2016 SAP SE or an SAP affiliate company. All rights reserved. 1

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2 ASUG SAP HANA Platform Program The ASUG SAP HANA Platform Program will focus on providing SAP HANA platform education, customer experience, and knowledge sharing both from a business and technical perspective. Join the ASUG SAP HANA Platform Program: bit.ly/hanaplatformsig 2016 SAP SE or an SAP affiliate company. All rights reserved. 2

6 S/4HANA Finance SAP Receivables Management Katharina Reichert, January, 2016 Customer

7 Series on Receivables Every other Thursday Today - Introduction to Receivables high level overview Jan 28 The SD Credit Check is gone! What is new in Credit Management in S/4HANA Feb 11 Tools to Lower DSO Feb 25 Deployment and Integration Options: Deeper Dive on HANA Cloud Platform apps and Central Finance 2016 SAP SE or an SAP affiliate company. All rights reserved. 7

8 SAP S/4HANA reimagines businesses for the digital economy Digitize the value chain Anticipate business outcomes Reimagine business models, business processes, and work 2016 SAP SE or an SAP affiliate company. All rights reserved. 8

9 SAP S/4HANA reimagines how companies interact with customers Digitize the value chain Large numbers of customers / touchpoints Direct connectivity with customers Automation Business Networks Anticipate business outcomes Customer information immediately available everywhere in the organization Proactive credit risk management Mobility and Analytics Reimagine business models, business processes, and work Working capital optimization strategies Factoring and Discounting 2016 SAP SE or an SAP affiliate company. All rights reserved. 9

10 Automation enables scale Reduce manual errors and increase straight-through-processing rates Automate processes to focus on exception management and customer care Credit checks Credit limit updates Opening or closing of invoice disputes Credit memos Collections prioritization Synchronization between incoming payments, open disputes and promised payments Self-service access for customers Open Disputes Today K USD Credit Limit Utilization Customers > 80% Today 6 Overdue Receivables Today 62.17% Collection Progress Current Run 0% 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 10

11 Accessing the Network is easier than ever before Use SAP ERP Add-On to integrate data and access working capital tools Integrate your order-tocash process seamlessly with your buyers processes for optimal collaboration Eliminate transit delay for documents like invoices or orders Minimize errors by eliminating manual data re-entry Increase transparency of the process chain Create Sales Order Order pushed in from customer via Ariba Network Send Goods & Invoice AribaPay: Certain. Secure. Simple Your business is a SUPPLIER Receive Payment Receive Remittance Payment Advice SAP ERP Add-On for Ariba Network ASN & Invoice sent to your customer Payment received via ARIBA Pay Clear Open Item & Post Pushed in remittance from customer via Ariba Network Access to accounts receivables finance 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 11

12 Mobile and analytics innovations deliver customer insights Connect your departments to reduce DSO Manager view / Head of Sales view Mobile-enabled Alerts/personalization Cash Collections Team view / Customer Service view Optimized for desktop usage Customer contact history in single view 18.6% A single source of truth enables real-time collaboration, delivering the right information at the right level of detail for each user s needs fewer overdue accounts receivable when companies have a holistic view of their customers at the time of interaction Source: SAP Performance Benchmarking 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 12

13 Working capital optimization strategies Tackle DSO within your business and with receivables factoring Internal receivables optimization Access to Receivables Finance tools Analysis Strategies Re-negotiate payment terms Require upfront payments Shorten dispute cycles Funder 55 Funders Funder Funder Analyze your customer receivables to identify drivers of DSO Hundreds of graphical reporting and filter options Eliminated sensitivity to cyclicality, seasonality and reporting key dates Immediate data availability Faster access to cash Income Statement and Balance Sheet benefits to lowered DSO Optimized interest income Less reliance on bank financing 2016 SAP SE or an SAP affiliate company. All rights reserved. 13

