SAP Receivables Management SAP Collections Management Webinar - Improve Receivables Performance with Advanced Collection Strategies

SAP Receivables Management SAP Collections Management Webinar - Improve Receivables Performance with Advanced Collection Strategies Webcast March 27, 2012 presented by SAP and HighRadius

SAP Receivables Management SAP Collections Management Webinar Improve Receivables Performance with Advanced Collection Strategies Today s Presenters Peter Jensen, SAP Sashi Narahari, HighRadius Dan Chapman, HighRadius Agenda for Today s Webcast - 1. Key trends and issues 2. High Radius introduction 3. Demonstration of Collections Management 4. Questions - please use Chat for any questions during the presentation

Today s Situation in the Receivables area 1960s Now Order 4 days - 7 days Today Delivery 14 days - 21 days Next day Invoice 4 days - 7 days Same day Payment 45 days - 60 days 45 days - 60+ days Source: Killen & Associates Inc It s the Same! 2011 SAP AG. All rights reserved. Internal 4

What Does This Mean for Your Business? Top executive issues How do I improve DSO, reduce costs, and reduce bad debt risk? How do I streamline customer to cash processes and decrease the overall cost of operations? How do I perform rules and exceptions-based management of customer invoicing and collections disputes? How can I optimize my staffing levels so resources are focused on the activities that add the most value? 2011 SAP AG. All rights reserved. Internal 5

SAP Receivables Management Introduced in 2002 Previously known as Financial Supply Chain Management (FSCM) Now re-branded as Receivables Management Over 1000 licensees worldwide Now version 6.x 2011 SAP AG. All rights reserved. Internal 6

The Role of Receivables Management in ERP Financials Sales and Distribution, Accounting, Treasury --- part of standard ERP Financials **Incl. Credit Limit only Sales and Distribution Sales Order Delivery Goods Issue Billing Receivables Management - Enhanced functionality - Optimized processes Credit Mgmt Biller Direct Collection Mgmt Dispute Mgmt Accounting * FI-CA = Contract Accounting for Business to Consumer, i.e. Telecom, Utilities, etc FI-AR FI-CA * General Ledger Treasury Cash Mgmt 2011 SAP AG. All rights reserved. Internal 7

SAP Receivables Management Benefits to the Client SAP Credit Management Reduce risk through consistent evaluations and policy Solutions Check for streamlining the order-to-cash cycle Credit Set and monitor credit limits, reduce bad debt expense SAP Biller Direct SAP Dispute Management SAP Collections Management Issue Invoice Resolve Disputes Collect Cash Reduce cost and effort in billing and payments processing Lower cost bank transactions and reconciliations Improve customer satisfaction Streamline dispute management and reduce costs Faster resolution and lower DSOs Shorter settlement cycles Streamline collections and improve success rates Lower collections costs and bad debt write-offs Increase cash cycle velocity Reduce working capital requirements 2011 SAP AG. All rights reserved. Internal 8

Return on Investment (ROI) Opportunities 30% Increase in Staff Efficiency Eliminate time spent to identify delinquent customers via Collection Strategies Reduce the time spent on phone via Collection Dashboard and Standardized Correspondence such as providing invoice copies, collection letters etc Automate Credit Decisioning within SAP Customer self-service via Biller Direct Portal 10% Reduction in DSO Faster turn-around on collection & deduction activities Intelligent collections via targeted identification of delinquent customers via Collection Score Ability to touch all delinquent customers via automation Reduce float by migrating a subset of lockbox customers to online electronic Bill Pay Model Other Reduce bad debit write-offs Reduce lockbox processing costs Reduce paper billing costs via electronic invoice presentment 2011 SAP AG. All rights reserved. Internal 9

SAP and a global partner ecosystem offer Rapid Deployment Solutions to meet specific business needs Software Quickly address the most urgent business processes Content SAP best practices, templates and tools make solution adoption easier Enablement Guides and educational material speed end user adoption SAP Rapid Deployment Solutions Service Software Enablement Content Service Fixed scope and price provides maximum predictability and lowers risk 2011 SAP AG. All rights reserved. Internal 10

