RECEIVABLES AND COLLECTIONS MANAGEMENT WITHSAP FOR TELECOMMUNICATIONS

SAP Functions in DetailSAP for Telecommunications

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Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Basic Concepts and Data Objects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Business Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Contract Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Telecommunications Objects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Postings and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Business Blocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Business Processes and Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Postings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Reversal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10– Initiating Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10– Processing Payments Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10– Settling Open Items with Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10– Postprocessing Clarification Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12– Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Security Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Dunning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Deferral and Installment Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15External Collections Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Interest Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Transferring Open Business Partner Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Deferred Revenue Postings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Closing Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18– Foreign Currency Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18– Doubtful Receivables and Individual Value Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18– Write-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Intercompany Invoicing and the Handling of Third-Party Charges . . . . . . . . . . . . . . . . . . . . . . 19– Cross-Company Postings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19– Convergent Billing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Creating Correspondence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Tax Returns for Tax on Sales and Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Withholding Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Foreign Trade Declarations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Information System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21– Account Display . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21– Reporting and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

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CONTENTS

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Integration with Other Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Telecommunications Billing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22CRM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23– SAP CRM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23– Non-SAP CRM and Customer Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Customer Financials Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24– Electronic Bill and Account Presentment and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24– SAP Dispute Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24– SAP Credit Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24– Convergent Invoicing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25SAP Sales and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25General Ledger Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25– Account Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26– Reconciliation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Cash Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Controlling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Data Warehousing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26– Open-Item Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26– Cleared-Item Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27– Reporting on Items Submitted to External Collections Agencies . . . . . . . . . . . . . . . . . . . . . . 27

Tools and Technical Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28User-Exit Concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Workflows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Print Workbench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Data Migration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Logs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Parallel Processing and Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Data Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Data Archiving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

SAP® Revenue Management – Contract Accounting (SAP RM-CA)is a vital part of SAP’s strategic customer financials managementoffering and a key solution of the SAP for Telecommunicationsportfolio of applications, solutions, and services for the telecom-munications industry. SAP RM-CA is a subledger accountingsystem specifically designed for the needs of the telecommuni-cations industry, such as handling large numbers of customersand high document volumes. In this type of environment, man-ually processing receivable items is not feasible, and automationis essential. In addition, system scalability and excellent perform-ance are crucial to ensure smooth day-to-day operation.

SAP RM-CA has been designed for use by experts and non-experts (like call center employees) alike. Terms and entities,such as general ledger accounts, which are meaningful toaccountants but not to other types of users, can be hidden toenhance usability. By deriving these entities in the backgroundfrom customizing entries, SAP RM-CA ensures data consistencyand correct account assignments even when several thousandusers with limited training have access to such functions asentering credit notes.

SAP RM-CA delivers significant benefits:

• Full control over receivable items prevents delays in cash flowand allows early detection of delinquency.

• One view of the customer across all accounts facilitates inte-gration into customer relationship management (CRM)strategies and credit management systems.

• Automation of everyday functions leads to substantial reduc-tions in manual processing.

• Tracking third-party charges provides complete control ofpayments to partner companies.

• Scalability and excellent performance specifications make iteasy to handle millions of subscribers.

• A high degree of openness ensures smooth integration withCRM, billing, and other systems.

• It delivers the capability to handle both prepaid and postpaidsubscribers within one receivables management application.

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INTRODUCTION

This section introduces some basic concepts and the underlyingdata entities on which the solution is built.

BUSINESS PARTNERS

The business partner is a master data entity that represents alegal entity or a natural person. The information stored dependson the type of business partner created. (A person has differentattributes than a company.)

A business partner can fill a number of roles simultaneously.However, a business partner’s data is stored just once in a centralmaster record. This reduces the amount of maintenancerequired, saves memory, and prevents data inconsistency. Possi-ble roles include contract partner or contact person.

Business partners can be assigned attributes, such as:

• Name

• IDs (such as driver’s license and company registration) andpersonal data

• Addresses and other contact details

• Bank details and credit card information

• Relationships to other business partners (for example, “is contact person for”)

You can carry out mass changes of bank data. This may be nec-essary if, for example, restructuring activities at banks result inchanges to bank or branch codes or to account numbers.

Each business partner can be assigned a creditworthiness score.This score is based on system events or a manually enteredvalue. System events can be dunning notices sent or payments

returned due to insufficient funds. Manually entered eventscan, for example, result from a customer’s complaint about anunjustified bank return. They can have positive or negativeeffects on the customer’s creditworthiness.

The creditworthiness score can be made time dependent. Forexample, events in the past can be given less significance thanthose that have occurred more recently. External credit infor-mation (like the customer’s Dun & Bradstreet credit rating) canalso be brought to bear when assessing creditworthiness.

CONTRACT ACCOUNTS

The contract account is a data entity below the business part-ner level which in case of telecommunications usuallycoincides with the level at which invoices are generated in thebilling system. You can assign many contract accounts witheach business partner. All postings in the solution are madeagainst an account. Contract accounts allow you to separatedifferent types of charges, for example, mobile and fixed linetelephony, made to a single business partner while maintaininga consistent overall view of customers.

The contract account carries attributes that drive SAP RM-CAprocesses for postings associated with the account. Examplesinclude:

• Incoming and outgoing payment methods

• Clearing strategies (assignment of open item to payments)

• Dunning procedure

• Alternate payer or alternate dunning recipients

• Correspondence recipients

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BASIC CONCEPTS AND DATA OBJECTS

TELECOMMUNICATIONS OBJECTS

Information about technical objects can be stored in relationto a contract account. Examples of such objects are telephonenumbers and line IDs for mobile or fixed-line connections.

You can track the status of each object to support processes,such as service disconnection in relation to dunning activitiesand reconnection when payment is received and you can usethis information as search criteria.

POSTINGS AND DOCUMENTS

Postings are always stored in document form. The document,the smallest unit in financial accounting, constitutes proof of a business transaction. It can only be posted if the balance ofthe items contained in it is zero. The system assures data con-sistency between receivables accounts and revenue and taxaccounts.

In SAP RM-CA, a document consists of a header and severalline items:

• The document header contains data that is applicable to alldocument lines, such as the document date, posting date,and document type.

• Receivables and payables lines in a document correspond todebits and credits. They contain all the data relevant for pay-ment transactions and dunning, as well as details of thereceivables account to which debits and credits are posted.

• General ledger lines contain the data for the profit and lossstatement and sales tax data.

A document need not contain all these lines. For example, a normal payment document that results in the complete clearingof certain receivables lines consists of a header and a GL lineidentifying the bank, alone. The solution can derive additionaldata relevant to account assignment from the relevant receiv-ables lines.

In addition to line items that are created in association withbills, payments, or credit memos and that cause an entry to bemade in the general ledger, the solution can also post statisticalline items. These line items are recorded only in the subledgeras postings against a contract account. Statistical postings canbe used to record security deposit request and dunning andinterest charges. They may serve merely as noted items, but theywill be converted to actual postings if a payment is made andthese items are cleared. For example, a general ledger entry isonly written once the revenue has actually been collected.This is useful in situations in which such charges (like for dunning) are levied, but would not be collectable through legalproceedings if the customer refused to pay them. In this case,statistical postings can be removed from the account withoutinfluence to the GL.

