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Advanced SAP Collections Management - 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 Manageme
nt
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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: Collector’s 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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Text
Review payment history
Collections Management: Payment History
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Text
Review open and closed dispute cases
Collections Management: Dispute Cases
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Text
Record promise for payment or customer contact at the invoice
level
Collections Management: Promise-to-Pay
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Text
Promise for payment has been recorded
Collections Management: Promise-to-Pay
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Text
Record customer contact resulting in completion
of the work item
Collections Management: Customer Contact
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Text
Work item completed
Collections Management: Completed Item
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Collections Management: Resubmission
Create a Follow-up reminder on
specific invoices
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Collections Management: Resubmission
Summary of all Follow-Ups
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Collections Management: Notes
Select invoice and enter invoice specific notes
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Collections Management: Notes
Summary of all Notes
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Collections Management: Correspondence
Several Correspondence Options available
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Email contact notes and log
directly from SAP to customer
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
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Collections Strategy Definition
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Text
Collection Rules within the Collection
Strategy
Collections Management: Collection Strategy
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Text
Conditions within a Collection Rule
Collections Management: Collection Strategy
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TextAutomatic
Prioritization of Customer Work
Items
Collections Management: Collection Strategy
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Text
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 SegmentationAutomated Correspondence‘Invoice-Level’ CollectionsCollect 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
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Automated Correspondence for 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 3rd level Dunning (Requires Enhancements to FSCM)
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Slow or Med Pay SMB Collection Strategy
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Advanced Correspondence
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Advanced Correspondence Automation
Selection criteria: type of letter, attachments and
method of communication
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Advanced Correspondence Automation
Highlight AR line items to be included in correspondence
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Advanced Correspondence Automation
Cover Letter
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Advanced Correspondence Automation
Invoice Attachments
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Advanced Correspondence Automation
POD Attachment #1
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Advanced Correspondence Automation
POD’s 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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Total Amount Past Due – Total of all overdue items in FI-Accounts Receivable Items with Open Promise to Pay – If 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 Collected’ amount
Dispute Cases not in a ‘To Be Collected’ Status – All 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 Notice – If 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 Payment – All 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
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Use ‘Collectable Amount’ in Strategies
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