Sap credit-and-collection-management

SAP Credit and Collection
Management
Vidar Greve Johannesson
vgj@scensum.com

© 2011 SAP AG. All rights reserved. 2www.scensum.com.
Agenda
1.SAP Financial Supply Management – Business Issues and value
proposition
2.SAP Credit Management
3.SAP Collection Management
4.Summary

Does this Sound Familiar?
Copyright 2002 by Randy Glasbergen
www.glasbergen.com

Cash Flow Cycle
Cash Flow Cycle
Days In Receivables
(average customer payment time)
Days In
Payables
(average time to
payment of supplier)
Days In Inventory Days Sales Outstanding
time
Sale +
Delivery +
Invoice
Cash
payment
for inventory
Actual
payment
date
Order
placed
Delivery +
invoice
Expected
payment date

Free Up Cash with SAP FSCM
With SAP Financial Supply Chain Management customers were able to
• Reduce the number of bad debt using SAP Credit Management
• Reduce efforts and costs for invoicing using SAP Biller Direct
• Reduce DSO through improved discrepancy resolution with SAP Dispute Management and
SAP Collections Management
Cash application
Accessing information
Payment reconciliation
Managing customer behavior
Invoice presentment
Discrepancy resolution
18 %
18 %
26 %
28 %
29 %
47 %
Source: Paystream Advisors, 2007
(percentage of highest pain scores)
Painpoints in Order to Cash Cycle
Companies have big potential to free up working
capital by applying best practices
Current
Working
Capital
Payables Receivables Inventory Best Practice
Working
Capital
321
bn $
91
bn $
49
bn $
110
bn $
Source: McKinsey (sample of 24 corporate clients)
Cash NPV released from best practice: 211 bn USD
71
bn $

 Fragmented stand-alone
systems
 No workflow or data
management
 No integration with GL or
AR systems
 Poor insight into
customer Credit risk
 No insight into process
bottle necks
 Lack control over processes,
workflow or prioritization
 Independent functions
 No coordination in collections/
dispute resolution
 Inconsistent credit
policies across divisions
 Fragmented and inefficient
 Paper-based and labor-
intensive
 Lack of standardization
Typical Barriers of the Order-to-Cash Cycle
High Cost of
Finance Operations
High Bad Debt Risk
High DSOs

OptimizingtheOrder-to-CashCycle
Overcome Your Barriers by Optimizing the
Order-to-Cash Cycle with SAP
 Enterprise Service Bundles
 SAP Biller Direct
 SAP ERP Financials
 SAP NetWeaver/SWIFT integration
SAP Solutions
Organization
 SAP ERP Financials
 SAP Credit Management
 SAP Dispute Management
 SAP Collections & Dispute Mgmt
 SAP Biller Direct
 SAP Accounts Receivable
Insight &
Control
 SAP CPM
 SAP GRC
 SAP Credit Management
IT Systems
Processes
 Establish greater cross-functional coordination
 Define global customer credit policies
 Establish clear lines of ownership and
escalation policies
 Organize unstructured data and collaborate
via workflows
 Streamline labor-intensive processes via
standardization and automation
 Straight-through payment processing
 Monitor performance of financial processes
 Implement financial controls and fraud
detection mechanism
 Control global credit risk
 Utilize open standards to connect financial
systems with customers, suppliers and banks
 Integrate collections / dispute systems with
accounting and AR systems
Finance StrategiesBarriers

Agenda
1.SAP Financial Supply Management - Introduction
4.Summary

Agenda
1.SAP Credit Management – Introduction
2.User Interface of the Credit Manager
3.Master Data
4.Credit Rules Engine
5.Reporting & Mass Change

Financial Supply Chain Management with SAP
Issue
Invoice
Forecast
Cash
Finance
Working
Capital
Resolve
Disputes
Collect
Cash
Check
Credit
Worthiness
Settle
& Pay
Reconcile
SAP Dispute
Management
SAP Collections
Management
SAP Credit
Management
SAP Biller Direct
(Electronic Bill Present-
ment and Payment)
Order-to-Cash

