Johannesburg, 28 Jun 2005
The very substantial financial gains to be had from information technology (IT) systems that streamline operations - cutting costs and improving productivity - are only the tip of the iceberg compared with the savings and efficiencies to be had from using IT to consolidate and integrate your financial supply chain.
So says SAP Africa senior consultant, Marco Bronze. "Even with the best operational systems in the world, organisations are still not collecting their cash early enough, controlling their credit tightly enough, optimising interest or managing their currency exposure with anything like the coherence that would really improve the bottom line.
"That's partly because executives have been busy getting the right operational systems bedded down. Also, without the operational systems in place, management hasn't had the depth and detail of information with which to enhance financial management processes. And, of course, the financial supply chain involves so many thousands of transactions in different disciplines of financial management that integrating the related information in any intelligent way without a purpose-built financial supply chain management (FSCM) system is impossible.
"Which is why, during the past four years, SAP has focused on maturing its FSCM product to provide organisations with a single system and a common set of business rules - and therefore total management consistency - for shortening settlement cycles, increasing the speed of dispute resolution, lowering the cost of payment and billing, reducing bad or doubtful debt, improving cash flow management, reducing working capital and decreasing non-productive float.
"By integrating and shortening the financial supply chain in this way, SAP FSCM not only helps organisations bring in cash much faster, it also reduces the frequency of deductions and under-payments - making a massive contribution to profitability."
SAP's FSCM toolset includes inter-related disciplines such as credit and dispute management, electronic bill presentment and payment, electronic bill consolidation, bank account consolidation, cash flow and liquidity management, and treasury and risk management.
Its credit management facility allows you to import Dun and Bradstreet credit ratings into your system, enabling you to set appropriate levels of credit and payment terms and conditions for new customers.
Its dispute management module allows you to flag payment issues and disputes early. Through your Web site, customers can check an invoice, record a dispute and have it dealt with by your credit manager immediately. Any settled dispute automatically authorises payment directly from your customer's bank account.
The SAP FSCM advanced electronic bill presentment and payment functionality allows payment for customer-approved invoices to be collected immediately from their bank accounts. Customers can also allocate payments to appropriate invoices - thereby saving you the administrative costs of reconciling accounts.
The SAP FSCM electronic bill consolidator is useful when an organisation has intermediaries who collect payments centrally for, for example, lights and water accounts. Consumers make one lump sum payment for all their varied accounts to a single organisation and the system allocates the correct amounts to their accounts. Apart from saving massively on administration, the consolidator also boosts customer satisfaction.
If you have multiple bank accounts, including those for subsidiaries, SAP FSCM in-house cash management enables you to manage them all centrally - slashing the costs of bank fees, reconciliation, account payment and collections.
The SAP FSCM cash and liquidity management module helps you plan and manage your free cash flows, enabling accurate projections and facilitating account reconciliation. It also enables you to act in time to optimise excess cash, because you know it's coming in.
And the treasury and risk management module helps you better manage your investments, securities and deposits as well as gain oversight of deals and your cash position. You can also more effectively manage your interest rate and currency exposure and control and limit credit risks.
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