Transcript Roche Template

SAP Receivables Management
Dispute & Collection Module Implementation
August 13, 2012
Judy Wagner, Director Corporate Credit
Roche Diagnostics Corporation
ERP Version & Receivables Management Modules
• SAP ERP Version – 6.0
• Receivables Management version – Enhancement Pack 4
• Modules used – Collection Management and Dispute Management
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Number of customers and their characteristics
• 17,000 overall payers
• Approximately 6,000 active payers
– Size varies across all segments, small to large
– Both public and private customer
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AR Size
• AR Balance
– Between $250 - 300 M
– Average 89% current
– Average auto cash hit rate 81%
• Annual Sales
– $2+ B
– 688K+ invoices generated in 2011
– DSO averages ~45 days
• Staff
– Supervisors – 3
– Collectors – 16
– Credit Analysts – 4
– AR (Cash App) - 4
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Main sources of overdue payments
• Disputes
– Pricing
– Tax certificates
• Customer cash flow issues
– Related to government reimbursement
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SAP Receivables Management
• Best in class/fit with SAP
• Provided a solution that did not have bolt on solutions that would have to be
maintained and upgraded in future
• Partnered with SAP out of Germany to create a global template and to assist
with the implementations on first 4 affiliates
– Listened and understood our global approach
– Brought solution through process discussions and gap analysis
– Great partners with exceptional knowledge on Receivables Management
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Global instance vs. Regional instance – why?
• Align processes across the global utilizing the same tools
• Easier support model if we all use essentially the same global template
• Establish best practices
• Saved costs in long run as we did not have to do full requirement gathering
for each country
• Consistent reporting and shared knowledge going forward
– Training manuals
– Resources
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Organizational Environment
• RDC first site to go live August 2011. Spain live in 2012 and working now with Tucson
who is expected to go live beginning of 2013.
• Future state – 6-8 organizations on 1 instance of SAP and 3 affiliates on another
instance of SAP, all organizations are separated by different company codes
• Users:
– 16 Collection
– 50 Contracting (Pricing)
– 4 Cash application
– 4 Customer Service
– 1 Tax
• No shared service at this time, however, tool could be leverage to do this
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Gaps identified in the modules
• No bolt on software, however, we did custom program some items into
Receivables Management
• Gaps identified dispute management:
– Enhanced correspondence with ability to utilize various templates and
attaching supporting files
– Correspondence is able to be configured in multiple languages
– System able to assign process deadlines automatically
– Program that identifies overdue cases
– Workflow functionality based on reason code and potential next steps
– Ability to automatically begin the creation of debit and credit from
Receivables Management
– Automatic creation of disputes needed to be program, functionality exists
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Gaps identified in the modules
• Gaps identified collection management:
– Added key fields from F.35 into Receivables Management, i.e. text
– Added fields from credit management (i.e. DSO, credit risk)
– Integrated Collection Module with the dunning process
– Able to upload mass creation of promises to pay
– Added field for rolling 12 month sales
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Reporting
• Using BW, 7 reports
– Collection Management
• Worklist summary
• Customer contact results
• Promise to pay
– Dispute Management
• Flexible dispute management report
• Dispute Aging
• Turn Around Time
• Management Overview
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Roles & Processes in Collections Management
Collection
Specialist
Collection of
Receivables
Collection
Manager
Controls
Collections
Data
Synchronization
and Worklist
creation
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Collection of Receivables Process Overview
• Three basic processes Collection Specialist performs:
Access
Worklist
Prepare
Customer
Contact
Contact
Customer
Automatically created
Key figures per worklist item
Promise to pay
Personalized
Validation detail
Dispute cases
Search functions
Due date grid
Resubmissions
Statistics
Invoice overview
Customer contact
Overview of past payments,
contacts, and resubmissions
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Collection Manager process for “Control of
Collections”
Define
Collection
Strategies
Collection Rules
Collection
Strategy
Maintain
Collection
Groups
Collection
group
Adjust
Business
Partner Master
Data
Supervise
Collection
Process
Business
partner
Allocate
worklist items
Collection
profile
Control
statistics
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Collection Rule
Collection rules reflect the reason why a customer is to be contacted. A
collection rule formulates the prerequisites that a customer in a collection
segment must fulfill in order to receive valuation points. SAP delivers
various collection rules in the standard. Collection rules are listed for
each collection strategy.