Credit Management – Business Facts
Year 2007: approximately 129,822 corporate bankruptcies
in Western Europe*
Average delay in payments for Western Europe between
8 days and 21 days*
Ineffective credit management in distributed sales
systems
Information needed for credit decisions is spread out all
over the company
No credit history available when doing business with
new customers
Communication between sales, credit, and finance
departments is very time-consuming
A customer is treated differently in different business units
within the same company
* Source: Creditreform

SAP Credit Management – Focus
 System to implement a company wide credit policy
 Central credit management in a distributed system landscape
 Monitor a customer‟s credit exposure in one central system
 Customer scoring using own scoring rules creating new
reports and queries
 Automatically calculate and assign a customer-specific
credit limit
 Interface to external credit agencies
 Web-based access to credit information for sales people
 Distribute customer master data via Master Data Management
(MDM)
 Strategic credit analysis with predefined reports
 Credit Manager Portal to speed up credit decisions
 Improves productivity by automating credit decision process
and focusing on the processing of exceptions

How to Manage the Credit Risk ?
Collect internal and external information about the
customer
Evaluate and classify the customer according to
this information
Assign a credit limit according to the risk assessment of
the customer
Collect information about the credit exposure of business
transactions with this customer
Ongoing monitoring of the credit limit usage
Hedge business transactions for high risk customers
Monitor early warning signs
Plan sales and marketing activities for low risk customers
Compare credit portfolio with companies‟ strategic goals
Share credit information with sales

Invoice
Risk Class I
Check by ext.
Credit Agency
Risk Class II
Cash on delivery
Letter of credit
Advance Payment
Risk Class III
Default Probability Sets Risk Hedging
Score
Default Probability
Very Good Very Bad
10 %
20 %
30 %
= Customer

Treatment of Clients Depending on Sales and Default Risk
Sales with client
Risk of
default
High
Sales
Low
Sales
High Risk Low Risk
Customer C
Customer D
Best Case Client:
 Intensify Customer
Relationship
Possible Actions:
 Increase sales prices
 Increase use of hedging
instruments
 …
Customer BCustomer A
Possible Actions:
 Lower sales prices
 Reduce use of hedging
instruments
 …
Possible Actions:
 Reduce business with
this customer
 Change dunning procedure
 Permanent credit
risk monitoring

Functional Overview
Credit Limit Management
 Implement a company wide credit policy
 Manage a customer credit profile
 Central credit management in a distributed system landscape
Credit Case
 Credit case for structured processing of credit limit applications
 Track status and result of credit limit applications
Credit Rules Engine
 Categorize customers by scoring rules
 Automatically calculate and assign a customer-specific credit limit
 Credit check rules
 Model and implement own customer credit score cards
Credit Information
 Interface to external credit agencies
 Input parameters for scoring rules
 BW Content
Credit Manager Portal
 Role-based access to credit management information and analysis

Credit Limit Management
Functions
 Manages the credit profile of a customer
 Monitor credit exposure / limit in a
central system
 Web-Based access to customer„s
credit profile
 Rules Engine for implementing own scoring
and limit rules
 Scalable platform to use in B2B and
B2C Scenarios
 Score customers and vendors
Business Benefit
 Imlement company wide credit policy
 Early identification of default risk
 Reduce processing costs by automating credit decisions
Credit
Limit
January
February
March
April
Credit
Exposure
AlertAlert

Credit Case
Functions
Virtual Folder to track credit applications
A credit case contains
 Major customer master data & credit profile
 Status
 Organizational data
 Documents
 Orders
 Notes
 Inbox
A credit case can be sent from user to user
It is linked to the customer credit data
SAP Workflow Integration
Business Benefit
Sales people can enter an application for credit limit
change
Track status of the application
Inform sales when decision is made

