Financial Supply Chain Management in SAP
Copyright © 2006 Accenture All Rights Reserved.
Agenda
Introduction & Objectives
Business Need
Market Analysis
Value Proposition
Financial Supply Chain Management
Overview
Credit Management
Collection Management
Dispute Management
Technical Overview
Assets & Credentials
2
Agenda
Introduction & Objectives
Business Need
Market Analysis
Value Proposition
Financial Supply Chain Management
Overview
Credit Management
Collection Management
Dispute Management
Technical Overview
Assets & Credentials
3
A continually high number of insolvencies and a high average payment time in
Europe threaten the transformation of receivables into liquid assets.
Insolvencies and average duration of payment in European countries
Insolvencies in Western Europe and Germany
(EU 15, Norway and Switzerland)
Average duration of payment (b2b) in Europe 2009
(Selection of countries)
250,000
200,000
150,000
Germany
Western Europe
100,000
50,000
0
2004 2005 2006 2007 2008 2009* 2010*
* Estimated by EulerHermes
 The number of business insolvencies is increasing . 214.510 insolvencies are expected in Western Europe in the
year 2009.
 In Europe, the average payment time for invoices was 57 days in the year 2009. In some countries the average payment
time is even over 100 days.
The risk of too high balances of accounts receivables, high losses of accounts receivables and
significant costs due to additional tied up capital still remains.
4
Source: Euler Hermes / Credit reform and European Payment Info
Concerning the management of receivables process there are significant
differences between industry average & High Performing Organizations.
Industry average vs. High Performing Organizations*
0,15%
Cost of Order-to-Cash
Process (% Rev.)
$5,00
Cost per AR Transaction ($)
4,50
0,13%
$4,00
High performing organizations …
$3,00
 … operate a streamlined Orderto-Cash process – this
translates into a significant
reduction in operating costs.
0,10%
0,05%
0,05%
$2,00
$1,00
0,00%
4%
Average
High Performing Org.
Customer Billing Error
3,4%
Rates (%)
0,70
$0,00
Average
50
45
48
High Performing Org.
Days Sales
Outstanding (Days)
40
3%
35
 … have significantly fewer
billing errors and collect cash
substantially faster than their
peers – this has a considerable
impact on overall funding
requirements.
30
2%
1,7%
25
20
15
1%
10
5
0%
0
Average
5
High Performing Org.
22
 … have implemented an
integrated IT system with realtime information during the whole
process – this enables further
reduction of Days Sales
Outstanding
Average
High Performing Org.
* Source: Hackett
Note: Figures are indicative of high performing organization generally and will vary by industry type and industry segment
Approximately 70% of all companies take actions against loss of accounts
receivables. Accenture SAP F&PM - already supporting these activities - still
sees more sale potential in this area.
Managing the risk* and how Accenture SAP F&PM can help
How SAP F&PM can help
Protection against lossing receivables*
Belgium
40%
62%
38%
Average
70%
30%
Great Britain
70%
30%
France
70%
30%
Netherlands
79%
21%
Germany
79%
21%
 In average 70% of all European companies take
activities to protect their accounts receivables
 Apart from process and functional activities, high
attention is paid to the support through IT systems
% Share of the companies
that take measures against loss of accounts receivables
that do not take measures against loss of accounts receivables
6
Improvement Potential
Italy
60%
 Optimization and harmonization of business
processes
 Implementation and integration of IT solutions within
the business processes
 Establishing more High Performance Companies
in the area management of receivables
SAP F&PM Credentials
 Within the last 12 months, SAP F&PM ASG was able
to deliver various projects in this area
 Client 1
Implementation of a SAP BW system for
supporting FI-AR processes
 Client 2
Implementation of a system, which supports the
selection, assessment and sale of receivables
 Client 3:
Support the redesign of the accounts receivables
processes (including the evaluation of tools for
accounts receivable management in SAP ERP)
*Source: Altradius Zahlungsbarometer; Studie zum Zahlungsverhalten europäischer Kunden; Results,
Sommer 2006
Receivables and Collection Management (RCM) covers the spectrum of
activities that credit, dispute and collection departments assume in order to
ensure timely payments by customers.
Definition of Receivables and Collection Management (RCM)
Receivables and Collection
Management
 … is an integral part of the Order to
Cash (OTC) Management.
 … makes sure that account
adjustments or bad debt losses stay
to a minimum when supplier credits
are granted.
 … does not only focus on cash
collection but also on aspects like
creditworthiness, contracting as well
as measures and processes of the
whole Financial Supply Chain.
 … targets at strengthening the
company’s cash flow to reach a solid
financial standing.
7
The Receivables and Collection
Management Universe *
Credit Scoring
Credit
Decisions
Order Accuracy
Contract
Management
Credit
Pre-Bill Mgmt
Facilitation & e-Invoicing
Alerts and
Exception
Manageme
nt
Cycle Time
Analysis
Reporting &
Analysis
Remittance
Processing
Dispute
Collections
Manageme
Management
nt
Escalation
Root Cause
Identification
*Source: PayStream Advisors
Real Time
Review
Dispute
Identificatio
n
Prioritization
Integrated AR
Agenda
Introduction & Objectives
Business Need
Market Analysis
Value Proposition
Financial Supply Chain Management
Overview
Credit Management
Collection Management
Dispute Management
Technical Overview
Assets & Credentials
8
A valuation of the most important RCM solutions by means of defined criteria
suggests SAP FSCM to be the most powerful one.
Comparison of possible IT solutions for the RCM process
Criteria
Tool SAP FSCM
1
ORACLE
Receivables
2
Sungard
Avantgard3
Cforia
Application
Suite4
Capgent
Order to
Cash Suite5
Integration into existing
SAP ERP systems
Global Scalability
(Languages, currencies)
Usability (look and feel,
integration into SAP)
Speed of implementation
Accenture’s
Implementation
Capability
1
2
3
4
5
How well are the
criteria met:
full
low
high
not
medium
9
 From an overall
perspective SAP FSCM is
the best solution for
Credit, Dispute and
Collection Management
 Major companies are
already using it:
Performance, Stability
and Support
Ranking
NON-EXHAUSTIVE
Source: SAP, Oracle, Sungard, Cforia, Capgent (Emails and
Documentation)
Agenda
Introduction & Objectives
Business Need
Market Analysis
Value Proposition
Financial Supply Chain Management
Overview
Credit Management
Collection Management
Dispute Management
Technical Overview
Assets & Credentials
10
Our Point of View.
Development of a high performing Order to Cash capability requires a holistic approach.
Cash Cycle
RfQ+
Offer
Order
Processing
Open Item Mgmt
Cash
Application
Billing
Dunning & Bad Debt Mgmt
Presales
Order
Delivery
Invoicing
date
Effective
payment
Due
date
Risk increase
Electronic Bill
Presentment &
Payment
Bankruptcy
Provision Write-off
Dispute
Management
Credit Policy
& Risk
Collection
Management
Negotiated BPDSO
credit period
Past due
DSO
Co-responsibility
Sales/Finance
Contractual / “Normal”
 Company leads
11
Finance
responsibility
Issues / Problems 
Company bears
A holistic business integration perspective across the entire order-to-cash
process enables to increase the value.
Order-to-Cash : Unlocking the Value
Key Questions
Process
Value Proposition


What does a high performing OTC process look like?
What aspects of the OTC process are to be retained / outsourced?
A streamlined,
integrated, error-free
OTC process …


How should the OTC team be organized / transformed?
What capabilities / expertise are required to perform the reengineered OTC process?
... underpinned by a
flexible, cost-effective
organization structure
…

What technology tools / systems are available to enable / automate
the OTC process?
What integration is required with other applications?
… enabled by worldclass systems and
applications …
What key data / information is required by the business?
How can this information be used to drive and measure process
efficiency and effectiveness?
… and supported by a
single version of the
truth.
Alignment
People
Alignment
Technology

