Your Company’s New Secret Weapon

Traditionally, manufacturers have devoted most of their time and resources to managing the physical supply chain without giving much attention to the financial one. But as business costs continue to rise, managing your company’s cash and capital is just as vital to your success as handling relationships with your supply chain partners. 

Luckily, you have a secret weapon in your back pocket—SAP Financial Supply Chain Management (SAP FSCM). Read on to learn a bit more about financial supply chain management in general, the benefits of SAP FSCM in particular, and how to put that financial firepower to work for you.

What is Financial Supply Chain Management? 

First things first, what is “financial supply chain management” exactly? FCSM is the practice of looking at your financial processes at the holistic level, as opposed to looking at each one individually. The entire process covers the procure-to-pay cycle, working capital management, and the order-to-cash cycle, including everything from ordering and invoicing to reconciliation and payment. 

Financial SCM also includes the transaction processes between trading partners that lead to buying, producing, and selling goods and services throughout your industry and beyond. This often overlooked step is one of increasing importance, especially as miscommunications between business partners, managers, and employees continue to make lasting effects on operational efficiency.

As companies place more focus on their physical supply chain rather than that of their finances, the disconnect between systems leads to many, often unintended, consequences that affect financial processes, cash flow, and overall working capital. This, paired with the need to view financial transactions and accounts with a wide lens, makes the need for a comprehensive FSCM system even greater.

The goal of financial supply chain management is to gain visibility into the entire process so that you can make things more efficient (and save your company money). Of course, dealing with so many stakeholders and moving parts is a bit easier said than done. That’s why SAP’s FSCM module is so useful—it’s been designed to help you reduce this complexity and make your supply chain more efficient.

Here’s how.

What is SAP FSCM?

SAP FSCM is a set of applications that can give you improved visibility and control of your accounts receivable by allowing you to manage customer-related financial functions, (including billing, receivables, collections, and risk assessment), all within your SAP ERP system. With the integrated features of SAP FSCM, you are able to improve the efficiency of your accounts payable and accounts receivable operations, understand the cooperation needed between systems and teams, and make better decisions to improve your business’s overall cash flow.

The solution consists of several components, including: 

SAP Biller Direct

This module allows customers and suppliers to access invoicing and payment information through your company’s business portal, making managing billing disputes, invoices, and settlement issues easier. Biller Direct also lets you handle electronic payment and settlement processes with customers or suppliers and provides seamless integration capabilities to connect your FSCM system with your accounting system.

SAP Collections Management

The SAP FSCM Collection Management app makes it easier to identify problem accounts, helping you to improve the productivity of your collections and increase collection rates. 

SAP Credit Management

SAP FSCM Credit Management evaluates your customer’s creditworthiness using internal and external rating data, accelerating your credit managers’ ability to extend or reject customer credit limits. Real-time credit data and other useful financial information is key in determining the extent of your credit lending and the efficiency of your credit score system for each individual user.

SAP Dispute Management

The complete SAP FSCM Dispute Management app gives your accounts receivable/debt department full transparency when it comes to customer invoicing and billing issues. It addresses disputes over receivables and provides monitoring that detects payment issues before they grow into massive headaches. 

SAP In-House Cash

This app processes internal and external payment transactions, helping to reduce the number of bank accounts you must hold, as well as the volume of foreign payments that need to be made. The SAP In-House Cash feature also helps reduce transaction costs and allows users increased visibility into account statuses, payments, and receipts, making cash and liquidity management a little less complicated.

SAP Treasury and Risk Management

Finally, the Treasury and Risk Management app makes it easier to manage payments, cash, risk, liquidity, and compliance. Making it even more useful, it’s also integrated with financial reporting, banking information, accounting, and overall business information systems.

Other Benefits of FSCM Configuration in SAP

SAP FSCM gives you real-time insights into your company’s financials so that you can better manage your working capital and receivables to help reduce costs. By streamlining the overall management of the receivables-related process (not to mention a reduction in manual activities), the solution helps you save money by increasing efficiencies. 

Additionally, SAP FSCM not only allows you to predict cash flow, but it can also help to reduce working capital and operating expenses by increasing the number of customer payments and reducing debtors. 

How Can We Help?

If you’re ready to give your financial supply chain manager a bit more firepower, Surety Systems is here to help out. We know that SAP FSCM is a bit of a unique module, but it’s one our senior-level, US-based SAP consulting team has experience with. To give you a better idea of what to expect when partnering with us, we’ve included a sample profile of one of our top-notch SAP FSCM consultants.

Surety Senior SAP FSCM Consultant

  • US Citizen
  • 25+ years of total SAP FI/CO experience
  • Certified in SAP Financials
  • Expert in the SAP FI-FSCM space
  • Heavy background in SAP Credit Management
  • Completed 10 Full Lifecycle Implementations of FSCM, including multiple S/4HANA FLC Implementations

If you’re in need of a partner to help you implement SAP FSCM in your organization, navigate the complex functions of FSCM tables in SAP, or optimize your existing SAP system, we’ve got you covered. 

Contact us today to get started.