SAP Solution BriefSAP Business SuiteSAP Customer Financial Management

Credit and Collections Management for High-Volume Business

BenefitsSolutionObjectives Quick Facts

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Objectives

Following all avenues to turn revenue into profitTough economic conditions get tougher when customers don’t pay on time. To help eliminate financial risk, the SAP® Customer Financial Management package gives you a full picture of customers despite high-volume business. In this way, you can reduce risk, decrease days sales outstanding, and minimize bad debt.

Companies dealing with high data volumes are investing a great deal of time and money in becoming more customer centric. They are going all out to attract new customers while doing all they can to accommodate the wishes of existing ones. But in the ongoing quest for top-line growth, you can’t afford to neglect an equally important factor – profitability. Many companies today give less credence to top-line growth than they used to. What counts now is the bottom line. You need to fully utilize all ave-nues for turning revenue into profit.

At face value, each customer or potential customer is a plus for your business, but only if you can count on each one of those custom-ers to generate revenue. You need them to pay their bills for services rendered. By helping you efficiently handle the high volumes of data from your credit management and collections pro-cesses, the SAP Customer Financial Manage-ment package supports you in making sure your revenue contributes to your profit.

Following all avenues to turn revenue into profit

Benefits Quick FactsSolution

Classifying customers by risk SAP software shows you the whole picture of credit and collections management, so you can mitigate the risk of uncollectible revenue. With the SAP Credit Management application, you can make a comprehensive assessment of potential, new, and existing customers through credit scoring. With this information, you can decide up front what terms and conditions you want to offer a customer. You also have the nec-essary information to work within the collections process to handle customers on an individual

basis to suit their financial circumstances and payment-default risk profile better.

If you have a large customer base – typical for large companies active in any one of a wide range of industries – the software allows you to auto-mate to increase efficiency. SAP Credit Manage-ment is powerful enough to handle large volumes of data, and it alerts you to take action only in those exceptional situations where your direct intervention is required.

SAP Credit Management provides the internal information that plays so important a role in the assessment of existing customers.

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Classifying customers by risk

Performing risk-based segmentation

Employing flexible and powerful collections management

Leveraging analytics in an integrated environment

Solution BenefitsObjectives Quick Facts

Performing risk-based segmentationSophisticated credit scoring provides the nec-essary information for risk-based segmentation of your customers. This type of segmentation is the prerequisite for applying a differentiated approach that can be employed throughout the customer lifecycle, starting with contract and order management and extending beyond collections.

Credit scoring is only as good as the information it is based on. To get valid data, SAP Credit Management integrates with virtually any data source:

• Data from external credit bureaus through the software’s open interface

• Sociodemographic information to review address, income level, and profession

• Negative and premium customer lists from data you maintain or share with other companies

With support from a credit-rules engine, you can set up company-specific rules for calculating the internal score and risk class of a customer that take into account the above-mentioned data. You can set different limits for different services or products extended to customers. A central view of all data lets you treat each customer individually.

Use the software to combine a customer’s payment history with external sources to get the complete picture of a customer.

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BenefitsSolutionObjectives Quick Facts

Classifying customers by risk

Performing risk-based segmentation

Employing flexible and powerful collections management

Leveraging analytics in an integrated environment

Employing flexible and powerful collections managementWhen credit risk is determined automatically by the software, you can exploit that mecha-nism to dynamically adjust your collection strategy to a customer’s current situation. You can take into account a multitude of parame-ters provided by the software, along with any additional criteria you require to determine what actions to take during collections. This gives you the flexibility and the information you need to apply the approach best suited for each individual customer. You can set up as many strategies as you require, combining sequential

or parallel treatment actions to achieve optimized business practices.

The collections management functions of the SAP Customer Financial Management package handle the internal collection activities for you. They hand off work to external collection agen-cies when appropriate and monitor the progress of that work. In addition, they provide the foun-dation for you to engage competently in legal proceedings.

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BenefitsSolutionObjectives Quick Facts

Classifying customers by risk

Performing risk-based segmentation

Employing flexible and powerful collections management

Leveraging analytics in an integrated environment

Via a collection manager cockpit, managers can at any time manually access all key data required to promptly assess a customer situation and make informed decisions.

