What is FSCM ?
FSCM Stands for Financial Supply Chain Management.
Why should we 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.
What version of SAP 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.
Business too small/ big to use SAP FSCM?
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.
What module(s) should 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 Work list.
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.
Where is reporting found for SAP FSCM?
As with most new SAP functionality, reporting in core ERP is limited within SAP FSCM. Implementing just the core SAP FSCM modules alone will leave a gap in terms of business reporting. Within SAP BW there is some good business content which is simple to implement. Reporting should be part of the initial build within the project. Some customers who do not use SAP BW will design their own ABAP reports which is must better than using the standard content. Any project that does not consider reporting will find it almost impossible to measure the performance of the various teams.
How do you implement SAP FSCM?
It is really important to note that a SAP FSCM project is 80% process re-design and 20% software implementation. It is therefore imperative that any business implementation of SAP FSCM aligns to these percentages. An implementation team cannot work in isolation from the business as the screens, terminology and processes are considerable different to core SAP FI-AR.
A business cannot input into any solution unless they understand the full capability of a system, otherwise they are over reliant on the implementation partner to make decisions for them. With this in mind, running business workshops on a proof of concept within the customer’s landscape enables the customer to make decisions with a better understanding. In turn this will reduce the subsequent phases including, build, test and training.
PI to use SAP FSCM Credit Management?
The simple answer here is no if you have Enhancement Package 5. However you need to implement WS-RM to replace the job PI does. If you have a PI server it does not make sense to look at the WS-RM option. If you do not have PI and want Credit Management it is worth considering WS-RM (if you have Enhancement Pack 5). To be fair this is more of technology question for your BASIS team to decide the landscape approach they plan to adopt.
How to design a global template for SAP FSCM?
Before designing the processes to support the Credit Collections team, the organizational units need to be defined. Collections and Credit Management have separate organizational units to represent the various levels within a Company. Where measure are to be common, organizational units can be shared, and where differences are required unique values are required. Breaking out the full implementation into smaller chunks enables the solution to be rolled out and enabling quick wins.
How would you deal with underpayments from customers in FSCM?
We deal with underpayments from customer we will prepare dispute case for underpayment. through dispute case we will handle customer underpayments.