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Turning payables into profits in the retail and wholesale business

This blog was originally written by Harald Ritter.

Today’s retail landscape and pooled payment

Today most of the big retailers do a variety of businesses:


  • do the classic brick and mortar retailing with self-owned stores,
  • have franchise partners,
  • do wholesale business,
  • have shared services like global buying, and
  • most of them are represented in own legal entities within the group, e.g. you will find global buying companies

In retailing pooled payment is quite a common process in the buying process which makes life easier for vendors and retailers. Companies like MIAG are offering services for pooled payments. The processes are highly automated with electronic data exchange in both directions (receiving invoices, sending payment advices, etc.) which leads to more efficient processes at the vendor.

The payment agent takes a delcredere commission for his services. A delcredere commission in general terms is defined as a fee received by an agent from a principal for guaranteeing the payment of goods sold.

Taking on a customer’s challenges with SAP EEC

So how does a retailer turn payables with his vendors into profits?

With SAP ECC the retailer can use the functionality of the agency business to handle the pooled payment process himself. This way the formerly outsourced service for pooled payment is sourced in.


In this project the retailer wanted to replace the service provider for the pooled payment by in-house processing of pooled payments in two countries which have a purchase volume of 500 m. per year.

It was also decided that the business with pooled payments should be done within an existing legal entity.

The process

In preparation of the change all those vendors wanting to participate in the new process had to sign a new master agreement and a service level agreement which define the details for processing in the SAP ECC System.

In this case not all of the country organizations are working in SAP. Thus the organizations in these two countries send their vendor invoices in an electronic format to the SAP ECC System where they are converted into a settlement request list. Then the delcredere commission is calculated. Based on the settlement request list a remuneration list is created which picks up the calculated delcredere commission and creates an invoice to the vendor. With the payment run, the payable amounts to the vendor and the delcredere commission are netted and paid to the vendor. An invoice list to the country organizations is created on a monthly basis to claim the money that has been paid to the vendors.

Let’s do the math

The purchase volume of 500 m. per year and 70% can be handled via pooled payment and an average delcredere commission of 0.5% of the purchase value.

In sum the retailer will thus get a commission of 1.75 m.

The outcome

So what is the implementation effort? In this example it took around 250 to 300 person days to implement the solution in the agency business. The main effort typically lies in the inbound interfaces for the invoices and in the outbound interfaces for the payment advice and the payments.

In this project the ROI was reached within less than half a year!

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