Create Limit Application (Example)
Sales assistant enters credit
limit application (credit case)
Need more
information?
Send back credit case
with financial data
Approve / reject
credit limit application
no
yes
Assign credit manager
manually / automatically
Send workflow item to
credit manager
Send credit case to
financial analyst
Change limit in
master data (manually)
Customer exceeds
credit limit frequently
Send workflow item to
financial analyst
Close credit
limit application
Send notification to
sales assistant (workflow)

Creating Credit Limit Request
Select Business Partner
Add Attachments
Define details
Confirmation
Add note
Review and save

Integration
Functions
Central credit management in a heterogeneous
system landscape
Import exposure information from various systems
Perform credit limit check in real-time
Integrate services from external credit agencies into
the credit decision process
Distribution of customer master data by MDM
Business Benefits
Minimal effort for connecting SAP and non-SAP Systems and low TCO due to XI
Seamless integration of external services increases user productivity
Real-time credit limit check guarantees consistent credit decisions
Provide customer credit profile to other applications (e.g. CRM)

Credit Manager Portal
Functions
 Role based application providing analytical
tools
needed for quick credit decisions
 Single point of access for all relevant
credit information
 Work lists inform the user about to-do‟s
 Platform to make credit information available
for sales people
Business Benefits
 Improves user efficiency due to consolidation
of various information sources
 Improves communication between sales,
credit
and accounting department
 Sales people can access credit information
from customer site

Credit Analysis
Functions
 Company-wide monitoring of credit risk
 Analysis of customer payment and order
behavior
 Alert on high risk customers
 Risk structure analysis of the customer base
by country / business unit / customer group
Business Benefits
 Proactive credit management
 Identification of risks before customer
gets insolvent
 Hedging of high risk customers reduces
unexpected losses
 Aim marketing and sales activities to low-
risk customers
 Drive price policy by a customer risk
category

Integration with External Credit Agencies
.......
Credit-
reform
SCHUFA
D+B
XML
Original XML Document is stored in the
document management system that is
used by the SAP Business Partner
Real Time
SAP
Enterprise Portal
Credit
Manager Portal
SAP
Credit
Management
Real Time
D&B
Creditreform
External Credit
Information System
Credit-
reformD+B

Comparison R/3 Credit Management
with SAP Credit Management
Master Data FI-AR Account SAP Business Partner
FI Data SAP Business Partner FI-AR, FI-CA, others
Monitor Credit Exposure Only for simple system-
landscape (1xFI, 1xSD)
Distributed system-landscape
(multiple FI, SD and CRM
systems)
Customer Scoring/Rating Not available Credit Rules Engine
External Credit Information
(e.g. D&B)
Only through partner products any XML based credit
information service
Rule based definition of
credit limits
Not available Credit Rules Engine
Workflow Only in SD Create Workflow for any
Credit Event
Analysis Customer fact sheet Credit Manager Portal (incl.
BW Content) and OLTP
reporting
Connectivity for non
SAP-systems
Not available PI Server
R/3 Credit Management SAP Credit Management

Agenda
3.Master Data

Work Center for SAP Credit Management – Modeling the
Role of the Credit Manager
Each Work Center
represents a certain
area of activity:
 Worklist
 Processing of credit
limit requests
 Processing of blocked
sales orders
 Processing of blocked
customers
Each work center provides access to a range of work lists, pre-filled reports and
services appropriate to the tasks performed by the user.

Worklist
User receives
notifications on
credit events
(e.g. changes in
risk class, score etc.)
User can view details
and access directly the
dialogue processing
of business partner
maintenance
Detailed Navigation =
View Switch
Links launch
applications in
Activity Window
(user can also
start applications
related to master
data and mass
data processing here)

Credit Limit Requests Overview
Links launch
applications in
Activity Window
Pre-delivered
default queries with
customized values
View Switch
User can access
directly the dialogue
processing of the
respective request.

