sap retail finance supply chain

SAP Financial Supply Chain

Management (SAP FSCM)

Solution Overview

© SAP AG 2009. All rights reserved. /

Legal Disclaimer

This presentation is a preliminary version

and not subject to your license agreement

or any other agreement with SAP.

This document contains only intended

strategies, developments, and functionalities

of the SAP® product and is not intended to

be binding upon SAP to any particular

course of business, product strategy, and/or

development. Please note that this document

is subject to change and may be changed

by SAP at any time without notice.

SAP assumes no responsibility for errors

or omissions in this document.


1. Today’s Business Issues and Value Proposition

2. The SAP Financial Supply Chain Management (SAP FSCM)

Set of Applications

3. Summary

Agenda


Does this Sound Familiar?

Copyright 2002 by Randy Glasbergen

www.glasbergen.com


Working Capital Management DOES Matter

The financial supply chain is increasingly recognized as an area

offering significant potential for generating bottom line improvements

and creating competitive advantage. According to Killen Associates,

“a typical billon-dollar company spends approximately $27 million

annually for unnecessary working capital and inefficient processing

functions because they lack visibility into the financial supply chain

and receivables.”

The financial supply chain refers to the end- to- end trade processes and

information that drive a company’s cash, discounts, and working capital.

From a buyer’s perspective, this involves the full procurement-to-payment

process. For the seller, it is the order-to-cash cycle.

Source: Bolero


Cash Flow Cycle

Days In Receivables(average customer payment time)

Days In

Payables(average time to

payment of supplier)

Days In Inventory Days Sales Outstanding

time

Cash Flow Cycle

Sale +

Delivery +

Invoice

Cash

payment

for inventory

Actual

payment

date

Order

placed

Delivery +

invoice

Expected

payment date


Challenges in Credit Departments

0 10 20 30 40 50 60 70 80 90 100

Reduce portfolio risk

Reduce DSO

Reduce bad debt write-offs

Accelerate new customer approvals

Do more with less staff

Do more with existing staff

84%

74%

87%

68%

65%

86%

Source: Paystream Advisors, 2007

(percentage of important/very important replies)

%


0

10

20

30

40

50

Relevance of Goals to Receivables Operations

48 % 42 % 42 % 37 % 36 % 33 % 32 % 31 %

5 %


(percentage of important/very important replies)


Free Up Cash with

SAP Financial Supply Chain Management

With SAP Financial Supply Chain Management customers were able to

Reduce the number of bad debt using SAP Credit Management

Reduce efforts and costs for invoicing using SAP Biller Direct

Reduce DSO through improved discrepancy resolution with SAP Dispute Management and

SAP Collections Management

Cash application

Accessing information

Payment reconciliation

Managing customer behavior

Invoice presentment

Discrepancy resolution

18 %

18 %

26 %

28 %

29 %

47 %


(percentage of highest pain scores)

Painpoints in Order to Cash CycleCompanies have big potential to free up working

capital by applying best practices

Current

Working

Capital

Payables Receivables Inventory Best Practice

Working

Capital

321

bn $

91

bn $

49

bn $

110

bn $

Source: McKinsey (sample of 24 corporate clients)

Cash NPV released from best practice: 211 bn USD

71

bn $

Fragmented stand-alone

systems

No workflow or data

management

No integration with GL or

AR systems

Poor insight into

customer Credit risk

No insight into process

bottle necks

Lack control over processes,

workflow or prioritization

Independent functions

No coordination in collections/

dispute resolution

Inconsistent credit

policies across divisions

Fragmented and inefficient

Paper-based and labor-

intensive

Lack of standardization

Typical Barriers of the Order-to-Cash Cycle

High Cost of

Finance Operations

High Bad Debt Risk

High DSOs


Op

tim

izin

g t

he O

rder-

to-C

ash

Cycle

Overcome Your Barriers by Optimizing the

Order-to-Cash Cycle with SAP

Enterprise Service Bundles

SAP Biller Direct

SAP ERP Financials

SAP NetWeaver/SWIFT integration

SAP Solutions

Organization

SAP ERP Financials

SAP Credit Management

SAP Dispute Management

SAP Collections & Dispute Mgmt

SAP Biller Direct

SAP Accounts Receivable

Insight &

Control

SAP CPM

SAP GRC


IT Systems

Processes

Establish greater cross-functional coordination

Define global customer credit policies

Establish clear lines of ownership and

escalation policies

Organize unstructured data and collaborate

via workflows

Streamline labor-intensive processes via

standardization and automation

Straight-through payment processing

Monitor performance of financial processes

Implement financial controls and fraud

detection mechanism

Control global credit risk

Utilize open standards to connect financial

systems with customers, suppliers and banks

Integrate collections / dispute systems with

accounting and AR systems

Finance StrategiesBarriers


Operational Effectiveness –

Set the Stage for Top Line Growth

SAP helps to solve your individual pain points in transactional finance.

