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 % HealthCare 56 %

EUR 8.2 billion CropScience 19 %

As of December 31, 2010

Bayer HealthCare
Animal Health

Consumer Care

Bayer HealthCare

Pharmaceuticals

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

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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
Risk Class

Check Rule
Credit Specific Notes

Customer group

Financial / Non-Financial Information

Credit Segment Data

o Company Code specific Credit Data

Credit Limit Exposure Payment behaviour Credit relevant Assignment Control Data (Block / Special attention)

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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

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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.

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

Check Rule / Customer group: Check rule identifies either 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

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FSCM Credit Management General Data III

The following values will be available (Credit Profile) Scorecard Local Scorecards Global Scorecard Check Rules Y01 Credit Check account Y02 Credit Check will be performed on a higher Account (dep. on hierarchy)

Risk Class High Risk Medium Risk Low Risk Intercompany

Customer Groups Default (Initial) Small Medium Large

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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

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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

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FSCM Credit Management Credit Segment Data

Available Data on Credit Segment Level

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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 cant 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.

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FSCM Credit Management

Credit Segment Data III (Special Attention / Block)
Special Attention Types

<blank> no special attention needed
ACC BDW CED CIA US AH: Autopay Credit Card Bad Debt Write Collection Expense Due Cash in Advance

Block Reasons

BA CA DP Bankrupt Cash in Advance Debtor in Possession

DS
HD IN PC RB

Do Not Sell
Hold All / Refer to Credit Inactive Customer Placed for Collection Rebate Customer

COR
DIR FDM ICC PAS

US: Credit Only Release

Direct Debit Final Demand Letter Sent US AH: Immediate Credit Card Pass All credit checks

RSK
SCC

Risk Alert Received

US AH: Scheduled Credit Card

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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

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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

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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

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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)
Credit Check hierarchy

FSCM Credit Management hierarchy

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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.

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FSCM Credit Management Credit Check Routine

Maximum Doc value, Percentage and overDue days can be set on the basis of a combination of Risk class and Customer group. But it is not MANDATORY

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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.

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FSCM Credit Management - GCMC Expiring Credit Limits

Depending on your selection you get a list of Business Partners where the Credit Limits 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 customers where the validity is not relevant because no Limit is defined (not zero).

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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)

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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.

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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.

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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 Collection Specialist Main task is to process the daily work list: Prepare customer contact Contact customer

Assign collection strategies to Business Partners

Supervise collection process

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