S/4HANA Receivables Management

Credit Management with SAP S/4HANA

SAP SE
December, 2017

PUBLIC
Standard process automation for core invoice-to-cash
Extend your Receivables Management with SAP Cloud Accelerators

Business Benefits Rating experts Receivables manager Customers

Rating agency/credit bureau
View/download invoices
 Cross-system automation Update scores as conditions change
Send remittance
of collections processes to Monitor customers automatically
deliver superior customer Make payments

service
Cloud for Data-driven process control Cloud for
 Analytics and workflow credit integration for team management customer payments
alignment with sales, A/R,
and executives to reduce Credit Collections Dispute SAP Cash
DSO Application

 Optimized for global Match invoice lines

Cash to customer accounts
business services SAP S/4HANA Utilizes Machine learning
deployment
Sales team Cash collection
 Automated collaboration Senior executives Mobile analytics and
Redesigned processes team
insight to avoid credit
with external expertise blocks and reduce DSO
Automation and workflow

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Credit Evaluation and Management
Benefits and Capabilities

Benefits Capabilities
Cross-enterprise and cross-system credit
Reduced bad debt write-offs
evaluation and management process

Balanced global view of customers, Easy access to credit information for

considering risk and return your sales team

Improved collaboration with sales and Customer scoring based on rules,

senior management including internal and external factors

Improved scorecard accuracy by Workflow for faster decision-making once

incorporating external ratings credit limits are reached

0.3% Amount of A/R write-offs by the 25% top-performing companies (compared

to 3.1% for the bottom 25%)
Source: ASUG Benchmarks

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S/4HANA Credit Management
Feature Description
ERP/ECC
SAP Credit Management as part of SAP
Receivables Credit Management in ERP/ECC
(additional license)
Scope E2E solution capabilities in ERP. Receivables
bundle includes Dispute, Collections and Credit
Management. No migration to S/4HANA solution
needed, only if moving from SD/FI-AR CM to
S/4HANA Credit Management (see slide 11).
Functionality • Automated customer scoring, rating and limits
using credit rules engine / formula editor
• Flexible credit checks
• Process credit limit requests in a structured
way using credit case
• Credit events and follow-on processes to
support process automation and efficiency
• Flexible workflow structure
• Blocked sales document management via
Documented Credit Decision/ also on account
• Include rating information from external credit
information providers
• Multi-system scenario (central credit with
multiple ERP systems connected)
• Credit Reports (BW/ ALV Grid)
• company.
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All rights reserved.with SAP Cloud Platform Add-
ǀ PUBLIC
ons (not all ERP releases supported)
S/4HANA
Basic Credit Management as part of
S/4HANA Enterprise Management as of
1511 (no additional license)
New Credit Management Solution based on
HANA data model with basic functionality.
This solution will become effective once
client moves to S/4 HANA. This should be
only positioned if customer doesn’t want to
use full Credit Management functions.
• Manual entry of credit limit for new &
existing customers
• Manual entry of risk class & score for a
business partner
• Credit check of sales orders
• Manage blocked orders via Documented
Credit Decision
• Define relationships for business partner
manually (like “in Credit Management is
managed by…“, „Higher-level Credit
Management Account of...“)
• Payment behavior key figures
• Fiori Smart Business
S/4HANA
Advanced Credit Management with S/4HANA
Enterprise Management (with additional
license)
New Credit Management Solution based on HANA
data model including additional capabilities. The
receivables bundle includes Dispute and
Collections Management in addition and should
always be positioned with new S/4 HANA deals.
Basic Credit Management plus:
• Automated customer scoring, rating and limits
using credit rules engine / formula editor
• Flexible credit checks of sales documents
• Process credit limit requests in a structured way
using credit case
• Credit events and follow-on processes to support
process automation and efficiency
• Flexible workflow structure
• Blocked sales document management via
Documented Credit Decision / also on account
• Include rating information from external credit
information providers on ‘Credit Profile’
• Multi-system scenario (Central Finance)
• Enhanced reporting / credit analytics using Fiori
• Extensibility with SAP Cloud Platform Add-ons 4
for process enhancement & automation
S/4HANA Credit Management
Feature Description (cont.)