SAP lets you free up additional cash to finance the growth of your business.


Value Creation with SAP ERP: Optimizing your financial supply chain

SAP ERP

Lower Cost of

Payment

And Billing

Less Bad or

Doubtful Debt

Decreased Non-

Productive Float

Improved Cash

Flow Management

Reduced Working

Capital

Shorter

Settlement

Cycles

Faster Dispute

Resolution

Enhanced CRM


Financial Supply Chain Management with SAP

IssueInvoice

ForecastCash

FinanceWorking Capital

ResolveDisputes

CollectCash

CheckCredit

Worthiness

Settle& Pay

Reconcile


SAP CollectionsManagement


SAP Biller Direct (Electronic Bill Present-

ment and Payment)

Order-to-Cash


Solutions for streamlining the order-to-cash cycle

SAP Credit

Management

Reduce risk through consistent evaluations and policy

Set and monitor credit limits, reduce bad debt expense

SAP Biller Direct Reduce billing costs through electronic invoicing

Improve customer satisfaction

SAP Dispute

Management

Streamline dispute management and reduce costs

Faster resolution and lower DSOs

SAP Collections

Management

Streamline collections and improve success rates

Lower collections costs and bad debt write-offs

Collect

Cash

Resolve

Disputes

Issue

Invoice

Check

Credit



Controlling

Treasury

Efficiency – One Integrated Approach for

Logistics and Finance

FSCM

Accounting

Sales and Distribution

ProfitabilityAccounting

IncomingOders

ForecastCosting

Cash/ LiquidityForecast

Cash/ LiquidityForecast

Cash Positioning

Biller Direct

DisputeManagement

Inventory/Cost

G/Ledger

IncomingOrders

CollectionsManagement

A/RG/Ledger

GoodsIssue

Electronic Billing

CreditManagement




Set of Applications

3. Summary

Agenda




Set of Applications

2.1. SAP Credit Management

2.2. SAP Biller Direct

2.3. SAP Dispute Management

2.4. SAP Collections Management

3. Summary

Agenda




IssueInvoice

ForecastCash


ResolveDisputes

CollectCash

CheckCredit

Worthiness

Settle& Pay

Reconcile





ment and Payment)

Increase the financial visibility of your customer base with SAP Credit Management

Control your customer’s credit exposure

Optimize terms for your customers

Reduce amount of bad or doubtful debt

Order-to-Cash


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


Credit Profile

Customers use

scoring rules

They get own

calculated customer

scoring

Customers can

import external

credit information

Credit reports is

stored in the

customer’s master

data


Credit Manager Work Center – The Place to

Get Your Job Done

Work Centers enable more efficient and effective work and reduce the time spend with

routine tasks (available since SAP enhancement package 2 for SAP ERP).

Each Work Center represents a certain area of activity of a business user in the respective

role in the organization. It is the place for the user to start or restart working in that area.

It provides a role-based central point of access to all work-related content and tasks pushed

to users and aggregates the most important information for one user in that area of activity.

It is focused on personal work organization and efficiency as it rather brings the work to

the user and allows users to self-organize their work and thus replaces reactive work by

proactive work.

Relevant information and tasks are actively “pushed” to the user supported by work lists, alerts,

monitoring and analytics. Instead of users having to search for that information themselves.

Users find just the right applications to solve their tasks. And based on the work triggers,

context information is being used to help the user to get their job done more efficiently.

Where suitable, users are guided through common tasks, for example in Self-Service

like applications.

Work Centers are customizable and you can integrate other applications, information or even

existing third party applications.


Blocked Sales Orders (Example)

Links launch

applications in

Activity Window.

