SAP S/4HANA Receivables Management

Receivables Management is part of the Financial Operations area – which are often structured / grouped in shared services or global business services.

SAP has a series of modules that can help companies manage receivables.

These add-ons can be deployed in a single system, but can pull data together from multiple systems – giving your team a unified view of their receivables, even in a distributed systems landscape.

Automated processes deliver high quality customers interactions – and if your shared services organization has to deliver services for additional units next year, the receivables processes will be ready to scale, with:

  • Credit checks for every business transaction

  • Updating of customer credit limits 

  • Workflow for dispute resolution

  • Automated creation of credit memos / accounting postings

  • Collections prioritization

  • Synchronization between accounting / incoming payments and promised payments and open disputes

Reporting allows your teams to focus on key customer accounts to drive down bad debt write-offs by better managing credit relationships, and improve DSO and working capital with tools to collaborate with your customers on payments.

Receivables Management is a key part of an optimized order to cash process. Based on FI-AR (the accounts receivables backbone of SAP ERP Finance), SAP offers a suite of add-on applications that are fully, natively integrated with FI-AR and ERP processes like sales and distribution.

Companies can deploy these add-ons as needed – there is no "correct" order for an implementation – businesses start where their pain is greatest.

These receivables management engines include:

SAP Credit Management – to help companies implement a single company-wide credit policy and use credit analysis results to calculate credit limits – including embedding credit checks into key operational processes

SAP Biller Direct – an electronic bill presentment and payment solution that 1) lets customers download or pay invoices via bank transfer, card, etc., as well as start the dispute process, and 2) allows vendors to see the approval and payment status of their invoices, including inquiry functionality

SAP E-Invoicing for Compliance – an e-billing solution that sends customers validated, signed invoice PDFs via email or invoices via EDI – including the compliance checks required in 37 different countries

SAP Collections and Dispute Management – modules that provide workflow and process support for managing disputes as well as a module that generates prioritized collections worklists that help collections specialists proactively contact customers.

These add-ons can be deployed in a single system, but can pull data together from multiple systems – giving your team a unified view of their receivables, even in a distributed systems landscape.

For the accountant using the latest version of S/4HANA Finance, SAP makes analytical Fiori applications for reporting scenarios available, with apps tailored for accountants and managers.

Clicking on these coloring coded tiles will provide real-time analytics about total and future receivables, dunning levels, and much more. And you can always jump into the customer details.

In terms of transactions, user productivity has also been improved:

  • Layout variants allow users to save favorites from hundreds of data columns

  • Fuzzy search and type-ahead features

  • Worklists structure processes

  • Context-sensitive navigation points within processes

  • Improved productivity – fewer clicks and screen changes

Fiori apps have been delivered for the following sub-processes in FI-AR:

  • Customer balances

  • Customer line item browser

  • Clear/Post incoming payments

  • Correspondence

  • Dunning

  • Manage bank statements


SAP Credit Evaluation and Management

Credit Management lets companies have a cross-enterprise, scorecard-based approach to rating customers and managing automatically-assigned credit limits which will reduce write-offs while increasing automation rates. All exposures from all systems are considered, and workflow-based processes keep credit blocks from slowing sales.

Credit Limit Management
  • System to implement a company-wide credit policy (one central view of customer credit, even in a distributed system landscape)

  • Manage a customer credit profile - based on the SAP Business Partner master data structure

Credit Case
  • Credit case for structured, workflow-supported processing of credit limit applications

  • Track status and result of credit limit applications in worklist approach

Credit Rules Engine
  • Categorize customers by scoring rules

  • Automatically calculate and assign a customer-specific credit limit

  • Credit check rules

  • Configuration of follow up processes with event chains

  • Customer scoring using own scoring rules

SAP Dispute Management
  • Manual dispute handling is disjointed (lots of media breaks –phone, email), which drives up DSO, and puts customer relationships at risk

Most companies handle billing disputes and collections cases in the following way. (1) A customer calls, emails or faxes the seller to tell them there is a problem with the invoice or the AR department sends a report with past due accounts. (2)The dispute coordinator use receivables aging reports extracted from the company’s AR system—but they do not show the reasons behind past-due accounts. (3) The coordinator needs supporting data to verify the dispute so he calls or emails the people in sales or shipping—depending on what’s being disputed– and hopes they provide a timely and accurate response. (4) Tracking and follow up are strictly manual and there’s no way to tell whether or not progress is being made against the dispute. (5) And because the disputes are not tracked in the AR system, its likely that the customer will appear on an aging report and called by a collection agent.

