Q1. Why should I use SAP FSCM ?
If you are using standard FI-AR to manage your credit collections process, SAP FSCM provides tools to enhance your process. The tools in isolation will not solve any problems or add any direct benefit. However, the various modules will improve control and visibility, and enable the team to process more customers with a common process.
Q2. What version of SAP do I need to be on?
If you are using SAP ERP 6 then the core processes and functionality can be accessed. However, it should not be overlooked that new functionality has been released in the latest Enhancement Packages. Some customers can see the benefit of implementing SAP FSCM immediately and will work with their existing Enhancement Package version. Others will recognize some of the new functionality and wait until their ERP system is on the relevant Enhancement Package.
Q3. Is my business too small/ big to use SAP FSCM?
As I mentioned before if you currently manage your Credit Collections process utilizing the SAP FI-AR module then you can use SAP FSCM. The size of your business should not be seen as a blocker to move to SAP FSCM. In some cases, having large volumes of customers or large volumes of invoices increases the potential benefits. The real measure is to look at the potential process improvements. If you want to perform credit checking and scoring in a more efficient manner SAP FSCM will improve your existing process.
SAP has recently released an RDS to provide an efficient process to implement SAP FSCM, reducing the cost of implementation. This is targeted at smaller customers wanting an accelerated implementation. Please note this is only available for customers on Enhancement Package 5 and beyond.
Q4. What module(s) should I start with?
Collections Management is the most popular and most simple module to implement. However, to fully see the benefits of Collections Management the other 3 modules should be implemented as well.
When asked the question, I normally turn this around and try to align the customer’s strategic objectives from the implementation to decide the scope of the implementation. Customers who have high volumes of customer invoice disputes will obviously look towards Dispute Management – however aligning this with Collections Management joins the gaps between disputes and credit collections. Where a customer has bad debt issues and pays significant attention to Credit Limits and Credit Exposure, Credit Management will be more appealing – however the Credit Risk Class and Credit Exposure can be used to influence the Collections Worklist.
Q5. What are the Major benefits of SAP FSCM?
The process improvement that can be achieved can be broken down into a number of different streams.
Process efficiency and controls can be seen within the Credit Collection teams and other associated teams.
The Collection work list ensures the correct customer is called at the right time within the Collection process. This will enable more customers to be called, as the volume of effort to record a customer contact is simplified into a single transaction.
Logging disputes removes manual offline processes, and reducing the time spent to log and process disputes will directly improve the cash collection process leading to more cash being received in a quicker time frame.
The new version of Credit Management provides more accurate credit data using internal and external data, reducing the potential risk for bad debts.