Detailed Navigation =

View Switch Pre-delivered default queries

with customized values

Access to Key activities

via action buttons

POWL Detail section with Credit-

relevant master data maintained in

the connected FSCM system

related to the selected work item


Business Benefits Trough


Control credit risk via real-time credit allocation and ongoing

monitoring

Make fast credit decision through online credit rating check

Reduce transaction costs by automating the credit application

process

Link dunning & dispute information to the credit

decision process

Reduce effective DSO by reducing payment delays and

bad debt

Increase revenues with risk-free accounts (decreased rate of

credit refusals)

Improve customer relationship by concentrating service on

profitable customers

Meet compliance regulations (SOX 404, 409)

Benefit from better refinancing offerings (Basel II)

Make use of a well-defined process for credit limit applications


One System Scenario

SAP Credit Management 6.0

(part of ECC 6.0)

SAP NetWeaver 2004s

(SAP Web AS 7.0 ABAP) *

SAP ERP 6.0

(ECC 6.0)

Deployment Options for

SAP Credit Management (One System)

SAP EP 7.0 SAP BW 7.0

optional

* Includes SAP Exchange Infrastructure, BW 7.0 and EP 7.0


SAP ERP 6.0(ECC 6.0)

orSAP ERP 2004

(ECC 5.0)or

SAP R/3 Enterprise or

SAP R/3 4.6Cor

SAP FI-CA (min. 4.64)


SAP Credit Management (Two Systems)

One System Scenario Two System Scenario

SAP Credit Management 6.0

(ECC 6.0)

SAP NetWeaver 2004s

(SAP Web AS 7.0 ABAP and Java)

XI

SAP EP 7.0 SAP BW 7.0 optional




Set of Applications





3. Summary

Agenda



SAP Biller Direct

IssueInvoice

ForecastCash


ResolveDisputes

CollectCash

CheckCredit

Worthiness

Settle& Pay

Reconcile





ment and Payment)

Supplement traditional billing procedures with SAP Biller Direct

Electronic invoicing for businesses

Electronic payment for customers

Integrate customer service with finance

Order-to-Cash


Functional Overview

SAP Biller Direct is a component of SAP Financial

Supply Chain Management (SAP FSCM) and provides

functions for Electronic Bill Presentment and Payment

(EBPP)

Using SAP Biller Direct, invoice recipients can see

their account balance with the Biller and look at their

bills, credits or payments

Invoice recipients can initiate payments or download

bills into their accounts payable system

Invoice recipients can dispute bills from the internet

and collaborate with the biller

SAP Biller Direct enables real-time integration between

the SAP backend system and the internet without any

data redundancies


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


Integration with SAP 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


Assignment of Accounts in User Management

Engine (UME)

Multiple back-end systems can be supported:

Only one SAP Biller Direct installation needed

Backend systems assigned to user in User Management Engine (with respective accounts)

However, no merge of bill or credit items from several backend systems into one line

item display

System assignment

Account assignment


Buy-Side E-Invoicing – Open Bills View

(Available Since Enhancement Package 2)

Suppliers can

check their

invoices & credits

They can check

finalized payments

from their

customers

They can upload

invoice data (XML)

and invoice

documents (PDF,

TXT)


Business Benefits Trough

SAP Biller Direct

Lower cost of billing without printing and postal charges

Efficient processing of payments and exceptions including

better explanation of payment deductions

More precise cash management and improved liquidity

planning

Data integration with accounts receivable, accounts payable,

cash management and dispute management

Better customer retention and opportunities for one-to-one

marketing

Productivity gain for A/R and A/P departments

Fewer accounting and settlement errors

Immediate access to invoice copies

No changes of existing business processes



SAP Biller Direct

One System Scenario Multiple Systems Scenario

* Integration with SAP Dispute Management isn’t available below R/3 Enterprise or FI-CA 4.72

SAP Biller Direct 6.0

(Java)

SAP NetWeaver 2004s


SAP ERP 6.0

(ECC 6.0)

SAP Biller Direct 6.0

(Java)

SAP NetWeaver 2004s


RFC

SAP ERP 6.0 (ECC 6.0)or

SAP ERP 6.0 (ECC 5.0)or

SAP R/3 Enterpriseor

SAP R/3 4.6C *or

SAP FI-CA (min. 4.64) *




Set of Applications





3. Summary

Agenda




IssueInvoice

ForecastCash


ResolveDisputes

CollectCash

CheckCredit

Worthiness

Settle& Pay

Reconcile





ment and Payment)