Collections and Dispute RDS Go live in as little as 5 weeks What s included Solution scope Dispute resolution extends your accounts receivables process to automate the creation of dispute cases related to customer invoices and payment discrepancies and provide a collaborative platform to resolve all dispute cases rapidly and effectively. Dispute resolution with dunning supports dispute resolution with automatic dunning integration by setting and removing dunning blocks for disputed objects involved in a dispute case. Receivables collection allows you to manage collections proactively, including sending payment reminders, arranging promises-to-pay, and automating follow-ups, especially with high volumes of open items. Receivables collection with dunning extends receivables collection with automatic dunning integration, so that dunning blocks are set for open items in promise-to-pay arrangements. Dispute resolution with workflow extends dispute resolution with the SAP Business Workflow tool to enable dispute managers to forward dispute cases to other process experts, including time-based escalations. 2011 SAP AG. All rights reserved. Internal 11

Affordably accelerate collections and dispute resolution with SAP Rapid Deployment Solution methodology Significantly accelerate your implementation with fixed-scope SAP engineered services at a predictable price to streamline and automate your receivables management business processes quickly and efficiently. You can proactively manage and collect overdue receivables by using receivables collections tools and dunning integration. The dispute management features of the SAP Collections and Dispute Management rapid-deployment solution provide dispute managers with a tool to process disputes centrally and protect customer relationships. You can effectively manage disputes that arise out of customer invoices by using dispute resolution tools, dunning integration, and workflow integration. You can identify bad debt risk potential and take preventative steps to reduce further exposure. 2011 SAP AG. All rights reserved. Internal 12

Key deliverables for CDM RDS What does SAP deliver? Installation check Workshop to confirm predefined requirements Project documents: work breakdown structure including a project schedule, test scripts, and scoping questionnaire Activation and unit test of chosen packages for the SAP Collections and Dispute Management rapiddeployment solution in the development system Knowledge transfer to key users on configured SAP Collections and Dispute Management rapiddeployment solution system Support for going live What do you have to do? Provide the IT infrastructure (server) Install the enhancement package 5 for SAP ERP 6.0, on the development, quality assurance and production environments Provide remote access to systems for SAP team Provide designated contact people in the business and IT departments Conduct end-user training and change management Conduct performance and integration testing Conduct data migration and cleansing Transport to quality assurance and production environments 2011 SAP AG. All rights reserved. Internal 13

SAP Receivables Management SAP Collections Management Webinar Improve Receivables Performance with Advanced Collection Strategies Today s Presenters Peter Jensen, SAP Dan Chapman, HighRadius Sashi Narahari, HighRadius Agenda for Today s Webcast - 1. Key trends and issues 2. High Radius introduction 3. Demonstration of Collections Management 4. Questions - please use Chat for any questions during the presentation

About HighRadius Founded by a team with an extensive background in SAP and financials process automation Specialize in implementing SAP Receivables Management Modules (Collections & Dispute Management, Credit Management, Biller Direct) Provide Accelerators enhance SAP Receivables Management modules Ranked among fastest growing technology companies in Houston in 2008, 2009 & 2010 2011 SAP AG. All rights reserved. Internal 15

List of Some Projects and Implementation Scope S.No Customer Collections Dispute Credit Biller Direct Status 1 Live 2 Live 3 Live 4 Live 5 Impl 6 Live 7 Live 8 Live 9 Live 10 Live 2011 SAP AG. All rights reserved. Internal 16

List of Some Projects and Implementation Scope S.No Customer Collections Dispute Credit Biller Direct Status 11 Impl 12 Impl 13 Live 14 Live 15 Live 16 Live 17 Live 18 Live 19 Live 20 Live 2011 SAP AG. All rights reserved. Internal 17

SAP Collections Management Overview Collection Supervisor Collection Specialist 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 2011 SAP AG. All rights reserved. Internal 20