ERP/ECC S/4HANA S/4HANA

SAP Credit Management as part of Basic Credit Management as part of S/4HANA Advanced Credit Management with S/4HANA
SAP Receivables Credit Management Enterprise Management as of 1511 (no Enterprise Management (with additional
(additional license) additional license) license)
User SAP Gui (classic user interface) Fiori Launchpad, Web Dynpro, SAP Gui Fiori Launchpad, Web Dynpro, SAP Gui
Interface
Deployment On Premise On Premise/Private Cloud/Public Cloud On Premise/Private Cloud/Public Cloud
Option
Cross-Sell SAP Receivables Management S/4 HANA Enterprise Management S/4 HANA Receivables Management (7019113-16)
Opportunities (7018508) S/4 HANA Receivables Management (7019113-16) Cloud (8004951)I PrivateCloud (8003310-11)
SAP Bank Comm. Management Cloud (8004951)I PrivateCloud (8003310-11) S/4 HANA Central Finance (7019747) I
(7018537) SAP Cloud for customer payments (8004800) private Cloud (8004729)
SAP In House Cash (7018536) SAP Cash Application (8005289) SAP Cloud for customer payments (8004800)
SAP Treasury and Risk Management SAP Shared Services Framework Private Cloud SAP Cloud for credit integration (8004799)
(7016968) (8004444) SAP Cash Application (8005289)
SAP Cloud for customer payments S/4 HANA In House Cash (7018222-26) S/4 HANA In House Cash (7018222-26)
(8004800) S/4 HANA SAP Treasury and Risk Management S/4 HANA SAP Treasury and Risk Management
SAP Cloud for credit integration (7018827-31) (7018827-31)
(8004799) S/4 HANA Cash Management (basic version S/4 HANA Cash Management advanced
SAP Shared Services Framework included in Enterprise Management; advanced (7018639-45)
(7017254) (7018639-45)

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Enhancements with S/4HANA Credit Management

Orchestration simplification
1 Exposures updated with SD documents without web services, XML – lowering TCO and
implementation complexity

Streamlining
2 Elimination of data redundancy and configuration steps

Delightful user experience

3 Fiori award-winning user experience with Smart Business analytical reporting

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 1
Orchestration of messaging
SAP Credit Management before S/4HANA OP 1511

 SAP Credit Management was technically decoupled

from SAP ERP
• XML messages are exchanged to update credit
commitments (exposure) or to do credit worthiness
checks
• This can be facilitated with SAP NetWeaver PI (XI) or
WS-RM (since EHP 5 for ERP6.0)

 This decoupling allowed for a high degree of flexibility in

deployment scenarios; however, the messaging
orchestration added technical complexity

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 1
Orchestration simplification
SAP Credit Management in SAP S/4HANA Finance OP as of 1511

One-system landscape: SAP Credit Management and SD in S/4HANA system

S/4HANA
 SD commitments/exposures (sales orders, deliveries,
billing documents) are updated in same LUW (Logical
SAP Credit Management Unit of Work) as the create / update for SD
documents
SD FI
 No XML messages / web services are used

SAP HANA
 No aggregates (table UKM_TOTALS not updated)

 Lower TCO, less configuration!

Mixed-system landscapes
SD FI Technology
S/4HANA S/4HANA Finance Migration to SAP Credit Management required; connectivity via PI or WS-RM
S/4HANA ERP
ERP S/4HANA Finance Use FI-AR Credit Management or SAP Credit Management; connectivity via PI
or WS-RM
ERP ERP

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 2
Streamlining
SAP Credit Management in SAP S/4HANA Finance OP as of 511

 Elimination of data redundancy*

• No commitment updates are sent from FI-AR to SAP Credit Management
• Instead, a HANA view reads the AR exposure in real-time on the fly when exposure is required in SAP
Credit Management
o For credit-worthiness checks
o Customer reporting

 Use of web-services with generic proxies*

• Lower TCO and reduced configuration effort and lower TCO; no configuration is needed through the
SOAMANAGER transaction in this case
o For credit-worthiness checks
o For Documented Credit Decision (DCD) creation if sales order is blocked
o For credit vector / payment behavior updates

*applies to single-system landscapes only

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 3
Delightful user experience
SAP Credit Management in SAP S/4HANA

 Analytic focus with Fiori

• Smart Business analytics for
credit controller
• Central task execution for more
effective credit management

 Credit worklists & cockpit bring

tasks to the user (LAB PREVIEW)
• Blocked credit orders for quick
review, unblocking
• Time-based resubmissions,
periodic evaluations of
customer’s creditworthiness
• Processing of requests for
new/extended credit limit lines