Reduce DSO (Days Sales Outstanding) and increase customer profitability with SAP

Dispute Management

Identify issues and disputes earlier in the payment cycle

Track and monitor reasons that drive DSO Streamline process of dispute resolution

Order-to-Cash


Functional Overview

Cross-department dispute resolution

All information is centrally stored and structured (electronic record)

Integration with SAP Workflow incl. e-mail notification of

processors

Integration in financial but also in logistical processes

Creation and viewing of dispute cases from financial transactions

Automatic update of dispute cases by financial transactions

Links to financial and billing documents (SD and CRM)

Correspondence capabilities

Customer correspondence (automatically and manually)

Internal escalation of critical dispute cases

Support of different communication channels

SAP Biller Direct


Analysis of dispute resolution

BI Content


Dispute Resolution Process

Workflow Example

John Miller

Shipping Clerk

Tom Busy

Account Manager

Sally Smith

Dispute Manager

(Coordinator)

Hans Doe

Receivables Manager

John reads e-mail

He accesses workflow inbox

and executes work item

John confirms late delivery and

return dispute case to Sally

2

Tom read e-mail



Tom decides that credit memo

should be granted and returns

dispute case to Sally

4

Sally assigns Tom Busy as next processor

She asks Tom to decide about dispute

Work item is created and e-mail is sent to Tom

3

Hans reads e-mail



Hans posts credit memo as

suggested and return dispute

case to Sally

6

Sally assigns Hans Doe as next processor

She asks Hans to post credit memo

Work item is created and e-mail is sent to Hans

5

Sally assigns John as next processor

She asks John to confirm late dlivery

Work item is created and e-mail is sent

to inform John

1


Dispute Case

A dispute case

summarizes and

structures all

dispute-related data

and contains

various attributes

A case can be

accessed and

processed by all

authorized

employees

Processors can

create notes, view

an action log or link

business objects to

the case


Integration with SAP Workflow

Occasional processors can process a dispute case via SAP Workflow

Here the processor gets an overview of the main dispute case attributes

Processors can create notes and upload documents

By returning the dispute case to the coordinator, or by forwarding it to the next processor, the workflow item is completed

Attached documentsUpload documents

Navigation to billing document

Navigation to dispute case


Dispute Case Analysis

Dispute case

analysis helps to

identify potentials to

improve the dispute

resolution process

It is a basis to

calculate the costs

of unresolved

dispute cases and

of the process itself

The example report

shows the time-

based sorting of

dispute cases by

splitting the values

into five blocks


Business Benefits Through


Reduce Days Sales Outstanding (DSO)

Increase customer profitability

Improve liquidity and cash forecast

Optimize, streamline and accelerate cross-department

dispute resolution due to workflow integration and

automation

Gain information about flaws in existing processes

which frequently lead to disputes

Improve customer relationship thanks to more tightly

focused queries and quicker resolution of disputes





* SAP Collections Management and SAP Dispute Management have to be set up on the same system if both are used

** The implementation of ECC 6.0 is optional for customers implementing only SAP Dispute

SAP Dispute Management 6.0 *

(part of ECC 6.0)

SAP NetWeaver 2004s

(SAP Web AS 7.0 ABAP)

SAP ERP 6.0

(ECC 6.0)

SAP Dispute Management 6.0 *

(part of ECC 6.0)

SAP NetWeaver 2004s


SAP ERP 6.0 **

(ECC 6.0)

RFC

SAP ERP 6.0

or

SAP ERP 2004

or

SAP R/3 Enterprise




Set of Applications





3. Summary

Agenda




IssueInvoice

ForecastCash


ResolveDisputes

CollectCash

CheckCredit

Worthiness

Settle& Pay

Reconcile





ment and Payment)

Establish a customer centric receivables management with SAP Collections

Management

Evaluate, identify and prioritize accounts

Collect receivables proactively

Process optimization for high volumes of open items

Order-to-Cash


Functional Overview

Collection strategies

Comprise company specific rules for collecting receivables

Used to select and prioritize customer accounts for the collection

Daily work lists for collection specialists

Automatically created based on collection strategies

Prioritized list of all customers that are to be contacted by collection specialist

