Using SAP to improve debt collection: Out-of-the-box integration with world-wide credit agencies
Proper debt collection starts with a thought-through credit management
In today’s economic and social situation, companies across the world can find themselves struggling with their current credit management processes. Markets and companies’ financial situations change so rapidly overnight that it remains difficult to react instantly. Also it seems that the present situation is much more severe than previous recessions and if companies continue enforcing their existing credit policies stringently, it may have a detrimental effect on relations with their customers. Getting invoices paid can turn out difficult and requires a different approach from that which has served well in the past. In this context, purely relying on internal payment behavior experience may not be sufficient any longer, especially in cases where market conditions have changed or new market segments are explored.
Credit Departments therefore need reliable, not to say unbiased sources to explore new credit strategies to better understand and remove barriers of getting paid. Further, it becomes indispensable to redesign and automate credit and collections policies to realize an immediate increase in cash inflow, due to a higher probability of default in the present situation.
Organizations are more than ever required to reclassify their customers’ risk classes quickly based on changing payment behavior and risk assessment. If possible, credit limit decisions should be automated via a customer’s score, according to a standard formula, ideally triggered though updates provided by external information sources such as credit agencies. In this way, a customer’s risk class can control the specification of payment conditions. But how to manage all this automatically for a huge customer portfolio? The simple answer is:
SAP S/4HANA Cloud for credit integration with out-of-the-box integration to world class credit agencies
This cloud-based solution helps customers to connect to the world’s leading credit bureaus. Accessible with a single click from existing SAP Credit Management processes, full credit reports are available in a dedicated library, while key metrics (such as foundation date, industry, risk classification, etc.) drive the existing rating processes. But since every company has a different scorecard with different factors according to their customer credit portfolios, customers can make use of sample code delivered with Business Add-Ins (BAdIs) to pull additional data fields from the XML data formats shared by the agency and feed the information into the core credit processes. This means that all of the data that is included in an agency’s credit reports, literally hundreds of data fields including financial reporting information, as well as profitability and liquidity indicators, can be used in automated analyses of customer creditworthiness.
The solution accelerates the credit processing and saves time and manual efforts through automation by seamless integration into credit limit checking for sales processes in SAP ERP 6.0 EhP4+ as well as S/4HANA on premise or cloud.
SAP S/4HANA Cloud for credit integration is helping companies provide their credit teams more choice in the external credit data they can integrate in their customer credit risk scorecards by allowing them to connect to more than 13 world’s leading credit agencies – leading to more confidence in rating accuracy and higher rates of automation.
Next to the import of credit reports, the solution also supports the search & look up for unique identifier shared by the agency, the monitoring process (register/de-register/process updates) as well as triggering an investigation (and receiving of the result) in case one of your business partners is not yet known in the agencies database. For a full list of all agencies connected as well as the services and functions supported by each agency, please visit SAP Help
How SAP can support you
Through the SaaS approach, SAP customers can benefit from this all-inclusive offering where SAP handles the technical integration of leading credit agency data into core credit processes and thus providing great innovation without touching core credit management processes. Expanding to another credit agency for a new market or switching can be done in hours (instead of weeks and months) with a clear understanding of the cost impact to the IT budget. The solution clearly removes the burden of integrating each agency one by one which usually leads to significant effort for implementation and maintenance effort per agency*
With SAP Credit Management enhanced with SAP S/4HANA Cloud for credit integration, you always have full transparency over the credit risk in your customer portfolio – now and beyond challenging times.
Don’t delay – approach SAP today for more information! Go to sap.com/receivables, SAP Help or ask your SAP contact directly!
Next to interested customers, we also invite all interested credit agencies to approach us so that we can share with you directly how you can join our ecosystem and thus become accessible to more than 440.000 SAP customers in > 180 countries!
*Please note that a direct contract with the credit agency is still required for the services and reports requested from them. SAP is solely responsible for managing the technical interface to the agency. The agency remains responsible for the content of services contractually agreed with them.