Blocked Customers
View Switch
Links launch
applications in
Activity Window
Pre-delivered
default queries with
customized values
Action button leads
the user directly to
the exact location of
the block information
in the business
partner master data

Agenda
3.Master Data
5.Integration with External Information Providers

Master Data in SAP Credit Management
Credit data is a component of SAP Credit Management
and is stored in SAP Business Partner. It consists of the
credit profile data and credit segment data.
The credit profile is used for the central storage of
customer data relevant for risk assessment (scoring, risk
class, external rating, credit check rule).
Credit segments can map various areas of a company
(such as sales area, countries, company codes). They
are used for area-specific administration of credit limits
(and their utilization) and to store information on the
payment behavior of the customer. The corresponding
credit segment data is used for credit checking when the
order is created or on delivery within a company area.
By using relationships you have the possibility of
creating customer hierarchy.

Business Partner in SAP Credit Management
Scoring Rule:
Rules that define how
a customer is scored
(e.g. industry, D&B,
legal form, country)
Credit Check Rule:
Rules that define how a
customer is credit checked
(e.g. static / dynamic check,
oldest open item …)
External Rating from D&B

Total Credit Exposure:
2.100.000 €
700.000 €
3.100.000 €
Relationship
Higher-level credit management account of …
Business Partner 4711
Segment 0000
Credit Exp.: 1.000.000 €
Segment 0000
Credit Exp.: 700.000 €
Is the higher
level credit
management
account of …
Is the higher
level credit
management
account of …
Segment 0000
Credit Exp.: 1.500.000 €

Agenda
3.Master Data

Credit Rules Engine
Create scoring formula and credit limit formula by
using the formula editor. Parameters (for example
business partner data) and functions are used as input
parameter.
One scoring formula and several credit limit formulas (for
each credit segment) are assigned to the rule for scoring
and credit limit calculation, which is assigned to each
customer in the credit profile. The risk class is determined
directly from the score.
In customizing, specific score ranges which do not
overlap are assigned to each risk class. For the check
rule, the system determines the steps which are taken to
check the creditworthiness of a customer when a sales
order is created. This may include the static check of the
credit limit or the check of the highest dunning level.
Customer-specific process chains in SAP Credit
Management can be defined through events which
trigger follow-up actions

Credit Rules Engine
IF (Black List Entry exists):
S = 0
ELSE
S = (2*A + 3*B + 5*C) / 10
Customer
Address
Mapped Score B:
B+ = 30
Mapped Score A:
AAA = 50
Birth Date Profession
RegionAge GroupProfessionScore
...
ATL <20 Student 17
NYC 20-30 Student 18
...
Score C: 17
Black List Int. Scoring S = 27.5
Calculate Internal Credit Scoring
(Existing Customer)
Credit Agency I
AAA
Credit Agency II
B+
Sales
Volume
Dunning Payments
Score D: 3
Int. Scoring S = 19.3
Credit Rules Engine
IF (Black List Entry exists):
S = 0
ELSE
S = (2*A + 3*B + 5*C + 5*D) / 15
Sales Volume Score SV
0 – 100 0
101 – 300 5
301 – 1000 10
...
Dunning Score DU
0 0
1 3
...
Paym. (days after Due) Score PY
0 0
<5 4
<10 8
<20 15
...
 Score D = SV – DU – PY = 3
Credit Information

Agenda
3.Master Data

Reporting
Ad hoc reporting in SAP Credit Management
Various reporting and analysis options are available in SAP Credit Management,
such as creating warning lists, analyzing liability data for one or more customers, or
logging the last order-related credit check for a customer
Various mass changes are available in SAP Credit Management, such as
calculating the creditworthiness, risk class, or credit limit for the first time for a
number of customers

Report UKM_MASS_DSP2
UKM_MASS_DSP2 – Report for Credit Segment Data:
Credit Limit (current /calculated) + validity date
Blocked Customers in SAP Credit Management
Customers to monitor
Resubmission Date
Assigned Credit Analyst
Plus all UKM_MASS_DSP1 Fields e.g. 80% for early warning list

