You are on page 1of 46

1

Advanced SAP Collections


Management - Best Practices
Copyright 2011, HighRadius Corporation. All rights reserved.

Presented By:
Sashi Narahari
August 15, 2011
CRF SAP User Group
2
Agenda
FSCM Overview
Collection Management Overview
Collections Best Practices
3
FSCM Modules At-A-Glance
4
Receivables
Management
5
SAP FSCM Collections Management
Overview
6
SAP Collections Management
Overview
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


Collection Supervisor Collection Specialist
7
Collections Management: Collection
Specialist
8
Text

Double-Click to open
customer work item
Collections Management: Collectors Worklist
9
Text

Review open items to
be collected
Collections Management: Invoice Summary
Default Customer
Contact readily
available
10
Text

Review payment
history
Collections Management: Payment History
11
Text

Review open and
closed dispute cases
Collections Management: Dispute Cases
12
Text

Record promise for
payment or customer
contact at the invoice
level
Collections Management: Promise-to-Pay
13
Text

Promise for payment has
been recorded
Collections Management: Promise-to-Pay
14
Text

Record customer contact
resulting in completion
of the work item
Collections Management: Customer Contact
15
Text

Work item
completed
Collections Management: Completed Item
Collections Management: Resubmission
Create a Follow-up
reminder on
specific invoices
Collections Management: Resubmission
Summary of all
Follow-Ups
Collections Management: Notes
Select invoice and
enter invoice
specific notes
Collections Management: Notes
Summary of all
Notes
Collections Management: Correspondence
Several
Correspondence
Options available
Email contact
notes and log
directly from SAP
to customer
Collections Management: Correspondence
Select a set of
invoices
Collections Management: Correspondence
Select the specific
type of
correspondence or
letter to send
23
Collections Management: Collection
Manager
24
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
25
Basic
Rules
Collection
Rules
Collection
Strategy
Collection Strategy for
Higher Risk Customers
High to Medium Risk and
greater than 80% Credit
Limit Utilization
Valuation: 15 points
Risk Category
Credit Limit Utilization
Past Due Invoices Over 15
days Past Due & Dunned
One or More Times
Valuation: 20 points
Dunning Level
Documents by posting key
and document type
Individual Items Overdue
Since N Days
Resubmission Due for the
Customer
Valuation: 5 points
Resubmission Due for the
Customer
Collections Strategy Definition
26
Text

Collection Rules
within the Collection
Strategy
Collections Management: Collection Strategy
27
Text

Conditions within a
Collection Rule
Collections Management: Collection Strategy
28
Text

Automatic
Prioritization of
Customer Work Items
Collections Management: Collection Strategy
29
Text

Priority is determined by
the valuation of each
collection rule
Collections Management: Collection Strategy
30
Collections Best Practices
31
Collections Best Practices
Customer Segmentation
Automated Correspondence
Invoice-Level Collections
Collect on Clean Receivables
Blocked Order Based Collections
32
Customer Segmentation
By Size
Large Accounts
Small & Medium Businesses (SMB)
By Payment Behavior (Days Beyond Terms)
Fast Pay, Medium Pay, Slow Pay
By Risk Category
High, Medium, Low
Sales Volume
High, Medium, Low


33
Automated Correspondence
for SMB
Gentle Reminders, Past-Due Notices, Demand
Letters (Standard SAP A/R Dunning)
For most SMB Customers
Except for Fast Pay or High Sales Volume
Include Invoice Copies, POD Copies for 2
nd

and/or 3
rd
level Dunning (Requires
Enhancements to FSCM)

34
Slow or Med Pay SMB
Collection Strategy
35
Advanced Correspondence
36
Advanced Correspondence Automation
Selection criteria: type of
letter, attachments and
method of communication
37
Advanced Correspondence Automation
Highlight AR line
items to be included
in correspondence
38
Advanced Correspondence Automation
Cover Letter
39
Advanced Correspondence Automation
Invoice Attachments
40
Advanced Correspondence Automation
POD Attachment #1
41
Advanced Correspondence Automation
PODs attached to the
Invoice AR line item
42
Invoice-Level Collections
Dunning might not work for Large Customers
Most large business have automated AP
systems and are not paying because there is a
issue with the invoice
Invoice-Level Collections similar to Disputes
First perform root cause analysis based on
history what the reasons for issues are
EDI Transmissions, Disputes (Pricing Errors,
Shortages etc)
Create Dispute Case for problem invoices
43
Create Disputes for Invoices
44
Total
Amount
Past Due
Items with
Open
Promise to
Pay
Dispute
Cases not in
a To Be
Collected
Status
Items with
a Current
Dunning
Notice
Items
Arranged
for Payment
Amount To
Be
Collected
Total Amount Past Due Total of all overdue items in FI-Accounts Receivable
Items with Open Promise to Pay If there items with an open promise to pay, or items with
a future payment promised on date, these items will be excluded from the To Be Collected
amount
Dispute Cases not in a To Be Collected Status All open dispute cases, which have not
been updated with a status that is mapped to the To Be Collected in collections
management, will be excluded from the To Be Collected amount
Items with a Current Dunning Notice If a line item in FI-Accounts Receivable has recently
been dunned, this amount will be excluded from the To Be Collected amount.
Items Arranged for Payment All amounts that are (a) collected with a debit memo
procedure or (b) where the account statement balance contains a payment notification from
the bank will be excluded from the To Be Collected amount

BAdI: Amount To Be Collected: Can be used to enhance the to be collected amount
calculation
To Be Collected Amount Calculation
Clean Receivables
45
Use Collectable Amount in
Strategies
http://www.highradius.com