Data available for Collection Strategies Broken Promise to Pay Number of Promise to Pays Promise to Pay Amount Customer Contacts Resubmissions Collections Data Open AR & Dispute Mgmt Data Aging Amount Dunning Level Amount Dunned Disputed Amount Dispute Case Status Payment Data Master Data or Operational Data which can be added to collections management Other Data Credit Data Credit Limit % Utilization Credit Exposure Risk Category 2011 SAP AG. All rights reserved. Internal 22

Collections Management: Collection Strategy Text Collection Rules within the Collection Strategy 23

Collections Management: Collection Strategy Text Conditions within a Collection Rule 24

Collections Management: Collection Strategy Text Automatic Prioritization of Customer Work Items 25

Collections Management: Collection Strategy Text Priority is determined by the valuation of each collection rule 26

Clean Receivables To Be Collected Amount Calculation 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 2011 SAP AG. All rights reserved. Internal 27

Collections Management: Collector s Worklist Text Double-Click to open customer work item 30

Collections Management: Invoice Summary Text Default Customer Contact readily available Review open items to be collected 31

Collections Management: Payment History Text Review payment history 32

Collections Management: Dispute Cases Text Review open and closed dispute cases 33

Collections Management: Promise-to-Pay Text Record promise for payment or customer contact at the invoice level 34

Collections Management: Promise-to-Pay Text Promise for payment has been recorded 35

Collections Management: Customer Contact Text Record customer contact resulting in completion of the work item 36

Collections Management: Completed Item Text Work item completed 37

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 Select the specific type of correspondence or letter to send Select a set of invoices

Sample Scenario based on customer segmentation Small & Medium Business Slow Pay Automated Proactive Reminder Past Due Notice 1 after 7 Days Past Due Notice 2 after 21 Days Demand Notice after 45 days Call Customer after 60 days Small & Medium Business - Fast Pay Past Due Notice 1 after 14 Days Past Due Notice 2 after 28 Days Call Customer after 60 days Major Accounts (Large Customers) Past Due Notice 1 after 14 Days Past Due Notice 2 after 30 Days Call Customer after 60 days 2011 SAP AG. All rights reserved. Internal 45

Collections Management: Collection Strategy Strategy for Slow Pay Customers Collection Rules within the Collection Strategy 46

Collections Management: Collection Strategy Strategy for Fast Pay Customers Collection Rules within the Collection Strategy 47

Collections Management: Collection Strategy Strategy for Major Customers Collection Rules within the Collection Strategy 48

Collections Management: Collector s Worklist List of Customers Prioritized 49 PRN Proactive Reminder Notice (0-20 points) PDN 1 - Past Due Notice 1 (21-40 points) PDN 2 - Past Due Notice 2 (41-60 points) CDN Collection Demand Notice (61-80 points) CALL Call the Customer (81-100 points)

Collections Management: Valuation Priority is determined by the valuation of each collection rule 50

ACA: Correspondence from Worklist Ability to send correspondence from Worklist 51

ACA: Correspondence Packages Packages are the various types of collated correspondence 52

53 ACA: Correspondence Letters

Collections Management: Valuation Priority is determined by the valuation of each collection rule 54

55 ACA: Correspondence Letters

Collections Management: Valuation Priority is determined by the valuation of each collection rule 56

57 ACA: Correspondence Letters

Collections Management: Valuation Priority is determined by the valuation of each collection rule 58

59 ACA: Correspondence Letters

ACA: Dynamic Business Letter Partner Generation End users can create letters 60

ACA: Dynamic Letter Generation Define sections for the letter 61

ACA: Dynamic Letter Generation Ability to define static and dynamic content 62

ACA: Dynamic Letter Generation Ability to define what columns to display in the letter grid 63

64 ACA: Dynamic Letter Generation

SAP Receivables Management SAP Collections Management Webinar Improve Receivables Performance with Advanced Collection Strategies QUESTIONS??? please use Chat for any questions during the presentation Contact info for Today s Presenters Peter Jensen, SAP - 802.537.3331 --- peter.jensen@sap.com Sashi Narahari, HighRadius - 281.968.4474 --- sashi.narahari@highradius.com Dan Chapman, HighRadius 281.968.4476 --- dan.chapman@highradius.com