Example of a rule:
Prerequisite
Risk Class
+
Condition
=
Collection Rule
Total Open Items
Since N Days
Broken Promise to Pay
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Data Sources for Collection Rules
SAP Accounts
Receivable
SAP Dispute
Management
SAP Collections
Management
SAP Credit
Management
• Dunning Data
Data
• Customer Data
Open Item
Payment Data
• Dispute Case Data
• Contact Data
Promise to pay Data
• Resubmission Data
• Credit Rating
• Credit Exposure
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Collection Strategies
Collection Strategies comprise company-specific rules for collecting
receivables.
Collection strategies have the following purpose
• Determine which customers are to be contacted in collection management
(basis for automatic worklist creation
• Prioritize customers on the collection worklist
• Define the currency in which the amounts are to be displayed on the worklist
• Determine the time intervals of the aging of receivables per customer in a
segment (due date grid)
• Define the type of integration with dunning in Accounts Receivable
Accounting
• Determine the influence of the terms of payment on Collections Management17
(consideration of cash discounts)
Sample Collection Strategies
Industry
Weighted Value
10
Z: Prv: CD LVC
Strategy Description
Total of All Items Overdue Since n Days
Prerequisites and Conditions (Values)
Item Total: From 0.00 to 0.00
Days Overdue: 60
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Broken Promise to Pay
Total Promised: From 0.00 to 0.00
Level of Promise to Pay: 0 to 0
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Total of Amounts from Dispute Cases to Be Collected
Total Amounts: From 0.00 to 0.00
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Total of All Items Overdue Since n Days
Item Total: From 25,000 to 50,000
Days Overdue: 91
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Total of All Items Overdue Since n Days
Item Total: From 25,0001 to 100,000
Days Overdue: 91
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Total of All Items Overdue Since n Days
Item Total: From 100,001 to 999,999,999
Days Overdue: 91
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Dunned Amount Still To Be Collected n Days after dunning
Dunning Level: 4 to 4
Days Since Last Dunning: 30
Successful Customer Contact in Last n Days
Days Since Last Contact: 7
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There is a resubmission due for the customer
Contact Person was Absent
Contact Person Requests to be Called Later
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Total Valuation
Exit Rule (X)
X
This strategy can probably be simplied since we would only Dun these customers and that for the most part would be the only
contact made on these accounts.
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Sample Collection Strategy
Industry
Y053 Prv: Applied Science
Weighted Value
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Strategy Description
Total of All Items Overdue Since n Days
Prerequisites and Conditions (Values)
Item Total: From 0.00 to 0.00
Days Overdue: 30
Risk Category Low
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Total of All Items Overdue Since n Days
Item Total: From 0.00 to 0.00
Days Overdue: 30
Risk Category Med
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Total of All Items Overdue Since n Days
Item Total: From 0.00 to 0.00
Days Overdue: 30
Risk Category High
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Total of All Items Overdue Since n Days
Item Total: From 0.00 to 0.00
Days Overdue: 30
Risk Category Very High
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Total of All Items Overdue Since n Days
Item Total: From 25,000 to 50,000
Days Overdue: 91
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Total of All Items Overdue Since n Days
Item Total: From 25,0001 to 100,000
Days Overdue: 91
40
Total of All Items Overdue Since n Days
Item Total: From 100,001 to 999,999,999
Days Overdue: 91
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Broken Promise to Pay
Total Promised: From 0.00 to 0.00
Level of Promise to Pay: 0 to 0
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Broken Promise to Pay
Total Promised: From 0.00 to 0.00
Level of Promise to Pay: 0 to 0
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Total of Amounts from Dispute Cases to Be Collected
Total Amounts: From 0.00 to 0.00
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Dunned Amount Still To Be Collected n Days after dunning
Dunning Level: to
Days Since Last Dunning: 30
Successful Customer Contact in Last n Days
Days Since Last Contact: 7
There is a resubmission due for the customer
Contact Person was Absent
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Exit Rule (X)
X
Contact Person Requests to be Called Later
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Total Valuation
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Sample Collection Strategy
Industry
Weighted Value
100
Z: Prv: Affiliates
Strategy Description
Prerequisites and Conditions (Values)
Amount of Individual Items Overdue Since n Days
Item Total: From 0.00 to 999,999,999
Exit Rule (X)
Days Overdue: 60
100
Total Valuation
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How SAP Dispute Management helps
collections
• Controls and streamlines the dispute case process
• Central component for handling dispute cases enables crossdepartment dispute resolution
• Integrated in financial but also in logistical process
• Organizes and stores all information and documents related to a dispute
case
• Includes sophisticated reporting
– Detect quality issues
– Control workload
– Track dispute process
– Deductions per customer
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What is a Dispute Case?