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Migration required from FI-AR Credit to S/4HANA Credit Management

Technical implications SAP migration reports*

 Migrate credit accounts from FD32 to UKM_BP (business
 Transaction FD32 (“customer credit master”)
partner)
will not work anymore
 SAP Credit Management configuration is automatically
 Deleted tables include S066 / S067
created based on existing FI-AR credit configuration data
 Customers wanting credit checks in S/4HANA
 Credit exposure in FSCM is re-build
must migrate to SAP Credit Management
 Documented Credit Decision (DCD) created for credit
 See SAP Note 2270544 for more details
blocked sales orders

Benefits to SAP Customers

 Easier upgrade from basic credit management functionality to advanced automated credit management
processes
 HANA-based reporting and analytics
 Advanced Fiori apps for Credit Management
 Principle of one: unified SAP solution means improvements can focus on single product

No migration needed from SAP Credit Mgmt. as part of Receivables in ECC to S/4HANA Credit Mgmt.!
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*Available since SAP S/4HANA 1511 FPS 2, released May 2016
Appendix
SAP Credit Management in S/4HANA: License Requirements (1)

Feature No additional Additional license

license required required

Set credit limits for a business partner manually X

Set credit limits for a business partner automatically X

based on a calculation formula
Set risk class for a business partner manually X

Set risk for a business partner automatically based on X

a calculation formula
Set internal score for a business partner manually X

Set internal score for a business partner automatically X

based on a calculation formula
Credit check of sales documents X

Process credit blocked sales documents as X

documented credit decision
Process documented credit decision without sales X
documents (manually credit or by credit event)

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SAP Credit Management in S/4HANA: License Requirements (2)

Feature No additional Additional license

license required required

Reports under ‘--> List Displays' X

Define relationships for business partner (like “in X

Credit Management is managed by…“, „Higher-level
Credit Management Account of...“)
Payment behavior key figures X

Process credit limit requests X

Define credit events and follow processes X

Use formula editor X

Multi-system scenario (= central credit management X

with multiple ERP systems connected)
Store rating information from external credit X
information providers on ‘Credit Profile’ screen
BI Content for SAP Credit Management X

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Historically, SAP had 2 solutions for credit management
SD/FI-AR CM vs. SAP Credit Management

“FI-AR” Credit Management SAP Credit Management

Master Data FI-AR Account SAP Business Partner

FI Data FI-AR FI-AR, FI-CA, others
Monitor Credit Exposure Only for simple system- Distributed system-landscape
landscape (1xFI, 1xSD); SAP (multiple FI, SD and CRM
system only systems); SAP and non-SAP
Automated Customer Scoring, Not available Credit Rules Engine
Rating, and Limits
External Credit Information Only through partner products Standard solution by SAP,
(e.g. D&B) “Cloud for credit integration”
Workflow Only in SD Any credit event, documented
credit decisions, credit limit
requests
Analysis ABAP List reports Classic list reports, Fiori Smart
Business / HANA Live;
OLAP/OLTP (incl. BW Content)

“Single-system credit checks “Cross-system credit checks against

against a limit you determine” calculated ratings and limits”
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As of S/4HANA 1511, FI-AR credit checks will be performed by base edition
of SAP Credit Management*
Basic S/4HANA Credit
Management – technical SAP Credit Management
foundation is SAP Credit
Management
Master Data SAP Business Partner SAP Business Partner
FI Data FI-AR FI-AR, FI-CA, others
Monitor Credit Exposure Distributed system-landscape Distributed system-landscape
(multiple FI, SD and CRM (multiple FI, SD and CRM
systems); SAP and non-SAP systems); SAP and non-SAP
Automated Customer Scoring, Not available Credit Rules Engine
Rating, and Limits
External Credit Information Standard solution by SAP, Standard solution by SAP,
(e.g. D&B) “Cloud for credit integration” “Cloud for credit integration”
Workflow Documented credit decisions Any credit event, documented
credit decisions, credit limit
requests
Analysis Fiori Smart Business / HANA Fiori Smart Business / HANA
Live Live; OLAP/OLTP (incl. BW
Content)

*No additional license required for this basic functionality; if additional functionality required (scorecards, automatic determination of limits,
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workflow, integration of external credit information, customers must license SAP Credit Management
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