Automated and Digitized Accounts Receivable Process in SAP S/4HANA (Cloud)

Minimizing Default Risks:
Accounts Receivable Management with SAP S/4HANA (Cloud) 

Bad debt can plunge companies into great financial difficulty. The automated and digitized accounts receivable process in SAP S/4HANA (Cloud) helps to counter these risks.   

Many suppliers have already had the bitter experience of a customer not paying or only partially paying for goods or services already received. In some cases, this can have serious consequences for a company, ranging from lost profit and negative operating results through to insolvency.

The Perfect Trio for Better Customer Relationships

If you don't want it to come to this, you should utilize the automated accounts receivable process in SAP S/4HANA and SAP S/4HANA Cloud. This process integrates three innovative solutions for efficient receivables management, namely SAP Credit Management, SAP Dispute Management and SAP Collections Management. Managers gain real-time insights into the accounts receivable and working fund portfolio, thereby enabling them to make informed decisions faster. Collection specialists can use the "Collections Worklist" app to prioritize the payment of overdue receivables and to focus on the most urgent customers.

Companies benefit from the accounts receivable process in SAP S/4HANA (Cloud) in a number of ways, including fewer default risks and Days Sales Outstanding (DSO) as well as increased working capital and improved customer relationships. 

1: SAP Credit Management

The SAP Credit Management component enables companies to identify default risks in good time (for example, based on the past payment behavior of customers). They can then use this information to derive strategies for the prevention of bad debt losses. Examples include issuing reminders, negotiating certain terms of payment, or advance payments for those customers who may not be able to meet their future payment obligations. The SAP Credit Management solution also facilitates automated credit decisions whereby an individual credit limit is calculated on the basis of a customer's internal creditworthiness and risk class. Credit reports from Creditreform, for example, can also be linked so that external ratings can form part of the decision-making process.

2: SAP Dispute Management

The SAP Dispute Management component contains functions for processing receivables-related dispute cases. It enhances the invoice - payment phase of the order-to-cash process chain (order - delivery - invoice - payment) if a disagreement arises with the customer at this point. For example, a business partner may arbitrarily reduce already agreed payments because damaged goods were delivered or an outdated price was charged. A company usually has to invest a great deal of time and effort into following up on such cases and obtaining clarification. SAP Dispute Management shortens this process because each dispute case is created, structured, and coordinated in SAP S/4HANA (Cloud).

3: SAP Collections Management

SAP Collections Management supports the implementation of proactive receivables management. In Germany, for example, it is still common for suppliers to send their customers one or more written reminders after an open item has reached its due date. This places a strain on the business relationship and is not very effective in many cases. It is much more effective for specially trained collection specialists to contact the debtors by telephone in advance. It is then possible to discuss further action with these customers early on, and to agree on a promise to pay. SAP Collections Management supports this process by making it possible to prioritize debtors on collections worklists on the basis of predefined collection strategies.

Would You Like to Learn More?

Your company's business results are directly affected by the creditworthiness and payment behavior of your business partners. The accounts receivable process in SAP S/4HANA and SAP S/4HANA Cloud provides an innovative solution that helps you to minimize payment defaults and instead focus on creditworthy and reliable business partners.

If you would like to receive detailed information about the capabilities and benefits of accounts receivable management with SAP, our consultants will be happy to help you.