Report UKM_MALUS_DSP
UKM_MALUS_DSP – Report for Credit Limit Utilization
Credit Exposure (%)
Credit Limit Still Available / Amount by which credit limit exceeded (absolute)
Customer Credit Group
Credit Analyst or Group
Resubmission Date
Blocked Customer in SAP Credit Management

Report UKM_VECTORS
UKM_VECTORS – Payment Behavior KPIs
Total Sales Volume in last 12 months
Gross Total of Cleared Items with Cash Discount Not Taken
Gross Total of Cleared Items without Cash Discount Loss
Av. Arrears with cash discount payments
Av. Arrears without cash discount payments

Report UKM_COMMITMENTS
UKM_COMMITMENTS – Display / Correction of Commitment Data
(Credit Exposure)
Display of commitments, for example, by commitment type or credit horizon
Detail view of commitment items (e.g. open items, open orders )
Due date of open items and open orders
Navigation

Agenda
4.Summary

Agenda
1.SAP Collections Management – Introduction
2.Process „Collection of Receivables‟
3.Process „Control Collections of Receivables‟
4.Process „Data Synchronization and Creation of Worklist‟
5.Analytics

Financial Supply Chain Management with SAP
Issue
Invoice
Forecast
Cash
Finance
Working
Capital
Resolve
Disputes
Collect
Cash
Check
Credit
Worthiness
Settle
& Pay
Reconcile
SAP Dispute
Management
SAP Collections
Management
SAP Credit
Management
SAP Biller Direct
(Electronic Bill Present-
ment and Payment)
Order-to-Cash

Collections Management – Important Business Issue
Increasingly bad payment behavior
 Increasing Days Sales Outstanding (DSO)
 No reaction on automatic correspondence like dunning
 Financial situation influences customer relationship
Collections Management today is mostly a time-consuming, costly and
cumbersome process
 Select and prioritize customers to be collected
 Search for account information
 High volumes

What Are the Business Objectives?
Increase share of collected receivables
 Reduce Days Sales Outstanding (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 complete picture of customer history
 Increase customer satisfaction

How Does SAP Collections Management Help?
SAP Collections Management provides collection strategies that allow to select and
prioritize customers for the collection of receivables
 Collection strategies are the basis for the automatic creation of daily worklists for collection
specialists.
 Worklists ensure evaluation, identification, stratification and prioritization of customers according to
collection strategy
 Daily worklists improve user productivity and efficiency
SAP Collections Management offers special collection procedures to document and react
on customer contacts
 Promise to pay agreements
 Dispute cases (via integration with SAP Dispute Management)
 Resubmissions
 Customer contacts
Collection managers will find a variety of options to control the collection of receivables
 Define and adapt strategies
 Maintain collection groups
 Workforce management by reassigning worklist items and monitoring degree of worklist processing

Agenda
2.Process ‘Collection of Receivables’
5.Analytics

Two Roles: Collection Manager and Collection Specialist
Collection Group
Collection Manager
Main Tasks:
Define or adapt collection strategies
Keep collection groups up-to-date
Adjust business partners
Supervise collection process
Main Tasks (are all about
processing the daily worklist):
 Prepare customer contact
 Contact customer
 Document customer contact
Collection Specialist

‘Data Synchronization and Creation of Worklist’ Process
Create
Worklists
Monitoring
Replicate
Customer
Master
Data
Transfer
Data from
Accounts
Receivable
 Master data
synchronization
 Contact persons
 Collections
Management
specific data
 Monitor master
data
synchronization
 Monitor parallel
runs
 Create worklist
items
 Distribute
unassigned items
 Initial transfer
 Periodic transfer
 Selected transfer

