Billing, A/R, Credit and Dispute Management

Agenda
1) 2) 3) 4) 5) Process Highlights Change Impacts Key Data Elements Key Configuration Elements Gaps

Order to Cash Cycle

Inquiry
Payment
2 7 1

Quotation
Billing
Invoice

Sales and Distribution Cycle

Quote

Post goods issue

Bill of Landing Export papers

Sales Order
Order confirmation

Shipping
Delivery
Delivery document

Picking/Packing
Transfer orders

Billing, AR, Credit, Collections & Disputes

1) Credit Management
Set Credit Limits and assign Risk Categories Review new and existing credit accounts to ensure settings are current Generate Billing Documents (Invoices, Credits and Debits) - send to customers Troubleshoot Billing Documents that fail to generate, post; or send.

2) Billing 3) Accounts Receivable

Post incoming payments and clear open items Raise Miscellaneous FI Invoices and Credits Monitor Customer Accounts to ensure they remain current
Follow-up with customers for late payments Identify Doubtful Accounts Investigate and validate deductions and other customer claims Issue Credit and Debit notes to resolve disputed items Re-bill invalid deductions

4) Collections 5) Dispute Management

Billing - Overview
In SAP, the term Billing is used broadly to describe the generation of the following:
Invoices Credit Notes Debit Notes Cancellation Documents

Pricing is determined at Order Confirmation

Invoice is calculated using the pricing from the order and quantity from delivery

Customer Invoice FI Module Accounting Document CO Module

Order

Delivery

Billing Document/ Invoice

Quantity is determined during delivery confirmation

CO-PA Postings

BAR Process (KDD) Highlights

1) Intercompany Billing Process
Revolutionizes how we do business with ourselves AR and AP entries match significantly reduces price discrepancies Billing to the customer auto triggers the billing to the intercompany partner

Intercompany Order (Drop Ship)

1) Intercompany Billing Process
Revolutionizes how we do business with ourselves AR and AP entries match significantly reduces price discrepancies Billing to the customer auto triggers the billing to the intercompany partner
Delivery Order

McCain Interco Seller PGI

Interco. Billing

McCain Interco Buyer

Billing

Customer

Material Shipped

Intercompany Return (to Source)

1) Intercompany Billing Process
Revolutionizes how we do business with ourselves AR and AP entries match significantly reduces price discrepancies Billing to the customer auto triggers the billing to the intercompany partner
Delivery Return Order

McCain Interco Seller PGR

Interco. Billing

McCain Interco Buyer

Customer

Billing

Material Returned

Intercompany Return to Interco Buyer

1) Intercompany Billing Process
Revolutionizes how we do business with ourselves AR and AP entries match significantly reduces price discrepancies Billing to the customer auto triggers the billing to the intercompany partner
Return Order Delivery

McCain Interco Seller

McCain Interco Buyer PGR

Billing

Customer

No Interco Billing Material Returned

BAR Process (KDD) Highlights

2) Dispute Management Application
Central repository for tracking and resolving customer deductions and claims Includes diary functionality to capture the story behind the deduction Integrated with SAP FI module Currently every region appears to manage claims differently (PRMS, Lawson, Blacksmith, other); this will be a major change.

BAR Process (KDD) Highlights

Implementation of Auto Cash. ( Not applicable as neither China or India will be using Auto cash)
Post cash, clear invoices and create residuals automatically Cheques via lock box and EFT supported by EDI Remittance Advice Elimination or reduction of Cash App data entry Cash Applicator moves from data entry work to Hit Rate Management Extension of touchless order philosophy

4) New Credit Management Functionality

Assign customers to Risk Categories which enable the auto credit check to subject higher credit risk customers to more rigorous credit check Credit Exposure Calculation Next Review Date Past Due Open Items Early Warning Report allows Credit Analysts to identify customers who are approaching their credit limit allows McCain to manage Credit more proactively

BAR Process (KDD) Highlights

5) Global Reason Codes
FI Module (Cash Application, FI Documents) Dispute Management Reason Codes Order Reason Codes (Returns, SD Credit Memos/Debit Memos) This will enable McCain to compare performance across regions and share best practices

6) E-Invoicing
SAP provides McCain with the ability to automatically email, fax or EDI invoices to customers We will leverage this capability to move as many McCain customers to EInvoicing as possible to reduce or eliminate printing, stuffing and mailing

BAR Change Impacts

happens before printing New Functionality: E-Invoicing automatically send invoices via (email/fax) All SD invoices, credit notes and debit notes are automatically scanned into a Document Management System. ( Not applicable as neither China or India are using the Datamagine document management system)

Cash Application.
Introduction of automated payment processing (Lockbox and EFT support by EDI Remittance Advice) where cash is applied immediately by the system. ( Not applicable as neither China or India will be using automated payment processing) All residuals (deductions) will remain in the Customer (A/R) Line Item Report. They will no longer be moved to a separate system or separate set of Customer Numbers

BAR Change Impacts

Credit Management
New Credit Management functionality for capturing more credit information about McCain customers in SAP Residuals, depending on their reason code, will be excluded from Credit Check New functionality: Early Warning Report in Credit Management; ability to track the amount of credit used and flag when customer is approaching their limit

Dispute Management
Dispute Management application provides a standard and central repository for claim and deduction information. This application will track and provide the current status of all claims including the story behind the claim itself.

BAR Change Impacts

Customer Tolerance Groups
This functionality will allow McCain to internally identify customers who are eligible for the $250.00 auto write-off and who are not McCain will be able to take away or reduce the write-off tolerance of customers who appear to be abusing this mechanism

User Tolerance Groups

The system will put restrictions on the $ value of transactions that users are authorized to execute in the system. For example, new hires can be assigned a user tolerance that prevents them from posting any documents in the system with a value greater than $1,000.00

Security
New security roles across the company Billing and AR has several roles due to SOD concerns

BAR Key Data Elements

1. Open A/R
Transactional Data No immediate prep work required

2. Credit Management (Credit Master)

Relatively Static Data (i.e. limits and risk categories can change) Data Construction required for new Credit Related data Limit Risk Category Credit Representative Group Credit Control Area Leverage Existing Templates

3. Billing Output Types (Print, Email, Fax; or EDI)

Static (subject to infrequent changes) Data Construction required for each Bill-To

BAR Key Configuration Elements

1. Payment Terms 2. Terms of Sale 3. A/R Tolerances (User and Customer)

BAR Key China/India Gaps

Known Gaps: 1) SD Invoice Form
Display Address and Logo based on Sales Organization Tax issues (India) Must be able to print a document showing all GL transactions on each invoice (China-Goverment Audit requirement, must be archived and available for 15 years)

2) Order Acknowledgement
Language - Must be produced in Chinese (China)

3) Customer Statements Form

Legal Regulatory Requirements

Wrap Up