What is the Advantage to Credit Management in SAP ERP?
SAP ERP’s credit management feature helps businesses make accurate and timely decisions with increased economic security and success in mind. Human error can be eliminated through automated decision-making to increase business resiliency and financial success.
Business financing solutions also assist companies in optimizing their cash status by effectively monitoring contract accounts receivable and payable, setting and monitoring consumer credit limits, as well as assessing creditworthiness.
Accurate data analysis
Traditional credit management was done manually and through third-party systems which provided customers with credit scores based on perception. While this information can be useful, it doesn’t always represent your Organisation accurately.
With FS2 Credit, we can automate this process by centrally analyzing relevant credit data across your SAP landscape in real-time. This enables you to streamline policy implementation and mitigate risks while also cutting FTE time spent sourcing data – improving overall operational efficiency.
The new integration solution goes beyond traditional FI-AR-CR systems by combining Sales, Distribution, Contract Accounts Receivable & Payable with Credit Management from FSCM. This enables you to align credit limit & risk determination more closely with business targets while having full control over all credit decisions made. Depending on your business model and needs this can either be implemented in production systems or cloud solutions.
Automated decision-making
Streamlined processes make it easy for employees to gain real-time data insights and make smarter decisions, ultimately improving business performance while decreasing costs. Furthermore, many processes can be automated using intelligent technologies such as machine learning or AI.
Centralized credit management removes the need for local credit teams to maintain credit limits. Utilizing system-independent XML interfaces, you can connect internal systems like SD and financial accounting as well as external information providers, so they can report credit-related information directly into SAP Credit Management for consolidation and subsequent credit checks at either customer or customer group levels.
Centralized credit management solutions can be particularly useful for large organizations with multiple branches or regions that use the SAP ERP system; local personnel may not always have access to real-time updates of SAP credit management system data. If your organization includes satellite offices that don’t sync up to SAP credit management system, however, decentralized systems could still work well as credit control options.
Reduced risk of financial losses
Credit worthiness and payment behavior of your business partners have an incalculable effect on sales opportunities for your company. By efficiently managing receivables, you can mitigate risk while building rapport with customers.
SAP ERP software provides tools that streamline workflows to reduce risks associated with bad debt and uncollectible payments, and set clear credit policies in line with industry norms and your own company goals.
Contrasting with traditional FI-AR-CR systems, centralized credit management systems take an integrated approach to improving decision-making and mitigating risk. By centralizing data into one database and offering global access, they facilitate easier analysis of credit risk indicators as well as faster decision-making processes and reduced time spent manually updating records across databases – freeing you to focus on more pressing matters such as reducing bad debts or improving customer relations.
Increased customer satisfaction
Customers demand access to instantaneous information when it comes to product availability and purchase decisions, and companies who fail to do so quickly risk losing customer trust and loyalty. With SAP integration, businesses can stay ahead of these customer demands and strengthen performance through centralized data analytics.
An enterprise may benefit from using SAP S/4HANA actual costing for inventory and material movements to continuously evaluate inventory instead of the traditional approach (standard price that remains constant over time or moving average price). This enables accurate forecasts for customers about when more inventory will become available.
SAP ERP software also enables businesses to track stock levels and identify any items that may be out-of-stock, making it easier for sales teams to connect with customers and provide a positive buying experience. In addition, greater inventory visibility provides peace of mind for customers uncertain when their orders will ship out.
