3 50 tips in 50 minutes to get credit and cash flowing faster

Modernize Credit-to-Cash Cycle © Copyright 2013 HighRadius. All Rights Reserved

Tips and Tricks for Optimizing Credit and Cash Management in SAP

Pankaj Jagtap, Director of Consulting HighRadius Corproation


In This Session …

• Get specific SAP tricks and tips on how to:

– Better manage disputes

– Better manage collections

– Better manage A/R documents

– Better manage credit

– Better manage payment processing


What We’ll Cover …

• Overview

• SAP Dispute Management Tips

• SAP Collections Management Tips

• SAP Credit Management Tips

• SAP Biller Direct Tips

• Wrap-up


Receivables Management in ERP Financials

Receivables Management was once called Financial Supply Chain Management (FSCM) and was introduced in 2002. There are over 1,000 licenses worldwide!


Return on Investment (ROI) Opportunities

• 30% increase in staff efficiency

– Eliminate time spent to identify delinquent customers via Collection Strategies

– Reduce the time spent on phone via Collection Dashboard and Standardized Correspondence, such as providing invoice copies, collection letters, etc.

– Automate “Credit Decisioning” within SAP

– Customer self-service via Biller Direct Portal

• 10% reduction in DSO

– Faster turn-around on collection and deduction activities

– “Intelligent” collections via targeted identification of delinquent customers via “Collection Score”

– Ability to touch all delinquent customers via automation

– Reduce float by migrating a subset of lockbox customers to online electronic Bill Pay Model

• Other

– Reduce bad debit write-offs

– Reduce lockbox processing costs

– Reduce paper billing costs via electronic invoice presentment



• Overview





• Wrap-up


Dispute Case from FBL5N

Problem Statement

It takes multiple steps and screens to open a dispute case linked to receivables from FBL5N

Tip/Benefit Step shown in the next slide opens the dispute case in a single click


Dispute Case from FBL5N (cont.)

Single click here opens the

dispute case directly, as

shown in the inset


Attaching Documents to Dispute Case

Problem Statement

It can be difficult to add an attachment to a dispute case by going to the linked objects

Tip/Benefit Step shown in the next slide enables you to store the documents quickly, leading to efficiency of operation


Attaching Documents to Dispute Case (cont.)

Single click here will let you

select a document from your

local storage, which can be

retrieved from the Attachment list


Dispute Case Log

Problem Statement

Users cannot get a view of any changes made by them or others to the dispute case

Tip/Benefit Dispute management has a readily available log of all changes made to a case with date and time of change; this can be very useful for audit purposes

Prerequisite: The attributes need to be selected in the attribute profile during configuration


Dispute Case Log (cont.)

Clicking on the Log button provides all the changes

made to the case, along with the user accessing

the case with date and time details. It also provides

the old and new values of the attributes changed.


Dispute Case Status Can Be Confirmed Instead of Closed

Dispute Cases Status can be Confirmed instead of Closed. Once Confirmed, a Dispute case can no longer be reopened. This is particularly helpful if dispute cases need to be archived once complete.


Dispute Case Status Can Be Confirmed Instead of Closed (cont.)


Automatically Create Dispute Cases for Credits

Information It is possible to automatically create dispute cases for open credits

Prerequisite This functionality is available in EHP 4 or later


Automatically Create Dispute Cases for Credits (cont.)

You can auto-create dispute cases for

credits by choosing credit indicator in

transaction FDM_AUTO_CREATE


Business Partner Is Not Needed for Dispute Management

There is a general notion that a business partner is required for using dispute management, but dispute management works directly on the customer master data


Business Partner Is Not Needed for Dispute Management (cont.)


Ability to Attach Any SAP Document in Linked Object of a Case

Problem Statement

Standard SAP provides for linking of FI-AR documents to a dispute case, whereas various other documents are required for resolution of a case

Tip/Benefit Configuration can be changed to update the Case Record Model to add any SAP document as a category


Ability to Attach Any SAP Document in Linked Object of a Case (cont.)

Add Credit Memo Request to a

Dispute Case as a linked object


Email Notification to Occasional Users

Problem Statement

Many times, the case needs to be worked on by users outside the deductions team, but they need to be manually notified

Tip/Benefit Standard workflow provides for automatic notification in workflow, which can be sent to the user’s email, as well, when they are assigned as the processor of the case

Prerequisite: Need to activate the WS 01700044 and maintain the users who regularly process the case in a separate configuration, so that they do not start getting the notifications


Email Notification to Occasional Users (cont.)

Change the Processor and

the new processor will get

the email notification


Processing Buffer Between FI-AR and FSCM

Problem Statement

Updates on the FI-AR are not reflecting on the dispute case

Tip/Benefit FDM_PROCESS_BUFFER program needs to be scheduled as a batch job every 15 minutes to clear any buffer between FI-AR and FSCM, so that the data is in sync


Processing Buffer Between FI-AR and FSCM (cont.)