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Creditworthiness(automatic/manual)

PaymentTerms

SettlementCategory

InterestKey

Acct. DeterminationCharacteristics

AccountClass

DunningProcedure

ToleranceGroup

BU

SIN

ESS

PA

RTNER

LEVEL CONTRACT ACCOUNT

LEVEL

Figure 1: Parameters at the Business Partner and Contract Account Levels

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Figure 2: SAP RM-CA Postings

DOCUMENT HEADER

1: n

Doc. Number: 010000234591Posting Date: 02/22/2002Doc. Type: F1Currency: USDReconciliation Key: TK2202199801

010000234591

Contr. Acct.4711

Comp. CodeT100

Due Date02/25/2002

Amount230,00

BUSINESS PARTNER ITEMS

ITEM 0001010000234591

Comp. CodeT100T100

G/L Acct.800000175000

Amount200,0030,00

010000234591

GENERAL LEDGER ITEMS

1: n

Documents can be posted to multiple company codes, eachrepresenting a separate legal entity. This allows you to createconvergent invoices (leveraging the convergent invoicing solu-tion of SAP for Telecommunication), including charges fromseveral independent subsidiaries. These charges are presented tocustomers on a single invoice, but are tracked separately in theaccounting system.

Open items are uncompleted transactions. An unpaid billingline item, for example, is managed as an open item in the con-tract account until it has been paid and cleared (at which pointit becomes a cleared item). Identifying items as open or clearedenables rapid access to outstanding receivable or payable items.Open items in an account can be cleared immediately or inincrements over time. When a partial payment is received, theitem is divided into a cleared item in the amount cleared andan open item containing the remaining amount.

BUSINESS BLOCKS

SAP RM-CA supports extensive automation of business processes.However, there are situations in which this is undesirable or inwhich automatic processing should be suspended. The solutionprovides a range of blocking options for these cases:

• Dunning block

• Payment block (for incoming or outgoing payments)

• Interest block

• Clearing block

• Posting block

Blocks can be set manually or by triggering processes. In thecase of bank returns, you can block a contract account for bankcollection for a defined period. This allows you to gather thefacts of the situation and clarify them with the customer. Youcan restrict blocks to a specific period, and they can refer eitherto the entire contract account or simply to selected documents.The solution records the user who has set the block and showsit in the blocking history.

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POSTINGS

Most documents are entered automatically through data transferfrom external systems or the execution of batch runs withinthe solution. However, debit and credit memos can also beentered manually. SAP RM-CA supports these activities with auser-friendly data entry mechanism known as the transactionlogic. A transaction code with an explanatory tag is selectedfor each transaction entered manually. Accounting-relatedentries, such as the general ledger and tax accounts to be post-ed against, are then derived internally from the transaction code.This makes it easier for casual users to enter postings. Becausethe solution hides accounting entities with which a casual usermay be unfamiliar, the risk of error and data inconsistency isreduced.

Documents are classified by transaction type. The solutionautomatically determines the due date using the payment con-ditions specified for the contract account. Receivables lines withdifferent due dates can be gathered together and the customercan pay for them at regular intervals (installment plans). Thestart date and payment intervals can be set flexibly for thesenew groupings of previously existing items. However, the post-ing information of the original items is always kept for laterreference.

Items originally posted to one contract account may be trans-ferred to a different account. The second account can belongto the holder of the original account or to a different businesspartner. This applies to both debit and credit postings.

REVERSAL

Documents can be reversed, for example, when a complaint isreceived about a billing line item. A reversal document is gen-erated, which, together with the reversed document, has a zerobalance. During reversal, these two documents are linked toeach other.

BUSINESS PROCESSES AND FUNCTIONS

Reversals are supported for the following posting transactions:

• Incoming and outgoing paymentsWhen reversing payments, the item to which the paymentwas allocated (the debit or credit memo) is identified as open again. This item’s due date, as well as payment and dunningdata, is returned to the previous status before the incomingor outgoing payment is posted.

• Debits and creditsReversals of debit items reduce the balance owed by the cus-tomer; reversals of credit items increase it. You can reverseboth items created within the system (such as fees) and post-ings for items previously received from upstream billing systems.

• Write-offsThe reversal process for write-offs is similar to the reversalprocess for payments. The write-off is reversed, and the origi-nal item (that had been cleared by the write-off) is reopened.

• InterestWhen interest is reversed, an adjustment is also made to theoriginal receivable items on which the interest was calculated.

Figure 3: Reversal

DOCUMENT HEADER

Doc. Number: 010000234591Posting Date: 02/22/2002Doc. Type: F1Currency: USDReconciliation Key: TK2202199801Reversed with: 102345678

Contr. Acct.4711

Comp. CodeT100

Due Date02/25/2002

Amount230,00

BUSINESS PARTNER ITEMS

Comp. CodeT100T100

G/L Acct.800000175000

Amount200,0030,00

G/L ACCOUNT/TAX ITEMS

Doc. Number: 102345678Posting Date: 03/05/2002Doc. Type: S1Currency: USDReconciliation Key: TK05003200103Reversed with: 010000234591

Clearing Doc.: 102345678Clearing Reason: 05

Contr. Acct.4711

Comp. CodeU100

Amount230,00

CLEARED ITEMS

REVER

SAL

Comp. CodeT100T100

G/L Acct.800000175000

Amount200,0030,00

10

PAYMENTS

SAP RM-CA supports all the payment methods used by telecom-munications companies, including any country-specific features.These include:

• Bank debits

• Bank transfers

• Checks

• Credit cards

• Cash

You can enter both incoming and outgoing payments. Thepayment method is determined at the contract account level.You can define different methods for incoming and outgoingpayments.

Most payments are created and settled automatically, but man-ual entry is also possible, for instance, for individual incomingor outgoing payments that are made at the cash desk.

Initiating PaymentsIncoming and outgoing payments, such as direct debit requeststo banks or credit transfers, are initiated using the paymentprogram. The payment program executes the following steps:1. Determining which open items are to be settled using the

selection criteria entered for the payment run and the duedates of the open items

2. Combining due items as payments or debit memos in accor-dance with industry-specific or company-specific rules (if no payment methods are set at the document level, creditsand debits are offset against each other)

3. Selecting payment methods and bank details4. Posting payment documents and clearing open items5. Provisioning data for payment media used to exchange

payment information with financial institutions6. Creating payment media, such as bank files

Processing Payments ReceivedTelecommunications companies receive direct payments in theform of cash and checks, as well as payments initiated by thetelecommunications company, such as those described previously. These are processed via the cash desk or using payment lots,depending on the type of payment.

In the case of cash desk processing, cash payments made bycustomers are entered into the solution and processed individu-ally. The solution creates any documents required (such aschecks or receipts). The cash desk is integrated into the cashjournal, but it can be implemented with or without the cashjournal. If the cash journal is used, additional functions areavailable, such as the following:

• Logging and evaluating postings made at cash desks

• Opening and closing cash desks

• Assigning users to their respective cash desk

• Performing a cash desk closing for each cash desk

Payment lots group together payments to be processed jointly.They are created manually by entering data from checks orautomatically by transferring the data from account statementsusing data medium exchange (DME). The solution automati-cally creates the required output documents.

Settling Open Items with PaymentsAutomatic payment settlement refers to the automated execution of postings for incoming and outgoing paymentsand the subsequent settlement of the open items for whichpayment is received. The system can process incoming paymentdata received from legacy systems, financial institutions, andcollections agencies. It creates a payment posting for the relevantbusiness partner and allocates the payments to one or morereceivable items. It also takes into account any credit items thathave been released for settlement.

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Payments are allocated to open items according to the businessrules of the telecommunications company. Items to which pay-ments are allocated are cleared automatically. Overpaymentscan be posted on account, and underpayments can be posted aspartial payment.

By specifying minimum payment amounts, you can avoid set-tling very small sums.

In exceptional cases, it may not be possible to allocate an incom-ing payment to an item. That payment can then be posted onaccount at the contract account level and subsequentlyprocessed manually.

