sap receivables management credit and collections

SAP Receivable Management

Credit & Collections

CRF SAP User Group Meeting Manhattan Beach, CA

March 18, 2013

• Bayer AG • Company Profile 2013 Slide 2

Full year sales: €39.8 billion

110,500 employees

291 subsidiaries Headquarterd in Leverkusen, Germany

U.S. Headquarters – Pittsburgh, PA As of December 31, 2012

Key Locations / Regions

The Bayer Group is a global enterprise

with companies in almost every country

Europe

Latin America / Africa / Middle East

North America

Asia / Pacific

North America – Business Structure

Breakdown of Total Sales by Subgroup 2010

EUR

8.2 billion

HealthCare 56 %

CropScience 19 %

MaterialScience 25 %

As of December 31, 2010

Bayer HealthCare

Animal

Health

Consumer

Care

Pharma-

ceuticals

Diabetes

Care

Bayer

HealthCare

Bayer Healthcare, LLC Animal Health

Customer base:

Distributors

Veterinarians

Pet Specialty Retailers


65,000 Vets in U.S.

45,000 Accounts - ~20,000 with AR

balances

Approx. 42,000 orders per month are

processed

Average invoice <$1500

Approx. 8% of sales orders go on credit

hold


Process 15,000 checks per month

7500 credit card transactions/mo.

Use Paymetric for processing and credit

card storage

Send monthly statements and dunning letters

Use Billtrust for mailing of statements and

dunning letters

Agenda FSCM Credit Management

Global Credit Management Cockpit

Global Credit Management View

FSCM Collections

FSCM Credit Management

The Data portfolio within FSCM Credit Management is split into two sections:

General data

o Address data

o General Credit Settings / Information

Credit Segment Data

o Company Code specific Credit Data

Scorecard Check Rule

Risk Class Credit Specific Notes

Customer group Financial / Non-Financial Information

Credit Limit Credit relevant Assignment

Exposure Control Data (Block / Special attention)

Payment behaviour

FSCM Credit Management –

General Data

The General data section of the Business Partner provides information about:

• Address • Bank / Credit Card Details

• Financial / Non

Financial Information


General Data II

Within the “Credit Profile tab” you can maintain

the following details of the Customer:

Risk Class: The Risk class clusters the

Customer Portfolio. Depending on the Risk class

the credit check criteria will be tighter.

Score Card: you can either select a local Scorecard

or keep the global score card which will be set by

default when a business Partner will be created

Score: will be calculated

depending which Score

card is chosen.

Check Rule / Customer group: Check rule identifies either

the Credit Check will be performed on this customer or one

level above in the hierarchy. Customer Group can be used

to cluster the customer and/or to have different Credit Check

values


General Data III

The following values will be available (Credit Profile)

Scorecard Check Rules

Local Scorecards

Global Scorecard

Y01 – Credit Check account

Y02 – Credit Check will be performed

on a higher Account (dep. on hierarchy)

Risk Class Customer Groups

High Risk

Medium Risk

Low Risk

Intercompany

Default (Initial)

Small

Medium

Large


General Data IV

Assessment Data tab:

Non-Financial Data: The first two lines can be

maintained by the user. Global and Local Score

only shows the Scorecard values

Controls: The User can

create/delete entries

on a yearly basis and

switch between different

years

Financial Data: Financial

Data can be entered and

Changed. Rations and

sums will be calculated

automatically


General Data V

The following financials can be entered by the user (Assessment Data)