Executing the program will clear

any buffer between ECC and FSCM

for data synchronization


SMARTFORM Simplified

Tip Use of accelerator can simplify creation of different correspondence forms without any development, providing immense flexibility to business users


SMARTFORM Simplified (cont.)

Generation of forms from

UDM_DISPUTE requires

development of separate

form for every letter


SMARTFORM by Accelerator

Accelerator provides the

framework to create variations of

correspondence forms without

development



• Overview





• Wrap-up


Collection on Business Partner Not in Work List

Problem Statement

Sometimes a user needs to work on a customer for collection when they are not in their work list. This may happen when the customer has not broken any collections rule, but there has been contact with them and the user needs to update the contact details or if a promise to pay needs to entered.

Tip/Benefit A collections specialist can work on any business partner when needed. This is used at times when the actual specialist for the customer is on a break and a customer has called for the invoices.


Quick access to another

business partner or

someone else’s work list

Collection on Business Partner Not in Work List (cont.)


Open Customer from Collections and Not Business Partner

Tip User can open customer master data from the collection management Process Receivable screen


Open Customer from Collections and Not Business Partner (cont.)

Though collections management works

with the business partner, you can view

the customer master directly by double

clicking on the Customer in the Process

Receivables screen. This does not display

the business partner details.


Resubmission and Notes at Invoice Level in Enhancement Pack 5

Problem Statement

Notes and resubmissions have to be maintained, in general, for the business partner, even though they pertain to a specific invoice

Tip/Benefit Now, with Enhancement Pack 5.0, you can make notes or resubmissions at an individual or selected invoice on the Process Receivables screen


Resubmission and Notes at Invoice Level in Enhancement Pack 5 (cont.)

Select the required invoices, and then

make a resubmission or notes for them

specifically


Strategy Simulation

Problem Statement

Managers need to wait for the work list generation to confirm the outcome of any change to the strategy. This can make it difficult to optimize the collections strategy.

Tip/Benefit Using the steps shown on the next slide, the effects of the strategy on a business partner can be immediately simulated. Hence, it becomes easier for the managers to tweak the strategy to the organizational needs.


Strategy Simulation (cont.) Simulation helps in tweaking

the strategy without

generation of regular work list


Strategy Valuation

Problem Statement

All items in the work list appear with very high priority. This may make it difficult to focus a specialist’s work, as all customers need to be worked on as a priority.

Tip/Benefit Strategy valuation points need to be assigned in such a way as to create a work list with a good mix of all priorities, which is automatically assigned based on valuation points. The next slide shows a work list with a mix of all priorities.


Strategy Valuation (cont.)


Process Receivables Screen Has Real-Time Data but Not the Work List

Information All data seen on the work list is generated based on the UDM_GENWL transaction when it was run; but once the user goes to the Process Receivables screen, the data pertaining to the invoice is real-time from FI-AR


Process Receivables Screen Has Real-Time Data but Not the Work List (cont.)

REAL-TIME DATA

Data at Work List Generation


Additional Attributes on Process Receivables Screen in Enhancement Pack 5 Problem

Statement Adding regularly used fields from AR document requires custom logic to be built

Tip/Benefit It is now easier to update the include for any field on a BSID table without coding the logic for retrieving data. This reduces development efforts immensely.


Additional Attributes on Process Receivables Screen in Enhancement Pack 5 (cont.)

Fields from SAP AR can be easily added

without much development effort


Returning from a Customer’s Process Receivables Without Adding a Note

Problem Statement

If a user enters a customer by mistake, they need to add a note before coming back to the work list

Tip/Benefit The next slide shows a way of coming out of the customer’s process receivable without entering a note


Returning from a Customer’s Process Receivables Without Adding a Note (cont.)

Use “Continue without customer contact”

icon to come out of process receivables if

there is no activity on the account


User-Specific Layout for Collection Specialist

Problem Statement

Collection Specialists require their own work list layout, as the default layout may not be suitable. However, when they change the default layout, the changes become applicable to everyone.

Tip/Benefit Using the steps shown on the next slide, a Collection Specialist can change the work list layout, but save it as a user-specific layout


User Specific Layout for Collection Specialist (cont.)

While saving a layout for your use

only, choose the option User-specific

while saving the layout


Update of Contact Person Is Not a Master Data Change

Problem Statement

Users have to request a master data change to update the contact person for a customer

Tip/Benefit The contact person update is not a master data change, but it adds to the customer master


Update of Contact Person Is Not a Master Data Change (cont.)

The contact person update is not a

master data change, but it adds to the

customer master



• Overview





• Wrap-up


Manage Credit Limit at Multiple Customer Hierarchy Levels

Problem Statement

Managing credit for individual customers

Tip/Benefit You can create a customer hierarchy and manage credit at multiple hierarchy levels


Manage Credit Limit at Multiple Customer Hierarchy Levels (cont.)

