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SAP Receivables Management SeminarUsing SAP Collection Strategies & CorrespondenceAutomation to Increase Collections Performance andReduce DSOSashi NarahariCEO, HighRadiusFeb 6, 2013Dallas, Texas

Agenda SAP Collection Strategies– How to effectively segment customers? Sap Collections integration with A/R– Is it real-time? Correspondence Automation– How to make the computer do a lot of ‘standard repetitivework’ and refocus the analysts time on high value targets?2

DemoStandard SAP Collections ManagementHighRadius Advanced Correspondence Automation

SAP Collections Management UsersCollections Manager Define collection strategies /rules Define work item assignmentto users / groups Monitor and reallocation ofworkloadCollections Specialist Incoming / Outbound collectioncalls Process daily worklist based onprioritization Record customer contact andfollow up

Collections Management UsersCollections Manager

Data available for Collection Strategies Broken Promise toPay Number of Promiseto Pays Promise to PayAmount Customer Contacts Resubmissions Master Data orOperational Datawhich can be addedto collectionsmanagementCollectionsDataOpen AR &DisputeMgmt DataOther DataCredit Data AgingAmountDunning LevelAmount DunnedDisputed AmountDispute Case StatusPayment Data Credit Limit% UtilizationCredit ExposureRisk Category

Collections Strategy DefinitionCollectionStrategyCollectionRulesHigh to Medium Risk andgreater than 80% CreditLimit UtilizationValuation: 35 pointsCollection Strategy forHigh Risk CustomersMaximum Valuation 100Past Due Invoices Over 15days Past Due & DunnedOne or More TimesValuation: 50 pointsResubmission Due for theCustomerValuation: 15 points

Collection Strategy ValuationValuation ofcustomer isless than 40%of MaximumValuation of Valuation –customer is Mediumles thanPriority20% ofMaximumValuation –Low PriorityValuation ofcustomer isless than60% ofMaximumValuation –High PriorityValuation ofcustomer isless than orgreater thanequal to100% ofMaximumValuation –Very HighPriority

Solution ArchitectureSet ofCustomers[C1, C2, Cn]RulesStrategySubsetSet ofofCustomersCustomers[C1,[C1,C2,C2,C3 Cn] Cn]EmailAutoCorrespondenceFaxMailCall

Sample Scenario

Customer Segmentation Small & Medium Business – Slow Pay–––––Automated Proactive Reminder 7 days beforePast Due Notice 1 after 7 DaysPast Due Notice 2 after 21 DaysDemand Notice after 45 daysCall Customer after 60 days Small & Medium Business - Fast Pay– Past Due Notice 1 after 14 Days– Past Due Notice 2 after 28 Days– Call Customer after 50 days Major Accounts (Large Customers)– Proactive Reminder 14 days before– Past Due Notice 1 after 14 Days– Call Customer after 30 days

Collections Management: Collection StrategyStrategy forSlow PayCustomers Pro-active (0-20 points) 1st Past Due (21-40 points) 2nd Past Due (41-60 points) Demand Notice (61-80 points) Call (81-100 points)

Collections Management: Collection StrategyStrategy for FastPay Customers 1st Past Due (21-40 points) 2nd Past Due (41-60 points) Call (81-100 points)

Collections Management: Collection StrategyStrategy forMajorCustomers Pro-active (0-20 points) 1st Past Due (21-40 points) 2nd Past Due (41-60 points) Call (81-100 points)

Collections Management UsersCollections Specialist

Collections Management: Collector’s WorklistList ofCustomersPrioritized Pro-active (0-20 points) 1st Past Due (21-40 points) 2nd Past Due (41-60 points) Demand Notice (61-80 points) Call (81-100 points)

Is SAP Collections real-time? Short Answer: YES! Worklist generation is batch Say once a day Open Items is real-time Data is being read directlyfrom A/R17

Correspondence: From WorklistAbility to sendcorrespondencefrom WorklistSelect Pro-activeto mass process

Correspondence: Proactive ReminderSelect Package andwhich transactions toinclude incorrespondenceSelect Contact andCorrespondenceMode

Correspondence: Proactive Reminder

Correspondence: 1st Past DueSelect 1st PastDue to massprocess

Correspondence: 1st Past DueSelect 1st Past DuePackage

Correspondence: 1st Past Due

Correspondence: 2nd Past DueSelect 2nd PastDue to massprocess

Correspondence: 2nd Past DueSelect 2nd Past DuePackage & ‘Send’

Correspondence: Sample Email Correspondence

Correspondence: Sample Email CorrespondenceLetter and InvoiceCopy attachments

Correspondence: Sample Email Correspondence

Correspondence: Sample Email Correspondence

Correspondence: Demand NoticeSelect DemandNotice to process

Process Receivables: Customer Details ScreenSend correspondencebutton for individualcustomers

Correspondence: Demand NoticeSelect DemandNotice Package

Correspondence: Demand Notice

Correspondence: Package DefinitionSelect from a list of SmartForms, Documents suchas Invoice Copy, PODcopy etc to define a‘collated’ package

Correspondence: Maintain LettersSelect Letter toCreate/Edit

Correspondence: Maintain Letters

Correspondence: Maintain Letters

Correspondence: Maintain Letters

Correspondence: Maintain Letters

Correspondence: Maintain Letters

Correspondence: Maintain Letters

Correspondence: Maintain Letters

Collector’s Worklist: Call Customers‘Call’ customerswith high past duebalances or nooutcome aftercorrespondence

Collections Management: Invoice SummaryDefault Customer Contactreadily availableReview openitems to becollected

Collections Management: Payment HistoryReviewpaymenthistory

Customer Contact OutcomePromiseto ditionaldataRequestFollow up

Call Customer Outcome: Promise-to-PayCreatepromise topay on acollection call

Call Customer Outcome: Promise-to-PayRecord promisefor payment orcustomercontact at theinvoice level

Call Customer Outcome: Negotiate InstallmentsAbility to setupInstallment planson high riskcustomer

Collections Management: Promise-to-PayPromise forpayment hasbeen recorded

Collections Management: Promise-to-PaySummary ofall Promiseto Pay

Call Customer Outcome: Create Follow-upCreate aFollow-upreminder onspecificinvoices

Call Customer Outcome: Create Follow-upIdentify thedate of theresubmissionalong with aReason

Collections Management: ResubmissionSummary of allResubmission

Call Customer Outcome: Invoice DisputedCreateDisputes onInvoices

Call Customer Outcome: Invoice DisputedAbility to identifydetails of the disputeand route it to theappropriate analyst

Collections Management: Dispute CasesReview openand closeddispute cases

Notes ManagementSelect invoice andenter invoicespecific notes

Notes ManagementIdentify thereason of thenote

Collections Management: NotesSummary ofall Notes

Collections Management: Completed ItemTextWork itemcompleted

SAP Collections Management Users Define collection strategies / rules Define work item assignment to users / groups Monitor and reallocation of workload Incoming / Outbound collection calls Process daily w