SAP Receivables Management Seminar

Using SAP Collection Strategies & Correspondence

Automation to Increase Collections Performance and
Reduce DSO
Sashi Narahari Feb 6, 2013
CEO, HighRadius Dallas, Texas
Agenda
• SAP Collection Strategies
– How to effectively segment customers?

• Sap Collections integration with A/R

– Is it real-time?

• Correspondence Automation
– How to make the computer do a lot of ‘standard repetitive
work’ and refocus the analysts time on high value targets?

2
 Demo

Standard SAP Collections Management

HighRadius Advanced Correspondence Automation

SAP Collections Management Users

Collections Manager Collections Specialist

 Define collection strategies /  Incoming / Outbound collection

rules calls
 Define work item assignment  Process daily worklist based on
to users / groups prioritization
 Monitor and reallocation of  Record customer contact and
workload follow up
Collections Management Users
Collections Manager
Data available for Collection Strategies
• Broken Promise to • Aging
Pay • Amount
• Number of Promise • Dunning Level
to Pays • Amount Dunned
• Promise to Pay • Disputed Amount
Amount
Open AR & • Dispute Case Status
• Customer Contacts Collections • Payment Data
• Resubmissions Dispute
Data
Mgmt Data

Other Data Credit Data

• Master Data or • Credit Limit
Operational Data • % Utilization
which can be added • Credit Exposure
to collections
• Risk Category
management
Collections Strategy Definition

Collection Collection
Strategy Rules
High to Medium Risk and
greater than 80% Credit
Limit Utilization
Valuation: 35 points
Collection Strategy for
High Risk Customers Past Due Invoices Over 15
Maximum Valuation = 100 days Past Due & Dunned
One or More Times
Valuation: 50 points

Resubmission Due for the

Customer
Valuation: 15 points
Collection Strategy Valuation

Valuation of
customer is
Valuation of less than or
customer is greater than
less than equal to
Valuation of 60% of
customer is 100% of
Maximum Maximum
less than 40% Valuation –
of Maximum Valuation –
Valuation of Valuation –
High Priority Very High
customer is Medium Priority
les than Priority
20% of
Maximum
Valuation –
Low Priority
Solution Architecture

Set of
Customers
[C1, C2,
………Cn] Rules

Strategy

Subset
Set ofof
Customers
Customer Email
s[C1,
[C1,C2,
C2,
C3……………Cn]
………Cn] Auto
Correspon-
dence Fax

Mail

Call
Sample Scenario
Customer Segmentation
• Small & Medium Business – Slow Pay
– Automated Proactive Reminder 7 days before
– 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 50 days
• Major Accounts (Large Customers)
– Proactive Reminder 14 days before
– Past Due Notice 1 after 14 Days
– Call Customer after 30 days
Collections Management: Collection Strategy
Strategy for
Slow Pay
Customers

• Pro-active (0-20 points)

• 1st Past Due (21-40 points)
• 2nd Past Due (41-60 points)
• Demand Notice (61-80 points)
• Call (81-100 points)
Collections Management: Collection Strategy

Strategy for Fast

Pay Customers

•1st Past Due (21-40 points)

• 2nd Past Due (41-60 points)
•Call (81-100 points)
Collections Management: Collection Strategy
Strategy for
Major
Customers

• Pro-active (0-20 points)

• 1st Past Due (21-40 points)
• 2nd Past Due (41-60 points)
•Call (81-100 points)
Collections Management Users
Collections Specialist
Collections Management: Collector’s Worklist
List of
Customers
Prioritized

• Pro-active (0-20 points)

• 1st Past Due (21-40 points)
• 2nd Past Due (41-60 points)
• Demand Notice (61-80 points)
• Call (81-100 points)
Is SAP Collections real-time?
• Short Answer: YES!

• Worklist generation is batch

• Say once a day

• Open Items is real-time

• Data is being read directly
from A/R

17
Correspondence: From Worklist
Ability to send
correspondence
from Worklist

Select Pro-active
to mass process
Correspondence: Proactive Reminder
Select Package and
which transactions to
include in
correspondence

Select Contact and

Correspondence
Mode
Correspondence: Proactive Reminder
Correspondence: 1st Past Due

Select 1st Past

Due to mass
process
Correspondence: 1st Past Due
Select 1st Past Due
Package
Correspondence: 1st Past Due
Correspondence: 2nd Past Due

Select 2nd Past

Due to mass
process
Correspondence: 2nd Past Due
Select 2nd Past Due
Package & ‘Send’
Correspondence: Sample Email Correspondence
Correspondence: Sample Email Correspondence

Letter and Invoice

Copy attachments
Correspondence: Sample Email Correspondence
Correspondence: Sample Email Correspondence
Correspondence: Demand Notice

Select Demand
Notice to process
Process Receivables: Customer Details Screen

Send correspondence
button for individual
customers
Correspondence: Demand Notice
Select Demand
Notice Package
Correspondence: Demand Notice
Correspondence: Package Definition

Select from a list of Smart

Forms, Documents such
as Invoice Copy, POD
copy etc to define a
‘collated’ package
Correspondence: Maintain Letters

Select Letter to
Create/Edit
Correspondence: Maintain Letters
Correspondence: Maintain Letters
Correspondence: Maintain Letters
Correspondence: Maintain Letters
Correspondence: Maintain Letters
Correspondence: Maintain Letters
Correspondence: Maintain Letters
Collector’s Worklist: Call Customers

‘Call’ customers
with high past due
balances or no
outcome after
correspondence
Collections Management: Invoice Summary

Default Customer Contact

readily available

Review open
items to be
collected
Collections Management: Payment History

Review
payment
history
Customer Contact Outcome

Promise
to Pay

Not Dispute
Available Case
Customer
Contact

Request
Request
additional
Follow up
data
 Call Customer Outcome: Promise-to-Pay

Create
promise to
pay on a
collection call
Call Customer Outcome: Promise-to-Pay

Record promise
for payment or
customer
contact at the
invoice level
Call Customer Outcome: Negotiate Installments

Ability to setup
Installment plans
on high risk
customer
Collections Management: Promise-to-Pay

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

Summary of
all Promise
to Pay
 Call Customer Outcome: Create Follow-up

Create a
Follow-up
reminder on
specific
invoices
Call Customer Outcome: Create Follow-up

Identify the
date of the
resubmission
along with a
Reason
Collections Management: Resubmission

Summary of all
Resubmission
Call Customer Outcome: Invoice Disputed

Create
Disputes on
Invoices
 Call Customer Outcome: Invoice Disputed

Ability to identify
details of the dispute
and route it to the
appropriate analyst
Collections Management: Dispute Cases

Review open
and closed
dispute cases
 Notes Management

Select invoice and

enter invoice
specific notes
Notes Management

Identify the
reason of the
note
Collections Management: Notes

Summary of
all Notes
 Collections Management: Completed Item
Text

Work item
completed