Alignment
Data / Information
12


The reduction of open receivables leads to a significant positive cash flow
effect in year one and ongoing cost savings.
Value proposition
Cash flow & cost impact
1
1
“Open receivables
reduction effect”
Potential results:
Cash flow effect
2
“Ongoing cost savings”
2
2
2
16 Mill. €
“Ongoing cost savings”
Ongoing cost savings can be reached through:
 Gains in efficiency
 Reduction of bad debts
 Reduction of cost of capital
2
t
Client case:
 Revenues in FY 2007: 2 Bill. €
 Reduction of DSO: 2 Days
 Accounts Receivables: 270 Mill. €
 Bad Debt Provision: 5,4 Mill €
13
“Open receivables reduction effect”
The reduction of open receivables leads to an
improvement of the companies cash flow.
Potential results:
 Gains in efficiency:
0,4 Mill. €
 Reduction of bad debts
0,8 Mill. €
 Reduction of cost of capital
0,8 Mill. €
------------------------------------------------Ongoing cost savings
2,0 Mill. €
The relevant cost components for the business case are of a one-time and/or
an ongoing nature.
Cost components of business case
Implementation
Project


Technical
Architecture

Cost to develop the FSCM template
 Internal costs
 External costs
Cost for the related roll-out of the FSCM template
 Internal costs
 External costs
The costs for the technical architecture are heavily dependent on the
current Mondi situation as the FSCM module needs to connect to a
SAP ECC 6.0 system. The two scenarios are:
 Set-up of an ECC 6.0 system for the FSCM module
 Usage of an existing ECC 6.0 system
Cost nature
One-time
Ongoing
X
Cost nature
One-time
Ongoing
X

SAP Licensing

14
The licensing costs are depended on the current contract Mondi
currently has in place with SAP
The licensing cost typically is calculated based on:
 Implemented FSCM sub-modules
 Number of clients in scope
X
Cost nature
One-time
Ongoing
X
Every reduction in days sales outstanding of accounts receivables implicates
significantly improvements of cash flows and therefore annual profit & loss
benefits.
Exemplified cash flow improvements due to DSO reduction
Potential DSO reduction
Annual P&L benefit
Scenario 1 Scenario 2 Scenario 3
Days Sales Outstanding (DSO)
70
Opportunity Gap
60
5
days
10
days
Sales per year
€5 billion
€5 billion
€5 billion
1 Day of sales
€14 Million
(€5B/365days)
€14 Million
(€5B/365days)
€14 Million
(€5B/365days)
Days of
opportunity
5 days
10 days
15 days
45
Cash flow
improvement
€70 Million
(5 days x
€14 M)
€140 Million
(10 days x
€14 M)
€210 Million
(15 days x
€14 M)
Scenario 3
WACC
10%
10%
10%
Annual P&L
benefit
€7 Million
€14 Million
€21 Million
15
days
50
60
55
50
40
30
DSO
Scenario 1
Scenario 2
DSO
15
Achievable DSO
Receivables and Collection Management is part of the Accenture leading
practices for the Order to Cash (OTC) Process.
The focus of the market offering is Credit, Collection and Dispute
Management
2.0
Finance &
Accounting
Operations
2.5 Order to Cash (OTC)
2.5.1
Authorize
and manage
Credit
2.5.2
Manage
Sales
Orders
2.5.3
Manage
Contracts
2.5.4
Maintain
Customer
Master Data
2.5.5
Invoice
Customer
2.5.6
Maintain AR
Ledger and
Apply Cash
2.5.7
Manage and
Process
Collections
2.5.8
Manage and
process
Disputes and
Deductions
2.5.9
Manage
Customer
Requests and
Inquiries
2.5.10 Perform Revenue Assurance Activities
 Summary description: Order to Cash is the end-to-end process that addresses all
aspects of collecting cash - from initial order receipt and credit authorization to
collections and revenue assurance activities.
 Typically performed by: Ideally this process should be performed in a shared
service or BPO environment, by a dedicated OTC team, located in a low cost location.
 OTC is part of the F&PM process Suite
 RCM is part of the OTC
16
A typical RCM/FSCM customer profile comprises a variety of industries,
financial figures and IT infrastructure characteristics.
Accenture can offer value added to customers with the following profile
The typical RCM customer profile…
benefit
Industry
 Businesses that have a high volume of
receivables in many customer groups,
e.g. automotive, telecommunication,
chemical and pharmaceutical industries
 Businesses that have diverse products in
different price categories
Financial
Figures
 High proportion of receivables of Balance
sheet total
 High Days Sales outstanding
 High proportion of value adjustments of
short-term receivables
 SAP is used for the AR processes
IT
Infrastructure
17
 SAP infrastructure with release 4.6c or
higher
is available
… and departments that
 CFO
 Reduced process and
opportunity costs
 Finance Department
 Increase process
efficiencies
 Reduce DSO
 Increased transparency
 Sales Department
 Increase the financial
visibility of the customer
base
 Better credit management
 Track and monitor
reasons that drive DSO
Considering SAP F&PM’s capabilities with SAP and the result of the
tool selection, SAP FSCM is the best solution for SAP F&PM to enter
the consulting market for Receivables and Collection Management.
SAP F&PM‘s market offering for RCM
Optimizing and harmonizing the client‘s RCM process by implementing SAP FSCM
functionalities Credit, Dispute and Collection Management.
SAP Financial Supply
Chain Management
(FSCM)
 Explicitly developed for an
end-to-end RCM
 Set of functionalities that
helps companies organize
their receivables and credit
management within SAP
ERP Financials
 Focus on helping
organizations optimize
working capital and
financial supply chains
18
Source: SAP
Agenda
Introduction & Objectives
Business Need
Market Analysis
Value Proposition
Financial Supply Chain Management
Overview
Credit Management
Collection Management
Dispute Management
Technical Overview
Assets & Credentials
19
Agenda
Introduction & Objectives
Business Need
Market Analysis
Value Proposition
Financial Supply Chain Management
Overview
Credit Management
Collection Management
Dispute Management
Technical Overview
Assets & Credentials
20
The upgrade to the mySAP ERP offers a variety of new functionalities in all
functional areas, which can be deployed independently.
Solution map of mySAP ERP
21
Financial Supply Chain Management (FSCM) enables companies to efficiently
manage their financial relations with customers, dealers and vendors.
SAP's Financial Supply Chain Management (FSCM) helps
companies to
• Reduce their working capital and float
• Reduces the volume of arrears (Day Sales Outstanding)
• Improve their billing and payment processes
• Consistent company-wide credit policy
• Proactive credit risk management
• Forecast cash levels more accurately
• Improve the process of exception handling (Disputes)
• Track financial documents from order entry through
reconciliation
• Optimize the financial supply chain not only within the company
but also with external business partners
22
SAP Financial Supply Chain Management (FSCM) is an integrated approach to
provide better visibility and control over all cash related processes.
Financial Supply Chain Management (FSCM) enables companies to
efficiently manage their financial relations with customers, dealers and
vendors
Improvements with SAP FSCM:

Biller
Direct

Dispute
Management
Mgt. of receivables
Credit
Management
Collections
Management
SAP FINANCIAL
SUPPLY CHAIN
MANAGEMENT
Bank
Communication
Management
Cash &
Liquidity
Management
Treasury
Treasury &
Risk
Management
In-House
Cash
Focus Scope for Discussion
23
Reduce DSO and working capital
Improve efficiency in credit & collection
processes

Ensure consistent company-wide credit
policy and process

Manage proactive credit risk management

Forecast cash levels more accurately

Increase transparency in dispute
handling and accounting

Gain insights to avoid future credit &
collection issues & disputes

Optimize the financial supply chain not only
within the company but also with external
business partners
For the optimization of receivables most benefits can be reached by
implementing credit, collections and dispute management.
Overview of the credit, collections and dispute management
The functionalities …
… and benefits