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Your collection activities range from fully auto-mated tasks to semiautomated and manual activities, and the software supports your work in every aspect. Naturally, the software takes over automated tasks, such as creating col-lection letters, issuing reminders in the form of e-mail and text messages, making tele-phone calls via dialer software, and triggering workflows and service disconnections. How-ever, it also supports work involving semiau-tomated tasks, such as releasing receivables prior to their submission to an external col-lections agency. And it helps you with manual activities, for example, generating a collection work item to be processed by a collections

agent when that agent prepares to reach out to a customer by phone. In addition, at any time in the collections process, the software enables you to block an account for collections or add it to a specific work list.

What’s more, the collections management functionality of SAP Customer Financial Man-agement gives your collection agents a single point of access to their daily work and equips them with all relevant information and functions they need to carry out their tasks. They have a complete overview of the work assigned to them and the current status of work in progress, which increases their efficiency.

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BenefitsSolutionObjectives Quick Facts

Classifying customers by risk

Performing risk-based segmentation

Employing flexible and powerful collections management

Leveraging analytics in an integrated environment

Leveraging analytics in an integrated environmentSAP software supplies analytics that cover an extensive range of information. You can monitor credit exposure and risk, run reports on the suc-cess of collections, compare collection strategies for champion-challenger evaluations, measure the performance of external collection agencies, and analyze write-offs. You can then use this information to compare your company’s per-formance with industry benchmarks to refine your scoring algorithms, adjust your collection strategies, and change policies.

The SAP Customer Financial Management package is powered by the SAP NetWeaver® technology platform, which unifies technology components into a single platform, including third-party software. You can incorporate credit data from a wider variety of sources and work with legal organizations and external collection agencies. By connecting front- and back-office processes, the necessary information is always on hand to facilitate online credit checks during contract and order creation. You can take advan-tage of interaction center functions to integrate telephony and customer interaction history.

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BenefitsSolutionObjectives Quick Facts

Classifying customers by risk

Performing risk-based segmentation

Employing flexible and powerful collections management

Leveraging analytics in an integrated environment

Assign customers to categories of credit-risk classes so you address only paying customers during up-selling initiatives.

Boosting your bottom lineWith SAP software, you can perform ongoing assessments of your customers and, with this information, establish flexible collection strat-egies to keep the revenue stream flowing. The SAP Credit Management application gives you a complete picture of your credit risk at any moment, enabling you to respond responsibly to the overall strategic situation as well as to individual customer events.

SAP Customer Financial Management is tailor-made to support high-volume business to help you:

• Make a comprehensive, ongoing assess-ment of the creditworthiness of new and existing customers based on information from internal and external sources

• Treat your customers according to their creditworthiness, sociodemographic profile, and lifestyle data

• Cut costs and increase efficiency in credit and collection processes by automating routine tasks

• Lower risk by receiving alerts about issues before they escalate into problems

• Improve customer relationships and retention by applying preventive measures

• Reduce write-offs from customers with low credit scores by imposing stricter terms and conditions or declining to extend services to them

• Increase your days sales outstanding and accelerate cash flow by using the most effective approach to getting payment

• Achieve a fast ROI with applications that integrate with your existing infrastructure

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Boosting your bottom line

BenefitsSolutionObjectives Quick Facts

SummaryThe SAP® Customer Financial Management package helps you make credit decisions, per-form collections individually tailored to your customers, and monitor internal and external collection activities. As part of the consume-to-cash process for high-volume business, SAP Customer Financial Management offers best-of-breed functions along the entire value chain – from online rating and charging to convergent billing and invoicing. Objectives

• Deliver a reliable, comprehensive credit score of customers

• Automate routine collection tasks • Impose stricter terms and conditions on customers with low credit scores

• Analyze the collection process to identify the most effective approach to receiving payment

Solution • Credit scoring and segmentation to assess the credit risk of customers

• Collections management to monitor external collection activities

• Integrated analytics to run reports on collection strategies and analyze write-offs and payment agreements

Benefits • Reduced risk by considering the complete credit and collection history of customers

• Improved customer retention by extending services to customers appropriate to their credit risk assessment

• Decreased costs by automating routine tasks in the credit and collection processes

Learn moreVisit us online at www.sap.com/lines-of-business /sales/next-generation-billing/index.epx.

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