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Advanced SAP CollectionsManagement - 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
Management
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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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Text
Double-Click to open
customer work item
Collections Management: Collectors Worklist
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Text
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
C ll i i
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Record promise for
payment or customer
contact at the invoice
level
Collections Management: Promise-to-Pay
C ll i M P i P
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Promise for payment has
been recorded
Collections Management: Promise-to-Pay
C ll ti M t C t C t t
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Record customer contact
resulting in completion
of the work item
Collections Management: Customer Contact
C ll ti M t C l t d It
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Work item
completed
Collections Management: Completed Item
C ll ti M t R b i i
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Collections Management: Resubmission
Create a Follow-up
reminder on
specific invoices
C ll ti M t R b i i
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Collections Management: Resubmission
Summary of all
Follow-Ups
C ll ti M t N t
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Collections Management: Notes
Select invoice and
enter invoice
specific notes
Collections Management: Notes
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Collections Management: Notes
Summary of all
Notes
Collections Management: Correspondence
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Collections Management: Correspondence
Several
Correspondence
Options available
Collections Management: Correspondence
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Email contact
notes and log
directly from SAP
to customer
Collections Management: Correspondence
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
Credit Limit
% Utilization
Credit Exposure
Risk Category
Master Data orOperational Datawhich can be addedto collectionsmanagement
Aging
Amount Dunning Level
Amount Dunned
Disputed Amount
Dispute Case Status
Payment Data
Broken Promise to
Pay Number of Promise
to Pays
Promise to PayAmount
Customer Contacts
ResubmissionsCollections
Data
Open AR &Dispute
Mgmt Data
Credit DataOther Data
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BasicRules
CollectionRules
CollectionStrategy
Collection Strategy for
Higher Risk Customers
High to Medium Risk and
greater than 80% CreditLimit Utilization
Valuation: 15 points
Risk Category
Credit Limit Utilization
Past Due Invoices Over 15
days Past Due & Dunned
One or More Times
Valuation: 20 points
Dunning Level
Documents by posting key
and document type
Individual Items Overdue
Since N Days
Resubmission Due for the
Customer
Valuation: 5 points
Resubmission Due for the
Customer
Collections Strategy Definition
Collections Management: Collection Strategy
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Text
Collection Rules
within the Collection
Strategy
Collections Management: Collection Strategy
Collections Management: Collection Strategy
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Text
Conditions within a
Collection Rule
Collections Management: Collection Strategy
Collections Management: Collection Strategy
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TextAutomatic
Prioritization of
Customer Work Items
Collections Management: Collection Strategy
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 Segmentation
Automated Correspondence
Invoice-Level Collections
Collect 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
A t t d C d
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Automated Correspondencefor 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 3rdlevel Dunning (Requires
Enhancements to FSCM)
Slo o Med Pa SMB
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Slow or Med Pay SMBCollection Strategy
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Advanced Correspondence
Advanced Correspondence Automation
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Advanced Correspondence Automation
Selection criteria: type of
letter, attachments and
method of communication
Advanced Correspondence Automation
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Advanced Correspondence Automation
Highlight AR line
items to be included
in correspondence
Advanced Correspondence Automation
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Advanced Correspondence Automation
Cover Letter
Advanced Correspondence Automation
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o po o o
Invoice Attachments
Advanced Correspondence Automation
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p
POD Attachment #1
Advanced Correspondence Automation
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p
PODs 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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TotalAmountPast Due
Items withOpen
Promise toPay
DisputeCases not in
a To Be
Collected
Status
Items witha CurrentDunningNotice
ItemsArranged
for Payment
Amount To
Be
Collected
Total Amount Past DueTotal of all overdue items in FI-Accounts Receivable
Items with Open Promise to PayIf 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 Collectedamount
Dispute Cases not in a To Be Collected StatusAll 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 NoticeIf 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 PaymentAll 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
Use Collectable Amount in
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Use Collectable Amount inStrategies
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