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23rd February 2005

10:00 Welcome and introduction: the business challenge

Don Cameron, managing director, Plaut Consulting

10:10 How to improve your cash flow and cut costs

Peter Voss, senior business consultant, SAP

11:20 Break

11:45 How to gain more flexibility

Peter Voss

12:20 How to make a quick win

Dawn Johnson, senior consultant, Plaut Consulting UK

12:40 Discussion and close

Don Cameron

13:00 Lunch

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Discussion and close

How to improve cash flow and cut costsIntroduction: the business challenge

How to make a make a quick winHow to gain more flexibility

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Cash Management

Dispute Management

EBPP (Biller Direct)

Introduction to FSCM

Collections Management

Credit Management

Source:Killen&Associates, Inc., 2001

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CheckCredit

Worthiness

In-House CashCash &

Liquidity Management

Electronic Bill Presentment &

PaymentCredit

Management

Dispute Management


Treasury & Risk Management

IssueInvoice

ReconcileSettle& Pay

CollectCash

ResolveDisputes

FinanceWorking Capital

ForecastCash

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Cash Management

Dispute Management

Credit Management




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Increase the financial visibility of your customer base:

Control your customer’s credit exposureOptimize terms for your customersReduce amount of bad or doubtful debt

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SAP Financial Supply Chain Management

Financial Supply Chain Management

Credit Management


Payment


Dispute Management In-House Cash Cash & Liquidity

ManagementTreasury & Risk

Management

Settle& Pay

Check Credit

Worthiness

IssueInvoice

ForecastCash


ResolveDisputes

ReconcileCollectCash

Customers use scoring rules

They get own calculated customer scoring

Customers can import external credit information

The credit reports is stored in the master data of the customer

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Customers can see the credit limit and exposure by country

Display of the data in a geographical form

Present the distribution of the credit exposure per risk class

Analyze the risk structure of the customer base

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Cash Management

Dispute Management

Credit Management




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Supplement traditional billing procedures:

Electronic invoicing for businessesElectronic payment for customersIntegrate customer service with finance



Credit Management


Payment




Management

Settle& Pay

IssueInvoice

ForecastCash

ResolveDisputes



Check Credit

Worthiness

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� Display of bill and payment history and account balances

� (Partial) Payment using SAP Biller Direct

� Stopping Payments

� Offsetting Credits with Open Items

� User notification

� Automatic Debit Authorization

� Integration with SAP Dispute Management and SAP Cash Management

� Buy-Side e-Invoicing (Payer Direct)

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Customers can see all of their bills and credit notes in the Internet.

They can display the documents as PDF or XML

They can download bill data as PDF or CSV

They can select various payment methods

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Cash Management

Dispute Management

Credit Management




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Establish a customer centric receivables management

Evaluate, identify and prioritize accounts Collect receivables proactively Collaborate with external and internal business partners



Credit Management


Payment




Management

Settle& Pay

EvaluateCredit

IssueInvoice

ForecastCash

ResolveDisputes



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Worklist for collection agents� Criteria to select and prioritize customer accounts� Direct access to customer account from worklist

New functions to process and view open receivables� All open invoices and their status at a glance� Invoice history� Actions for one or several invoices can be directly taken � Tight integration with SAP Accounts Receivable

New collection procedure� Promise to pay agreements� Automatic integration with payments and clearing postings

Integrated with SAP Dispute Management 3.0*� Create and view dispute cases from SAP Collections Management

*not supported for SAP R/3 4.6c

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Collection agents get an overview on customer account level

They can select one or multiple invoices

Collection agents can create, change, renew, withdraw or void promises to pay

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Cash Management

Dispute Management

Credit Management




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Reduce Days Sales Outstanding and increase customer profitability

Identify issues and disputes earlier in the payment cycleTrack and monitor reasons that drive DSO Streamline process of dispute resolution



Credit Management


Payment




Management

Settle& Pay

EvaluateCredit

IssueInvoice

ForecastCash

ResolveDisputes



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� 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 (automatic and manual)� Internal escalation of critical dispute cases

� Support of different communication channels� SAP Biller Direct� SAP Collections Management

� Analysis of dispute resolution� BI Content

Sally SmithDispute Manager (coordinator)

1 •Assign John Miller asnext processor

•Asks John Miller toconfirm late delivery

•Work item is created ande-mail is sent to inform John

John MillerShipping Clerk

•Read e-mail•Access workflow inbox and execute work item

•Confirm late delivery•Return dispute case to Sally

2

Tom BusyAccount Manager

•Assign Tom Busy asnext processor

•Ask Tom to decideabout dispute

•Work item is created ande-mail is sent

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•Decide that credit memo shouldbe granted

•Return dispute case to Sally

4

Hans DoeAccounts Receivable Clerk

•Assign Hans Doe asnext processor

•Ask Hans to post credit memo•Work item is created and e-mail sent out

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•Post credit memo•Return dispute case to Sally

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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

They can also create correspon-dence

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The impact is profound:Shorter Settlement