Payment settlement can be executed at the following levels and,in combination with the payment allocation logic describedbelow, offers significant flexibility:

• Business partner

• Contract account

• Item

Figure 4: Clearing an Open Item by Payment

SOURCE RECEIVABLE

Doc. Number: 010000234591Posting Date: 02/22/2002Doc. Type: F1Currency: USDReconciliation Key: TK2202199801

010000234591

Contr. Acct.4711

Comp. CodeT100

Due Date02/25/2002

Amount230,00

BUSINESS PARTNER ITEMS

ITEM 0001010000234591

Comp. CodeT100T100

G/L Acct.800000175000

Amount200,0030,00

010000234591

GENERAL LEDGER ITEMS

012204445552

PAYMENT

Doc. Number: 01220445552Posting Date: 03/05/2002Doc. Type: Z2Currency: USDReconciliation Key: ZE0503199802

012204445552

Comp. CodeT100

G/L Acct.113100

Amount230,00

BANK OFFSETTING ITEM

ITEM 0001012204445552

You can flexibly define the rules for clearing open items toassure a high payment allocation hit rate. This reduces manualeffort. The solution supports multistep settlement rules. Clear-ing rules supported include:

• Oldest items first

• Clearing by reference number (like a bill number)

• Clearing by customer name

• Clearing by bank account number

When a payment is received for an item that, due to its dunninglevel, had previously caused a disconnection of service, thesolution can automatically cause an entry to be written to areconnect file.

Clarification items can be assigned to several accounting clerksat once. You can also reserve clarification items in the clarifica-tion work list for a particular clerk, preventing them from beingprocessed by other clerks. A clerk can also choose to cancel thisreservation. A lock on a clarification case can be assigned a timelimit. After the locking period has expired, all clerks can againaccess the clarification case. It is also possible for one clerk toforward clarification cases to another clerk (either by mail orusing SAP Workflow). All these functionalities can be adminis-tered via the authorization concept.

As part of clarification processing, SAP RM-CA tries to learnthe solution for a given situation. If, for example, a payment isreceived from an unknown bank account and therefore endsup in clarification and is eventually manually allocated to anopen item on a contract account, the solution remembers theconnection between the bank account and the contract account.The next time a payment is received from this bank account,the solution can automatically apply it to the contract accountwithout manual intervention.

ReturnsReturns may take the following forms:

• Payments returned by financial institutions when insufficientfunds mean a direct debit transaction cannot be carried out

• Incoming checks returned due to insufficient funds or incor-rect data

• Undeliverable postal remittances received

Returns are combined to form returns lots. You can createthem manually using returns slips, or the solution can createthem automatically by using the returns data provided by thefinancial institution.

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Figure 5: Payment in Foreign Currency

SOURCE RECEIVABLE

Doc. Number: 010000234591Posting Date: 02/22/2002Doc. Type: F1Currency: USD

010000234591

PAYMENT

Doc. Number: 0122044445552Posting Date: 03/05/2002Doc. Type: Z2Currency: EURO

The system automatically calculatesthe amount of the open items andclears them against the paymentreceived in a foreign currency.

Postprocessing Clarification CasesClarification cases allow the efficient processing of exceptionsthat occur in the automatic processing of:

• Incoming payments

• Outgoing payments

• Returns

• Credits

Each of the processes mentioned writes an entry to the clarifi-cation work list if the solution can’t automatically perform therequired allocations. Cases stored in clarification work lists areassigned to the accounting clerk responsible using the role definition feature (similar to SAP Workflow). That meansaccounting clerks receive in their work list only those clarifica-tion items for which they are responsible (based on their role inthe organization).

012204445552

Returns are processed automatically as follows:

• Payment settlement is canceledThe receivable items previously cleared by the direct debitrevert to being managed as open items.

• A returns document is created containing offsettingentries for the items in the payment document

• The solution creates other postings required in relationto expenses or chargesThe solution automatically creates bank charges and poststhem to the general ledger. Both bank charges (like externalcharges) and internal charges for handling returns can becharged to the business partner. Internal charges can bedefined as statistical postings or nonstatistical postings thatcreate an entry in the general ledger.

• Follow-up actions are initiatedExamples include notifying a customer, setting a deferral date,or creating a payment block or dunning block. Follow-upactions depend on the creditworthiness of the business partnerand the frequency of returns. Returns can, in turn, affect thecreditworthiness of the business partner.

SECURITY DEPOSITS

SAP RM-CA supports the request of security deposits fromtelecommunications customers. For example, a company mayrequest a security deposit when a customer first signs up for aservice or when, over the course of time, bad payment behaviorraises doubts about the customer’s ability to honor contractualcommitments. For each security deposit, a set of data can bestored to identify the service for which the deposit has beencreated.

The solution distinguishes between cash deposits and noncashdeposits:

• Cash security depositsA security deposit amount is agreed upon with the customeror calculated according to a freely definable extrapolationformula.

• Cash deposit requests and payments are posted for acontract accountCash deposit payments are retained until the customer hasdeveloped a positive payment history over an extended periodof time or until the contractual relationship with the customercomes to an end. Cash deposits or interest on cash depositscan also be refunded or offset against charges. If desired orrequired by law, interest is calculated for the entire period.

• Noncash security depositsNoncash deposits may take the form of savings books orguarantees of payment. A business partner is entered as theguarantor.

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Figure 6: Security Deposits

NoncashSecurityDepostits

Requestfor CashSecurityDeposit

Payment of SecurityDepostit

Administrationof DepositsReceived

Guaranteeof Payment

DUNNING

Payment reminders, or dunning notices, serve to remind busi-ness partners of overdue items. The dunning program monitorsa customer’s payment history and initiates actions whereappropriate. The dunning procedure plays a central role; thetelecom company defines how many dunning levels there arefor each dunning procedure and how they are determined.The dunning level is stored in each open item and incrementedwith each dunning notice.

Items can be combined in freely definable dunning groups. Onedunning group may include all a business partner’s dunningitems, or you can create a different group for charges related toeach division of a telecommunications company. For example,you can send separate dunning notices for charges relating tofixed-line, mobile, or Internet services and so on.

A dunning activity is initiated according to the highest dunninglevel of all the items in the dunning group. The solution alsotakes into account the dunning history, such as the last dunningdate. You can also freely define dunning activities. In mostcases, the solution prints a dunning letter, but you can alsocreate a file for service disconnection or to start legal dunningproceedings.

A dunning run determines the following:

• The contract account to be dunned and its open items

• The dunning level of the items in a dunning group

• Dunning activities based on the dunning level

In addition, dunning offers the following functions:

• Dunning chargesYou can calculate dunning charges for each dunning notice,subject to the dunning level of the open items and the credit-worthiness of the business partner. Dunning charges can beposted as active in the general ledger or as statistical documents.Dunning charges can be defined as a fixed amount or as per-centage. In the case of percentage, a minimum and maximumamount can be established. You can limit dunning charges to a given amount if additional interest has been calculated.The calculation of dunning charges can also depend on thecalculation of interest. This means dunning charges are onlycalculated if interest for the items has been calculated.

• Dunning of installment plansWhen a certain dunning level is reached, the solution canautomatically deactivate an installment plan, or you can ini-tiate an alternative dunning procedure (such as immediatedisconnection).

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System Configuration

Determi-nation ofNew DunningLevels

InfluencingParameters

Figure 7: Dunning

BusinessPartner

ContractAccount

OpenItems

DunningHistory

GenerateDunningProposal

GenerateDunningActivities

PostInterestandCharges

ThresholdsDays inArrearsDunningInterval

ChargeScheme

PrintForms

• Interest calculationThe solution can automatically calculate interest for theitems included in the dunning run.

• ReversalYou can reverse the most recent dunning run. You can reverseboth complete dunning runs (for example, if the dunningnotices have not yet been printed) and individual dunningnotices (for example, if a business partner submits a complaint).

