My first natural thought when someone mentions GRC (Governance Risk and Compliance) is “SoD” (Segregation of Duties) and then I think towards the brilliant SAP GRC suite of products Access Controls.
So for the Accounts Receivable team I would consider ensuring the various team members did not influence a process end to end. A simple example would be Sales order creation and Credit Limit creation. You would not want a user to be able to sell to a customer as well as set their credit limit as you could be opening yourself up for potential fraud.
However that is not the theme of this blog. I perceive there to be another type of risk that is not so widely considered. The main area of risk is running your Collections process through SAP and having offline spreadsheets, processes or notes.
I readily admit to spending a few years working in a Credit Collections Team. One of the processes I followed in the Collection cycle was to print off my aged debt report at the start of the period, and use that pile of paper to contact the customers which I managed. I would write notes on the print out which related to a promise to pay or perhaps a better day to contact the customer. From a personal point of view this information was very valuable, however it was of no use to my manager as he had no visibility regarding the progress I was making. If the cleaner threw the Aged debt report away believing it to be rubbish I would have been lost.
Performing tasks offline is a massive RISK. To mitigate this risk you need to ensure all customer contact is recorded within ERP so all users can see the work and progress a team member has made. This is extremely useful when team members are on holiday or off sick, a new team member can come in and use the notes within SAP to see what has happened and what needs to happen.
Having worked with ERP for over 12 years I am aware prior to ERP 6 there has been no standard functionality to record, track and resolve customer disputes. A common solution adopted by clients is to manage this offline in spreadsheets. Local spreadsheets are not real time, but are a reflection at a point in time. In practice many versions of spreadsheets will be passing through an Organisation leading to confusion and potentially duplication of effort.
To effectively manage this risk the full dispute cycle needs to be managed within SAP. Workflow needs to be used to send disputes to the correct individuals to speed up the process. Having all of the data in a single source system allows all users to see common information ensuring better decisions are made reducing processing time and significantly improving the efficiency of the Collections team.
Credit limit requests
Due to changes in business environments and circumstances it is essential that the credit limit you provide your customers are reviewed frequently. However there are plenty of occasions where ad-hoc changes are required. Normally within basic ERP this process would be paper based, with a Collection team user requesting the change, and then a Credit manager approving or rejecting it. Paperwork may need to be sent to the sales team for approval or the Credit manager may need to contact the Financial controller for final approval. Once the change has been approved, there is no visibility of this process within SAP. The paperwork would normally be filled and scanned. However if you need to review this decision it can be hard to decipher what actually occurred.
What is required is the ability to create a credit limit request document from within SAP. Workflow needs to be used provided to gain and record the approval. Finally the limit needs to be updated automatically. This process as standard is not available in core ERP.
Is there an answer out there?
Yes, of course there is an answer - SAP Financial Supply Chain Management (FSCM).
The Collections Worklist provides the Collections team the ability to records customer notes and promises to pay.
Within SAP FSCM there is a whole module for Dispute Management which integrated with Collections Management and uses SAP workflow.
Within SAP FSCM Credit Management there is the ability to create a credit limit request document.
When considering your internal governance risk and compliance please consider the associated risks around having manual offline processes that are not full visible. Having a fully integrated online solution ensures the correct level of visibility. SAP FSCM is a perfect foil to standard SAP Accounts Receivable within ERP as it provides a system to record notes and disputes, workflow processes around an Organisation and removes the risks offline solutions provide.