Functionality Supporting the
‘Collection of Receivables’ Process
 Automatically created
 Personalization
 Search function
 Statistics
 Key figures per worklist item
 Valuation detail
 Due date grid
 Invoice overview
 Overview of customer account
 Overview of past payments
 Overview of past contacts
 Check resubmissions
 Promises to pay
 Dispute cases
 Resubmissions
 Customer contact
Access
Worklist
Prepare
Customer
Contact
Contact
Customer

Collection Worklist
Aging of receivables per
selected customer
Link to business partner
Each collection specialist gets a daily worklist containing all customers who should be contacted.
Customers are valuated and prioritized according to collection rules in a collection strategy.
Summarizes information concerning
 Customer account in Accounts Receivable
 Past collection activities
 Credit Management
Detail valuation of customer
per collection rule
Assign items
Refresh worklist
Display completed items
Search for other business partner

Main Features of the Collection Worklist
Automatic creation of worklists based on collection
strategies
Summarized information per customer regarding
Customer account in Accounts Receivable
Past collection activities
Credit Management data
Detailed information per customer about
 Valuation according to collection strategy
 Aging of the customer‟s receivables (due date grid)
Personalize worklist by setting as default
Search function (view other customer account or
other worklist)
Navigation to business partner master from the worklist
Statistics about degree of worklist processing

View aging of customer’s receivables
Worklist as Starting Point for Customer Contact
Select worklist item and view data
View valuation of customer according to collection strategy
Maximum amount
to be collected
1
2
3

‘Process Receivables’ Function – Main Area During
Contact
Navigation
To contact the customer, the collection specialist navigates from the selected worklist item to the
„Process Receivables‟ function. This function offers detailed customer information and supports
various collection activities.

Process Receivables – Invoices (Open)
On the „Invoices‟ tab page the collection specialist gets an overview of all open invoices of a
customer in a collection segment. Per invoice the status is displayed including the amount
invoiced, open amount, disputed amount, amount promised to pay, state of promise etc.
View dispute case(s)
per selected invoice
View promises to pay
per selected invoice
View invoice history
of selected invoiceCustomer Data
Customer Contact Person
Display or print
billing document in
PDF format

Example – Printing Invoice in Worklists

Process Receivables – Past Payments
Payment History for selected payment
All documents related to the
payment are highlighted
The overview on past payments allows collection specialists to check past payments of the
customer he or she is contacting. The payment history lists all invoices that have been fully or
partially paid by the selected payment.

Process Receivables – Promise to Pay
The overview on promise to pay shows all promises to pay that were given for the open invoices
displayed on the „invoices‟ tab. You can navigate to the details of a selected promise to pay,
change or withdraw a promise to pay.
View promise
to pay
Change
promise to pay
Withdraw
promise to pay

Process Receivables – Dispute Case
The overview on dispute case shows all dispute cases that are related to the open invoices
listed on the „invoices‟ tab. You can navigate to a selected dispute case and – if you have the
authorization – process the dispute case. Furthermore, you can display which invoices are
assigned to the dispute case.
View assigned
invoices
Navigate to selected
dispute case

Collection Activities –
Documenting Customer Contact
The collection specialist has the following
possibilities to document his or her
collection activities
Create promises to pay
Create dispute cases
Create resubmissions
Document the customer contact itself

Promise to Pay Process
Hello Mrs. Brown, did you
recognize that invoice 4711 has
been overdue since 4 weeks?
Hello Mr. McFee, thank
you for reminding me.
We will pay the full
amount by Wednesday
next week.
Promise to Pay
Promised amount
Promised to date
Promised by
Note
Invoice reference
…
Tom McFee enters promise to pay
in the system
Accounts Payable Manager
Sue Brown
Tom McFee

Promise to Pay in
SAP Collections Management
Customer promises to pay one or several invoices
Collection specialist creates promise to pay
 Creation possible for one or several invoices
 Promise is traced on single invoice level
Collection specialist renews promise to pay
 Existing promises can be renewed
 Renewed promises get higher promise level
Promises to pay are updated by incoming payments
State „kept‟ if incoming payment equals promised amount
State „partially broken‟ if payment amount is smaller than promised amount
Promises that are not kept get state ‘broken’
Customers with broken promises will automatically appear on the worklist if defined
so in the collection strategy

Create Promise to Pay
The collection specialist can create a promise to pay in the system for the selected invoices.
The total of all open amounts is proposed by the system as promised amount. If the promised
amount is less than the proposed amount, the promised amount can be distributed to the invoices.