14 SAP Receivables Management is a portfolio of automation solutions Accounts Receivable standard process automation Manage all financial accounting related aspects of customer accounts receivable. Credit Evaluation and Management Embed proactive credit management in transactional processes and portfolio analysis. Billing and E-Invoicing Deploy a customer bill payment portal or an e-billing process. Dispute Resolution Clarify and resolve customer payment disputes quickly and efficiently. Collections Management Proactively manage customer collections and customer service SAP SE or an SAP affiliate company. All rights reserved. 14

15 Accounts Receivable standard process automation Built-in analytics and transactional efficiency ANALYTICS TRANSACTION PROCESSING Example: Clear incoming payments Personalized launchpad with key apps for accountants and managers Color coding alerts users when thresholds are exceeded Fiori analytics are available on any device 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 2016 SAP SE or an SAP affiliate company. All rights reserved. 15

16 Managing A/R in S/4HANA with Fiori Accounts Receivable Manager Days sales outstanding Dunning level distribution Future Receivables Total Receivables Overdue Receivables Days Beyond Terms In the past, these reports were available only with significant time delays and often required pre-aggregation routines and BW data replication How is our business doing in terms of actively managing our INFLOWS of working capital? When do we expect to receive certain amounts of cash? S/4HANA makes this information available in real-time without data redundancy And managers can always drill-down from highest level analytics to line item details Which groups of customers are most overdue? Which accountants are most effective? 2016 SAP SE or an SAP affiliate company. All rights reserved. 16

17 Processing A/R in S/4HANA with Fiori Accounts Receivable Accountant Create Correspondence Display Customer Balances Manage customer line items Clear incoming payments Post incoming payments Manage bank statements Manage due items / collaborate with customers Match payments with open items Improved search capabilities helps you respond to inquiries as fast as possible while managing due items Clearing and posting incoming payments in standardized process with direct access to discount settings, customer contact information and notes In the past, there were more transaction codes and screen changes necessary to go through these processes S/4HANA streamlines processes and enables improved search and type-ahead capabilities to help you find the data you need as fast as possible 2016 SAP SE or an SAP affiliate company. All rights reserved. 17

18 How do the Fiori apps work together in a process? Sometimes it is a combination of apps that provide insights: Fiori App Fiori App: DSO Fiori App: Total Receivables Observations Very high level of DSO for customer Acme, Inc We do a lot of revenue with Acme, Inc Fiori App: Clear Incoming Payments Many payments applied to account, instead of clearing individual open items Fiori App: DSO Reasonable DSO for customer Acme, Inc 2016 SAP SE or an SAP affiliate company. All rights reserved. 18

19 App-to-app navigation moves you through the process flow With a customer in focus, you are offered different navigation options to continue investigations (view balances, master data) or process transactions (clear/post incoming payments, process receivables), subject to your system authorizations. Fiori App Fiori App: Manage Customer Line Items Observations Unallocated cash for customer Mark and Sons Fiori App: Clear Incoming Payments Clearing individual open items 2016 SAP SE or an SAP affiliate company. All rights reserved. 19

20 Credit Evaluation and Management Balance risk and return with a unified global view of your customers Cross-enterprise and cross-system credit evaluation and management process Customer scoring based on your rules, including internal and external factors Easy access to credit information for your sales team Workflow for faster decision-making once credit limits are reached Amount of A/R write-offs by 0.3% the 25% top-performing companies (compared to 3.1% for the bottom 25%) Source: ASUG Benchmarks SAP Credit Management sets and manages customer credit limits 2015 SAP SE or an SAP affiliate company. All rights reserved. Internal 20

21 Functional overview: SAP Credit Management Credit Limit Management Implement a company wide credit policy Manage a customer credit profile Central credit management in a distributed system landscape Credit Case Credit case for structured processing of credit limit applications Track status and result of credit limit applications Credit Information Interface to external credit agencies Input parameters for scoring rules Credit Manager Analytics Role-based access to credit management information and analysis Alert Alert Credit Rules Engine Categorize customers by scoring rules Automatically calculate and assign a customerspecific credit limit Credit check rules Model and implement own customer credit score cards January February March April Credit Limit Credit Exposure 2016 SAP SE or an SAP affiliate company. All rights reserved. 21