• Dunning historyThe dunning history contains the dunning data for eachdunned item, such as the dunning level of the processeditems and the dunning amount. This ensures that a log ofdunning activities carried out is available.

• Minimum amountsBy setting minimum amounts, you can avoid dunning forvery small amounts.

• Dunning blockYou can exclude individual items or contract accounts fromdunning. You can also set a time limit on a block.

• Call list creation as a dunning activityInstead of creating dunning notices, SAP RM-CA can createcall lists containing information on the dunned customers.The call list can automatically be sent to an external system(for example, the call center in mySAP™ Customer RelationshipManagement [mySAP CRM] so the call list can be processedin the interaction center). Call center agents can accessdetailed information on a customer’s account balance, thedunned items, and customer-specific data.

DEFERRAL AND INSTALLMENT PLANS

When customers are unable to meet their payment obligations,you can set up an installment agreement or a deferred paymentagreement for one or more receivable items.

An installment plan defines the number and individualamounts of the installments and their due dates. Payment anddunning runs are then based on the installments instead of theoriginal receivable items. The solution automaticallydeactivates the installment plan when the customer pays thefinal installment. However, you can also manually deactivate aninstallment plan, in which case the original receivable item isagain used in payment settlement and dunning.

Features available for administering installment plans includethe following:

• Creating customer notifications

• Automatically posting and calculating interest and chargesbased on the installment agreement

• Deleting installments still outstanding, changing amountsand due dates, and creating installments

• Processing partial payments toward installments

• Deactivating an installment plan when a specific dunninglevel is reached

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DeferralAmount Due: 1400,-

Figure 8: Deferrals

Document – PostDocument – Change

Old Due Date03/05/2002

New Due Date05/05/2002

1400,-Time

Automatic

Manual

ReturnsActivity Deferral Days

When posting a deferral on an open item, a due date differentfrom the original due date is entered. As a result, that item isneither dunned, nor are payments collected according to theoriginal due date. However, if the deferral date is exceeded, theitem continues to be dunned relative to the original due date,and the direct debit process resumes.

EXTERNAL COLLECTIONS AGENCIES

In cases in which all dunning activities have failed, a telecom-munications company may decide to involve an external collec-tions agency to collect money from a subscriber. SAP RM-CAsupports this process with functions for:

• Selecting eligible receivable items and passing them to collec-tions agencies

• Flexibly determining which agency should be used if severalare available

• Managing incoming and outgoing communication with thecollections agency

• Changing to another collections agency if the original agencyproves unsuccessful

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• Handling payments received for items that have been releasedto a collections agency

• Reporting on an agency’s efficiency

• Submitting items with a mass activity run

• Informing a collections agency of a customer’s direct (partial)payment of the due amount

• Recalling one or more items if the collections agency fails tocollect them after a given period of time

• Informing a collections agency if master data changes for oneor more business partner

• Informing a collections agency if a customer’s direct paymentfor a former submitted item has been reversed

• Informing a collections agency if the settlement resultingfrom a customer’s direct payment has been reversed whollyor partially

The incoming collections agency file contains:

• Collected amount

• Uncollectible amount

• Interest (to be forwarded to the subscriber)

• Charges (to be forwarded to the subscriber)

• Additional payment information

SAP RM-CA automatically creates all necessary postings thatresult from this collections agency information (for example,writing off uncollectible amounts, posting charges, and intereston the accordant subscriber’s contract account).

The collections agency charges the telecommunication companyfor each collected item with either a fixed amount or a certainpercentage of the collectable amount. SAP RM-CA creates therelevant credit postings to be paid out on the collections agency’scontract account.

InstallmentPlanAmountDue: 1000,-

Figure 9: Installment Plans

Old Due Date New Due Dates

250,-

Time

250,- 250,- 250,-250,-

InstallmentPlan Parameters(e.g. repay-ment plan)

Interest CalculationInstallment Plan

Installment PlanCharges

Install-ment PlanLetter

Manual

Automatic

Installment Plan – CreateInstallment Plan – Change

Dunning Activity Deactivation of Plan

• Initiation from a payment run or dunning runYou can initiate interest calculation from payment runs. Thesolution sends the interest information to the billing systemor the dunning notice.

• Mass interest calculationInterest calculation (both for credit and debit items) can beprocessed in a batch run.

Interest calculation can also take advantage of the followingfeatures:

• Minimum threshold means that calculation of very smallsums can be avoided.

• Interests blocks allow you to exclude items or specific businesstransactions (such as reversals) from interest calculation.

• You can define individual interest rates for business partnersor types of business transactions.

• Interest can be posted to the general ledger; debit interestcan also be recorded as a statistical posting.

• Each interest amount is linked to an interest supplementrecord that contains detailed information on how the interestwas calculated.

• The interest history records the interest calculated in eachperiod for each item. This ensures that interest on an item iscalculated once only in any given period.

TRANSFERRING OPEN BUSINESS PARTNER ITEMS

SAP RM-CA allows you to transfer receivables or credits. Thisis necessary if a business partner assumes the rights and obliga-tions of another business partner, such as in the case of inheri-tance or assumption of liabilities.

From time to time it might be also be necessary to transferreceivables or credits within different contract accounts of thesame business partner. For example, this occurs if a customerterminates a contract, but the remaining receivables are to becollected together with the receivables for the new contract.Transferred open items are cleared and posted to the targetaccount. Most of the posting information is transferred. Thenew items only differ from the original items in their originand posting date.

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INTEREST CALCULATION

The solution can calculate interest on individual debit andcredit items in the contract accounts of business partners. Thisallows you to charge debit interest for bad payment patternsand reward good payment patterns with credit interest.

During the interest run, the solution calculates and posts inter-est and provides the data for printing customer notifications. Itcalculates interest according to interest keys, which you canassign to contract accounts, individual items, or dunning levels.

The solution can calculate interest on the following items:

• Open or cleared debit items

• Installment plans

• Cash security deposits

• Credit items, such as credit memos

Interest calculation on debit items can make use of the followingfunctions:

• Individual processingThe solution calculates interest on the items of a businesspartner or of a contract account.

Activities that can trigger a submission

Figure 10: Submission to External Collections Agency

Mass run: Release

Buffer Table

Collections agency

Soft & EasyItem 1 SmithItem 2 JonesItem 3 RobertsItem 4 WrightItem 5 ClarkItem 6 Brown

Total:$1,205,488

Dunning activity

Write-off

Manual release

Submission File

Check Itemsto be released

Submit tocollectionsagency

The following items can be transferred:

• Individual items

• All open items of a business partner

• All open items of a contract account

• Open items from an installment plan

Transfers can be reversed.

DEFERRED REVENUE POSTINGS

Revenues are posted when a receivables document is posted.These revenues become effective for revenue purposes in theposting period in which they are actually posted. This meansthat these revenues are assigned to the posting period in whichthey are posted.

Some countries require revenue accruals or deferrals to be madein the general ledger for revenues that do not become effectivefor revenue purposes until some time in the future. Revenuesbecome effective in the future if the service upon which therevenue is based is actually performed in the future. Realizationof revenues must therefore be viewed separately from billing.Revenues and accrued or deferred revenues must be posted toseparate general ledger accounts. The solution performs accrualand deferral using deferred revenue accounts.

SAP RM-CA supports this process with the following threetypes of revenue realization:

• Standard revenue realizationThe posting to the revenue account takes place at the sametime the receivable document is posted.

• Time-related revenue realizationWhen posting the receivable document, it is already clear asto which dates the corresponding partial revenues from thedeferred revenue account will be transfer posted to the revenueaccount.