Control and monitor customers credit limit and exposure

Uniform credit rules and automatic credit limit
adjustments

Use of external information about credit ratings

Provision of daily collection work lists

Functions to process and view open receivables

Broad support of the collections procedure

Integration of dispute & credit management

Cross department dispute resolution and integration of
workflows

Automated correspondence activities and internal
escalation

Support of various communication channels
24


Credit
Management


Collections
Management



Dispute
Management


Source: SAP
Focus sales on “good” customers
Comprehensive and up-to-date
information for credit checks
Apply company-wide credit policy
automatically
Identify automatically customers
to be called
Efficient and comprehensive
information provided
40% efficiency increase in
collections management
All related information is within
the system
Resolve issues before invoice
due date
35% efficiency increase in
dispute management
Enabling Process Optimization in Authorizing and Managing Credit
within the Order-to-Cash Process by implementing SAP FSCM –
Credit Management.
Credit Management - Best Practices
• Credit policy is clearly defined, monitored,
communicated and operationalized
• Establish regular credit line reviews throughout entire
customer lifecycle
Optimization
• Allow immediate approval for customers with good
previous history
• Automate credit analysis and initial credit line
approval using rule-based decision support capability
which is regularly updated
• Multiple tiers of credit approval supported
• Monitor total customer credit exposure including
subsidiary activity, child accounts, and activity across
product lines
Enabling Technology – SAP FSCM
• Manage all credit-relevant master data of a business
partner
• Include collateral defined for a business partner in the
calculation of the credit exposure to monitor own risk
• Manage both internal and external credit information
• Integrated processing of external credit information from
multiple external providers
• Extract internal data for a business partner from the
legacy systems and use own rating rules to determine a
score
Enabling
• Automatic calculation of credit limit
• Define rules for determining which credit checks are
carried out
25
Enabling Process Optimization in Authorizing and Managing Credit within the
Order-to-Cash Process by implementing SAP FSCM – Credit Management.
Credit Management - Best Practices
• Credit policy is clearly defined, monitored,
communicated and operationalized
• Establish regular credit line reviews throughout entire
customer lifecycle
Optimization
• Allow immediate approval for customers with good
previous history
• Automate credit analysis and initial credit line
approval using rule-based decision support capability
which is regularly updated
• Multiple tiers of credit approval supported
• Monitor total customer credit exposure including
subsidiary activity, child accounts, and activity across
product lines
Enabling Technology – SAP FSCM
• Manage all credit-relevant master data of a business
partner
• Include collateral defined for a business partner in the
calculation of the credit exposure to monitor own risk
• Manage both internal and external credit information
• Integrated processing of external credit information from
multiple external providers
• Extract internal data for a business partner from the
legacy systems and use own rating rules to determine a
score
Enabling
• Automatic calculation of credit limit
• Define rules for determining which credit checks are
carried out
26
Enabling Process Optimization in Customer Invoicing within the Order-to-Cash
Process by implementing SAP FSCM – Biller Direct.
Invoice Customer - Best Practices
• Provide on demand, online access to historical
billing/volume information containing at least 12
months history
Optimization
• Invoicing is done on same day as product shipment
or service delivery
• Approvals/routing for credit memos, rebilling, and
invoice adjustments are workflow enabled
• Establish clear, well defined revenue recognition
guidelines
• Establish system enforced controls that limit which
personnel have access to change master data
• Establish and adhere to a clearly defined account
purge policy
Enabling
27
Enabling Technology – SAP FSCM
• Present account balances (bills, credits and payments) to
business partners the Internet
• Inform business partners of new bills and credits
electronically (e.g. SMS or e-mail)
• Facilitate the exchange of information from accounting
system (account balances, line items) internally and for
business partners
• Enable business partners to:
 settle open receivables online, by credit card or
bank transfer
 establish direct to you through the Internet
• Integration of Biller Direct with Dispute Management to
display ongoing disputes
Electronic Bill Presentment & Payment aims at improving interactions with
suppliers and customers.
Electronic Bill Presentment & Payment,
•
SAP Biller Direct is part of SAP Financial
Supply Chain Management and provides
functions for Electronic Bill Presentment
and Payment
•
Using SAP Biller Direct, invoice recipients
can see their account balance with the
biller and look at their bills, credits or
payments
•
Invoice recipients can initiate payments
or download bills into their accounts
payable system
•
Invoice recipients can dispute bills from
the Internet and collaborate with the biller
•
SAP Biller Direct enables real-time
integration between the SAP backend
system and the Internet without any data
redundancies
•
Biller Direct can allow a customers A/P
Source: SAP
Enabling Process Optimization in Dispute Management within the Order-toCash Process by implementing SAP FSCM – Dispute Manager.
Invoice Customer - Best Practices
• Track disputes by root cause including
correspondence
Optimization
• For dispute management integrate quality
management, sales and other involved functions
• Integrate dispute management with cash collection
• Define escalation levels and thresholds
Enabling Technology – SAP FSCM
• Creation of dispute case for underpayments or open
items to collect all data and information required for
processing the case
• Functions for workflow and for creating correspondence
available
• Creation of dispute case in different accounting
transactions (e.g. list of overdue items)
Enabling
• However, you can also create a dispute case
independently of the transactions in accounting in dispute
case processing.
• Manage the status of dispute cases
29
Enabling Process Optimization in Collection Management within the Order-toCash Process by implementing SAP FSCM – Collection Manager.
Manage Collections - Best Practices
• Analyze debtor behaviors based on historic
settlements to derive risk profiles
• Create customer profiles depending on behavior and
customer history. Subsequently, define payment
terms an methods (part of credit management)
• Define and conduct dunning based on customer
profiles, define escalation stages and points
• Follow up either by AR or sales department by
addressing overdue items individually
• Agree on netting procedures if business partners
where ever possible
• Manage workforce by prioritizing and planning of
activities
Enabling
30
Optimization
Enabling Technology – SAP FSCM
Search and prioritization tools:
 Identify accounts that require the most attention
 View open invoices, including status, promises to pay
and dispute cases
Customer interaction:
 Document the results of customer contacts
Controlling the Collection of Receivables
 Collection manager can define Collection Strategies
 Define Collection Group
 Assignment of Collection Group and Collection
Specialist
 Monitor Collection of Receivables
Financial Supply Chain Management (FSCM) enables companies to efficiently
manage their financial relations with customers, dealers and vendors.
SAP's Financial Supply Chain Management (FSCM) helps companies to
• Reduce their working capital and float
• Reduces the volume of arrears (Day Sales Outstanding)
• Improve their billing and payment processes
• Consistent company-wide credit policy
• Proactive credit risk management
• Forecast cash levels more accurately
• Improve the process of exception handling (Disputes)
• Track financial documents from order entry through reconciliation
• Optimize the financial supply chain not only within the company but also
with external business partners
31
The efficient management of credits, collections and disputes is critical for a
successful accounts receivable management.
Sales/
Operations
Dept.
Finance
Dept.
32
Acquire
Customers
Sell & Deliver
Manage
Credit
Manage
Receivables
Manage
Collections
Manage
Disputes
Check credit
worthiness
Bill
Execute
dunning
Investigate
disputes
Rate/ Analyse
customers
Post
Receivables
Block sales/
customer
Interact with
customers
Manage
credit limits
Manage
payments
Manage
payments
Create
credit notes
Apply for
credit insurance
Report
Interact with
agencies etc.
Document
results
Process
external data
Document
results
Report
Report
Report
Agenda
Introduction & Objectives
Business Need
Market Analysis
Value Proposition
Financial Supply Chain Management
Overview
Credit Management
Collection Management
Dispute Management
Technical Overview
Assets & Credentials
33
Benefits of FSCM Credit Management compared to FI AR / SD Credit
Management
AP Credit Management (FIN-FSCM-CR) will eventually replace the existing Credit Management
(FI-AR-CR). FI-AR-CR is a purely internal FI credit management application, whereas SAP
Credit Management (FIN-FSCM-CR) provides a comprehensive, integrated, and cross-system
form of credit management.
Benefits
• Supports collection and processing information about the credit exposure of a business
partner from different SAP and non-SAP systems.
• Support of automated updates of credit scoring information's. Consolidation of credit exposure
for the respective business partner enables central credit monitoring
• Companies with high number of business partners can automate their credit management
processes by implementing rules for scoring and rating of their business partners. Based
on rules the application can calculate credit limit proposals.
• Supports the integration of external credit information providers by standard XML
interfaces. Real-time integration with external information provides like D&B ensures accurate
customer scoring as well as request for credit insurance.
•
•
•
34
