12. Collections Management in SAP

What is Collection Management: 

Collections Management is an established expression for customer centric receivables management. 

Collection Management Supports:

1. Evaluation, identification, stratification and prioritisation of accounts
• From a risk management perspective
• From a customer relationship perspective
2. Proactive collection of receivables
• Payment reminders
• Promise to pay arrangements
• Follow ups
3. Process optimisation and automation for high volumes of open items

Collection Management - Important Business issue

1. Increasingly bad payment behaviour
• Increasing DSO (Days Sales Outstanding)
• No reaction on automatic correspondence like dunning
• Financial situation influences customer relationship
2. Collections management is today mostly a time consuming, costly and cumbersome process
• Select and prioritise customers to be collected
• Search for Account information
• High volumes

What are the business objectives

1. Increase share of collected receivables
1. Reduce DSO
2. Avoid write offs
3. Increase payment on time
2. Decrease cost of cash collection
3. Improve customer relationship managment