Create Dispute Case
The collection specialist can create a dispute case for the selected invoices. The total of all open
amounts is proposed by the system as disputed amount. The collection specialist can enter all
necessary information such as dispute reason and a note.

Resubmission
Suppress customer from worklist
until resubmission date
Collection specialists can set a resubmission for a customer. They can enter a note and a
resubmission reason. The customer will re-appear on the worklist at the resubmission date.
It is also possible to suppress a customer from the worklist until the resubmission date.
Overview of existing resubmission
Create resubmission
First line of note

Create Customer Contact
The collection specialist can document the outcome of the whole customer contact. Dispute
cases, promises to pay and resubmissions created during the contact will be automatically
assigned. A default note is set by the system and can be enhanced by the specialist.
Controls if worklist item remains on
worklist or will be removed
Default note automatically
created by the system

Agenda
2.Roles and Processes
4.Process ‘Control Collections of Receivables’
6.Analytics

Functionality Supporting the
‘Control Collection of Receivables’ Process
Collection Manager
 Collection rules
 Collection strategy
 Allocate worklist
items
 Control statistics
 Business partner
 Collection profile
 Collection group
Adjust
Business
Partner
Master Data
Supervise
Collection
Process
Define
Collection
Strategies
Maintain
Collection
Groups

Collection Strategies
Collection strategies comprise company-specific
rules for collecting receivables
Collection strategies have the following purpose
 Determine which customers are to be contacted in
Collections Management (basis for automatic worklist
creation)
 Prioritize customers on the collection worklist
 Define the currency in which the amounts are to be
displayed on the worklist
 Determine the time intervals of the aging of receivables
per customer in a segment (due date grid)
 Define the type of integration with dunning in Accounts
Receivable Accounting
 Determine the influence of the terms of payment on
Collections Management (consideration of cash
discounts)

Data Sources for Collection Rules
SAP Accounts
Receivable
SAP Dispute
Management
SAP Collections
Management
SAP Credit
Management
 Dispute Case Data
 Promise To PayData
 Contact Data
 Resubmission Data
 Risk Class
 Credit Limit Utilization
 Open Item Data
 Dunning Data
 Payment Data
 Customer Data

Maintain Collection Strategy
Determines structure of
Due Date Grid
The collection manager decides on the kinds of collection rules customers are to be contacted.
The corresponding collection rules are assigned to the strategy. Per rule the collection manager
enters the relevant parameters and the valuation points a customer receives when he fulfills the
rule.
Enter parameters
of collection rule

Allocation of Worklist Items to Collection Specialists
Worklist items of all collection groups
Reallocation only possible to other
specialists of the same collection group
The collection manager can view all worklist items assigned to his or her collection groups. The worklist items
are allocated automatically to the collection specialists. The collection manager can re-allocate worklist items
among specialist of one group. (Example: A collection specialist will not be able to finish his or her worklist
during the day.)

Supervise Progress of Worklists Processing
© SAP AG 2009. All rights reserved. / Page
Total number of
worklist items
No. of completed
worklist items
where the customer
was reached
Number of open
worklist items
The collection manager can view the worklist statistics of all collection groups he or she is responsible for.
The statistics show the total number of worklist items, the number of open worklist items, the number of
completed worklist items where the contact person was reached and the number of completed worklist items
with an unsuccessful contact.
No. of completed
worklist items
where the customer
was not reached