37% - Lower overdue accounts receivable where disputes can be settled online and a dispute management system is integrated into the collections system

Invoice disputes
  • Have various root causes inside and outside Finance

  • Are hard to identify

  • Delay payments

  • Increase DSO (day sales outstanding)

SAP Receivables Management automatically
  • Identifies disputes based on rules

  • Drives resolution - increases quality and shortens resolution

  • Builds structured knowledge database – (over time, the number of disputes decreases as you identify and fix the root causes of disputes - Your Finance team is happy. Your customer is happy)

  • Reduces DSO

Process Description:

1. Continuous synchronization between A/R and dispute cases

  • Automatically create disputes for underpayments

  • Create and view dispute cases from financial transactions

  • Automatic update of dispute cases by financial transactions

  • Link to financial and billing documents (and sales documents)

2. Monitoring for progress and success of collections

  • Analyze and escalate dispute cases

  • Create notes, view an action log or link documents to the case

  • Perform dispute case analysis and monitor trends that influence dispute resolutions

3. Automated workflow and allocation of worklists

  • Correspond with customers

  • Assign workflow for sales teams or collections agent to work with customers

SAP Collections Management

SAP delivers an integrated, automated and collaborative environment for collecting all accounts receivable, complete with integration to all relevant order, invoice, bill and credit information in the collections management capability of SAP Collections and Dispute Management.

The integrated nature of the solution provides important advantages to customers. Disputes and any relevant customer credit information is combined with bills and collections data to give collections and customer service personnel a complete picture of the customer relationship. This improves customer satisfaction, as well as reduces the time and expense of collecting from customers. The integration of the Biller Direct portal also enables customers to manage their own payments, further saving time (improving DSO) and costs.

Business issues: 

  • Inconsistent account prioritization; Labor intensive and long cycles; High costs of collection; Increased bad debt risk

Process Description:

1. Identify overdue accounts

  • Review dispute cases and overdue accounts

  • Receivables aging for customers

  • Collection specialist can create/renew promise to pay

2. Prioritize collections

  • Determine which customers are to be contacted

  • Determine the terms of payment, consider cash discounts

3. Generate worklists

  • Contacts valuated and prioritized according to collection rules in a collection strategy 

  • 360 degree review of customer data to prepare call

4. Leverage integrated system

  • Open and manage dispute cases

  • Process invoices individually or grouped

  • Analyze results to evaluate strategy effectiveness

SAP has 15+ years automating receivables processes – in simple environments but also in complex, multi-system landscapes. These receivables processes of credit, dispute and collections were designed to work across multiple ERP systems.

SAP Delivers
  • Standardized processes that scale as business expands and contracts - automation and integration makes processes less susceptible to changes in volume

  • High-quality support to make sure your customer interactions are consistent across the enterprise

  • Team management capabilities for prioritization, execution and reporting across systems

Several different connection scenarios supported (Central Finance, Shared Service Framework for Finance, ALE classic, etc) depending on your architectural setup.

  • Credit, Collections and Dispute could be deployed on your Central Finance instance with S/4HANA Finance

  • Or they can be deployed with SAP Shared Services Framework for Finance for an added level of service level management and communications integration

  • Finally, companies have been using ALE scenarios with these solutions across multiple back end ERP systems for nearly 15 years.

The SAP receivables management portfolio will help your finance operations team be ready for the digital business revolution – we enable you to scale standardized business processes and give each customer the impression that they are highly valued – by providing everyone with real-time access to account details.

Learn more at sap.com/receivables or contact us:
info@dycsi.com.mx
+1 210 707 9230

















SAP S/4HANA Credit Management
Solution Overview