• Cash

• Accounts Receivable

• Inventory

• Accounts Payable

• Current Assets

• Current Liabilities

• Total Assets

• Total Intangible Assets

• Total Liabilities

• Net Worth/Ret Earn

• Goodwill

• Cash from Operations

• Sales

• Cost of Goods Sold

• Net Operative Profit/EBIT

• Interest Expense

• Net Profit/Loss

The following Values will be calculated automatically

Working Capital

Tangible Net Worth

Gross Profit

Quick Ratio

Current Ratio

DSO

A/P Days

Inventory Turnover

Interest Expense Coverage

CurrDebt -> NetWorth

TotlDebt -> NetWorth

TotlDebt -> TotlAssets

NetWorth -> TotlAssets

Gross Profit Margin

Operative Profit Margin

Net Profit Margin

Return on Investment

Return on Equity

Net Income as % Sales


Credit Segment Data

Available Data on Credit Segment Level


Credit Segment Data II

Credit Limit: Can be set by the user or calculated by the

system. The system will not overwrite the a manual set

Credit Limit. In the case that a Limit was set manual the

calculated Limit will be shown below for informational

reasons

Block / Special attention: Depending on the

Block reason the result could either be that an

order will be blocked or that the user can’t even

create the order. When the Special attention is

used the Credit check steps could be

performed in different order than in standard

credit checking.

FSCM Credit Management – Credit Segment Data III (Special Attention / Block)

Special Attention Types

• <blank> no special attention needed

• ACC US AH: Autopay Credit Card

• BDW Bad Debt Write

• CED Collection Expense Due

• CIA Cash in Advance

• COR US: Credit Only Release

• DIR Direct Debit

• FDM Final Demand Letter Sent

• ICC US AH: Immediate Credit Card

• PAS Pass All credit checks

• RSK Risk Alert Received

• SCC US AH: Scheduled Credit Card

Block Reasons

• BA Bankrupt

• CA Cash in Advance

• DP Debtor in Possession

• DS Do Not Sell

• HD Hold All / Refer to Credit

• IN Inactive Customer

• PC Placed for Collection

• RB Rebate Customer


Segment Data IV (Exposure)

Click on the info button will open

the Exposure overview.

Double click on any category will lead

to the details. The following Categories exist

100 Open Orders

200 Open Invoices

300 Special Credit Exposure

400 Delivery Value

500 Billing Document Value


Segment Data V

•

The tab Payment behavior key figures

provides a high level overview of

• Dunning

• Overdue item

• Payment history

• Key figures


Segment Data VI

On the tab „Additional Segment Data“

You will find organizational data as well as information

in regards to payment key figures


Relationships - Hierarchy

In the Section “Relationships” you can see the relations

between the customers (higher / Lower account of)

Remark/Attention: The Relation/Hierarchy itself is not the

trigger where to check in regards to a Credit Check.

This is steered by the Check rule (general Data section)

Credit Check

hierarchy

FSCM Credit Management hierarchy

FSCM Credit Management -

Credit Check Routine

Limit, Block and Special

Attention type are set

on Credit Segment

level and independently

of the selected cust.

Group.


Credit Check Routine

Maximum Doc value,

Percentage and over-

Due days can be set on

the basis of a combi-

nation of Risk class

and Customer group.

But it is not

MANDATORY




FSCM Collections



The Global Credit Management

Cockpit offers the following

categories of interest:

- General BP Search

- Overview of Expiring Credit

Limits

- Blocked SD orders

- Increase of ADD

- Credit Limit Exceeded

Each category offers the user different

selection options which will be

shown in a different result list.

FSCM Credit Management - GCMC

Business Partner Search

•

In General the Business Partner search Tab

offers you to search for any criteria in the

Business Partner and provides a result list

which can be downloaded.

- Jump into the BP to maintain

Credit relevant Data


Expiring Credit Limits

Depending on your selection you

get a list of Business Partners

where the Credit Limit’s validity will

end soon. Out of the Result list

you can jump into the Business

Partner

If you set this flag the system will

exclude those customer‘s where

the validity is not relevant because

no Limit is defined (not zero).


Blocked SD orders


get a list of Blocked SD Orders.

