SAP Receivable Management

Credit & Collections

CRF SAP User Group Meeting

Manhattan Beach, CA
March 18, 2013
 110,500 employees
Full year sales: €39.8 billion
291 subsidiaries
Headquarterd in Leverkusen, Germany
U.S. Headquarters – Pittsburgh, PA
As of December 31, 2012

• Bayer
SlideAG
2 • Company Profile 2013
Key Locations / Regions

Europe

North America

Asia / Pacific

Latin America / Africa / Middle East

The Bayer Group is a global enterprise

with companies in almost every country
North America – Business Structure

Breakdown of Total Sales by Subgroup 2010

MaterialScience 25 %

EUR HealthCare 56 %
8.2 billion

CropScience 19 %

As of December 31, 2010

Bayer HealthCare

Animal
Health

Consumer Bayer Pharma-

Care ceuticals
HealthCare

Diabetes
Care
Bayer Healthcare, LLC Animal Health

Customer base:
 Distributors

 Veterinarians

 Pet Specialty Retailers

Bayer Healthcare, LLC Animal Health

 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
Bayer Healthcare, LLC Animal Health

 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

Page 9
Agenda FSCM Credit Management
Global Credit Management Cockpit
Global Credit Management View
FSCM Collections

Page 10
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
 Scorecard  Check Rule
 Risk Class  Credit Specific Notes
 Customer group  Financial / Non-Financial Information

Credit Segment Data

o Company Code specific Credit Data
 Credit Limit  Credit relevant Assignment
 Exposure  Control Data (Block / Special attention)
 Payment behaviour

Page 11
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

Page 12
 FSCM Credit Management –
General Data II
Within the “Credit Profile tab” you can maintain
the following details of the Customer:
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

Risk Class: The Risk class clusters the
Customer Portfolio. Depending on the Risk class
the credit check criteria will be tighter.
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

Page 13
FSCM Credit Management –
General Data III
The following values will be available (Credit Profile)

Scorecard Check Rules

 Local Scorecards  Y01 – Credit Check account
 Global Scorecard  Y02 – Credit Check will be performed
on a higher Account (dep. on hierarchy)

Risk Class Customer Groups

 High Risk  Default (Initial)
 Medium Risk  Small
 Low Risk  Medium
 Intercompany  Large

Page 14
FSCM Credit Management –
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

Page 15
FSCM Credit Management –
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

Page 16
FSCM Credit Management –
Credit Segment Data
Available Data on Credit Segment Level

Page 17
FSCM Credit Management –
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.

Page 18
FSCM Credit Management –
Credit Segment Data III (Special Attention / Block)
Special Attention Types Block Reasons
• <blank> no special attention needed • BA Bankrupt
• ACC US AH: Autopay Credit Card • CA Cash in Advance
• BDW Bad Debt Write • DP Debtor in Possession
• CED Collection Expense Due • DS Do Not Sell
• CIA Cash in Advance • HD Hold All / Refer to Credit
• COR US: Credit Only Release • IN Inactive Customer
• DIR Direct Debit • PC Placed for Collection
• FDM Final Demand Letter Sent • RB Rebate Customer
• ICC US AH: Immediate Credit Card
• PAS Pass All credit checks
• RSK Risk Alert Received
• SCC US AH: Scheduled Credit Card

Page 19
FSCM Credit Management –
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

Page 20
FSCM Credit Management –
Segment Data V

The tab Payment behavior key figures

provides a high level overview of

• Dunning
• Overdue item
• Payment history
• Key figures

Page 21 •
FSCM Credit Management –
Segment Data VI

On the tab „Additional Segment Data“

You will find organizational data as well as information
in regards to payment key figures

Page 22
 FSCM Credit Management –
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)
FSCM Credit Management hierarchy

Credit Check
hierarchy

Page 23
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.

Page 24
FSCM Credit Management -
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

Page 25
Agenda FSCM Credit Management

Global Credit Management Cockpit

Global Credit Management View
FSCM Collections

Page 26
FSCM Credit Management -
Global Credit Management Cockpit

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.

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FSCM Credit Management - GCMC
Business Partner Search
- Jump into the BP to maintain
Credit relevant Data

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.

Page 28 •
 FSCM Credit Management - GCMC
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).

Page 29
FSCM Credit Management - GCMC
Blocked SD orders
Depending on your selection you
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

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FSCM Credit Management - GCMC
Increase of ADD
Depending on your selection you
get a list of Business Partners
where ADD has increased in the
past significantly (dep. On your
selection)

Page 31 •
FSCM Credit Management - GCMC
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.

Page 32 •
FSCM Credit Management -
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.

Page 33
Agenda FSCM Credit Management
Global Credit Management Cockpit

Global Credit Management View

FSCM Collections

Page 34
Page 36 • Go4One SAMBA FSCM Credit Management Training • September 2012
Page 37 • Go4One SAMBA FSCM Credit Management Training • September 2012
Page 38 • Go4One SAMBA FSCM Credit Management Training • September 2012
Agenda FSCM Credit Management
Global Credit Management Cockpit
Global Credit Management View

FSCM Collections

Page 39
1. Roles and Processes
Collection Group

Collection Supervisor

Main Tasks:
 Define or adapt collection strategies
 Assign collection strategies to “Business
Partners
 Supervise collection process
Collection Specialist
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”.
Thank you!
Questions?

Presented by: Deb Blevins & Isabella Nouri

Bayer Corporation