SAP FICO - Boot Camp Presentation_SAP AR FSCM Overview

SAP AR-FSCM Overview Asha Prasanna; Sapna BhatiaContents•Accounts Receivables Overview•OTC Overview•FSCM Overview•FSCM Components•Biller Direct –Overview•Credit Management –Overview•Dispute Management –Overview•Collections Management –Overview•Treasury and Risk Management –Overview•Cash and Liquidity Management -OverviewAR OverviewAccounts Receivable (A/R) is one of the four important components that make up the SAP Finance module:Accounts Receivable ’s OverviewGeneral Ledger (GL)•Assets •Liabilities •Equity •Revenue•COS + Expense•Non-operating Expenses •Taxes•Labor and Material Cost ElementsAccounts Payable (AP)•Vendor invoices, credit/debit notes, payments —based on purchase order and goods receivedAccounts Receivable (A/R)•Customer invoices, credit/debit notes, receipts —based oncustomer order and goods shipped Asset Management (AM)•Depreciation, Asset PostingRecords and administers accounting data of all customersIs also an integral part of sales management Enables all postings in Accounts Receivable are also recorded directly in the General Ledger.Key FeaturesThe AR application component :•Accounts receivable records and manages the accounting data of all customers, and identifies the balance due by customer.•The customer balance is made up of:–Invoices–Debit/Credit memos–Payments–The A/R module is used to:•Process customer invoices and credit memos•Maintain customer payments and payment history•Manage deposits received from customers •Administer financial records and account balances related to customers•Manage credit for customersAR Overview (cont.)Master Data •Composite place to hold all relevant information for a customer •Bank account, dunning, payment termsInvoicing•Processingof invoices,creditmemos,subsequentdebits•Discounts,taxationReceipts &Clearing•Processingof payments•Manual,Automatic•Lockbox,checks,wiresCreditmanagement•Set upcreditpolicies•Managecredit forcustomersReports•Line itemreports•AccountbalancesFunctionalitiesOTC OverviewClientCompanycode 1101SalesOrganization1101Distribution channel (wholesale)Division 1Distributionchannel(retail)Division 2Salesorganization1102Companycode 1102Salesorganization1102Organization StructureCore processSales order iscreatedCustomer makes paymentBill sent toCustomer & AccountsAccounts Receivable•Collect money from customers•Process cash receiptsShipment made toCustomerBusiness process (Order to Cash) —using Industry Print for Hi-Tech Industry.Process FlowThe Accounts Receivable sub module includes the following:PaymentBilling to Customer Invoice Generation CustomerCash Processing Postings to GL andCustomer AccountsFSCM OVERVIEWFSCM Overview§Organizations aspire to improve the efficiencies of the accounts receivable and accounts payables so as to lead to an improvement in the business cash flow or working capital. By focusing on the cash flows one can provide extra working capital for their organization to invest in product development, stock or expansion.§In today's current market cash flow is even more important due to the reduced availability of cash in the market. This has lead to the associated business processes being put under the microscope to find ways of improving the cash flow to provide a competitive edge against a competitors.§This is where Financial supply chain management comes handy. It is the most effective approach to optimize working capital levels, streamline accounts receivable processes, and eliminate excess costs linked to payments.§With FSCM, companies get a single set of applications for complete support of the entire working-capital management cycle.§They can be tailored to the specific needs of your company and can work in harmony with your sales, inventory, and accounting systems.FSCM is built with various components to support its Functions.Components of FSCM FSCMDisputemanagementCollections managementCredit managementBiller directTreasury and riskmanagement Cash & liquiditymanagementComponents of FSCM (contd.)•for handling Web-based payments and account and bill display SAP Biller Direct:•for processing customer invoice complaintsSAP Dispute Management:•for proactively collecting outstanding receivables SAP Collections Management:•for managing customer credit linesSAP Credit Management:•for efficiently managing and optimizing liquidity SAP Cash and Liquidity Management:•for managing financial transactions and risks SAP Treasury and Risk Management:Business Process OTC and Role of FSCMBusiness Process and Role of FSCM cont.Trade settlementCOMPONENTS OF FSCMSAP Biller DirectSAP Biller Direct helps you manage account, billing, and payment information.Your business partners can display account balances from their finance and accounting departments –as well as data from their billing systems, such as information from the sales and distribution applications in my SAP ERP.That means customers can access both their open items and any available credits via the Internet and compare these against outstanding receivables.Suppliers can also view the status of invoices and payments via the Internet.Biller Direct Overview cont.Biller direct –Key Features•Provides functionality of Electronic Invoice Presentment and Payment (EIPP)•Invoice recipients can see their accounts balance with their biller, look at their bills, credit memos and payment s made to the biller•Invoice recipients can initiate payment s or download bills into their accounts payable system•Real time integration with SAP R/3•Invoice recipient can dispute their invoices online and collaborate with biller to resolve the dispute casesBiller Direct -BenefitsFor billers•Reduces billing transaction cost•Integrates data in AR, eliminating rekeying of the information •Shortens the time for customers to review and pay bills (Integration with Dispute Management)For buyers•Integrates data into AP, thereby eliminating rekeying of the information •Enables non EDI companies to trade electronically•Facilitate electronic paymentsSAP Dispute ManagementSAP Dispute Management is an industry-leading solution for integrating dispute resolution into the order-to-cash cycle. By helping you resolve disputes earlier in the settlement process, SAP Dispute Management can significantly reduce collection costs.Customer disputes arise for many reasons, including damaged goods or incorrect bills. SAP Dispute Management lets you process these disputes using a different reason code for each type of business transaction that may cause a complaint.Processing of DisputesDispute Management -Key FeaturesThe reason codes could include differences in price, quantity, quality, or