Increased process efficiency by order-to- cash integration and support of automated credit
decisions and customer data maintenance.
Credit limit checks to various time points during the sales and distribution process (sales
order entry as well as delivery).
Extended reporting functionalities (e.g. Early Warning List).
The Credit Management gives companies the ability to efficiently determine
the risk of losses on receivables by integrating the flow of information
between different departments within the enterprise, as well as through
external third-party services such as credit agencies.
Business Value Add
FSCM Module
 Centralized master data maintenance for Credit
Management
 Integration of external information sources for
credit assessment.
 Management of credit risk by lending in real
time and continuous monitoring
 Reducing Days Sales Outstanding (DSO)
 Reduction of deficit in payments
 Improved customer relationships by
concentrating the on profitable customers
Credit Management Process
Configuration
35
Assigning
Credit Limit
Credit Check
Analysis
Credit Management
Business Steps
 Creditworthiness Allocation
Evaluation of new and existing customers on
the basis of internal and external data.
 Credit limit Allocation
Customized Flexible credit limit calculation
based on company internal rules and internal
and external credit information
 Credit Limit Check
Centralized audit of clients´ total liabilities.
Global Credit Management, integrated in all
existing distribution, logistics and
Accounting system.
 Analysis
Identifying customers with low risk level.
Scorecards for customers DSO
Within the customizing a structure is build, which enables SAP FSCM to use
several input parameter as well as provide information regarding the credit
situation to other SAP Modules for a customer.
Configuration
Internal Customer
Information
External Scoring
Information
Credit Limit
Scoring 50 ≈
Limit 10.000
Internal Scoring
Calculation
Defining
Rules
Blocking Reasons
36
Business Partner
Master Data
Credit Check
Analysis
Organizational Structure
mapping
Risk Classes used in
other SAP Modules
Assigning
Credit Limit
SAP Credit Management
allows you to manage all
credit-relevant master data
about individual business
partners. This includes data
on current credit limit,
externally determined rating
values, risk class, and order
limit. The change history of
each master data field is
tracked to show information
about the time of the change,
the user, and the old versus
the new value. The credit
analyst can also use a
notepad function to enter
additional information about
each business partner
With the division of customers into segments, it is possible to reproduce
complex structures.
Configuration
Assigning
Credit Limit
Credit Check
Analysis
Create Credit Segments
0000
Main Segment
37
Commitment: 40.000
Credit Limit: 100.000
Z5100
Segment Europe
Commitment: 25.000
Credit Limit: 50.000
Z5200
Segment USA
Commitment: 5.000
Credit Limit: 10.000
Z5200
Segment Asia
Commitment: 10.000
Credit Limit: 15.000
Credit Segments are organizational
units used by the Credit
Management.
Credit segments have the advantage
that it is possible to group economic
activities of the company from the
perspective of credit control.
Every Credit Segment has its own credit
limit and commitment.
Credit segments allow to split
customers into different risk classes and
support risk assessment i.e. to meet
Sarbanes-Oxley guidelines.
Free Commitments for all
Segments: 60.000
SAP Credit Management includes a Credit Rules Formula Editor that can be
used to automatically calculate ratings (scoring), and calculate credit limits for
both private customers and business partners
Formula Editor
The credit analyst can extract internal data for a business partner from the legacy systems and use the
company’s own rating rules to determine a score. You can have these score values determined by the
following factors:
- Master data of the business partner (for example, country of origin of the business partner)
- Payment behavior (for example, average days in arrears)
- Dunning history (for example, number of dunning notices in the last 12 months)
- SAP Dispute Management (for example, the number of dispute cases in the last 12 months)
38
An analyst can determine and calculate the credit limit for a business partner
automatically. The predefined rules can be assigned in order to calculate the
internal scoring value.
Configuration
Assigning
Credit Limit
Credit Check
Analysis
Business Partner Master Data
Both the external and internal credit information and calculations are stored in the master data for each
business partner. The system periodically monitors the validity of the data, and the score data can be updated
either manually or automatically. There is also a mass processing function that can be used to recalculate the
rating value or change the rating procedure simultaneously for a large number of business partners.
39
Once the scoring has been calculated for a business partner, the Credit Limit
is automatically assigned in accordance with the
limits defined.
Configuration
40
Assigning
Credit Limit
Credit Check
Analysis
If the credit check has a negative response, the credit limit is exceeded. The
sales order is therefore blocked in the system to prevent further processing
(for example, delivery of goods).
Configuration
Assigning
Credit Limit
Credit Check
Analysis
Sales Rep
Stop Order
Request for Limit increase
Creates Sales Order
Credit Manager
Analyze and
decide
Credit Limit
exceeded !
Send workflow to
Credit Manager
Blocked sales
order
Run credit check
41
The salesperson enters
information such as desired credit
limit, expected sales volume,
reason for increase, notes about
the request, attachments.
The credit limit request will pop
up in the work list of the credit
manager, who will check the
details.
He might approve the request,
send it back because he has
additional questions, forward it to
someone else or reject it.
If the credit limit request is
approved, the credit limit of the
respective business partner is
increased, extending the credit
line to accommodate future
business.
At regular intervals, the credit manager checks for blocked orders and reviews
the customers' credit limits.
Configuration
Alternatively, the credit manager can be informed via workflow
when a customer fails to pass a credit check.
42
Assigning
Credit Limit
Credit Check
Analysis
The reporting functionality of the SAP FSCM Credit Management supports the
Management as well as the Credit Analysts to identify areas for improvement.
Configuration
Assigning
Credit Limit
Credit Check
Credit Management Reporting
There are several standard
reports provides by the standard
SAP FSCM System.
For more detailed or custom
required reports SAP uses Business
Objects and BI. With this tools more
detailed and better visualized
reports can be Created
43
Analysis
By implementing the portal functionality of the FSCM Credit Management it is
possible to use visualized reports separated on a roll definition.
Configuration
44
Assigning
Credit Limit
Credit Check
Analysis
The target of the FSCM credit management functionality is a seamless orderto-cash integration, including external information providers.
Credit
Management
Sales &
Distribution
Sales
Create
Order
Deliver
Order
A/R
Account.
Post
Invoice
Calculate
Credit
Limit
Credit
Manager
Ext. Info
Provider
(e.g. D&B)
Slide No. 45 •
Search
Customer
Payment &
Clearing
Look up
Credit
Report
Assign
CL
Post
Payment
Update Customer Credit
Exposure & Payment Behavior
Credit Management – Features (1)
Credit Information and Business Partner Rating
•
The credit analyst can determine and manage both external and internal credit information for a
business partner. This information is used mainly as input parameters for the Credit Rules Engine
that companies can use to carry out automatic business partner ratings (scoring), making credit
decisions, or calculating credit limits.
•
SAP Credit Management also enables you to include collateral defined for a business partner in the
calculation of the credit exposure, meaning that you can also monitor your own company’s risk.
Processing External Credit Information
•
Requesting external credit information is completely integrated in SAP Credit Management (and
enables companies to request information electronically using appropriate XML interfaces. Since
credit departments often use several external credit information providers, SAP Credit Management
(FIN-FSCM-CR) can save the information provided by such an interface separately according to the
data provider. The XML interface is designed to allow the user to call up information about both
business partners and private customers.
Processing Internal Credit Information (Score)
•
The credit analyst can also extract internal data for a business partner from the legacy systems and
use the company’s own rating rules to determine a score. You can have these score values
determined by the following factors:
•
Master data of the business partner (for example, country of origin of the business partner)
•
Payment behavior (for example, average days in arrears)
•
Dunning history (for example, number of dunning notices in the last 12 months)
•
SAP Dispute Management (for example, the number of dispute cases in the last 12 months)
•
The external and internal credit information determined is stored in the master data of the business
partner. The system monitors the validity of the data determined periodically. The score data can be
updated manually or automatically.
Slide No. 46 •
Credit Management – Features (2)
Score and Credit Limit Calculation and Credit Limit Check (Credit Rules Engine)
•
SAP Credit Management enables you to automate certain processes by applying certain rules.
These rules are controlled by the Credit Rules Engine and hence support the subsequent
automated business processes.
Rating of Business Partners
•
A procedure is assigned to each business partner; each procedure has a formula for calculating
the rating value. You can define the formula to meet your own requirements using various data
that is available as input parameters for the formula. SAP Credit Management (FIN-FSCM-CR)
also has mass processing functions that enable you to recalculate the rating value or change
the rating procedure simultaneously for a large number of business partners.
Determining Credit Limit
•
You can calculate the credit limit of a business partner automatically. Using SAP Workflow, you
