Founded by a team with an extensive background in SAP and financials process
... Provide Accelerators to SAP FSCM modules (to fill SAP gaps). • Provide ...
SAP Financial Supply chain Management (FSCM) Solutions Presented by
Vikram Gollakota 1
Copyright © 2011, HighRadius Corporation. All rights reserved.
About HighRadius
• Founded by a team with an extensive background in SAP and financials process automation • Specialize in Cash Application, Collections, Deductions and Credit Management • Provide Accelerators to SAP FSCM modules (to fill SAP gaps) • Provide Hosted Software-as-a-Service (SaaS) Solutions
• Ranked among fastest growing technology companies in Houston in 2008, 2009 & 2010 2
Partial List of Customers
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HighRadius Product Lines
SAP FSCM Accelerators
ReceivablesRadius SaaS Products
Dispute Resolution Accelerator
POD & Claims Automation
Credit Memo Approval
Deductions Management
Credit Debit Matching Engine
Trade Promotions Settlement
FSCM Correspondence Automation
Cash Application Automation
Cash Collections Forecasting
Document Management
Credit Decision Accelerator for SAP
Credit Data Aggregation
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FSCM Modules At-A-Glance
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Receivables Management
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SAP Credit Management
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FSCM Credit Management – Overview
• New Module from SAP as a part of FSCM Suite. • Latest version is FSCM Credit Management 6.0 Enhancement package 4. • This is independent module and not an upgrade for SD Credit Management (FD32). • According to SAP this will eventually replace SD Credit Management.
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FSCM Credit Management vs. FI-AR Credit Management SAP
Description
Credit Checking. Integrate SAP and Non SAP Systems for a centralized Credit Management. Integrate external credit rating agency information.
Credit Sore and Limit Calculations. Workflow. Decoupled Risk Assessment to Credit Checking. Standard BI content and Portal Access for reporting and analysis 9
FSCM Credit Management
FI-AR Credit Management
SAP Credit Management Business Partner Overview
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A Business Partner can have many roles For example (Credit Mgmt, Collections Mgmt etc)
Business Partner Master Data (UKM_BP) similar to Customer Master Data (FD01). If Customer Master exists in FD01, Auto synchronization process available for BP to be created / updated upon Customer creation / change
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Various Identification Numbers of the customer like DUNS number, Legacy Customer Number, Ticker Symbol etc can be configured and stored here.
Tax Number and other legal identifications of the customer can be stored here. VAT Number, US Tax Identification Number etc
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Scoring Rule computes Credit Score / Credit Limit
Risk Class is derived from the credit Score above
Check Rule defines Credit Checking Rules. For example Dynamic Credit Check, Oldest open item etc
Integrate External Agency Rating information. For example D&B Cap, D&B Financial Strength, Moody’s etc 13
Info Categories are available to store additional information like Credit Insurance, Negative Events etc
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Credit Segment = Credit Control Area Credit segments are required for calculating the credit limit and enable you to carry out detailed checks at business partner level.
Credit Limit / Exposure and Utilization %. Can take you to a detailed view
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Double click to get to the transaction details
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Double click to get to the transaction details
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Additional Information which will effect the credit decision an be added here. For example Security, Seasonal increase in limit etc
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Payment Behavior key figures are fields that summarize the customers payment history
Information Available on this Screen:
1. Dunning Data 2. Oldest Open Item Data 3. Last Payment Data 4. Key Figures (DSO, Sales of the last 12 months, Highest Sales in last 12 months etc)
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A business partner relationship represents the business connection between two business partners and is characterized by the business partner relationship category.
Some of the Relationship Categories that are important for Credit Management are 1. Higher-level Credit Management Account of 2. Lower-level Credit Management Account of 3. In Credit Management is managed by 4. Has Contact Person
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SAP Credit Management Credit Checking
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Credit Checking
Credit Check Rule is a set of conditions that are checked during “Order to Cash” process to determine if the process can continue without a block
Credit Check Rules can be assigned to the BP irrespective of the Risk class. For example a High Risk Customer having a “Cash in Advance” Payment Terms can have “Limited Credit Check” 22
Credit Checking – Definition
A Credit Check Rule consists of Check Steps each step consists of parameters that must be fulfilled for order processing to complete
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Credit Checking – Standard Checks
Standard Check
Explanation
Statistical Check of Credit Exposure
Static check includes total exposure of all Open Orders, Delivery, Billing and Open AR. It can also considers “Collaterals” and “Credit Insurance”.
Dynamic Limit Check with Credit Horizon
Dynamic check includes total exposure of all Open Orders (with in a Horizon period of days), Delivery, Billing and Open AR. It can also considers “Collaterals” and “Credit Insurance”.
Check for Maximum Document Value
Maximum Document Value, can be defined for each Segment.