delivery time.The system logs the status of a dispute as either open or completed.The status, along with the reason codes, controls subsequent actions on the dispute –such as notifying employees via workflow processes or generating an e-mail to the customer.With SAP Dispute Management, all information related to a dispute is summarized in one central business object: the dispute case.Dispute management –Key Features•Controls and streamlines processing of dispute cases•Stores all information and documentation relating to the dispute cases •Being a central component for handling dispute cases, Dispute Management facilitates a solution for resolving dispute cases across departments•SAP Dispute Management is integrated into Financial and logistics process•Proper reporting of dispute caseSAP -Collections ManagementSAP Collections Management can help you handle receivables proactively and prioritize accounts by risk.With SAP Collections Management agents and analysts can identify accounts that require the most attention based on receivable value, name of customer, or DSO.Collections Management –Key Features•SAP Collections Management lets you navigate customer accounts directly through a collections work list.•The work list provides an overview of all the information you might need when contacting the customer. The customer collection view shows all open invoices, including their current status, as well all open promises to pay and dispute cases.•You can also display a history of each invoice, along with any related promises to pay or dispute cases.•In addition, the application lets collections agents document the results of customer contacts.•An agent can, for example, create a promise to pay and trace it later at the invoice level. Promises to pay that customers do not fulfill automatically receive a status of “broken” or, if the payment received does not correspond to the amount indicated, “partially kept.”•Agents can also create dispute cases or provide information about the status of existingProcessing of receivable sCreate promise topayCreate disputecaseInvoice historyDisplay promise topay by invoiceDisplay dispute case by invoiceDisplay disputecasesNavigate to FIdocumentDisplay promise topayChange promise topayWithdraw promiseto payChange FIdocumentVoid promise topayChange disputecaseInvoice viewCollections management -Benefits•Helps in evaluation, Identification, stratification and prioritization of accounts•Proactive processing of receivables•Helps in automation of high volume of receivables•Controls and manages workforce management•Establish a customer-specific receivables-management process to improve customer relationships•Reduce DSO•Improve cash flows•Increase the efficiency of collection agentsSAP Credit ManagementSAP Credit Management helps you manage your customer’s credit line. By integrating the financial and nonfinancial aspects of your customer base, SAP Credit Management can reduce credit risk and optimize credit terms for each customer.Credit Management –Key Features•SAP Credit Management makes it easier to issue credit to your best-paying customers.•If you rely on external credit standards, SAP Credit Management can integrate credit-scoring information from third-party services.•A centralized credit-rules engine lets you segment customers according to their creditworthiness and payment reliability.Credit Management and Other ComponentsCredit ReviewBilling/InvoiceCredit CheckingCustomer DeliveryCustomer OrderNew CustomerInitial Credit ReviewDetermine RiskPeriodic CreditReviewCREDIT LIFE CYCLECredit management -Benefits•Credit Management provides the tools for evaluating the creditworthiness of customer using internal rating policies and external credit data and enables fast and consistent credit decision •Reduces delay in payment•Provides better credit control•Optimized terms and conditions for customersSAP Cash and Liquidity ManagementSAP Cash and Liquidity Management, a key application for financial supply chain management, helps you monitor how your strategic planning affects cash flow –from both a macro and a micro perspective.The application’s pre-built data integration capability links you with other SAP FSCM applications, and thus helps to depict activities from operational areas such as financial accounting, treasury, logistics, and sales and distribution.Cash ManagementCash and Liquidity Management –Key FeaturesLets you integrate data from third-party or legacy applications and link the systems from different subsidiaries or countries –eliminating the need for duplicate data collection or retention.SAP Cash and Liquidity Management makes it easy to transfer inbound data, handle liquidity analysis and decision making, and effectively process outbound data.Cash and Liquidity Management -Benefits• Determine and optimize liquidity by individual departments, subsidiaries, business subunits, or organizations• Support various internationally recognized formats for electronic banking • Choose between centralized or decentralized cash management• Identify reserves held in foreign currencies• Automate data aggregation with real-time integration of different source systems• Choose between short-and medium-term cash-flow analyses• Generate short-, medium-, and long-term cash-flow forecastsSAP Treasury and Risk ManagementSAP Treasury and Risk Management offers a comprehensive set of functions for managing financial transactions and risk.Integration between SAP Treasury and Risk Management and the system’s cash-and liquidity-management functions lets you base trading decisions on data from current global liquidity and risk analyses that reflect cash flows from your company’s operational business.Treasury and Risk ManagementTreasury and Risk Management –Key FeaturesWith the risk-management application, you get more than the traditional, isolated view of individual sections or specific risks.To measure your foreign-exchange and interest rate exposures, you can calculate the value of your positions and simulate what would happen to future values should interest rates change.You can then explore possible hedging transactions to reduce your interest rate risk.Treasury and Risk Management -Benefits•Helps to measure and control your credit and settlement risk.•The investment, debt, and foreign exchange management capabilities comply with current regulations and accounting standards, such as FAS 133 and IAS 39.•Provides significant freedom in defining and structuring the levels for default risk.About DeloitteDeloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. 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