You can create a customer hierarchy

and manage credit at multiple

hierarchy levels


Display Business Partner for Collections or Credit

Problem Statement

Users need to go to business partner and then select the required profile to look at relevant data

Tip/Benefit UDM_BP can be used to look at collections data directly and UKM_BP can be use to view the Credit Management data


Display Business Partner for Collections or Credit (cont.)

This directly displays the Collections

Role details of business partner


Display Business Partner for Collections or Credit (cont.)

This directly displays the Credit Role

details of business partner


Simulate a Credit Check

Trick Credit Managers have the ability to simulate the credit check of a customer without any actual sales entry


Simulate a Credit Check (cont.)

Click on the “Simulate” icon

to Simulate a Credit Check


Credit Score Trace

Information Turning on Logging for scoring customers will provide details of how a customer received a particular score. It will also give the ability for the user to compare the parameters.


Credit Score Trace (cont.)

Select this check box to

start Credit Score

Tracing


Details of Credit Score Valuation

Trick Credit Managers have the ability to view details of valuation for providing the credit score to a business partner


Click on the “Information on

Formula” icon to see more

details

Details of Credit Score Valuation (cont.)



• Overview





• Wrap-up


SAP Biller Direct Supports Both Partial and Residual Payments

Information SAP Biller Direct allows both residual or partial payment. Proportional Discount allowed for partial payments. Partial payments can be restricted as user/customer level/at application level.


SAP Biller Direct Supports Both Partial and Residual Payments (cont.)

Select an invoice and enter

the amount you want to pay


SAP Biller Direct Supports Both Partial and Residual Payments (cont.)

Check this box if

you want to make a

partial payment

instead of a residual


Customer Can Communicate with AR Analysts Using Dispute Case Notes

Information Customer can communicate with AR analysts using dispute case notes. Certain specified note types can be made available to the customer in SAP Biller Direct. All customer-entered notes in SAP Biller Direct can be seen in dispute management.


Customer Can Communicate with AR Analysts Using Dispute Case Notes (cont.)

Biller Direct Notes

Dispute Case Notes


SAP Biller Direct Users Can Self-Edit Notification Settings

Information SAP Biller Direct users can self-edit notification settings for Bills and Credits


SAP Biller Direct Users Can Self-Edit Notification Settings (cont.)


SAP Biller Direct Users Can Create a Payment Advice

Problem Statement

AR analysts might spend a lot of time in matching an existing credit to an open deduction

Tip/Benefit Using the steps shown on the next slide, an SAP Biller Direct user can also help in matching a credit to a debit and create a payment advice, which can then be processed by an accounting clerk


SAP Biller Direct Users Can Create a Payment Advice (cont.)

We can select the required debits and

credits and then create a payment advice

which can be processed in ECC by an AR

analyst


SAP Biller Direct Supports Head Office Branch Functionality

Information SAP Biller Direct users support customers maintained under the Head Office – branch relationship. Users assigned to a Head Office Customer can view transaction details of all branch customers assigned to the Head Office.


SAP Biller Direct Supports Head Office Branch Functionality (cont.)


Set Up Minimum Payment Amount for Customers Paying from SAP Biller Direct

Information You can set up a Minimum Payment amount for a customer paying through SAP Biller Direct. You can specify an amount or a percentage of the invoice or both. When you enable both, the upper limit applies.


Set Up Minimum Payment Amount for Customers Paying from SAP Biller Direct (cont.)


Set Up Minimum Payment Amount for Customers Paying from SAP Biller Direct (cont.)

Enter the minimum

payment amount as a

figure and/or as a

percentage of the

invoice amount


Partially Utilize a Credit While Making a Payment in Biller Direct

Information You can partially utilize a credit instead of using the entire credit while making a payment


Partially Utilize a Credit While Making a Payment in Biller Direct (cont.)

Select the Credit and enter the

amount you want to utilize


Partially Utilize a Credit While Making a Payment in Biller Direct (cont.)

Select the checkbox to

allow partial utilization of

credit



• Overview





• Wrap-up


Where to Find More Information

• www.highradius.com/resources/videos – Training videos and case studies on SAP Receivables Management

• http://service.sap.com/fscm – SAP components and functionalities

– Requires login credentials to the SAP Service Marketplace

• http://info.highradius.com/blog – SAP Receivables Management best practices posts

• http://info.highradius.com/paystream-rcm-report/ – Analyst report including HighRadius and SAP profiles

http://www.highradius.com/resources/videos

http://service.sap.com/fscm

http://info.highradius.com/blog

http://info.highradius.com/paystream-rcm-report/






7 Key Points to Take Home

• Measure KPIs for continuous improvements

• Change management is key to success in receivables management

• Periodically review and update collection strategies

• Periodically review the Credit Scoring Model and assess

• Use SAP Dispute Management workflow for collaboration

• Encourage continuous training and knowledge sharing for the end users

• Participate in conferences or user groups for latest trends


Your Turn!

How to contact me:

Pankaj Jagtap

[email protected]