In our previous blog we have talked about how you can analyse your invoice-to-pay process using the plug and gain approach.
Now, let’s check, how you can leverage plug and gain for your invoice-to-cash process.
The invoice-to-cash process holds significant importance, as it must operate with maximum efficiency to ensure timely collection of payments from customers and reduce Days Sales Outstanding (DSO), thereby positively impacting your working capital.
In many companies, a substantial number of customer invoices require processing, highlighting the importance of ensuring optimal efficiency in the invoice-to-cash process. Therefore, automation and reduction of manual interactions are essential. How to achieve this? By using the Value accelerator for analysis of invoice-to-cash (plug and gain approach). It provides you with out of the box analyses including the relevant data from your underlying SAP ERP system.
What’s included?
The following dashboards are targeted at continuously improving your invoice-to-cash process:
- Improve Days Sales Outstanding (DSO)
- Improve operational efficiency
- Optimize your payment term usage
- Increase automation along the I2C process
If you are considering altering your invoice-to-cash process as part of a SAP S/4HANA transformation, the following analyses might be particularly interesting for you:
- Analyze and improve your Best-Run Score
- Improve your master data quality
- Harmonize your process
Please consider that they also prove useful as part of continuous business process improvement initiatives.
The data, as customary with the plug-and-gain approach, is sourced from SAP Signavio Process Insights. This allows to quickly provide data without building or leveraging dedicated extractors in SAP Signavio Process Intelligence.
It encompasses various process flows, change performance indicators, and master data, thus facilitating a holistic view of the invoice-to-cash process. Additionally, the data can be loaded over an extended period to facilitate the detection of patterns and trends over time.
The dashboards are structured to seamlessly lead users through the analyses, providing explanations of context and motivation, along with potential conclusions for each analysis. Additionally, users will receive recommendations on how to proceed and address the root causes of process issues. This facilitates business users in navigating the analysis without requiring extensive technical knowledge of SAP ERP or expertise in process mining
In this blog, we will focus on two sample use cases showcasing how the content can be used to improve your invoice-to-cash process.
Example: Improve operational efficiency
Manual changes not only require additional effort from your workforce, which could otherwise be allocated to more valuable tasks, but they also imply a risk of inconsistencies and inadequate master data quality, for example, when it comes to changing payment terms during the invoice-to-cash process. The analysis considers manual changes to sales billing documents and accounting documents, focusing on the most relevant fields to be changed.
Start your analysis by evaluating,how many of your sales billing documents and accounting documents are changed throughout the invoice-to-cash process. You can directly identify the financial impact based on the estimated effort for manual change. If needed, you can always adjust the cost according to your policy. Additionally, you can gain insights on which company codes perform manual changes most and for which customers manual changes are particularly common. This information will aid in identifying the customers most affected by these changes, allowing us to prioritize them accordingly.
By analysing which fields are changed frequently, you can better understand the consequences and root causes of changes. For instance, if users primarily modify text fields, it likely entails additional effort that may not yield significant benefits, as reporting on textual changes is often unreliable. However, contrary to changes to fields like payment terms which should have been derived from customer master data, those changes do not indicate inconsistencies respectively compliance issues as well as insufficient customer master data quality.
In case manual changes are a significant issue throughout your invoice-to-cash process which you’d like to work on, you might want to dig deeper to understand change patterns. You can analyse for example whether changes occur based on an initial value or whether an existing value is overwritten. You can always filter on particular company codes or purchasing organizations if you would like to start with smaller set of data first or compare the results for different organizational units.
The analysis provides information on whether the original document was created automatically or manually, and if it was manually created, whether the same user who created the document also made subsequent changes to it. This helps in understanding whether the root cause for changes is primarily due to missing information transferred via external interfaces or organizational misalignment.
Beyond manual changes in general, you get an analysis focusing on those fields which should have been derived from customer master data according to SAP ERP standard. These fields serve as a starting point for understanding how to enhance your customer master data. For example, if you see that the payment method changes belong to the top changes in your process, the recommendation would be to check the master data maintenance process in detail. As a next step, let’s jump to the corresponding analysis.
Example: Improve customer master data
Manual interactions along the invoice-to-cash process can be significantly reduced if customer master data is maintained correctly. Specifically when preparing a SAP S/4HANA transformation, be it greenfield, brownfield or bluefield, you want to make sure to prepare your customer master data in the best way possible for customer vendor integration (CVI) and for allowing operations to run as smoothly as possible after Go Live.
The plug and gain analyses can help you understand which customers are used most frequently, to which extent you are using one-time customers and customers which are internal trading partners.
Conducting plug-and-gain analyses can provide insights into various aspects, such as identifying which customers are utilized most frequently, assessing the extent of usage of one-time customers, and distinguishing customers who are internal trading partners.
While this helps as a first overview, you might want to dig deeper into those customers for which changes are frequently performed in transactional documents (see above). Based on that, you can create a work package of customer master data which needs to be improved.
Usually, you want to reduce your customer data to only those which are used and needed. Therefore, it is valuable to look at those customers which have been blocked or for which the deletion flag is set. Those are customers which you might not necessarily take over to your new system. Blocks can be set on different levels of customer master data (centrally, on company code or sales organization level). The analysis helps you to differentiate between the different types of blocks and levels. This can serve as a starting point to analyze whether blocking has been performed consistently.
Furthermore, you would like to make sure you do not transfer duplicates. Identifying customers with the same trading partner within one company code helps to avoid duplicates. Whereas there are dedicated tools helping you to prepare for business partner migration, you might want to use this out of the box analysis to get a first overview of how many customers are affected and whether there is need for further action.
Additionally, if customers are suppliers at the same time, you want to migrate them to business partner as part of your SAP S/4HANA transformation using the same business partner number. Identifying these dual-role entities is crucial for ensuring a seamless transition. . This information is also included in the plug and gain dashboards. Based on that, you can follow the instructions in documentation to ensure that they are migrated to the same business partner number.
Finally, to avoid non-compliant transactions, plug and gain analysis gives you insights on whether you have customers in high-risk countries and whether you have open receivables for them.
Combined with the information on customer master data available in SAP Signavio Process Insights, the “Improve your master data quality” dashboard for invoice-to-cash provides you with valuable information to start assessing and working on your customer master data quality and make sure your SAP S/4HANA transformation is successful.
How to get it?
If you believe that the above above-mentioned analyses would offer value to you and your organization, you might be wondering how to obtain them. These analyses are included in the plug-and-gain approach by SAP Signavio, which has been launched at Sapphire. This approach harnesses the capabilities of the SAP Signavio Suite and offers distinctive out-of-the-box analyses for both continuous improvement and transformation projects. By leveraging this approach, you can bypass lengthy implementation projects and quickly access valuable insights.
Reach out to your SAP counterpart to learn more about how you could benefit from plug and gain by SAP Signavio!
Where to find further information
- The following note explains the prerequisite and scope of plug and gain by SAP Signavio: https://me.sap.com/notes/3340986/E
- Previous blogs onBest-Run scores,process house,transaction scoresandprocess flow variants
- Plug and gain approach: https://www.signavio.com/plug-and-gain-approach/
