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Advanced SAP Collections Management - Best Practices
Copyright © 2011, HighRadius Corporation. All rights reserved.
Presented By:
Sashi NarahariAugust 15, 2011
CRF SAP User Group
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Agenda
• FSCM Overview• Collection Management Overview• Collections Best Practices
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FSCM Modules At-A-Glance
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Receivables Manageme
nt
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SAP FSCM Collections ManagementOverview
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SAP Collections ManagementOverview
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
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Collections Management: Collection Specialist
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Text
Double-Click to open customer work item
Collections Management: Collector’s Worklist
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Text
Review open items to be collected
Collections Management: Invoice Summary
Default Customer Contact readily
available
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Text
Review payment history
Collections Management: Payment History
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Text
Review open and closed dispute cases
Collections Management: Dispute Cases
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Text
Record promise for payment or customer contact at the invoice
level
Collections Management: Promise-to-Pay
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Text
Promise for payment has been recorded
Collections Management: Promise-to-Pay
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Text
Record customer contact resulting in completion
of the work item
Collections Management: Customer Contact
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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
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Collections Management: Collection Manager
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Data available for Collection Strategies
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Collections Strategy Definition
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Text
Collection Rules within the Collection
Strategy
Collections Management: Collection Strategy
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Text
Conditions within a Collection Rule
Collections Management: Collection Strategy
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TextAutomatic
Prioritization of Customer Work
Items
Collections Management: Collection Strategy
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Text
Priority is determined by the valuation of each
collection rule
Collections Management: Collection Strategy
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Collections Best Practices
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Collections Best Practices
Customer SegmentationAutomated Correspondence‘Invoice-Level’ CollectionsCollect on ‘Clean Receivables’Blocked Order Based Collections
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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
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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 2nd and/or 3rd level Dunning (Requires Enhancements to FSCM)
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Slow or Med Pay SMB Collection Strategy
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Advanced Correspondence
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Advanced Correspondence Automation
Selection criteria: type of letter, attachments and
method of communication
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Advanced Correspondence Automation
Highlight AR line items to be included in correspondence
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Advanced Correspondence Automation
Cover Letter
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Advanced Correspondence Automation
Invoice Attachments
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Advanced Correspondence Automation
POD Attachment #1
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Advanced Correspondence Automation
POD’s attached to the Invoice AR line item
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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’
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Create Disputes for Invoices
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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
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Use ‘Collectable Amount’ in Strategies
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