22 HANA Cloud Platform app: SAP Credit Information LAB PREVIEW Current Situation SAP ERP SAP Credit Management On Premise SAP PI XML Agency 1 Agency 2 Agency 3 Integration of external credit agencies done by the customer / during the implementation project Significant implementation effort per interfaces (= per agency) Agency 4 HCP Solution On Premise SAP ERP SAP Credit Management HCP App Credit Risk Information XML Agency 1 Agency 2 Agency 3 Agency 4 Maintenance of interfaces to credit agencies done by HCP service provider (= SAP) Bulk of external credit report data remains in HCP app Target data fields (external rating, foundation date, ) transferred to Credit Mgmt for use in scorecard SAP customers have a broad choice of external credit agencies Reduced TCO and faster ROI for Credit Management projects Assumptions Customer must sign contracts with credit agency directly SAP roles remains purely technical; SAP does not own the data; SAP will not use this data for own purposes. The HCP Credit Information shall be able to connect to SAP Credit Management releases (down to ERP 6.0) 2016 SAP SE or an SAP affiliate company. All rights reserved. 22

23 SAP Customer Payment Portal Let customers access their account details with self-service scenarios Your Customers SAP Customer Payment Portal View and pay bills FI-AR self-services FI-AR Account: Customer 1 FI-AR Account: Customer 2 FI-AR Account: Customer 3 SAP ERP FI-AR SAP Customer Payment Portal is a HANA Cloud Platform app that will enable customers to View bills Make payments Start the dispute resolution process View their master data and inform you of any changes Perform annual balance confirmations 2015 SAP SE or an SAP affiliate company. All rights reserved. Internal 23

24 Initial release supports 3 customer-facing processes LAB PREVIEW Match payments with invoices Customer selects payments and the open items that should be cleared This creates a payment advice that gets sent to AR clerk for processing Avoids long telephone conversations Pay my bills Customer selects open item and creates payment Create inquiry for underpay Manage my accounts Customer can view their master data In-tool notification of changes is planned for release SAP SE or an SAP affiliate company. All rights reserved. 24

25 Match payments with invoices LAB PREVIEW Customers can assign payments to invoices and send payment advice notes to the biller Assigned items can be changed up until the point when the biller s accounting clerk has processed them The responsible accounting clerk can access the payment advice notes out of his SAP inbox 2016 SAP SE or an SAP affiliate company. All rights reserved. 25

26 Pay my bills LAB PREVIEW Customers can see all of their bills and credit notes on the internet If billing document contains SD line items, then these can be displayed; Financial documents do not have this line item detail available They can download bill data in PDF, XML format 2016 SAP SE or an SAP affiliate company. All rights reserved. 26

27 Pay my bills LAB PREVIEW Customers can pay their invoices using credit cards or bank collection (FI-AR) Online credit card authorization and settlement supported (planned) Partial payments, offset with credits and cash discounts are supported When a customer has paid an invoice, a payment method, bank details, or credit card details are entered in the open items that belong to the selected invoice *credit cards in Release SAP SE or an SAP affiliate company. All rights reserved. 27

28 Maintain my accounts - customers can view their master data Customers can display their data to check for accuracy In a future release, they will be able to notify you of changes: Change their address, bank or credit card data Grant or withdraw automatic debit authorizations Modify their notification preferences LAB PREVIEW 2016 SAP SE or an SAP affiliate company. All rights reserved. 28

29 Payment history and invoice history LAB PREVIEW Payment history Filter payments by time, status, bank Payments can have a different status (in progress, processed) depending on the backend ERP processes Scheduled payments can be cancelled provided that no payment run took place Open Invoices History Invoices from the last 60 days are shown in the portal 2016 SAP SE or an SAP affiliate company. All rights reserved. 29

30 Create inquiry for a partial payment LAB PREVIEW Customers that indicate a partial payment may need to document an inquiry Configuration on whether this functionality is mandatory is part of customizing 2016 SAP SE or an SAP affiliate company. All rights reserved. 30