• Payment-related revenue realizationThe actual payment itself leads to realization of the partialrevenues.

CLOSING OPERATIONS

Foreign Currency ValuationForeign currency valuation recalculates the value of currentassets and payables that were posted in a foreign currency. Thisallows you to adjust receivables and payables accounts whenpreparing statutory reports.

Valuation is performed according to the single valuation prin-ciple. This means that the individual items that are open at thebalance sheet date are taken into account during valuation.Foreign currency valuation can be in the local currency, as wellas in currencies managed in parallel (such as group currency orhard currency).

Doubtful Receivables and Individual Value AdjustmentsReceivables valuation is an accounting procedure designed torecognize that the posted value of a receivable item may be different from the actually recoverable value of that item.Doubtful receivable items are handled in a two-step process.The first step is to mark them as doubtful. Where necessary,you can adjust them individually in a second step by the likelyunrecoverable amount. This way you can account for a likelyfull or partial reduction of revenue.

No document is posted against the contract account when theadjustment is carried out, which means that the view of receiv-able items remains unchanged. Instead, the open item is identi-fied as doubtful and a correction posting is forwarded to thegeneral ledger. Information on doubtful receivable items andindividual valuation adjustments can be accessed via contractaccount information.

If the valuation of an item is adjusted individually where it hadnot previously been marked as doubtful, the full amount isautomatically classified as doubtful.

This process can be carried out as individual or mass process(based on overdue period).

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Write-OffsUncollectible receivable items can be written off partially or in full. The solution automatically adjusts sales tax. Statisticalitems, such as dunning costs, can also be written off.

SAP RM-CA also allows you to write off credits. It uses author-ization control to define whether a clerk is allowed to write offdebits or both credits and debits.

The solution can automatically write off credits and debits ofsmall value as small amounts. You can define separate limitsfor writing off small amounts for debits and credits.

Write-offs can be triggered manually or by using an age-depend-ent automatic mass process.

INTERCOMPANY INVOICING AND THE HANDLING OF

THIRD-PARTY CHARGES

In intercompany invoicing, one company is responsible forbilling and collecting revenue belonging to other companies.Customers usually deal exclusively with the invoicing companyand receive a single bill that details all charges from all compa-nies. These charges then result in general ledger accountassignments that affect more than one company code or revenueaccount.

Intercompany invoicing is relevant for cross-company postingsand convergent billing.

Cross-Company PostingsSay a corporate group (Zippy Telecom) bills for services per-formed by several of its subsidiaries (Zippy Mobile, Zippy Inter-net, and so on) and posts the resulting receivable items usingvarious company codes. The invoicing company receives pay-ment for all services. In a later step, a clearing process transfersthe money collected for each item to the appropriate company(represented by the company code). A managing companycode is specified for any shared accounts, such as cash clearingaccounts.

Convergent Billing Convergent billing allows a telecommunications enterprise tomanage the offerings of other service providers and to includetheir charges on its own invoice. Examples include networkservices and content downloads provided by third parties. Convergent billing is particularly relevant in deregulated tele-com markets in which one company frequently invoices billingline items and carries out collections for another operator.

Customers receive a single bill for services provided by the tele-communications company, as well as third parties. The telcoprocesses open items on behalf of third parties and forwardsinformation and payments as required.

You can configure SAP RM-CA so that credits to other serviceproviders can only be paid out once payment has actually beenreceived from the subscriber. You can also delay the paymentto the service provider for a certain period of time. (For exam-ple, a payment to the service provider can be made two weeksafter the money has been received from the subscriber.) Thisprevents cash flow problems and protects against fraud.

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Figure 11: Cross-Company Code Postings

Business Partner 4711Contract Account 1234

Contract 1 inComp. Code T100

Clearing Acct. In T100

(3a) 100 (2) 150(3b) 50

Payment in Company Code T100 for:Contract 2 – Comp. Code T 200 50 USDContract 1 – Comp. Code T 100 100 USD

Revenue Mobile

(1) 100 100 (3a)

Payables for Comp. Code T200

50 (4)

Contract 2 inComp. Code T200

Revenue ISP

(1) 50 50 (3b)

Receivables for Comp. Code T100

50 (4)

The solution provides a number of reports to analyze the pay-ments to the service providers, including a report on paymentsthat are expected to be made to a selected service provider. Thisreport shows the receivables that have been posted on the sub-scribers contract accounts and that will be paid to the selectedservice provider once the subscriber has paid them. It also pro-vides a report on payments that have been distributed to orposted on the selected service providers contract accounts.

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CREATING CORRESPONDENCE

SAP RM-CA can automatically create correspondence relatingto transactions. Examples include documents for automaticsettlement (checks and bank transfers) and customer notifica-tions. The following notifications can be created automaticallyor manually as required:

• Account statements that contain a list of a customer’s openitems and the total amount of all receivable items

• Dunning notices that contain a list of a customer’s overdueopen items and their total amount

• Notifications about installment plan agreements with detailsof installment plan agreements, including amounts and duedates (you can also create payment forms for installmentsand send them to the customer)

• Notifications about document changes, such as deferralagreements, containing information on the document thatwas changed to reflect the payment deferral agreement

• Payment notifications to confirm an incoming payment or torequest additional information relating to a payment received

• Returns notifications that contain information on the eventinitiating a return and a listing of the items affected

• Security deposit request with detailed information about thesecurity deposit that the customer is asked to make

• Interest notifications, containing a listing of items on whichinterest has been calculated and an overview of interest cal-culation (interest for cash security deposits can be communi-cated in the same way)

• Contract account changes (if customers advise of changes totheir bank details, a confirmation can be sent once the bankdata for the contract account has been updated)

• Write-off notification to inform customers that the telecom-munications company waives payment on certain receivablesor parts of receivables

TAX RETURNS FOR TAX ON SALES AND PURCHASES

When transactions that are relevant to sales tax are posted, suchas receivables and payables or down payments that are managedas gross amounts, SAP RM-CA determines the tax indicatorand corresponding tax account to be used based on the businesstransaction involved. The solution automatically makes corre-sponding postings to the tax accounts. Depending on the statu-tory requirements and the level of detail required, the solutioncan create returns from the general ledger in the SAP FinancialAccounting component, or it can update a separate reportingfile in SAP RM-CA. This is used as the basis for creating returns.This means that you can create reports for the posting date,due dates, or dates on which payment is made. The level ofdetail for the returns and statements is defined by making thecorresponding system settings. You can assign county- orregion-dependent taxes or produce a statement for the individualdocuments.

Figure 12: Handling Charges Billed on Behalf of Third Parties

BillingCustomers

TransferOpen Item

Customer 1

Contract Account: CA 1

Assign Serviceto Content Prov.

InvoiceCustomer

Content Prov. 1

Contract Account: CA 1

Open ItemCA1 CACP

Credit Item for Payed Customer Items

Report – ClearedContent Provider items

Detail Cleared Content Prov. Items

Payment

From the account display, you can branch to the followingareas:

• Business partner and contract account

• Dunning, returns, and clearing histories

• Payment usage

• Installment plans

• Original receivable items of an installment plan

• Request for cash security deposit

• Optically archived invoices

Reporting and AnalysisIn addition to functions for reporting at the level of individualbusiness partners, SAP RM-CA has extensive capabilities foraggregated reporting. Open items for a specific date on a balancesheet and the document aging structure list are used to drawup financial statements. Open items on a balance sheet are cal-culated and shown by customer and general ledger account fora key date (end of the month, quarter, or fiscal year). The solu-tion also displays the balance carried forward from the previouskey date.

Items that are open on the key date can be listed according tothe due date using the document aging structure list. This listforms the basis for write-offs and valuation adjustments as ofthe balance sheet date.