Out of the Result list you can

1. Go into the Business Partner

2. Go into the SD Order

3. Create a note which will be

attached to the order

4. Maintain a release order

5. Release an order

The following Release Reasons are available

Release Reasons

001 Credit limit reviewed

002 Payment status/history reviewed

003 Payment commitment received

004 Payment advice existing

005 Account within credit limit

006 Account current & within credit limit

007 Business decision or approval

008 Obligated to ship

009 Other (comment required)

999 Keep order blocked


Increase of ADD

•


get a list of Business Partners

where ADD has increased in the

past significantly (dep. On your

selection)


Credit Limit Exceeded

•

Depending on your selection you get

a list of Business Partners where

Credit Limit has exceeded.

You can decide if you want to focus

on the horizon or the overall

exposure.


Seasonal Credit Limit Increase

Using the Transaction

/BAY0/FM_CR_SICL to maintain a

temporary increase of the credit

Limit (e.g. Promotion actions).

If there exists a temporary increase

this will be visualized in the Business

partner and the credit Check.




FSCM Collections

• Go4One SAMBA FSCM Credit Management Training • September 2012 Page 36




FSCM Collections

Page 39

1. Roles and Processes

Collection Supervisor

Collection Specialist

Collection Group

Main Tasks:

Define or adapt collection strategies

Assign collection strategies to “Business

Partners

Supervise collection process

Main task is to process the daily work

list:

Prepare customer contact

Contact customer

Document customer contact

2. UDM_SPECIALIST

Via transaction UDM_SPECIALIST you access the work list, where all Business Partners are listed, who

fulfill at least one rule of the Collections Strategy and where the SPECIALIST (-> you) is maintained as

Specialist in Business Partner Master Data.

The Work list is generated automatically each day newly.

3. UDM_SPECIALIST

Via Icon “Assign item” the Collections Specialist can assign Business Partners to another Collections

Specialist of the same Collections Group.

Via Icon “Go to” the Collections Specialist can either jump into the worklist of another Collections

Specialist of the same Collections Group, or view a single specific other Business Partner.

4. UDM_SUPERVISOR

Via Icon “Assign item” the Collections Supervisor can assign Business Partners to another

Collections Specialist of any Collections Group.

Via Icon “Go to” the Collections Supervisor can either jump into the worklist of another

Collections Specialist of any Collections Group, or view a single specific other Business Partners.

Via Extras -> Display Statistics the Supervisor can view the current Statistic of Worklist entries per

Specialist and can eventually assign BPs to different Specialists.

4. Process Receivables

When double clicking on a Business Partner in the Worklist, the system jumps into the Process Receivable list,

which is similar to FBL5n (line item display) with additional information.

On “Tab-line”, you can view invoices (current displayed view), payments, created Promises to pay and Dispute

Cases, past Customer Contacts and you can view and create Resubmissions.

Below the “Tab-line” there are Icons with which you can create Promise to Pay and Dispute Cases.

The Layout of the item list can be adjusted, sorted etc. (as in FBL5n).

5.Process Receivables – Overview

Back on tab “Invoices” and after a refresh of the list (via Icon “Refresh” ) you can see that there

are now new Promises to pay and a new Dispute Case, which have been created on the slides

before.

Also in transaction FBL5n columns of Promises to Pay and Dispute Case information can be

displayed. Those information are given in “real-time”.

6. Process Receivables – Customer

Contacts Under tab “Customer Contacts”, all customer

contacts are documented.

If you have finished the contact with the

customer and created e.g. Dispute Cases or

Promise to Pay, you leave the Process

Receivables list via Icon “Back” .

The pop-up “Change Customer Contact”

appears and you are forced to give a contact

result.

There are already texts given in the lower part

for the created Dispute Case, Promise to Pay

and Resubmission which have been created.

you can add additional information and have to

save the result.

If you enters the Process Receivables list for

this Business Partner the next time, the text

from this customer contact is than displayed

under tab “Customer Contacts”.

Questions?

Presented by: Deb Blevins & Isabella Nouri

Bayer Corporation

Thank you!

sap receivables management credit and collections

Documents

credit check criteria

credit card storage

credit card transactionsmo

credit profile tab

check rule customer

data portfolio

bayer group

general data section