can implement an approval procedure where changes to a credit limit can be checked and
approved by a superior.
Rules for Credit Check
•
You can define rules for determining which credit checks are carried out. Here you can choose
whether, in addition to the check for the credit limit utilization, other checks are to be carried out,
for example, the maximum age of the oldest open item, or the maximum number of dunning
transactions of the business partner.
•
You can also define what consequences a negative check result is to have (for example, block
sales order, block customer account, or trigger workflow).
Slide No. 47 •
SAP FSCM Credit Management provides the following standard reports (1 of 3)
FSCM Credit Management Standard Reports
Credit Profile
• Risk Class (0CDM_DS03_Q0001)
The query evaluates the credit profile of business partners, concentrating on the risk class. The focus
is on the distribution of risk classes over the business partner, for example, by country.
• Risk Class/Score Monthly History (0CDM_DS02_Q0002)
This query portrays changes to the risk class and score in SAP Credit Management for each month.
• Credit Limit Monthly History (0CDM_DS02_Q0001)
This query portrays the changes to the credit limit at credit segment level in SAP Credit Management
for each month.
• Risk Class/Score Daily History (0CDM_DS01_Q0002)
This query portrays the changes to the risk class and score in SAP Credit Management for each day
• Credit Limit Daily History (0CDM_DS01_Q0001)
This query portrays the changes to the credit limit at credit segment level in SAP Credit Management
for times and days.
• Profile Analysis: Credit Limit (0CDM_C0_Q0001)
The query evaluates the credit profile of business partners, concentrating on the credit limit. The focus
is on the distribution of the credit limit over the credit segments.
• Profile Analysis: General (0CDM_C0_Q0002)
The query evaluates the credit profile of business partners according to the central characteristics of
SAP Credit Management. The focus is on creating an overall list with all of the important information.
48
SAP FSCM Credit Management provides the following standard reports (2 of 3)
FSCM Credit Management Standard Reports
Credit Risk
• Early Warning List (0CDM_MC0_Q0001)
The individual business partners are listed with their credit exposures. You can use this query to
identify the business partners with a particularly high exposure. You can branch to the liability
individual evaluation via the report-report interface.
• Score from Analysis Process (0CDM_I0_Q0001)
The query represents the score calculated by the analysis process and its influencing factors for each
business partner.
• Liability – Individual Evaluation (0CDM_C2_Q0001)
The query represents the composition of the liability of business partners broken down by different
liability categories.
• Portfolio (0CDM_MC0_Q0003)
The query portrays the credit exposure, aggregated by risk class.
• FIAR: Payment Behavior Payment History (0FIAR_O10_Q1001)
The query represents the payment behavior of the customers.
• Credit Risk Analysis Credit Exposure List (0CDM_MC0_Q0004)
The query represents the credit limit, the credit exposure, and the credit limit utilization.
• Credit Exposure by Country (0CDM_MC0_Q0002)
The query portrays the credit exposure of the business partners, aggregated by country
49
SAP FSCM Credit Management provides the following standard reports (3 of 3)
FSCM Credit Management Standard Reports
New Rating Analysis and Simulation Analysis
• Overview of Collective Processing Runs (0CDM_EXTR_Q0001)
This query provides an overview of all collective processing run extracts for the new rating or
simulation of credit profiles of business partners in SAP Credit Management that are in the SAP
Business Information Warehouse (BW). The query is used as a selection list for branching to the
queries of the new rating analysis/simulation analysis.
• New Rating Analysis and Simulation Analysis (0CDM_DS00_Q0001)
The query analyzes collective processing runs for simulation or new ratings as part of the
determination of credit profiles of business partners in SAP Credit Management. It provides an overall
view of the changes to the credit profiles that result from such collective processing runs.
• New Rating Analysis and Simulation Analysis: Risk Class (0CDM_C1_Q0001)
The query analyzes collective processing runs for simulation or new ratings as part of the
determination of credit profiles of business partners in SAP Credit Management. The focus is on
changes to the risk classes resulting from the simulation or new rating.
50
Organizational structure Credit Management
MASTER DATA
Customer Credit Group
Formulas
Formulas
Formulas
Formulas
Risk
Class
0000
Main Segment
Info
Types
Z5100
Segment Europe
Z5200
Segment USA
Z5200
Segment Asia
Business Partner
Rule set for
Scoring
and Credit
Calculation
Z210 Credit Control Area: North
Pacific
Z320 Credit Control Area: South
Pacific
Company Codes
Company Codes
Company Codes
Checking
Rules
FI-AR / SD ..
51
Agenda
Introduction & Objectives
Business Need
Market Analysis
Value Proposition
Financial Supply Chain Management
Overview
Credit Management
Collection Management
Dispute Management
Technical Overview
Implementation Approach
Assets & Credentials
52
Collections Scenario
„Customer is in delay with payment “
Business value add
FSCM Module
 Accounts receivable can be managed
effectively
 Reduction of DSO
 Acceleration through standardized
communication
 The relationship with the customer should not
be affected in a negative way
Collections Management Process
Define
Collection
Strategies
53
Distribute
Worklist
Prepare
Telephone
Call
Collection Management
Business Steps
Call
Customer
and note
Information
 Customer is in delay with payments for several
days
 The case appears on a collection agent's
Worklist
 Depending on the client conversation next
steps will be performed
Collections Management –
Define Collections Strategy
Define
Collection
Strategies
Distribute
Worklist
Prepare
Telephon
e Call
Call
Customer
and note
Informatio
n
Assigned to Collection
Group Europe
Valuation
(Prioritization on Worklist)
Overdue Periods
(Displayed on Worklist)
Collection Rules
(Selection Criteria)
54
Collections Management –
Distribute Worklist
Define
Collection
Strategies
Distribute
Worklist
Prepare
Telephon
e Call
Call
Customer
and note
Informatio
n
Worklist Distribution
Prioritization of Worklist
based on Collections Strategy
Worklist items are
distributed to responsible
Collections Specialist
Structured Worklist to be processed by a Collections Specialist
55
Collections Management –
Prepare Telephone Call
Define
Collection
Strategies
Distribute
Worklist
Prepare
Telephon
e Call
Call
Customer
and note
Informatio
n
Telephone Call Preparation
Contact is based on holistic
information on the client.
Payment
History
56
Promise to pay Related Dispute
Cases
tracking
Contact
History
Resubmission
tracking
Collections Management –
Call Customer and note Information
57
Define
Collection
Strategies
Distribute
Worklist
Prepare
Telephon
e Call
Call
Customer
and note
Informatio
n
Collection Management proactively handles and manages inventory of
receivables
Collection Management,
• SAP Collections Management supports
– Evaluation, identification,
stratification and prioritization of
accounts
• From a risk management
perspective
• From a customer relationship
perspective
– Proactive collection of receivables
– Payment reminders
– Promise to pay arrangements
– Follow ups
• Process optimization and
automation for high
volumes of open items
• Workforce Management
58
‘Promises to Pay’ in the system
Monitoring of payment received and the promise to
pay kept through the Integration with AR
Source: SAP
Collections Management: 3 major processes
SAP Collections Management supports an active receivables management.
The receivables processing is divided into the following three processes:
Collecting Receivables
The collection specialist performs this process. It covers the following process steps:
• Call Up Worklist
• Prepare Customer Contact
• Contact Customer
Controlling the Collection of Receivables
The collection manager is responsible for ensuring that the receivables are collected according to the
financial targets of the company. The process covers the following process steps:
• Define Collection Strategies
• Process Collection Groups
• Change Assignment of Collection Group and Collection Specialist to Customer
• Monitor Collection of Receivables
Data Synchronization and Creation of Worklists
This process is a prerequisite for collecting receivables. The process steps run mostly automatically
and are monitored by an administrator. The process covers the following process steps:
• Replicate customer master data
• Transfer data from Accounts Receivable (FI-AR) to Collections Management
• Create worklists
• Monitor processes
Slide No. 59 •
The collection specialist receives a work list with all open items assigned to
him. To contact the customer he can navigate to a detailed view.
Navigation in the collection management
60
A detailed view per customer includes the entire customer history and allows
the documentation of all collection activities.
Detailed collection view per customer
View invoice history
of selected invoice
61
View promises to pay per
selected invoice
View disputed case(s)
per selected invoice
SAP collection management provides detailed reporting to measure the
productivity of the collection process.
Main key figures
•
•
•
•
•
•
•
Number of work list items and percentage of completion
Amount to be collected and processed
Number of customer contacts and analysis
DSO
Number of promises to pay
Overdue
Etc.
The key figures can be analyzed by
• Collection specialist
• Collection group
• Collection segment
• Collection strategy
• Etc.
62
The target of the SAP collection management is to establish a customer
centric receivables management.
Targets
63
•
Increase share of collected receivables
• Reduce DSO
• Avoid write-offs
• Increase payments on time
•
Decrease cost of cash collection
•
Improve Customer Relationship Management
• Retain valuable customers and convert difficult customers by providing the right
interaction in delicate scenarios
• Provide a complete picture of customer history
• Increase customer satisfaction
Collection Management - Collection of Receivables
64
64
Collection Management - Control Collection of Receivables
65
65
Functionality Supporting Process the “Collection of Receivables”
66
66