• A dispute case is a new business object that
– Has descriptive attributes
– Is like a folder that links all relevant documents and objects
– Can be processed across multiple departments
– Supports different communication channels
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Updating Dispute Management Information
Dispute Management is automatically informed of financial transactions
such as:
• Incoming payment for disputed items
• Offset credit memos for disputed amount
• Manual clearing positing
The update is visible in the dispute case
• In corresponding amount fields
• As linked objects in specific folders
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Correspondence
Can be created
•
Automatically by events like
– Creating a dispute case
– Closing a dispute case
•
Manually by the user when processing the dispute case
SAP delivers standard customer correspondence for
•
FAX, e-Mail, and letter
– Notification that a dispute case has been created
– Notification that dispute case has been closed
– Query regarding dispute case
– Information about dispute case
•
Customers can create their own correspondence
– Using Smart forms
– Data available for correspondence
• All attributes
• External Notes
• Object keys of objects sorted in the dispute case folder (case record)
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Reporting
Receivables Management Dashboard - January 2012
Collection Activity for the Month
Collection Specialis
No of worklist items
2837
No of completed Worklist Items
305
Dashboard
Date
Goal of 25%
% of completed Worklist Items
10.75%
1/6/2012
CURRENTLY THE PTP DATA IS ONLY SHOWING OPEN PTP ITEMS AND DOES NOT REFLECT ITEMS PAID WITH A STATUS OF 'KEPT' - THIS IS BEING
ADDRESSED
Promise To Pay Activity for the Month
Activity is only for payments promised for Current Month
Goal 85% Kept
245
$1,145,152.90
$15,000.00
Dispute Activity for the Month
Number of Open Dispute
Coordinator
Cases
464
Goal TAT < 45 days
Average Resolution Time (Days)
24.98
Current Disputed Amount
$1,657,151
100.0%
0 - 30 Days
$675,116
40.7%
Goal no deduction amounts beyond 61 Day aging bucket
91 - 120 >= 121
31 - 60 Days
61 - 90 Days
Days
Days
$643,305
$266,561
$69,263
$2,907
38.8%
16.1%
4.2%
0.2%
Receivables Management Dashboard - July 2012
Collection Activity for the Month
Collection Specialist
No of worklist items
11567
No of completed Worklist Items
3049
Promise To Pay Activity for the Month
Activity is only for payments promised for Current Month
Collection Specialis
Amount Promised
$11,608,609.48
Number of Promise to Pay
1342
Dispute Activity for the Month
Number of Open Dispute
Coordinator
Cases
153
Dashboard
Date
Goal of 25%
% of completed Worklist Items
26%
Goal 85% Kept
% Promised
% Promised
Amount Paid (Promise to Pay) Kept
Broken
$9,942,803.95
86%
Goal TAT < 45 days
Average Resolution Time (Days)
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Current Disputed Amount
$942,774
100.0%
0 - 30 Days
$423,465
44.9%
7/31/2012
% Partially Kept
Goal no deduction amounts beyond 61 Day aging bucket
91 - 120 >= 121
31 - 60 Days
61 - 90 Days
Days
Days
$54,157
$450,032
$5,665
$9,455
5.7%
47.7%
0.6%
1.0%
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Key Challenges Faces
Change Management
Experienced
Collection Team
• Numerous years
on old system
• Felt safe
Established
business
processes
• Well
documented
processed for
old system
Involvement of
other groups
• Gain buy-in
• Eliminate
redundancy
Metric reporting
and
measurement
• New process
metrics and
people
measurements
Lessons Learned
Change Management
Security
• Batch roles
Master Data
• Know data gaps
• Understand
regression
impact
Technology
Market to nonpower users
• Contracting
• Tax
• Customer
Service
Flexible tool and
processes
• Challenge
allowing people
to create their
processes
Process
Finance 2011 Accomplishment
Launch of Receivables Management
Flawless execution +
Change management +
Planning
Testing
On time launch
Receivables
Management
= Achieve results
Innovation
Judy L. Wagner
Director Corporate Credit
Phone: 317-521-2040
Email: [email protected]
We Innovate Healthcare
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