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with SAP
Financial Institutions
Suppliers
Customers
“ Leading organizations will use the Financial Value Chain to improve the efficiency of the
Finance function and to optimize working capital.
Customer Customer
… the bottom-line:
Lower costs and DSOs, lower risks and free cash for financing company growth
© SAP 2007 / Page 7
Optimizing the Credit-to-Cash Cycle with SAP
Financial Institutions
Suppliers
Customers
Check
credit- Issue Settle
& pay Reconcile
worthiness invoice
Resolve Disputes
and Collect Cash
Resolve
Streamline dispute management and reduce costs
SAP Dispute Management disputes Faster resolution and lower DSOs
* SAP Bank Relationship Management is available with SAP ERP Enhancement Package 2 as part of Treasury applications from SAP
Customer Challenges
Takes too long to evaluate credit
Inconsistent methods and policies
No global view of exposure
Evaluations hold up sales orders
Functions
Role-based portal providing
comprehensive view for
quick credit decisions
Single point of access for all
relevant credit information
Provides global view of
exposure to each customer
Business Benefits
Improves user productivity
by consolidating of multiple
information sources
Improves communication
between sales, credit and
accounting departments
Sales people can access
customer profile from the
field
Functionality
Fast, consistent rating of
business partners via
scoring
Utilizes broad range of
internal and external data for
usage in credit scoring
Credit reports are stored in
the customer master data
Profiles are dynamically
updated with new
information as relationship
evolves
Challenges
High billing costs
Paper-based processes increase errors
and drive up costs
Mail delays bill delivery
High DSOs
Functionality Benefits
Customers receive bills quicker via web Lower billing costs and resource
demands
View balances and payment history
Receive payments faster
Make payments online
Decrease DSOs
Log dispute cases
Improve customer satisfaction
Challenges
Disputes take too long to resolve, tie up
liquidity
High cost and effort to resolve disputes
High DSOs
Impact customer satisfaction
Functionality Benefits
Greater automation, workflow and Faster dispute resolutions and at
collaboration lower cost
Centralized information repository Reduce DSOs
Automatic escalations based on time Improve customer satisfaction
Customers can log dispute cases via
Biller Direct
Amount Fields
Customer
Contact Person
Linked Objects
Challenges
Inconsistent account prioritization
Labor intensive and long cycle times
Inconsistent collection strategies
High costs of collections
Increase bad debt risk
Functionality Benefits
Rules-based collections strategies Improved collections rates
Prioritization via work lists Reduced bad debt expense
All relevant information at a glance Streamline collections and reduce
operating costs
Proactive targeting of “late pays”
Reduce DSOs
Each collection specialists gets a daily worklist containing all customers that should be contacted.
Customers are prioritized according to collection rules as part of broader collections strategy.
My Worklist
Bus. Partner Name Priority Curr. Open To Be Collected Promised Disputed Dunned Level Dun. Date Last Pmt. Last Contact Credit Limit Exposure Risk Class
400200 Electronics Corp. Very high USD 12,534 5,455 2,544 1,874 2,688 3 03/03/05 15/01/05 03/15/05 20,000 76 % C1
102300 Media Tronics Very High USD 9,765 8,566 589 8,566 2 03/03/05 01/29/05 03/02/05 15,000 90 % B2
312045 Trade Markets Int. High USD 35,458 21,369 4,890 2,561 15,697 2 03/03/05 02/02/05 03/04/05 40,000 88 % B1
536211 Contilia Enterprise High USD 25,566 11,368 11,368 2 03/03/05 02/21/05 03/10/05 25,000 61 % A3
168999 Happy Camper High USD 12,687 8,512 2,566 8,512 1 03/03/05 02/15/05 50,000 20 % A2
Navigation
Collection specialists can drill down into list detail of all open invoices which are populated by SAP-AR
ensuring every role working the case has the most up-to-date information.
Bank accounts Bank Memo Treasury Earmarked Disputes Customer/Vendor- Purchase requisitions
clearing records Deals funds open items
In-House Cash Purchase orders
accounts Intra-day
banks Real estate Blocked items
bank Sales orders
Payments
statements … Down payment
in transit …
… requests
…
© SAP 2007
2008 / Page 27
27
SAP In-House Cash
Customer Challenges
Fragmented global cash balances
Lack visibility and control
Complex and high cost cash transfers
Currency translation losses
Challenges
Accounts SAP
Corporate Client
Functionality Benefits
Receive bank statement electronically via Saved costs via standardization
SWIFTNet of all bank connections
Automatic reconciliation of incoming Saved efforts by automation
payment with customer invoice Streamlined straight-through-
Monitoring of exceptions and processing processing of incoming payments
status
Working Capital
Reduction in Days Sales Outstanding (DSO) (increase on-time payments) 10% - 25%
Revenue
Increase revenues with risk-free accounts (decreased rate of credit refusals) 0.5% - 1.0%
“ We plan to reduce bad debt risk by 20-50 percent. We will speed information
access by 20-40 percent for sales and credit staff. We will reduce the time needed
to collect credit information and enter data into the system by 10-20 percent.
Tim Ziert, Senior Credit Manager
“ SAP (Dispute management) has been a great enabler and strategic advantage for
us...it facilitates teamwork and collaborations to get disputes resolved quickly Tim Ziert,
Senior Credit Manager
Ritch Cushway, Global Customer Financial Services Manager
Integrated Solution…
Manage the Financial Supply Chain seamlessly embedded into the related
processes of Logistics, Financial Accounting and Treasury Management
End-to-End Connections with Suppliers, Customers and Banks