Agenda
5.Process ‘Data Synchronization and Creation of Worklist’
6.Analytics

 Create worklist
items
 Distribute worklist
items
 Customer /Vendor
Integration
 Create „Collections
Management‟ role
 Change collection
segment data
 Monitor master
data
synchronization
 Monitor parallel
runs
 Initial transfer
 Periodic transfer
 Selected transfer
Functionality Supporting the ‘Data Synchronization and Creation of
Worklist’ Process
Create
Worklists Monitoring
Replicate
Customer
Master
Data
Transfer
Data from
Accounts
Receivable

Complete Business Partner Master Data
Create
‘Collections
Mgmt’
business
partner role
Assign
collection
profile
Assign
collection
group
different
to default
group
(optional)
Assign
collection
specialist
(optional)
Report: Assign/Change Business
Partner Collection Profile
Report: Change Business
Partner Segment Data

Agenda
6.Analytics

Analytics in SAP Collections Management
(as of SAP Enhancement Package 1)
Analytics for SAP Collections Management enable you to control and
optimize your collection activities
Analytics for SAP Collections Management comprises the following analysis
scenarios:
 Analysis of worklists
 Analysis of customer contacts
 Analysis of invoices and promises to pay
 Analysis of open items linked with organizational units of Collections
Management

Analysis of Worklists
Business value:
 Measure performance and productivity of collection
groups/collections specialists
 Measure effectiveness of collection strategies
Main key figures:
 Number of worklist items
 Number of completed worklist items
 % Completed worklist items
 Amount to be collected
 Amount processed (including amount promised to pay
and amount disputed)
Main characteristics:
 Collection specialist
 Collection group
 Collection segment
 Collection strategy

Analysis of Worklists – Daily Collection

Analysis of Customer Contacts
Business value: Measure performance and productivity of
the collection specialists
Main key figures:
 Number of customer contacts
 Amount promised during the customer contact
 Original disputed amount of dispute cases created during contact
 Number of promises to pay created during contact
 Number of dispute cases created during contact
 Number of resubmissions
 Contact date
 Contact result
 Contact type
 Collection strategy
 Business partner

Analysis of Invoices and Promises to Pay
Business value: Measure effectiveness of collection
activities and volume of invoices managed in SAP
Collections Management
Main key figures:
 Amount promised
 Amount paid (referring to promise to pay)
 Amount invoiced
 Amount paid (of invoice)
 Number of invoices
 Number of promises to pay
 % Kept / % Broken
 True DSO
 Days in arrears
 Promise to pay level / Promise to pay state
 Invoice number
 Document date
 Payment date (of invoice)
Customer

Analysis of Open Items Linked with Organizational Units of
Collections Management
Business value: Due date analysis for organizational units
of SAP Collections Management, ability to plan ahead
Main key figures:
 Overdue for more than 90 days
 Overdue from 61 to 90 days
 Due within 30 days
 Due within 30 to 61 days
 Due within 61 to 90 days
 Due within more than 90 days
 Business partner

Due Date Analysis

Agenda
4.Summary

SAP Credit Management – Summary
Customer Challenges
 Takes too long to evaluate credit
 Inconsistent methods and policies
 No global view of exposure
 Evaluations hold up sales orders
SAP Functionality
 Analyze risk and set policy quickly
 Consistent evaluation and policy
 Global view of credit exposure
 Automatically update exposure
throughout customer lifecycle
Benefits
 Faster credit decisions
 Lower costs and resource
demands
 Reduce bad debt write-offs
 Reduce sales order delays

SAP Collections Management – Summary
Challenges
Inconsistent account prioritization
Labor intensive and long cycle times
Inconsistent collection strategies
High costs of collections
Increase bad debt risk
Functionality
Rules-based collections strategies
Prioritization via worklists
All relevant information at a glance
Proactive targeting of “late pays”
Benefits
Improved collections rates
Reduced bad debt expense
Streamline collections and
reduce operating costs
Reduce DSOs

Thank you
Vidar Greve Johannesson
vgj@scensum.com
www.scensum.com
For more information feel free to contact:

Sap credit-and-collection-management

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