KPIs, customer valuation, due date grid to prepare customer contact

Functions to process and view open receivables

All open invoices and their status at a glance including invoice history

Actions for one or several invoices can be directly taken

Collection procedures

Promise to pay agreements

Resubmissions

Customer contacts

Integration with SAP Dispute Management and SAP Credit Management

Create and view dispute cases from SAP Collections Management

Data can be used on work list and in collection strategies


Collection Worklist

Each collection

specialist gets

a daily worklist

containing all

customers that

should be

contacted

Customers are

valuated and

prioritized

according to

collection rules in a

collection strategy

Summarized

information to

prepare the

customer

contact

Aging of receivables per

selected customer

Summarizes information concerning Customer account in Accounts Receivable

Past collection activities

Credit Management

Detail valuation of selected

customer per fulfilled collection rule


Function Process Receivables

Overview of all

open invoices of a

customer in a

collection segment

Status information

per invoice

Creation of

promises to pay

and dispute cases

possible

Navigation to other

tab pages gives

overview of past

payments, past

customer contacts,

open resubmissions

etc.

View dispute case(s)

per selected invoice

View promises to pay

per selected invoice

View invoice history

of selected invoice


Collection Strategy

The collection

manager decides

based on which

collection rules

customers are to be

contacted

These collection

rules are assigned

to the strategy

Per rule the

collection manager

enters the relevant

parameters and the

valuation points a

customer receives

when he fulfills the

rule

Determines structure

of Due Date Grid

Enter parameters of collection rule


Business Benefits Through


Safeguard liquidity

Increase on time payments

Reduce Days Sales Outstanding (DSO)

Reduce write-offs

Increase collection specialist efficiency and decrease cost

of customer centric receivables management

Automatic worklists containing prioritized customers

Summarize all relevant information and necessary

activities for collection of receivables in one

application

Ensure execution of company specific collection

strategies

Element of holistic customer relationship management

Decrease reliance on and risk of third party debt

collectors





* SAP Collections Management and SAP Dispute Management have to be set up on the same system if both are used

SAP Collections Management 6.0 *

(part of ECC 6.0)

SAP NetWeaver 2004s


SAP ERP 6.0

(ECC 6.0)

SAP Collections Management 6.0 *

(part of ECC 6.0)

SAP NetWeaver 2004s


SAP ERP 6.0

(ECC 6.0)

RFC

SAP ERP 6.0

or

SAP ERP 2004

or

SAP R/3 Enterprise




Set of Applications

3. Summary

Agenda


Benefits

End-to-end automation of the financial value chain

Shorter settlement cycles

Faster dispute resolution

Lower days sales outstanding

Fewer bad debt write-offs

Increase cash cycle velocity

Reduce working capital requirements

Lower cost bank transactions and reconciliations

Reduce cost and effort in billing and payments processing


The Bottom Line

The Ability to Optimize according to Particular Pain Points

Reduced Risk of Bad Debt

Streamlined Collections and Dispute Management, reduced DSO

Reduced Costs of Invoicing with Biller Direct

The Power to Enable Financial Transformation

Strong platform for centralization of tasks as shared services

New insights into operational business performance for better decision

making

Integrated Solution

Manage the Financial Value Chain seamlessly embedded into the related

processes of Logistics, Financial Accounting and Treasury Management

End-to-End Connections with Suppliers, Customers and Banks



Further Information

SAP Public Web

http://www.sap.com/fscm

SAP Service Marketplace (log-on required)

https://service.sap.com/fscm

Documentation on SAP Help Portal

http://help.sap.com

(SAP ERP >> SAP ERP Central Component >> SAP ERP EHPs)

Training / SAP Education

http://www.sap.com/education

User Groups

http://www.asug.com

http://www.dsag.de

http://www.sap.com/communities/usergroups.epx for more

Contact

Your SAP Account and Consulting Engagement Manager

http://www.sap.com/fscm

https://service.sap.com/fscm

http://www.sap.com/education

http://www.asug.com/

http://www.dsag.de/

http://www.sap.com/communities/usergroups.epx


Thank you!


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sap retail finance supply chain

Documents

sap product

sap biller

sap credit management

bolero sap ag

summaryagenda sap ag

sap dispute management

working capital management

paystream advisors