You can analyze the volume of open items at the end of theworking day according to various criteria (such as overduereceivable items). You can then use the results to initiate addi-tional actions with regard to customers (such as manualdisconnection).

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WITHHOLDING TAX RETURNS

SAP RM-CA supports credit and debit withholding tax. Thesolution determines the withholding tax indicator to be usedfrom the master data (contract account) for the business part-ner involved when the receivables or payables are posted. Thesolution automatically makes the corresponding tax postingsfor incoming and outgoing payments. It creates a separatereporting file that forms the basis for the return.

FOREIGN TRADE DECLARATIONS

Transactions with tax-based nonresident companies includestock reports and transaction reports. Transaction reports thatrelate to payment transactions are based on a separate report-ing file that is updated if incoming payments are received or ifoutgoing payments are made. Stock reports are made usingopen-item lists that meet the corresponding selection require-ments. The legal recipient code, for example, the state centralbank indicator for Germany, can be recorded in the system set-tings and set automatically.

INFORMATION SYSTEM

Besides the extensive functionality detailed above for handlingbusiness partners, contract accounts and open items, SAP RM-CAincludes a range of online queries, reports, and analyses.

Account DisplayThe account display function provides an overview of debit andcredit items for a business partner or contract account. You canlimit the selection displayed using various criteria (for example, cleared items only or statistical items only).

Configuration variants control how items are displayed. Pre-defined variants determine the level of aggregation accordingto what information is to be displayed. Sorting variants deter-mine the sequence in which the items are displayed.

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Another IDoc interface links SAP RM-CA postings to theimages of the bills they were based on. Providing a link to theoptical archive is useful when a call center employee is dealingwith bill inquiries from customers, for example.

You can also pass data back to the billing system to be includedin the next bill. Both old open items (those that had alreadybeen communicated to the customer – in previous bills, forinstance) and new items (those created during the most recentbilling period, such as interest postings generated in SAP RM-CA)can be handled this way.

SAP offers a certification process for vendors of telecommuni-cations billing systems to have their systems validated for theintegrated use with SAP RM-CA.

INTEGRATION WITH OTHER SYSTEMS

TELECOMMUNICATIONS BILLING

It is essential that a receivables management system interfaceswith the billing systems that produce the recurring (mostlymonthly) bills for access and usage charges. To enable this, SAPoffers a standard interface that enables postings to be createdfor bills brought across. Based on SAP’s intermediate document(IDoc) technology, the interface meets all requirements for:

• Openness for integration to any system

• Ease of use

• Flexibility for enhancements to data structure

• Uploading performance

Besides creating the subledger postings with their correspondinggeneral ledger account assignments, the interface also providesthe option of maintaining profitability analysis information inthe SAP Controlling component.

Figure 13: Integration to External Billing Systems

RM-CADoc. No. Invoice No. Amount

❏ .... ..... ......❏ 0000815 4709 xx.xx❏ 0000816 4710 xx.xx❏ 0000817 4711 xx.xx❏ 0000818 4712 xx.xx❏ 0000819 4713 xx.xx❏ .... ..... ......

ExternalBillingSystem Bill 4713

xx.xxBill 4712

xx.xx

Bill 4711

xx.xx

RM-CADoc. No. Invoice No. Amount

❏ .... ..... ......❏ 0000815 4709 xx.xx❏ 0000816 4710 xx.xx❏ 0000817 4711 reverse❏ 0000818 4712 xx.xx❏ 0000819 4713 xx.xx❏ .... ..... ......

FIAccount Amount

❏ 880000 .....❏ 175000 xx.xx

CO-PADivision Quantity AmountFixed-Line xx.xx xx.xxMobile xx.xx xx.xxInternet xx.xx xx.xx

OpticalArchive

Open Items to Billing System

Bill Document Transfer + OpticalCO-PA

Archive Link toOptical ArchivedBills

Mass Reversal

Bill 4711

xx.xx

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CRM

It is equally important that receivables management systemsinterface with customer care and CRM systems. SAP RM-CAprovides crucial data for customer-centric tasks. SAP RM-CAcan be integrated with both the SAP Customer RelationshipManagement (SAP CRM) component and non-SAP customercare and CRM packages.

SAP CRMMaster DataStandard replication techniques integrate SAP RM-CA masterdata entities with SAP CRM master data. This ensures data con-sistency across systems and full visibility of the SAP RM-CAdata structure in SAP CRM.

CRM BillingInvoice documents created in SAP CRM using the CRM billingfunctionality (for example, for hardware sales, installation serv-ices, and so on) can be posted to SAP RM-CA as the accountsreceivable system. This integration is a standard feature.

Interaction CenterSAP RM-CA also integrates with the interaction center capabil-ity of SAP CRM. As the work environment for front-office andcall center employees, the interaction center is the central placefor interaction with customers. The combination of the inter-action center with the content delivered by SAP RM-CA createsan interaction center for financial customer care, a high-pro-ductivity environment for call center agents dealing with thefinancial aspects of the customer relation.

From the interaction center for financial customer care, youcan perform the following customer contact managementprocesses.

INFORMATION PROVISION AND CONSULTING

Call center staff can view SAP RM-CA subledger items (postings,installment plans, and so on) alongside objects residing in othersystems (such as orders and contracts in SAP CRM). Thisenhances the level of service they can provide to customers.

You can add sources of information with a great deal of flexibility.Support for industry standards, such as display in the HTMLformat, makes integration of external sources easier.

IMMEDIATE EXECUTION OF SIMPLE BUSINESS PROCESSES

Call center agents can access SAP RM-CA features directly, aswell as standard CRM functions like order creation. This includescreating and updating master data (business partner data andcontract accounts) and executing transactional process steps,such as creating an installment plan or deferral date for openitems, executing payments, and so on.

STARTING A WORKFLOW

When a call center agent can’t resolve a case while a customeris on the phone, the agent may need to start a workflow. Thisworkflow (defined using SAP’s workflow management system)can be followed up by status and assigned to the appropriateclerk.

CUSTOMER CONTACT

SAP RM-CA can automatically log customer contacts. Thisapplies equally to contacts originated by customers – such asphone calls – and to contacts initiated by the telecom company –such as written notifications or dunning notices. While handlinga customer contact, a call center agent can create a reference toa data object. Customer contacts can also be classified as com-plaints, services, and so on.

Customer contacts can be listed according to type, time period,and so on. Analyzing contacts provides information about theefficiency of business processes and the capacity utilization ofthe customer service representative.

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Non-SAP CRM and Customer CareSAP RM-CA has been integrated successfully into non-SAP customer care and CRM systems in many installations.

CUSTOMER FINANCIALS MANAGEMENT

SAP provides telcos with powerful features for all customer-related financial processes. Receivables management capabilitiesare a key aspect of SAP’s expanding customer financials manage-ment offering and integrate tightly with other components. Ofthese, electronic bill and account presentment and payment isalready available while first versions of the other components(SAP Dispute Management, SAP Credit Management, and SAPConvergent Invoicing) will become available in 2003.

Electronic Bill and Account Presentment and PaymentElectronic bill and account presentment and payment capabili-ties allow telcos to provide their customers with direct onlineaccess to accounts and bills. Besides viewing bills and accountbalances, customers can:

• Authorize payments via bank debit or credit cards

• Use credit postings to offset charges

• Change master data

SAP Dispute Management SAP Dispute Management is used to create and administer dispute cases following customer complaints (disputes aboutincorrect bills or unjustified dunning letters). SAP RM-CA isintegrated with SAP Dispute Management in several ways:

• Underpayments registered in SAP RM-CA can trigger the creation of a dispute case.