Cycles

Enhanced CRM

Improved Cash FlowManagement

Faster Dispute Resolution

Decreased Non-Productive Float

Lower Cost of Payment

And Billing

Less Bad or DoubtfulDebt

Reduced WorkingCapital

FSCM Suite

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General Ledger in mySAP ERP

Customer Requirements

Segment Reporting

Legal Reporting

Management Reporting

Compliance

TransparencyFast Close

Extensibility

ParallelAccounting

TCO Reduction

GL in mySAP ERP

Balanced books by any dimension

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General Ledger in mySAP ERP

Customer Requirements

mySAP ERP: A Unified WorldToday: A Scattered World

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Segment reporting

��Multi-dimensional,Customer-defined

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��Ledger

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Requirements

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General Ledger in R/3 Enterprise General Ledger in mySAP ERP

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Legal Requirements

Mgmt. and Segment reporting

Extensibility by Industries

Extensibility by Customers

Balanced book by any dimension

Parallel sets of books

Fast Close

TCO reduction

Intl. Accounting Standards

Compliance & Transparency

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� As before, the mapping of internal areas of responsibility can be done by means of profit centers.

� The derivation of profit center and partner profit center is carried out in preceding applications (e.g. MM) or in RWIN or by clearly assigning a CO object to a profit center. This corresponds to the previous R/3 logic.

� The segment is made available as a new organizational unit to map the legal requirements with regards to segment reporting.

� The segment is derived by clearly assigning a profit center to a segment or via BadI (Abap- Coding or substitution).

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Unified Financial and Management Accounting� One version of the truth – stored in the General Ledger � Supports legal, segment, and management reporting� Multi-dimensional analysis – slice and dice� Multiple hierarchies� Pre-defined reports delivered as SAP content

Extensibility / Flexibility� Option to expand standard accounting with industry specific

and/or customer-defined fields� Meets international expectations� Important for industry solutions

Balanced Books for any dimension� Essential for segment reporting� Important for various industries (public sector, insurance, media)

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Entry: Expenses for two profit centers

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Payables and taxes are split online, accordingly.

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Parallel Accounting� Any number of parallel ledgers� Same UI for all ledgers (data entry, functions, reporting)� Almost the same functionality for all ledgers � Online posting into multiple ledgers� Postings per specific ledger� Closing activities can be run in parallel ledgers simultaneously� Standard reporting for multiple ledgers� Parallel accounts are supported in all Ledgers

Parallel Ledgers

� There is exactly one leading ledger in every client.

� In Customizing it is determined, which ledger in a client is assigned the role of leading ledger.

� The leading ledger reflects the accounting principle which is used to generate the consolidated financial statement. It is integrated with all subledgers and updated in all company codes (if posting is not ledger-specific).

Example:

Other LedgerHGB

LedgerUS GAAPLedger

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IASLedger

Leading Ledger =Group Ledger

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GL in mySAP ERP allows expansion of standard accounting with industry specific and/or customer-defined fields� Meets international expectations� Important for industry solutions

GL in mySAP ERP enables balanced books for any dimension� Essential for segment reporting� Important for various industries (public sector, insurance, …)

GL in mySAP ERP allows parallel accounting in FI with some restrictions� Enables standard reporting in FI for parallel ledgers� Period closing jobs can be run in parallel

GL in mySAP ERP will significantly support Fast Close and reduce TCO� less data redundancy and reconciliation, real time integration of CO

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� To improve cash flow projection

� To achieve real time management of cash flows

� To obtain more flexibility with liquidity planning

� To adapt easily to changes in organisational structure

Effective cash management is essential

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Cash Position and Liquidity Forecast are the two key components

Liquidity ForecastCash Position

typical timeframe: 1-24 weekstypical timeframe: 0-5 days

data sources- manual memo records (planning records) - invoices - sales orders - purchase orders

data sources- individual manual postings- bank postings- bank clearing postings

movements in sub-ledger accounts (customers and vendors)

movement in bank accounts and bank clearing accounts

medium to long termshort term

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Comparison of Cash Position and Liquidity Forecast

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� Can be as detailed as required

� Drills down to Accounts

Receivables/Payables Ledger

� Gives AR/AP open items for basis of report

� Reflects open orders

� Allows other balance sheet accounts

such as VAT, PAYE to be included

A medium to long term view of liquidity

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� Reduce working capital

� Gain accurate cash forecasts

� Eliminate expensive, non-productive floats

� Reduce days sales outstanding

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� Resource required

- Cash management consultant

� Estimated time frame

- Depends on level of customisation: approximately six weeks

� Key actions before implementation

- Map out reporting levels

- Agree balances

It’s not difficult to get up and running

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� SAP Cash Management is tightly integrated with SAP’s

financial accounting system

� SAP Cash Management updates the liquidity reports in real time

� SAP Cash Management leverages the functionality already

available with SAP Financials (FI)

� SAP Cash Management is available in R/3 since 4.0b

Make a quick win

If you’ve got it, use it!

Implement the solutions that fit your immediate needs

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� Identify the benefits they bring to you

...or conduct a short cost-benefit analysis

� Decide where FSCM and the new General

Ledger fit into your overall strategy

� Obtain a true picture of the costs of

implementing them

fscm

Documents

mailaccess

paymentcollections

house cashcash

working capital

risk managementsettleamp

liquidity

visibility

improve cash