SAP FSCM Collections Management

Advanced SAP Collections
Management - Best Practices

CRF SAP User Group
Presented By:
Sashi Narahari
August 15, 2011
Copyright 2011, HighRadius Corporation. All rights reserved.
Agenda
FSCM Overview
Collection Management Overview
Collections Best Practices
FSCM Modules At-A-Glance
Receivables
Management
SAP FSCM Collections Management

Overview
SAP Collections Management

Overview
Collection Supervisor
Define collection strategies /

rules
Define work item assignment
to users / groups
Monitor and reallocation of
workload
6
Collection Specialist
Incoming / Outbound collection

calls
Process daily worklist based on
prioritization
Record customer contact and
follow up
Collections Management: Collection

Specialist
Collections Management: Collectors Worklist

Text
Double-Click to open
customer work item
Collections Management: Invoice Summary

Text
Default Customer
Contact readily
available
Review open items to

be collected
Collections Management: Payment History
Review payment
history
10
Text
Collections Management: Dispute Cases
Review open and

closed dispute cases
11
Text
Collections Management: Promise-to-Pay
Text
Record promise for

payment or customer
contact at the invoice
level
12
Collections Management: Promise-to-Pay
Promise for payment has

been recorded
13
Text
Collections Management: Customer Contact

Text
Record customer contact

resulting in completion
of the work item
14
Collections Management: Completed Item
Work item
completed
15
Text
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
Select the specific

type of
correspondence or
letter to send
Select a set of
invoices
Collections Management: Collection

Manager
23
Data available for Collection Strategies

Broken Promise to
Pay
Number of Promise
to Pays
Promise to Pay
Amount
Customer Contacts
Resubmissions
Master Data or
Operational Data
which can be added
to collections
management
24
Collections
Data
Open AR &
Dispute
Mgmt Data
Other Data
Credit Data
Aging
Amount
Dunning Level
Amount Dunned
Disputed Amount
Dispute Case Status
Payment Data
Credit Limit
% Utilization
Credit Exposure
Risk Category
Collections Strategy Definition
Collection
Strategy
Collection
Rules
Basic
Rules
High to Medium Risk and

greater than 80% Credit
Limit Utilization
Risk Category
Valuation: 15 points
Credit Limit Utilization
Dunning Level
Collection Strategy for
Higher Risk Customers
Past Due Invoices Over 15

days Past Due & Dunned
One or More Times
Documents by posting key

and document type
Valuation: 20 points
Individual Items Overdue
Since N Days
Resubmission Due for the

Customer
Valuation: 5 points
25
Resubmission Due for the

Customer
Collections Management: Collection Strategy

Text
Collection Rules
within the Collection
Strategy
26

Text
Conditions within a
Collection Rule
27

Text
Automatic
Prioritization of
Customer Work Items
28

Text
Priority is determined by
the valuation of each
collection rule
29
30
Customer Segmentation
Automated Correspondence
Invoice-Level Collections
Collect on Clean Receivables
Blocked Order Based Collections
31
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
32
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)
33
Slow or Med Pay SMB

Collection Strategy
34
Advanced Correspondence
35
Advanced Correspondence Automation
Selection criteria: type of

letter, attachments and
method of communication
36
Highlight AR line
items to be included
in correspondence
37
Cover Letter
38
Invoice Attachments
39
POD Attachment #1
40
PODs attached to the

Invoice AR line item
41
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

42
Create Disputes for Invoices
43
Clean Receivables
To Be Collected Amount Calculation
Total
Amount
Past Due
44
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
Use Collectable Amount in

Strategies
45
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What are the main modules covered in FSCM?

What are the main modules covered in FSCM?

What are the main functions of SAP Collections Management?

What are the main functions of SAP Collections Management?

Advanced SAP Collections

Management - Best Practices

Copyright 2011, HighRadius Corporation. All rights reserved.

FSCM Modules At-A-Glance

SAP FSCM Collections Management

SAP Collections Management

Define collection strategies /

Incoming / Outbound collection

Collections Management: Collection

Collections Management: Collectors Worklist

Collections Management: Invoice Summary

Review open items to

Collections Management: Payment History

Collections Management: Dispute Cases

Review open and

Collections Management: Promise-to-Pay

Record promise for

Collections Management: Promise-to-Pay

Promise for payment has

Collections Management: Customer Contact

Record customer contact

Collections Management: Completed Item

Collections Management: Resubmission

Collections Management: Resubmission

Collections Management: Notes

Select invoice and

Collections Management: Notes

Collections Management: Correspondence

Collections Management: Correspondence

Collections Management: Correspondence

Select the specific

Collections Management: Collection

Data available for Collection Strategies

Collections Strategy Definition

High to Medium Risk and

Credit Limit Utilization

Past Due Invoices Over 15

Documents by posting key

Resubmission Due for the

Resubmission Due for the

Collections Management: Collection Strategy

Collections Management: Collection Strategy

Collections Management: Collection Strategy

Collections Management: Collection Strategy

Collections Best Practices

Collections Best Practices

By Payment Behavior (Days Beyond Terms)

Gentle Reminders, Past-Due Notices, Demand

Include Invoice Copies, POD Copies for 2nd

Slow or Med Pay SMB

Advanced Correspondence Automation

Selection criteria: type of

Advanced Correspondence Automation

Advanced Correspondence Automation

Advanced Correspondence Automation

Advanced Correspondence Automation