using sap collection strategies & correspondence ... · using sap collection strategies &...

Using SAP Collection Strategies & Correspondence Automation to Increase Collections Performance and Reduce DSO

Sashi Narahari CEO, HighRadius

SAP Receivables Management Seminar

Feb 6, 2013 Dallas, Texas

Agenda

• SAP Collection Strategies – How to effectively segment customers?

• Sap Collections integration with A/R – Is it real-time?

• Correspondence Automation – How to make the computer do a lot of ‘standard repetitive

work’ and refocus the analysts time on high value targets?

2

Demo

Standard SAP Collections Management

HighRadius Advanced Correspondence Automation

SAP Collections Management Users

Define collection strategies / rules

Define work item assignment to users / groups

Monitor and reallocation of workload

Incoming / Outbound collection calls

Process daily worklist based on prioritization

Record customer contact and follow up

Collections Manager Collections Specialist

Collections Management Users Collections Manager

Data available for Collection Strategies

• Credit Limit

• % Utilization

• Credit Exposure

• Risk Category

• Master Data or Operational Data which can be added to collections management

• Aging

• Amount

• Dunning Level

• Amount Dunned

• Disputed Amount

• Dispute Case Status

• Payment Data

• Broken Promise to Pay

• Number of Promise to Pays

• Promise to Pay Amount

• Customer Contacts

• Resubmissions Collections

Data

Open AR & Dispute

Mgmt Data

Credit Data Other Data

Collection Rules

Collection Strategy

Collection Strategy for High Risk Customers

Maximum Valuation = 100

High to Medium Risk and greater than 80% Credit

Limit Utilization

Valuation: 35 points

Past Due Invoices Over 15 days Past Due & Dunned

One or More Times


Resubmission Due for the Customer


Collections Strategy Definition

Collection Strategy Valuation

Valuation of customer is les than 20% of Maximum Valuation – Low Priority

Valuation of customer is less than 40% of Maximum Valuation – Medium Priority

Valuation of customer is less than 60% of Maximum Valuation – High Priority

Valuation of customer is less than or greater than equal to 100% of Maximum Valuation – Very High Priority

Solution Architecture

Set of Customers

[C1, C2, ………Cn]

Set of Customers

[C1, C2, C3……………Cn]

Subset of Customers [C1, C2, ………Cn]

Strategy

Rules

Auto Correspon-

dence

Call

Email

Fax

Mail

Sample Scenario

Customer Segmentation • Small & Medium Business – Slow Pay

– Automated Proactive Reminder 7 days before

– Past Due Notice 1 after 7 Days


– Demand Notice after 45 days

– Call Customer after 60 days

• Small & Medium Business - Fast Pay – Past Due Notice 1 after 14 Days



• Major Accounts (Large Customers) – Proactive Reminder 14 days before



Collections Management: Collection Strategy

Strategy for Slow Pay

Customers

• Pro-active (0-20 points) • 1st Past Due (21-40 points) • 2nd Past Due (41-60 points) • Demand Notice (61-80 points) • Call (81-100 points)


Strategy for Fast Pay Customers

•1st Past Due (21-40 points) • 2nd Past Due (41-60 points) •Call (81-100 points)


Strategy for Major

Customers

• Pro-active (0-20 points) • 1st Past Due (21-40 points) • 2nd Past Due (41-60 points) •Call (81-100 points)

Collections Management Users Collections Specialist

List of Customers Prioritized

Collections Management: Collector’s Worklist

• Pro-active (0-20 points) • 1st Past Due (21-40 points) • 2nd Past Due (41-60 points) • Demand Notice (61-80 points) • Call (81-100 points)

Is SAP Collections real-time?

17

• Worklist generation is batch • Say once a day

• Short Answer: YES!

• Open Items is real-time • Data is being read directly

from A/R

Ability to send correspondence

from Worklist

Correspondence: From Worklist

Select Pro-active to mass process

Select Package and which transactions to

include in correspondence

Select Contact and Correspondence

Mode

Correspondence: Proactive Reminder

Correspondence: Proactive Reminder

Select 1st Past Due to mass

process

Correspondence: 1st Past Due


Select 1st Past Due Package

Select 2nd Past Due to mass

process

Correspondence: 2nd Past Due

Correspondence: 2nd Past Due

Select 2nd Past Due Package & ‘Send’

Correspondence: Sample Email Correspondence


Letter and Invoice Copy attachments

Select Demand Notice to process

Correspondence: Demand Notice

Process Receivables: Customer Details Screen

Send correspondence button for individual

customers


Select Demand Notice Package

Correspondence: Package Definition

Select from a list of Smart Forms, Documents such

as Invoice Copy, POD copy etc to define a ‘collated’ package

Select Letter to Create/Edit

Correspondence: Maintain Letters

Correspondence: Maintain Letters

‘Call’ customers with high past due

balances or no outcome after

correspondence

Collector’s Worklist: Call Customers

Review open items to be

collected

Collections Management: Invoice Summary

Default Customer Contact readily available

Review payment history

Collections Management: Payment History

Customer Contact Outcome

Customer Contact

Promise to Pay

Dispute Case

Request Follow up

Request additional

data

Not Available

Call Customer Outcome: Promise-to-Pay

Create promise to

pay on a collection call

Call Customer Outcome: Promise-to-Pay

Record promise for payment or

customer contact at the invoice level

Call Customer Outcome: Negotiate Installments

Ability to setup Installment plans

on high risk customer

Promise for payment has

been recorded

Collections Management: Promise-to-Pay

Collections Management: Promise-to-Pay

Summary of all Promise

to Pay

Call Customer Outcome: Create Follow-up

Create a Follow-up

reminder on specific invoices

Call Customer Outcome: Create Follow-up

Identify the date of the

resubmission along with a

Reason

Collections Management: Resubmission

Summary of all Resubmission

Call Customer Outcome: Invoice Disputed

Create Disputes on

Invoices

Call Customer Outcome: Invoice Disputed

Ability to identify details of the dispute

and route it to the appropriate analyst

Review open and closed

dispute cases

Collections Management: Dispute Cases

Notes Management

Select invoice and enter invoice specific notes

Notes Management

Identify the reason of the

note

Collections Management: Notes

Summary of all Notes

Text

Work item completed

Collections Management: Completed Item