• SAP RM-CA subledger objects (like postings) can be linked to a dispute case for quick access by the person looking toresolve the case.

• Employees in charge of creating or resolving dispute cases orcapturing or resolving disputes can make changes to SAPRM-CA documents, such as placing a dunning lock onto adisputed item to prevent further dunning activity.

SAP Dispute Management is also tightly integrated with thefinancial interaction center so that call center agents can useall query and overview functions in one work environment asfunctions to capture a dispute case.

SAP Credit ManagementSAP Credit Management is used to assign and monitorcustomer credit limits. SAP RM-CA provides creditworthinessinformation based on events that have occurred, such as dun-ning, returns, and so on. Receivables information stored in SAPRM-CA is also used to generate a snapshot of a customer’s out-standing receivables balance, which, in combination with datafrom other sources, gives the full picture of credit usage of thatcustomer.

Figure 14: SAP’s Customer Financials Management Offering for Telecommunications

CUSTOMER

Bill Inquiries● Payments● Complaints● Change of Payment

Terms● Credit Checking

mySAP Telecommunications

InteractionCenter

InteractionCenter

ConvergentInvoicing

Electronic BillPresentment &

Payment

Receivables& CollectionsManagement

Dispute Management

Credit Management

Mediation &Rating

Customer● Accounts● Contracts● Services

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Convergent InvoicingConvergent invoicing functionality addresses the need telecom-munications companies have to invoice their subscribers forservices delivered on different network platforms (Internet,mobile and fixed-line telephony, and so on) and subsequentlyrated and billed in independent billing systems. Convergentinvoicing capabilities bring these charges together onto a singleinvoice and combine them with additional billable items, suchas charges for hardware sales or installation.

SAP’s convergent invoicing offering will also offer features suchas cross-product discounting and handling of third-partycharges.

Convergent invoicing capabilities will be tightly integrated withSAP RM-CA, mainly as a source system for receivables itemshandled in SAP RM-CA.

SAP SALES AND DISTRIBUTION

A standard interface between the SAP Sales and Distributioncomponent and SAP RM-CA ensures the complete integrationof sales- or service-related invoices generated in SAP Sales and Distribution into SAP RM-CA processes.

GENERAL LEDGER ACCOUNTING

Telecommunication companies’ billing systems generate largenumbers of postings, which are managed in the receivables andcollections management subledger instead of in the generalledger. Each business transaction, that is, each posting for eachcustomer, is stored to enable itemization.

Because of the large volume of documents, posting in the SAPRM-CA subledger does not immediately lead to updating oftransaction figures in the general ledger. Instead, the subledgerdocuments are transferred in summary form to the generalledger of the SAP Financial Accounting component or to anon-SAP system. This improves performance and limits thevolume of documents in the general ledger.

As a result, when subledger documents are posted, SAP RM-CAupdates special subledger documents, known as summaryrecords. The summary records are formed from the individualreceivables and collections management documents in linewith account assignment and posting data. All the usualaccount assignments can be used in the subledger line item, forexample:

• General ledger accounting (company code, business area,and general ledger account number)

• Overhead cost management (for example, cost center, order,and project)

• Profitability analysis

The summary records are allocated to a reconciliation key,which identifies the individual postings that belong to a sum-marized general ledger entry. Users must provide the reconcili-ation key when making manual postings. When mass process-ing is performed, the solution automatically creates the keyand stores it in the header of the subledger document.

When a reconciliation key is closed, it is blocked for furtherpostings. This means that no other SAP RM-CA documentscan be entered into the totals records. A closed summaryrecord can be transferred to the general ledger and postedthere as an accounting document. Because the reconciliationkey is recorded in those SAP Financial Accounting documents,a link is created between SAP RM-CA documents and SAPFinancial Accounting documents. This enables bothitemization of the totals posted in the general ledger and rec-onciliation between SAP RM-CA and the general ledger. Inother words, the integration between SAP RM-CA and the gen-eral ledger offers the benefit of full drill-forward and drill-backward capabilities between the two systems while minimiz-ing the volume of data held in the general ledger.

Account DeterminationWhen an SAP RM-CA document is posted, the solution auto-matically carries out general ledger account determination. Itautomatically determines all receivables, payables, revenue, tax,and expense accounts based on account assignment details inthe line items. Exceptions may apply with country-specific taxrequirements.

ReconciliationDuring year-end closing, it is necessary to create, in the formof notes to the financial statements, an itemized list at the customer level for the general ledger accounts to which post-ings were made from SAP RM-CA. These notes provide anexplanation of balances in the general ledger on the basis of theassociated individual documents. It is, therefore, important toreconcile the balances of accounts in the general ledger regu-larly with the balances from the individual documents in thesubledger. Reconciliation between SAP RM-CA and the generalledger analyzes all the open-item documents belonging to atotals record and calculates the corresponding totals. All differ-ences are logged for further investigation.

CASH MANAGEMENT

An SAP RM-CA posting causes an immediate (synchronous)posting in SAP’s treasury and cash management solution. Thisensures that the liquidity forecast and the cash position of thecash management solution are always current. The level ofposting in cash management is defined in contract accountmaster data.

CONTROLLING

Documents that are generated in general ledger accountingwhen totals records are posted are not different from regularSAP Financial Accounting documents, and, therefore, alsoresult in the automatic updating of other ledgers and of con-trolling.

DATA WAREHOUSING

For more detailed analyses, data warehousing solutions supple-ment the online reporting capabilities of SAP RM-CA. SAPprovides standard extractors for exporting data into the SAPBusiness Intelligence (SAP BI) data warehousing solution. SAP BI includes standard data models to receive data extractedfrom SAP RM-CA and to use as the basis for reports.

SAP BI allows you to analyze data extracted from both SAP andnon-SAP systems. It stores the information centrally and makesit available for reporting purposes. Efficient analysis techniquesand advanced visualization tools provide the basis for fulfillingthe information and reporting needs of the heterogeneoususer groups in a telco.

The extraction tools and data models (or business content)provided for SAP RM-CA use open and cleared items and alsoitems submitted to external collections agencies to create stan-dard and customized reports.

Open-Item ReportingOpen items are transferred from SAP RM-CA to SAP BI by astandard extraction mechanism. You can determine the data to be selected and uploaded using various criteria, such as busi-ness partner, company code, or business area.

You have great flexibility to control the granularity – the levelof detail – of the open-item data loaded into SAP BI. For exam-ple, you can cluster open items for the period of time in whichthey will become due (such as 10, 20, or 30 days). In addition tothe actual posting information, SAP BI allows you to includebusiness partner or contract account information that you canthen use to analyze and create reports according to demographiccriteria. You can also include additional objects in the datastructure, which may be filled as the need arises.

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After the data is loaded into SAP BI, it is made available in stan-dard structures in the operational data store (ODS) at its mostgranular level and in InfoCubes with a predefined structure formore aggregated analysis.

The solution ships with sample reports, such as 30-60-90 reportsand historical analysis of open items. Additional reports arevery easy to create using the SAP BI tool set.

Cleared-Item ReportingAnother data extraction from SAP RM-CA provides informa-tion about items cleared during a given time period. As withthe open items, you can filter data according to various criteriaand control the granularity of information uploaded.

After loading the information into the correspondingInfoCube, you can perform the following analyses:

• Payment behavior by customer segment

• Payment methods used

• Seasonal fluctuations in payment patterns

• Payment delays by amount

Reporting on Items Submitted to External CollectionsAgenciesA report provides information about items being submitted toexternal collections agencies. After loading the informationinto the corresponding InfoCube, you can perform severalanalyses, including efficiency per collections agency and theamount of submitted, collected or uncollectible items (overallor per collections agency) in a given period of time.