SAP FSCM Collections Management provides the
following standard reports (1 of 4)
FSCM Collections Management Standard Reports
Analysis of worklists
• Degree of Worklist Processing (0CLM_MC1_Q0001)
This query shows you the number of worklist items that were assigned to a collection specialist, a
collection group, or a collection segment. It also shows the percentage of worklist items completed per
priority.
• Amount Processed per Day (0CLM_MC1_Q0002)
This query shows the percentage of the amount to be collected that was actually processed during a
day. As processing, the system valuates when customers have given promises to pays for invoices or
if they have requested that the collection specialist resolves disputed invoices.
Analysis of Customer Contacts
• Contact Analysis (0CLM_MC2_Q0001)
This query gives you an overview of all customer contacts carried out by a collection group within a
specific period. You can navigate to the level of a collection specialist or a collection strategy.
• Collection Activity Analysis (0CLM_MC2_Q0002)
This query shows and overview of all contact activities that your collection specialists have carried out
within a specific period. A collection manager can use this query to evaluate the following data per
collection group, collection segment, and collection specialist.
67
SAP FSCM Collections Management provides the
following standard reports (2 of 4)
FSCM Collections Management Standard Reports
Analysis of Receivables in Connection with SAP Collections Management
• Due Date Analysis (0CLM_IS01_Q0001)
This query gives an overview of the payment behavior of a customer within a specific period. It shows
the open items from Accounts Receivable Accounting per organizational unit of Collections
Management and per company code. The due date analysis displayed is based on the due date of the
open receivables.
• Receivables Ageing (0CLM_IS03_Q0001)
This query analyzes the age of the open receivables per organizational unit of Collections
Management and per company code. It combines data from Collections Management with data from
Accounts Receivable Accounting. The receivables grid displayed is based on the document date of the
open invoices.
Due Date Analysis (incl. Head Office - Branch Office Relationships)
• Due Date Grid (incl. Head Office - Branch Office Relationship) (0CLM_IS04_Q0001)
This query gives an overview of the payment behavior of a customer within a specific period. It shows
the open items from Accounts Receivable Accounting per organizational unit of Collections
Management and per company code. The due date analysis displayed is based on the due date of the
open receivables.*
*This query is only available if you have imported SAP Enhancement Package 4 for SAP ERP 6.0.
68
SAP FSCM Collections Management provides the
following standard reports (3 of 4)
FSCM Collections Management Standard Reports
Analysis of Invoices and Promises to Pay
• Details of Promises to Pay (0CLM_IS02_Q0001)
This query gives an overview of the results of promises to pay of a customer within a specific period. In
addition to the key figures for the promise to pay, you can also use this query to evaluation the
following data for the invoice, for example, the open item, the due date for net payment, and the
document date.
• Statistics of Promises to Pay (0CLM_IS02_Q0002)
This query shows an overview of invoices whose due date is within a specific period. These are
invoices for which there is a “valid promise to pay”. The system valuates a promise to pay that has not
been voided or withdrawn as a “valid promise to pay”. With this query you can follow the payment
behavior of a customer in connection with his promises to pay. You can also use the query to assess
the efficiency of promises to pay as a method for collecting open receivables for specific customers.
• Receivables Ageing (0CLM_IS03_Q0001)
This query analyzes the age of the open receivables per organizational unit of Collections
Management and per company code. It combines data from Collections Management with data from
Accounts Receivable Accounting. The receivables grid displayed is based on the document date of the
open invoices.
69
SAP FSCM Collections Management provides the
following standard reports (4 of 4)
FSCM Collections Management Standard Reports
Analysis of Invoices and Promises to Pay (incl. Head Office - Branch Office Relationships)
• Details of Promises to Pay (incl. Head Office - Branch Office Relationships) (0CLM_IS05_Q0001)
This query gives an overview of the results of promises to pay of a customer within a specific period. In
addition to the key figures for the promise to pay, you can also use this query to evaluate the following
data for the invoice, for example, the open item, the due date for net payment, and the document date.
Since the invoice amount, the open amount, and the amount promised cannot be added together, you
do not see totals in the evaluation.*
• Statistics for Promises to Pay (incl. Head Office - Branch Office Relationship)
(0CLM_IS05_Q0002)
This query shows an overview of invoices whose due date is within a specific period. These are
invoices for which there is a “valid promise to pay”. The system valuates a promise to pay that has not
been voided or withdrawn as a “valid promise to pay”. With this query you can follow the payment
behavior of a customer in connection with his promises to pay. You can also use the query to assess
the efficiency of promises to pay as a method for collecting open receivables for specific customers.*
• Receivables Ageing (incl. Head Office - Branch Office Relationship) (0CLM_IS06_Q0001)
This query analyzes the age of the open receivables per organizational unit of Collections
Management and per company code. It combines data from Collections Management with data from
Accounts Receivable Accounting. The receivables grid displayed is based on the document date of the
open invoices.*
*This query is only available if you have imported SAP Enhancement Package 4 for SAP ERP 6.0.
70
Agenda
Introduction & Objectives
Business Need
Market Analysis
Value Proposition
Financial Supply Chain Management
Overview
Credit Management
Collection Management
Dispute Management
Technical Overview
Assets & Credentials
71
Dispute Management targets smooth and quick resolution of
customer claims to accelerate the order-to-cash cycle
Dispute Management,
•
SAP Dispute Management
provides functions for
processing receivablesrelated dispute cases
•
It supplements the following
process chains in the stage
between invoice and payment
if there are discrepancies with
the customer:
FSCM is integrated with the AR e.g. Transaction FBL5N
Sales Order – Delivery –
Invoice – Payment
Contract – Service
Provision – Invoice –
Payment
72
Source: SAP
Dispute Scenario –
“The supply is partly damaged. The invoice is not paid fully.”
Business Value Add
FSCM Module
 Cost reduction for clarification of dispute cases
 Analyze and verify reasons of disputes
 Involving all necessary Roles through
departments
 Enhance customer satisfaction through the
clarification of disputes in time
Dispute Management Process
Dispute Management
Business Steps
 The delivered products contain defective items
 The customer criticizes this delivery, and pays
only 90% of the invoice
 Managing of Dispute Case
Identify the
next dispute
case
73
Work on a
dispute
Attach
information
Close the
dispute
Dispute Management –
Identify the next dispute case
SAP FI: Customer line item display (FBL5N)
Identify the
next
dispute
case
Work on a
dispute
Attach
information
Close the
dispute
SAP FI: Clearing of open items (FBL5N)
SAP FSCM: Collections Management
Identification of Dispute Case
You can create Dispute Cases
from various transactions and
transfer relevant data and linked
objects directly to Dispute
Management.
74
Dispute Management –
Work on a dispute
Identify the
next
dispute
case
Work on a
dispute
Dispute Case attributes
Dispute Case change history
Dispute Case links to SAP FI
Dispute Case notes for next processor
75
Attach
information
Close the
dispute
Dispute Management –
Attach information
Identify the
next
dispute
case
Work on a
dispute
Attach
information
Close the
dispute
Add open items
Update
Dispute Case
attributes
Add notes
(for next processor)
Add objects (i.e. letter)
76
Dispute Management –
Close the dispute
Identify the
next
dispute
case
Work on a
dispute
Result of Dispute Case Inspection
Customer Credit Memo
Collect unfounded Disputes
Close Dispute Case
77
Write off residuals
Attach
information
Close the
dispute
Dispute Management
If you use SAP R/3 4.6C, SAP R/3 Enterprise 4.70, or mySAP ERP 2004 for
your Accounts Receivable, accounting and dispute case processing are in
different systems. If you use SAP ERP 6.0 or a later release for your Accounts
Receivable, then you can run accounting and dispute case processing in one
system or in different systems.
•Structuring and resolving customer claims about receivables
•Provides functions for processing receivables-related dispute cases
•It supplements the following process chains in the stage between invoice and
payment if there are discrepancies with the customer:
• Sales Order – Delivery – Invoice – Payment
• Contract – Service Provision – Invoice – Payment
•The drill-down capabilities allow users to view information from other SAP FSCM
applications – such as SAP Biller Direct, SAP Credit Management, and SAP
Collections Management
78
Dispute Management
Main Features
• In the case of an underpayment, you can create a dispute case in the system. Here
you can collect all of the data and information required for processing the case.
This is data that already exists in accounting and new data that you enter for a
dispute case.
• During processing of a dispute case, you can use the functions for the workflow
and for creating correspondence.
• You can create a dispute case from the accounting transactions where you
determine the underpayment. For example, postprocessing of an account
statement or analysis of overdue open items. When you create the dispute case,
the system copies information from the accounting document (for example,
disputed amount) into the dispute case automatically.
• You can also create a dispute case in different accounting transactions and enter
the customer-disputed amount as soon as a customer has notified a future
payment deduction.
• However, you can also create a dispute case independently of the transactions in
accounting in dispute case processing.
79
Dispute management