31 Dispute resolution Workflow and escalation tools reduce DSO and increase liquidity Challenge Inability to identify disputes early Collaboration outside of the Finance team Spread of relevant information across different media and communication channels Disconnected processes: manual posting of credit memos or follow-up steps How SAP speeds things up Automatic, self-service creation of dispute cases Dispute case routing through the company via SAP Business Workflow Deep integration with business documents and processes Automated posting, correspondence and reporting 56.5% fewer uncollectible accounts receivable writeoffs using integrated, automated dispute management Source: SAP Performance Benchmarking 2015 SAP SE or an SAP affiliate company. All rights reserved. Internal 31

33 Instant insight Track numbers and value of open disputes Fiori Analytical app for Open Disputes Filter by dispute reason, processor, country Focus your team s attention on highest value disputes Navigate directly to details of dispute and customer account 2016 SAP SE or an SAP affiliate company. All rights reserved. 33

34 Collections management Collections management capabilities prioritize customers Customer-centric collections Identify overdue accounts and critical trends Prioritize collections activities based on strategies Generate, monitor and balance worklists Leverage complete integration (credit, disputes, billing, analysis) Extend the receivables processes beyond the finance team 19% Lower overdue accounts receivables when companies take a holistic view of their customers at the time of interaction Source: SAP Performance Benchmarking 2016 SAP SE or an SAP affiliate company. All rights reserved. 34

35 SAP software provides collection strategies that allow you to select and prioritize customers for collections activities Collection strategies are the basis for the automatic creation of daily worklists for collection specialists Worklists ensure evaluation, identification, stratification and prioritization of customers according to collection strategy Daily worklists improve user productivity and efficiency Collection procedures can be used to document and react to customer contacts Promise to pay agreements Dispute cases (via tight integration with the dispute management capability of SAP Collections and Dispute Management) Resubmissions Customer contacts Collection managers will find a variety of options to manage the team and their work Define and adapt strategies Maintain collection groups Workforce management by reassigning worklist items and monitoring degree of worklist processing 2016 SAP SE or an SAP affiliate company. All rights reserved. 35

36 Standardized deployments, with flexibility and scalability Rapidly deploy processes for new units and shared service centers Benefits of centralization Flexibility to scale according to business growth and changing invoice volumes Consistency of interactions with customers across your business Prioritization and reporting across multiple ERP systems Centralized Receivables Management Credit exposure and limits Dispute resolution Collections team management Operational reporting ERP 1 ERP 2 ERP 3 Supported connection scenarios Central Finance leverages the latest in S/4HANA Finance and SLT technologies Shared Service Framework for Finance provides extra layer of service-level management Classic based on ALE and web services 2015 SAP SE or an SAP affiliate company. All rights reserved. Internal 36

37 Does your receivables solution deliver these results? Visit us at sap.com/receivables for more details 1 Transparency Provide real-time information on working capital to your accounting and sales teams to close the gap between insight and action 6 Reduced Credit Risk Balance risk and return with a unified global view of your customers 2 Simple Account Management Let customers access their account details with self-service scenarios 7 Insight Identify root causes of customer disputes to fix business processes and reduce the number of future disputes 3 Consistency Gain a single view of customer receivables and provide upto-date statuses 8 Speed Resolve disputes faster using workflow and escalation tools to reduce DSO and increase liquidity 4 Process Automation Reduce manual errors and increase straight-through processing rates and user productivity 9 Scalability Rapidly deploy standardized processes for new units and shared service centers as invoice volumes require 5 Network Readiness Pull rich remittance information from the world s leading business networks to automate receivables processing 10 Acceleration Use SAP best practices and rapid deployment solutions to accelerate your projects and easily adapt to new innovations 2016 SAP SE or an SAP affiliate company. All rights reserved. 37

38 Series on Receivables Every other Thursday Today - Introduction to Receivables high level overview Jan 28 The SD Credit Check is gone! What is new in Credit Management in S/4HANA Feb 11 Tools to Lower DSO Feb 25 Deployment and Integration Options: Deeper Dive on HANA Cloud Platform apps and Central Finance 2016 SAP SE or an SAP affiliate company. All rights reserved. 38