identify thefrequency of missing information by customer, etc.
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What We’ll Cover …
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Introduction
Dispute Management
Credit Management
Collections Management
Wrap-up
Resources
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More information is available from the SAP Help Portal:http://help.sap.com/
Look under mySAP ERP> SAP ERP Central Component> Financials>SAP Financial Supply Chain Management
Also look at SAP Notes in the Service Marketplace Application Area FIN-FSCM
7 Key Points to Take Home
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SAP Dispute Management
Consider creating cases automatically
Know the options for controlling external correspondence
Use SAP NetWeaver BI reports to manage the resolution process
SAP Credit Management
Use internal hierarchies to implement different credit pol icies
Use external hierarchies to consolidate large customers
SAP Collection Management
Use master data synchronization to enhance integration withSAP Credit Management
Let collectors use Dispute Management to improve their efficiency
Your Turn!
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How to contact me:Jeff Hirsch