Objectives of dispute management
Company wide and transparent process
Clear and direct communication to reduce efforts of resolving dispute cases (process costs)
Active route cause processing, to reduce same dispute cases in future
Reach customer satisfaction due to quick solving processing
Reduce DSO
KPI’s from SAP
80
Data in minutes/ dispute case
Without special support
FSCM Dispute Management
Identify next dispute case
2,5 min
1 min
Process dispute case
15 min
15 min
Documentation/ forwarding of new
information and documents
3 min
1 min
Establish correspondence
5 min
1 min
Close dispute case
2 min
1 min
Sum
27,5 min
19 min
Amount of solved cases/clerk/ day
Ca. 15
Ca. 22
80
Dispute Management is an integral, customer facing step in the Customer
Revenue Cycle
Customer Revenue Cycle
Prospect*
Process
Order
Grant
Credit*
Activate*
Transact*
Bill*
Customer Revenue Cycle
Manage
Exposure
Apply
Payments
Handle
Disputes/
Deductions*
Collect*
* Denotes largely customer facing processes
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Receivables-related dispute cases arise if customers deduct an amount form
the invoiced amount (short-pay) that exceeds a corporate tolerance level
Dispute Causes
Disputed invoices can indicate issues in the customer relationship due to:
 Invoice Errors
 Pricing Errors
 Logistical Problems (late production and delivery)
 Damaged Goods
 Promotion Miscommunication
 Customer Incentives and Concessions
Dispute resolution can be a costly and highly manual process.
As dispute volumes increase, operating expenses dramatically increase as well.
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SAP Dispute Management streamlines procedures and facilitates an
understanding of dispute root causes while formalizing and automating the
process of communication, investigation, collection, escalation, and reporting
Capabilities – SAP Dispute Management
Escalate
Resolve
Report &
Analyze
Follow-up
SAP Dispute
Approach
Prioritize &
Research
Management
Prevent
Update
Identify Deduction
Accounts Receivable System
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The disputed item processes can be triggered by a customer debit note as well
as a short payment.
Example: Create Dispute Case for Incoming Payment
Process incoming
payments
yes
Underpayment?
Assign invoice
and post residual item
Open dispute case
for residual item
no
Get information from
customer responsible
(e.g. account manager)
Clear invoice
Is dispute
reason
known?
no
yes
Clear residual
item and close
dispute case
Create credit
memo
yes
Dispute
justified?
Investigate
dispute
Assign reason and link
related documents
(fax, letter..)
no
Write off and
close dispute case
84
yes
Write
off dispute?
no
Hand over to
collections
Dispute Creation
Residuals can be generated in
several ways:
Automated creation through electronic
bank payment files, lockbox files, check
deposit transactions, and manual payment
processing
1
Clicking the “Create Dispute Case” button
when a document is displayed
Overdue item review screening
Manual creation during payment posting
Upon creation, all pertinent data is linked to the residual, such as customer name,
invoice number and amount, billing documents, etc.
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Dispute Case Updates and Tracking
Dispute cases can be updated utilizing
numerous automated or manual steps:
Free-form text with typical name/time/note
type/text history
Incoming payments
Credit/debit memos with reference
Manual write-offs
Reverse documents
Reset clearing document
Responsibility Transfer
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Other Features
Additional functionalities include:
 Complete detailed dispute history of
manual and automated steps is retained
 Ability to enter any relative documents
(invoices, remittances, customer
correspondences, POD’s, etc) as
attachments
 Automated customer communications
(SMS, email, fax, letter)
 Internal escalation process
 Real-time updates within Dispute
Management and integrated SAP
modules
 Customer entry of dispute information
via client portal
 Sophisticated reporting module
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SAP Workflow Integration: Example
• Michele reads email
2
• Accesses workflow mailbox and executes
work item
• Confirms correct price, but needs approval
• Assigns Tom as next processor
• Email sent to Tom
Pricing Coordinator - Michele
1
• Sue assigns Michele as
next processor
Account Manager (Tom)
• Requests Michele to
verify shortpay due to
price
• Dispute case is created
• Email sent to Michele
4
3
Dispute Manager (Sue)
• Sue monitors dispute
from end-to-end
• Accesses workflow inbox
and approves price
dispute
• Approves credit memo to
customer
• Assigns Beth as next
processor
• Beth reads email
• Accesses workflow inbox
and posts credit memo
• Closes dispute case and
returns case to Sue
88
• Tom reads email
AR Clerk (Beth)
88
Optimizing Order-to-Cash: Short payment
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Optimizing Order-to-Cash: Logging and resolution
90
90
Optimizing Order-to-Cash: Workflow
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The disputed item processes can be triggered by a customer debit note as
well as a short payment
Example: Create Dispute Case for Incoming Payment
Process incoming
payments
yes
Underpayment?
Assign invoice
and post residual item
Open dispute case
for residual item
no
Get information from
customer responsible
(e.g. account manager)
Clear invoice
Is dispute
reason
known?
no
yes
Clear residual
item and close
dispute case
Create credit
memo
yes
Dispute
justified?
Investigate
dispute
Assign reason and link
related documents
(fax, letter..)
no
Write off and
close dispute case
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yes
Write
off dispute?
no
Hand over to
collections
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The creation and management of dispute cases is integrated in the line item
display.
Create and display dispute case
Integrate dispute information
in line item layout
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The management of dispute cases is highly integrated in the SAP collections
management.
Process of dispute item follow-up
•
Collection specialist can create a dispute case for one or several
invoices
–
System offers all open items of selected invoices for selection of
disputed items
– Collection specialist selects disputed items
– Collection specialist enters all required information and saves dispute
case
– Dispute resolution process can start immediately
•
Collection specialist can collect disputed amount for dispute cases
where the status is “to be collected”
– If the outcome of dispute resolution is that the dispute was not justified,
the dispute case gets the status “to be collected”
– Status “to be collected” is used in collection rule; customers with
dispute cases of this status will appear on the work list
– Status of dispute case is displayed per invoice
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The target of the SAP dispute management is to enhance the customer
profitability and reduce sales outstanding (DSO).
Benefits & Targets
Benefits:
• Improvement of the process by a totally new SAP functionality.
• Automatic assignment and forwarding of cases to the responsible
credit manager.
• Integration of communication with the customer (e.g. sending of
dunning letters).
Targets:
 Identify issues and disputes earlier in the payment cycle.
 Track and monitor reasons that drive DSO.
 Reduce the frequency of deductions and underpayments
