DISPUTE MANAGEMENTOptimizing Your Financial Supply Chain

To improve collections and reduce days sales outstanding (DSO),nearly every company must frequently investigate open receiv-ables from its customers. In many industries, some customersregularly reduce bill paid amounts or fail to pay their bills at all. All too often, companies use manual processes to handlethese dispute cases, which can involve many different areas of the organization. Such manual processing is typically time-consuming and expensive, ties up significant resources, and mayalso delay the resolution of dispute cases. In the United States, forexample, 61% of receivables remain open for more than 50 days.

There is a way that you can optimize the accounts receivable andcollections processes in your financial supply chain with theSAP Dispute Management application, a part of the mySAP ERPFinancials solution. Companies that use the application showimprovement in the processing of accounts receivable disputes,with days sales outstanding reduced by as much as 20%.

Centralized Case Processing

When your company experiences a dispute with a customer over a receivable, you can open up a dispute case in SAP DisputeManagement that becomes the central object for processing thedispute. A dispute case is an electronic file for collecting relevantinformation and displaying that information in a structured form.It includes attributes such as the reason for the dispute, the disputes priority, and the relevant customer contact. Amountfields in the application show you at a glance the disputedamount and all relevant payments, credit memos, and write-offs.

The SAP Dispute Management

application enables you to

resolve customer disputes over

receivables more effectively.

Fully integrated with other

SAP financial management

applications, it can help you

improve the tracking and

processing of short payments,

streamline your accounts-

receivable processes, and

enhance your customer

relationships. Companies that

use SAP Dispute Management

have reduced their days sales

outstanding by as much as 20%.

SAP Solution BriefSAP Dispute Management

You can create a dispute case directly from a specific financialtransaction, such as the processing of an incoming payment thathas been reduced or a customers line-item display. (See Figure 1.)You can also set the application to open dispute cases automat-ically for payment deductions posted by electronic accountstatement or lockbox file.

Figure 1: Create Dispute Case from Posting an Incoming Payment (Short Payment)

When you create a dispute case, the application automaticallyfills the amount fields. You can also set most attributes automat-ically, which considerably reduces manual processing. As the caseis created, the application links all information for the disputedtransaction to the dispute case including the customer name,invoice number, and invoice amount as well as all relevant billingdocuments. You can then access these items directly from thedispute case as you need them. (See Figure 2.)

Your department manager can assign a dispute case to a coordina-tor who is then responsible for resolving the case. The coordi-nator can also indicate any other employees who should be involved, including those from other departments. The applicationlets you classify and manage each dispute case according to its current processing status and the reason for the dispute whichmay include the following:

Incomplete supply or service (quantity deficiency) Deficient delivery or service (quality deficiency) A mismatch between price and service (price difference) Failure to meet the delivery date (time difference) Failure to follow through on promised trade promotions Other misunderstandings

Employees assigned to process dispute cases receive notification bye-mail. They can process dispute cases directly in the applicationor via a workflow task. The integration of dispute-case processingwith SAP workflow tools makes it easy for you to integrate employees into the resolution process as they are needed, andsimplifies the user interface. Users can see an overview of all previous activities related to their dispute cases and receive notification of their responsibilities. They can enter the results of their investigations as notes to the case and save any relevantdocuments as attachments.

SAP Dispute Management lets you inform customers about theircases either automatically or manually at any time. With themanual correspondence option, users can enter text, adding detail to enhance the customers understanding of the dispute.You can involve managers in critical dispute cases through an internal-escalation capability.

The close integration of SAP Dispute Management with your accounts-receivable applications allows the immediate update of amount fields and links. As a result, you can check a disputecase at any time to see which payments, credit memos, or otherwrite-offs have been applied to the items involved. Once all disputed receivables have been cleared, you can close the disputecase automatically.

The application is fully integrated with other software in mySAP ERP Financials, including the SAP Biller Direct application.This means, for example, that your customers can enter disputecases in SAP Biller Direct and communicate through a notefunction with the employees who process the cases. You can use the SAP Collections Management application to create dispute cases and collect receivables. The flexible architecture of SAP Dispute Management also enables process integrationwith industry-specific SAP solutions. This allows you, for example,to use the dispute management application to support yourtrade-promotion processes.

Figure 2: Dispute Case View

Many Business Benefits

SAP Dispute Management can help your finance department accelerate customer collections and resolve late-payment issues.With it, you can finally eliminate the use of faxes, voice mail, and spreadsheets to resolve, track, and settle accounts-receivablepayments. Improving your processes for dispute resolution anddeductions management can cut your DSO and improve yourability to manage cash flow. The application is designed to workas an extension to your SAP software platform and is critical in providing you with financial-supply-chain management capabilities in mySAP ERP Financials.

Manage Your Entire Financial Supply Chain More

Efficiently

SAP Dispute Management is a part of SAP Financial Supply ChainManagement (SAP FSCM) set of applications. As one of the newkey functional areas of mySAP ERP, SAP FSCM optimizes the financial and information flows within a company and betweenbusiness partners. In addition to receivables management, SAP FSCM includes applications for electronic bill presentmentand payment in SAP Biller Direct, collections management inSAP Collections Management, automation of credit decisions inSAP Credit Management, management of liquidity positions inSAP Cash and Liquidity Management, configuration of paymentfactories in SAP In-House Cash, and management of financialpositions and market risks in SAP Treasury and Risk Management.

To learn more about managing your financial supply chain withdispute management and other processes, visit the SAP Web site atwww.sap.com/financials.

Powered by SAP NetWeaver

SAP Dispute Management is powered by the SAP NetWeaverplatform, the open integration and application platform that enables change. SAP NetWeaver helps companies align IT withtheir business. It allows companies to obtain more business valuefrom existing IT investments and to deploy a services-orientedarchitecture. SAP NetWeaver reduces total cost of ownership(TCO) and complexity across the entire IT landscape.

SAP NetWeaver powers mySAP Business Suite, SAP xAppspackaged composite applications, and partner solutions. It provides the best way to integrate all systems running SAP ornon-SAP software. SAP NetWeaver unifies integration technolo-gies into a single platform and is preintegrated with businessapplications, reducing the need for custom integration.

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