Automate Clearing of Customer Payments in SAP with BEST Debtors Remit

Automate the Clearing of Customer Payments in SAP with BEST Debtors Remit

Read how Consol Glass automatically clears customer payments in SAP. This interview with Marita Baronet, Group Credit Manager at Consol Glass (Pty) Ltd, was presented at the Mastering SAP Financials Conference on 11 April 2022.

About Consol and the Group Credit Team

Consol Glass is a manufacturing company that believes the best things come in glass. The sole purpose of the company is to add quality to life.

The Group Credit team is based at Consol’s head office in Germiston, Johannesburg, and is responsible for the Group’s accounts receivable. The small team is made up of six individuals, each responsible for a section of the debtors’ book and ensuring that all debtor-related functions are performed on time.

Consol has an average of 700 active customers managed by the six-person team. The team’s responsibilities include:

• Conducting risk assessments
• Reducing bad debt
• Ensuring there are no, or minimal, overdue accounts
• Following up on outstanding customer payments
• Matching payments to invoices
• Resolving queries

There is never a quiet moment. However, the busiest period runs from the 28th of one month to the 7th of the next. The initial focus is on debt collection, completing month-end activities quickly and issuing customer statements.

Legacy Manual SAP Payment Allocation

Historically, Consol used manual payment allocation in SAP transaction F-32. The process was tedious, particularly when viewing and clearing large numbers of transactions.

The following issues were identified with manual SAP clearing:

• The view is constrained and relies on preconfigured layouts.
• High transaction volumes appear in a large list, making specific items time-consuming to find.
• Remittance items that are not already on the customer account must be raised manually.
• The customer account remains locked during processing.
• If a user’s SAP session times out before posting, all completed work can be lost.

In addition to these system limitations, the following business scenarios added complexity to an already time-consuming process:

• Some customers have multiple accounts but settle them with a single payment. The team therefore had to split payments manually between the individual accounts before matching each account.
• Some customers do not send remittances and instead pay according to their statements. These payments still require manual clearing at line-item level.
• When team members take time off, processing timelines can be affected because stand-in employees may not be familiar with the relevant accounts.

Why BEST Debtors Remit?

Consol was already using the BEST Vendor Recons module successfully. After learning about the BEST Debtors Remit module, the team contacted BEST for a demonstration.

The key project objectives and anticipated benefits were:

• Saving time
• Improving cash flow
• Providing more time for query resolution instead of payment allocation, which previously accounted for approximately 75% of the team’s time
• Standardising the process across all customer accounts
• Improving the audit process

The Implementation Project

The implementation was completed within three months, and Consol has used the module since January 2022. The company was highly satisfied with the outcome, and both the project and the product exceeded expectations.

The commitment of the accounts receivable team was central to the project’s success. BEST demonstrated strong knowledge of its product, SAP functionality and the required business processes. The project remained on schedule, with BEST providing additional effort and support where necessary.

Current Processing and Results

Initially, Consol focused on its top 20 to 30 customers. Priority was given to customers with high transaction volumes, unusual remittances, export remittances and settlement discounts.

Consol subsequently mapped 61 unique customers through its OCR tool, enabling their remittances to be loaded into SAP through BEST Debtors Remit. A total of 157 remittances were loaded, representing 9,440 remittance lines posted to customer accounts.

Of these line items, only 12 remained open on customer accounts because they related to claims that still needed to be processed. This represents a clearing rate of 99.9% of all remittance lines.

The following examples further demonstrate the impact and time savings achieved:

• A remittance worth R200 million and containing 1,000 line items takes 11 seconds to upload and match using BEST. Manually allocating the same payment would previously have taken approximately four hours.
• One customer had an overdue balance of R77 million in December. Following implementation of the new process, this was reduced to R6 million.

The solution has had a significant impact on the team, which values the speed and simplicity of the new process. Month-end close has been shortened by half a day, allowing customer statements to be issued and payment follow-ups to begin earlier. These time savings also allow the team to devote more attention to query management.

Using BEST Debtors Remit, Consol can now automatically:

• Clear customer payments from the bank account
• Post and clear detailed remittance lines against customer account line items
• Achieve a high clearing rate using detailed reference information
• Reduce manual errors through automation and programmatic matching
• Create a digital version of each remittance in SAP, represented by the posted document
• Attach the original PDF remittance to the posted document in SAP
• Automatically raise specific customer remittance entries, such as claims and other deductions, on the customer account

Consol would confidently recommend the BEST Debtors Remit module to organisations seeking to automate the clearing of customer payments in SAP. No support requests had been required at the time of the interview, and the product was regarded as both user-friendly and highly effective.

Watch the Consol Glass customer payment automation interview.

Download the BEST Consol Debtors Remit case study.

Find out how BEST Debtors Remit automates customer payment clearing in SAP.