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SAP FSCM Dispute Management provides the
following standard reports
FSCM Dispute Management Standard Reports
FSCM Dispute Management Standard Reports
• Dispute Cases: Time-Based Sorting with Document Reference (0DPM_I0_Q0)
This query shows the time-based sorting of dispute cases by splitting the values into five blocks. On
the selection screen you define the size of these blocks using variables. You then see the current
disputed amounts for each dispute case, split into these blocks.
• Dispute Cases: Values and Life (0DPM_DCAS_Q0)
This query determines the amounts and the life of dispute cases. It selects the original disputed
amount and the current disputed amount for a case. It calculates the life based on the following data:
- Closed cases: Time between date case was created and date case was closed.
- Cases not yet closed: Time between date case was created and key date for the query.
• Dispute Cases: Time-Based Sorting (0DPM_DCAS_Q1)
This query shows the time-based sorting of dispute cases by splitting the values into five blocks. On
the selection screen you define the size of these blocks using variables. You then see the current
disputed amounts for each dispute case, split into these blocks.
• Dispute Cases: History (0DPM_O0_Q0)
This query shows the progress of dispute cases during their life.
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Agenda
Introduction & Objectives
Business Need
Market Analysis
Value Proposition
Financial Supply Chain Management
Overview
Credit Management
Collection Management
Dispute Management
Technical Overview
Assets & Credentials
97
SAP FSCM - Deployment Scenarios and Requirements
General requirements for implementing SAP FSCM
 SAP FSCM can be set up in 2 different ways
 One System Scenario with SAP ECC 6.0
 Two Systems Scenario with SAP ECC 6.0, SAP ERP 2004, SAP R/3 4.7, SAP R/3 4.6c
 External Systems (e.g. for credit scoring information from third parties) can be integrated via an XML
interface
 SAP FSCM cannot be integrated with ERP systems other than SAP
 The different SAP enhancement packages for SAP ERP also include developments for SAP FSCM.
Nevertheless SAP FSCM also runs stabile without any enhancement packages
Requirements for
Credit Management
Requirements for
Dispute Management
Requirements for
Collections Management
 SAP Web Application Server
 SAP Web Application Server
 SAP Exchange Infrastructure
 SAP Exchange Infrastructure
 Should run on the same
system as dispute
management
 SAP FI-AR (min. 4.6c) or
 SAP FI-AR (min. 4.6c)
 SAP FI-CA (4.72)
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Matrix - Enhancement Packages for SAP - FSCM
99
Agenda
Introduction & Objectives
Business Need
Market Analysis
Value Proposition
Financial Supply Chain Management
Overview
Credit Management
Collection Management
Dispute Management
Technical Overview
Assets & Credentials
100
Accenture delivers tools and assets for all project phases.
Asset / tools overview
Cash flow impact
& ongoing cost
savings calculator
SAP FSCM Toolkit
Finance
Diagnostic Tool
Accenture
Business Process
Repository
Accenture Order to
Cash (OTC)
Leading practice
101
• Diagnostic tool to discover cash flow impacts / ongoing cost savings due
to reduced open receivables
• Calculate different scenarios
• SAP FSCM toolkit contains preconfigured documents / guides and / or
templates for a SAP FSCM implementation:
• Workshop documentation to collect requirements & functional design
• Process descriptions
• Configuration Rationales, Functional and technical Specs
• Testing, Training & support material
• Excel-based diagnostic tool
• Covers Mastery Scales, Leading Practices and benchmark analysis
for OTC, P2P and other
• Provides standard business processes in the areas of Finance, CRM, HR
and SCM.
• Contains Best Practices for an efficient and effective (re)design of business
processes
• Illustrates the relationship from one process to previous and subsequent
processes (Inputs, Outputs, Overlaps)
• Summary Description: Order to Cash is the end-to-end process that
addresses all aspects of collecting cash - from initial order receipt and credit
authorization to collections and revenue assurance activities.
• Ideally this process should be performed in a shared service or BPO
environment, by a dedicated OTC team, located in a low cost location.
Accenture - Order to Cash –
SAP Financial Supply Chain Management Toolkit
Accenture FSCM Toolkit
includes
• Design documents
• To-be-process flows
• Configuration
rationales
• Functional Specs
• Technical Specs/
RICEFs
• Test Cases / scripts
• Training documents
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Accenture IDES FSCM Prototype
FSCM Prototype Key Facts
• The Accenture FSCM Team has
customized a SAP FSCM Prototype with
the modules:
• Credit Management
• Collections Management
• Dispute Management
…that enables Client Showcases and
internal Accenture Trainings.
• The Prototype is technically based on a
SAP ECC 6.0 IDES system without any
enhancement packages.
• If you have further questions regarding the
prototype please contact:
 Ansgar Niestradt
 Oliver Straberger
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Siemens asked Accenture to build a prototype for the SAP FSCM sub-modules
‘Collections Management‘ and ‘Dispute Management‘
SAP FSCM Dispute Management and Collections Management
Client Overview
How Accenture Helped
Employing more than 49,000 people worldwide and operating in
over 130 countries, Siemens Healthcare as one of the three
Siemens sectors reported in fiscal 2008 (September 30) sales
of EUR 11.1 billion, orders of EUR 11.8 billion and a group profit
of EUR 1.2 billion.
With the upgrade of the SAP System to ECC 6.0 the FSCM
modules for an active receivables management are now
available. Regarding this background Accenture was asked to
build a prototype for the sub-modules ‘Collections Management‘
and ‘Dispute Management‘ in order to provide a better
understanding of the new SAP FSCM functionalities.
Its extensive portfolio covers all fields of the healthcare industry,
from imaging systems for diagnosis and therapy, to laboratory
diagnostics, to audiology, to modern information technology,
service and maintenance offerings, as well as consulting
services in the area of process optimization or hospital planning.
In a fist step the project goal was to customize the standard
FSCM functionalities without any enhancements and determine
whether the requirements of the IT-, Sales- and Accounting
department can be well supported with this IT solution.
The results of this analysis provide the decision basis regarding
the replacement of the existing SAP individual solution by the
standard SAP FSCM modules.
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Business Challenge
High Performance Delivered
Through acquisitions Siemens Healthcare extended its lead in
clinical IT, especially in hospital information systems, and also
strengthened their footprint in the field of diagnostics and
audiology technology. As a consequence of these acquisitions
Siemens Healthcare now faces the challenge to become an
integrated company using integrated information technology
and common key support functions.
• Provision of a holistic documentation of the SAP FSCM
customizing with specific test scenarios
• Operational value proposition regarding the implementation
of the standard SAP FSCM modules have been identified
• Time schedule of the implementation has been provided
• Siemens HC has perceived Accenture and its assets as a
value adding partner in the area of SAP FSCM