Check for Maximum Dunning Level
Maximum Dunning Level
Check for Age of Oldest Open Age of the Oldest Open Item Item Check of Payment Behavior Index 24
DSO
Check Checking – Rules Summary
• SAP FSCM Credit Checking can be enabled to integrate with both SAP and non-SAP instances • New Credit Check steps can be customized by adding custom rules and also make them configurable • This will switch off SD credit check
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SAP Credit Management Credit Scoring
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Scoring Rule computes Credit Score / Credit Limit
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Credit Score – Scoring Formula Example
1. If Customer is in Negative List Set Score = 0 and exit 2. If Customer is in Positive List set Score = 100 and exit 3. If Customer has a Foreclosure, Bankruptcy or any other negative characteristics Set Score = 0 and exit 4. Normalize external rating and add it to final score 5. Normalize Legal form and add it to final score 6. Normalize Industry and add it to final score 7. Normalize country and add it to final score 8. Normalize age of country add it to final score 9. Normalize Net Profit Margin and add it to final score 10. Normalize Equity Capital add it to final score 29
Score Formula: Define Steps , each step has a condition and points that can be assigned. All these points can add up to a credit score
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Credit Score – Limit Formula Example
1. If Credit Score = 0 Set the Credit limit = 0 2. If Credit Score > 0 and = 40 and = 60 and 90 set the credit limit = (MAX_SALES in last 12 months)*2.0
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Score Formula: Define Steps , each step has a condition and Limit subsequently credit limit can be calculated and assigned.
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SAP Credit Management Credit Workflow
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These events can trigger workflow’s, calculate the credit score / credit limit etc. For example External agency has downgraded the Customer and the information has updated in the BP. In this event we can configure the system recalculate Credit Score and start a workflow to have the Credit Analyst review the customer’s account 34
Credit Case and Credit case attributes. 35
Approval Steps for the Credit Case
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SAP FSCM Collections Management
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SAP Collections Management
Roles & Responsibilities
Collection Manager
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Define collection strategies / rules Define work item assignment to users / groups Monitor and reallocation of workload
Collection Specialist
Incoming / Outbound collection calls Process daily worklist based on prioritization Record customer contact and follow up
SAP Collections Management
Collection Manager
Work Item Prioritization
When should a customer be contacted for payment? How do you prioritize customers that should be contacted for payment? 39
Work Item Assignment
How do you categorize your customers for collection activities? How do you assign and distribute work items to collectors?
Monitor & Reallocation of Workload
Monitor collector performance Reallocation of workload through reassignment or temporary reassignment of work items
SAP Collections Management Collection Strategy
Collection Rule 1
Collection Rule 2
30 Points High Risk Class Item greater than 30 days past due Amount to be collected greater than $0.01 No successful contact within 5 days
20 Points
Collection Strategy
15 Points
There is a resubmission due
Collection Rule 5 20 Points There are broken promises to pay
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Collection Rule 4 10 Points
Collection Rule 3 Credit limit utilization is greater than 95%
Dunning level is greater than 2 Amount to be collected greater than $0.01
SAP Collections Management Demonstration: Collection Manager Role
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Text
Collection Rules within the Collection Strategy
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Conditions within a Collection Rule
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Text Automatic Prioritization of Customer Work Items
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Text
Priority is determined by the valuation of each collection rule
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SAP Collections Management Collection Specialist
Access Worklist
Review prioritization of customer work items Check degree of worklist processing Review customer-level information 46
Contact Customer
Review customer work item Receivables, payment history, dispute cases, promise to pay, notes and contact person
Record Customer Contact Create promise to pay to record invoice-level customer contact Create dispute case for disputed items Create resubmission for customer follow up
SAP Collections Management Demonstration: Collection Specialist Role
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Text
Double-Click to open customer work item
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Text
Review open items to be collected
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Review payment history
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Text
Review open and closed dispute cases
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Record promise for payment or customer contact at the invoice level
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Text
Promise for payment has been recorded
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Record customer contact resulting in completion of the work item
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Work item completed until worklist is regenerated
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SAP FSCM Dispute Management
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SAP Dispute Management
Centralize Information
Amounts Priority Customer Contact Reason
Attachments
Dispute Case Object Status
Notes Customer SAP Documents 57
Action Log
SAP Dispute Management
Dispute Case Processing
Dispute Case Creation Automatic creation from incoming deductions Manual creation from open AR line item Manual creation for prededucted claim notifications (CustomerDisputed Objects) 58
Research
Resolution
Identify reason code
Credit Issuance for valid claim
Update attributes, notes and attachments
Generate Correspondence for collection of invalid claim
CrossDepartmental collaboration
Write-off of uncollectable claims
Dispute Case Closure Automatic closure based on clearing activity in accounts receivable
SAP Dispute Management Demonstration: Processing of a Dispute Case
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Creation of Dispute Case
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Input selection criteria and hit search
Double-Click to open dispute case 61
Text
Click on reduce attributes button to input notes
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Text
Select note type
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Text
Input notes and click on copy
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Text
Click on increase attributes button to change dispute case attributes
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Text
Update attributes and send to Andy in the Logistics Department
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Text
Double-click to open dispute case
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Text
Click on the notes button
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Review notes
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Attach POD to dispute case
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Input internal notes and return to analyst in the deductions department
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Double-Click to open dispute case
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Text
Review notes
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Text
Review attachments
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Text
Update status and root cause code
Update Concluding Remark notes for correspondence
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Text
Generate Claim Denial Correspondence
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Text
Display Correspondence
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Text
Claim denial correspondence
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Text
Status automatically updated to closed
Amount re-paid by the customer
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SAP Biller Direct
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Dispute Invoices Online
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Enter Dispute Details
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Customer Master Administration - Contact Info
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Customer Master Administration - Bank & Credit Card
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Questions?
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