USER-EXIT CONCEPT

SAP software includes a powerful user-exit concept that providessignificant flexibility for adding or changing SAP RM-CA func-tionality without modifying the standard code delivered bySAP. This ensures that all enhancements made are maintainedthrough a release upgrade process.

Handover points to the user exits are known as events. Whenthe processing logic of an SAP RM-CA program reaches anevent, it checks in customizing tables for the name of the func-tion module to be executed. If it finds an entry for an installa-tion-specific module, SAP RM-CA executes the specific functionmodule instead of the standard function module. SAP RM-CAcontains more than 800 of these events in which modification-free changes and enhancements can be made.

WORKFLOWS

Standard workflows support multistep authorization withregard to:

• Posting a document

• Reversing a document

• Making single or mass changes of documents

• Creating an installment

• Creating a repayment request

• Performing a write-off

In addition to standard workflows, a number of triggers can beused to initiate company-specific workflows.

PRINT WORKBENCH

The print workbench can be used to print both letters with asimple logical structure and forms constructed on the basis ofa complex data hierarchy. While it is highly flexible and canmeet a wide range of needs, the print workbench remains ahigh-performance tool that can support the mass printing offorms.

The flexibility of the print workbench is based on the followingelements:

• Form classesForm classes are data structures that are preset for specificapplications. They contain all the data that can be used inthe application forms that are associated with them. Variousform classes are provided as standard. You can create additionalform classes as required.

• Application formsApplication forms are created on the basis of form classes.Several application forms can be defined for each form class.SAP RM-CA includes a number of model application formsas standard. User exits allow each telecommunications com-pany to adapt the application forms to meet its specific needs.

• Print action recordsPrint action records can be used to add to notifications with-out making changes to standard application forms. This isuseful for sending additional information to certain customersor when inserting flyers as part of a promotion. Print actionrecords specify which text or flyer is to be printed and thelength of the print run.

The print workbench uses the capabilities of SAP’s standardword processing functions (SAPscript) to print application forms.SAPscript either edits the data itself before sending it to theprinter or transfers the data to the raw data interface (RDI). In that case, layout and printing of the form are handled by a non-SAP system.

The print manager is used to manage (combine, delay and cancel) print requests.

DATA MIGRATION

The first-time transfer of master and transaction data – datamigration from a legacy system to SAP RM-CA – takes placevia an open interface. Migration is performed according to therequirements of the target system, which means that neitherthe data model nor the functional concept of the old systemare needed or used.

TOOLS AND TECHNICAL FEATURES

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To guarantee data consistency following migration, the data isgrouped according to business process criteria to form migrationobjects and then transferred to SAP RM-CA. Object-orienteddata transfer is made possible by using the service functionmodules of the SAP RM-CA business objects. These modulesuse the direct input technique, avoiding the performance dis-advantages of batch input.

Structures are assigned to a migration object. The structuralorganization of the migration objects is defined in SAP RM-CA.Because the structures are located in the data dictionary, customenhancements can be processed.

Because SAP RM-CA doesn’t know the data model of the legacysystem, it needs a program to extract data from the legacy sys-tem. That program does not have to edit the data according tothe SAP RM-CA data model; it simply needs to make it availablewith the correct parameters (for example, integer, length = 10).The layout of the data records is defined in the migration work-bench.

The test function, documentation, and status informationfunctions support the data migration process.

Test FunctionsThe data transfer process is tested using a small number of datarecords. New records are created for this purpose, so no datafrom the legacy system is required. As soon as the test data hasbeen transferred with no errors, the extraction program for thedata from the legacy system is created.

DocumentationThe structural form of the migration objects is documented indetail and can also be displayed as a list. Both the list and thefull documentation can be printed and exported to other appli-cations (such as Microsoft Excel).

In addition to standard field documentation, the fields in themigration objects are also documented. This documentationdescribes which fields must be supplied with data and whichcan optionally be supplied with data.

Status InformationInformation is provided on the status of the migration, makingit possible, for example, to monitor which data has already beensuccessfully transferred.

HISTORY

You can use the history function to record the status of receiv-ables and collections management entities (like contractaccounts) for a given time slice. The history function also makesit possible to store future-dated changes to entities.

To manage historical data for entities, the solution stores thedate from which and the date until which the stored status isvalid. It also stores the change date for information purposes.

A new time slice is not created for every change. For each entitytype, the solution specifies which field changes generate newtime slices. Changes made to entities or fields can be recordedin change documents even if those changes do not result in anew time slice.

LOGS

SAP RM-CA distinguishes between errors that occur in individualprocessing and those that occur in mass processing. If an erroroccurs in individual processing, the solution terminates theprocedure and displays an error message. If an error occurs inmass processing, the solution only terminates the procedure ifthe error is serious. In all other cases, it skips the entity withthe error and processes the next entity. This keeps disruptionsto batch processing operations to a minimum. Any errors thatoccur are logged.

PARALLEL PROCESSING AND PERFORMANCE

Processing large volumes of data is a common requirement inthe telecommunications industry, and it also applies to SAPRM-CA. SAP met this need by designing SAP RM-CA for paral-lel batch processing. This provides the necessary scalability andensures load distribution across system resources. The processworks by defining packages of data that are dynamically (ratherthan statically) assigned to a work process as such a processbecomes available.

For example:

• The entire account base (1.5 million) is divided into 300 pack-ages of 5,000 accounts each. There are 10 batch processesavailable.

• At the start of the batch run, the system will assign packagesto the 10 processes.

• After that, each process is dynamically assigned a new packagewhen it has finished work on the previous package. Thismeans that if one package takes a long time to process forsome reason, the other processes will compensate for it byprocessing a higher number of packages. This leads to a veryeven load distribution across the systems.

The solution has proven that it is capable of processing batchruns on over 40 million contract accounts while more than10,000 users (like call center agents) had online access to thesystem.

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Figure 15 and 16: SAP RM-CA’s Parallelization Technique

Approach: Distribute available data into packets and assign each packet to a processor before starting the run

Example: Nine packets distributed across three processors

Processor 1:

Processor 2:

Processor 3:

Total processing time

Result: Packet 5 on Processor 2 prevents packet from getting processed.Processor 1 and 3 are idle for much of the total processing time.Total processing time is longer than necessary

RM-CA does NOT use this approach!

1 2 3

4 6

7 8 9

5

Approach: Distribute available data into packets and assign each packet dynamically as a processor becomes available

Example: Nine packets distributed across three processors

Processor 1:

Processor 2:

Processor 3:

Total processing time

Result: Processing is distributed more evenly across available processors.Total processing time is reduced.

RM-CA uses this approach for mass runs!Packets can created periodically (for example, every three months) or even before each run.

1

2

3 46

7 8

9

5

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DATA STRUCTURES

Besides system performance, data volume and database sizeplay an important role in applications dealing with large cus-tomer bases. SAP RM-CA address performance issues in twoways in order to offer the best possible combination of low datavolume and functional breadth. First, SAP RM-CA uses leandatabase structures. A lean data structure is important forkeeping databases at a manageable size, especially for transac-tion data like postings. SAP RM-CA provides these structures,but it is still flexible enough to allow you to add new fields asyou deem necessary during installation.

Second, SAP RM-CA reduces the number of postings to a mini-mum. For example, in the case of payments, only header infor-mation is stored to the database, whereas information aboutwhich items were cleared is stored with the items as a referenceto the payment document.

DATA ARCHIVING

You can archive SAP RM-CA data that is no longer required forday-to-day operations. You can archive postings, dunningnotices, payment lots, correspondence, and other entities. Thedata is moved to an external storage device and then removedfrom the operational database, improving database performance.

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