SAP S/4HANA FSCM Credit Management A Comprehensive …

1 SAP S/4 HANA FSCM Credit Management vs SAP ECC Credit Management : A Comprehensive comparison EXECUTIVE SUMMARY. This whitepaper presents a comparative analysis of solution sets, bene ts and functionalities of SAP S/4 HANA FSCM. Credit Management vis- -vis SAP ECC Credit Management . With the introduction of new-generation SAP S/4 HANA, FSCM Credit Management replaces ECC Credit Management . Hence, there is an increasing need to understand FSCM. Credit Management in order to make informed decisions. SAP S/4 HANA Financial Supply Chain Management (FSCM) consists of different components which can be leveraged either independently or in a combination of components to optimize the nancial supply chain.

2 SAP S/4 HANA FSCM. components include: ! Credit Management ! Biller direct ! Dispute Management ! Collections Management S/4 HANA FSCM Credit Management INTRODUCTION. Credit Management provides various functions such as integrating external Credit information, Credit Management Challenges to Organizations scoring and categorizing new and existing customers on the basis of Credit to enable faster ! Credit Management is a well-de ned ! Organizations are increasingly burdened decision making. It allows organizations to process of controlling and collecting with bankruptcies of their customers, monitor and control the Credit risk from a central payments from customers.

3 Delayed payments, non-optimized Credit system and is particularly suitable for the policies in distributed systems. ! This is a function within an organization to handling of Credit Management processes in streamline Credit policies that could ! New customers and geographies pose a extremely distributed system landscapes. improve revenues signi cantly and high challenge with lack of Credit history. minimize nancial risks. S/4 HANA FSCM Biller direct ! Credit information resides in the silos of ! Credit controllers in an organization have to different interest groups in an organization manage the Credit department by making making it di cult to arrive at effective Biller direct enables an organization to set decisions regarding Credit limits, acceptable Credit decisions.

4 Up electronic payments, electronic billing, levels of risk and terms of payment to and integrate customer and nancial services customers. Solution using the internet. It supports the entire communication process from presenting Credit Controllers ! SAP S/4 HANA FSCM Credit Management bills to clarifying, reconciling accounts and provides functionalities such as internal ! Credit controllers are responsible for scoring, categorizing and integrating billing. It allows organizations to work controlling bad debt exposure and external Credit score ratings (for existing as closely with customers and partners for an expenses as well as maintaining strong well as new customers) which enable enhanced and hassle-free user experience.

5 Cash ows with e cient collections. organizations to overcome the challenges. ! The e ciency of cash ows can be S/4 HANA FSCM Dispute Management measured using various methods. Days Sales Outstanding (DSO) is the most Dispute Management provides functions to common method used. The organization is enable the processing of discrepancies responsible for ensuring an adequate between organizations and customers allowance for Doubtful Accounts. regarding the customer's nancial obligations ! Credit controllers constantly monitor the (Dispute cases).

6 It also enhances logistical Accounts Receivable portfolio for trends process chains engaged in billing and and warning signs by going through the payments which can help minimize scores and ratings provided by internal and discrepancies. external sources. ! Credit controllers maintain a "Black list" of S/4 HANA FSCM Collections customers on the basis of Credit limits, Credit terms, and Credit -rating criteria that Management are well de ned within the corporate Credit policy. Collections Management supports the evaluation, identi cation, cost component !

7 Last but not the least, Credit controllers play splitting and prioritization of accounts from a major role in initiating legal or other recovery actions against customers who a risk Management and customer relations are delinquent. perspective. It also supports the proactive processing of receivables, process automation and automation of large volumes of open items. FUNCTIONAL CAPABILITIES: comparison . Functionality ECC Credit Management FSCM Credit Management Master Data SAP Customer SAP Business Partner Finance Data FI-AR FI-AR, FI-CA, others Credit Exposure Monitoring Only at the level of Credit At segment and main segment level control area (Overall Credit limit).

8 Speci c simple system- Distributed system-landscape landscape (1xFI, 1xSD) (multiple FI, SD and CRM systems). SAP system only SAP and non-SAP. Scoring & rating for customer Not available Credit Rules Engine Credit information Only through Any XML based External Credit agencies partner products Credit information service Credit limit rules Not available Credit Rules Engine Credit case Not available Credit limit requests FEATURES OF S/4 HANA FSCM Documented Credit decisions Not available Documented Credit decisions Credit Management . Work ow Only in SD Any Credit event, documented Credit decisions, Credit limit requests Analysis Customer fact sheet Fiori Smart Business / HANA Live.

9 ! Organizations with widely distributed system ! Standard work ow is provided for Credit limit OLAP/OLTP (incl. BW Content). landscapes can monitor and control request by sales Credit approval & reject customer Credit risk from a central system options for controllers are available Non SAP connectivity Not available XI Server ! Scoring rules engine allows creation of ! It includes Credit cases and documented customer scores using own rules. These Credit decisions for accounts. The Relationships Not available Hierarchy relationship scores can also be combined with external documents can be created and approved.

10 Credit agencies The cases can be used for legal or dispute actions The comparison table above establishes the fact that ECC Credit Management is functionally limited. ! The scores can be used to calculate and In contrast, S/4 HANA FSCM Credit Management provides options to maintain Credit limit, use the assign customer speci c Credit limits either ! All customers are created as Business limit to block sales orders and release the sales orders. S/4 HANA FSCM Credit Management is fully automatically or manually Partner (BP) in FSCM Credit Management .