Manage your Credit Risk in SAP

Automate your credit policy by performing continuous risk classifications and credit limit allocations of your whole customer portfolio. Gain deep insight into your customer risk data, allowing you to make business risk transparent.
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Our Risk Management platform

Risk Management within Ready4 Credit Management allows you to anticipate risks using real-time data. This SAP tool helps you to integrate internal and external information such as credit reports and your own data history, enabling you to make objective credit decisions.

  • Gain an overview of customers including risk category, payment experience, negative indicators, credit limit, exposure, balance sheet ratios or risk clusters.
  • Manage guarantees and credit limits to secure your invoices with fully digitalised credit limit approvals.
  • Detect critical cases and automate decision work-flows based on your credit policy.
  • Get a 360-degree customer overview in real-time, including risk reports and KPIs to take the right decisions.
  • Proactively avoid bad debt losses by anticipating risks automatically.

Automate your credit decisions to mitigate risk

Digitalising your credit policies in SAP gives you the ease and automation to aid your decision-making processes without compromising on your manual modus. Cutting edge user experience including Fiori and SAPGUI allows you to analyse and manage your credit risks from all angles.

Capabilities

Every software component of our digital platform focuses on specific processes related to best practices on credit management, to support you at every stage. Ready4 Credit Management is designed for all industries and can be easily implemented within a short-time frame. Discover below what Ready4 Credit Management covers.

R4CM Risk Management software

R4CM Risk Management software has been designed specifically to help you gain a 360-Degree overview of your customer credit risk in real-time. From identifying critical cases and triggering manual credit decision workflows to optimising payment terms and predicting overdue payments, Risk Management gives you all the tools you need to ensure the right credit decisions are made.

  • Perform own risk classifications from whole customer portfolio.
  • Identify risky and lucrative customer trends.
  • Integrate your internal data from your SAP corporate system and external data from different sources into one solution.

Q&A

How can you build your own scoring procedure to monitor your customers in SAP?

The component Risk Management from R4CM is fully integrated in the corporate finance and accounting process in SAP and can be interfaced to external data sources such as credit bureaus, payment pools and trade credit insurers. The module combines and processes data from different internal sources such as own payment experience, last sales revenues and external data sources such as credit report information and trade insurers. In order to perform internal scoring and deliver a risk category to each customer, the module enables the customisation of scorecards. This involves mapping relevant data inputs from the chosen sources with a punctuation value so that a scoring value can be delivered. A higher score value is correlated with a lower risk category for the customer.    

Which information sources are relevant for the scoring system?

It basically depends on the branch and country specifics to where the customer belongs, and if the customer is a new or an existing one with available own payment experience. The most common data sources to assess in a scorecard for new customers normally includes: Credit information reports, payment pools, sales force surveys, and, when available, financial statements and balance sheet figures. For existing customers, the internal corporate SAP data source gains relevance by including figures from their own payment experience, sales revenues, negative indicators such as dunning levels andamount of invoices in dispute.

How does the system calculate an own credit limit recommendation?

As a result of the scoring, every customer gets a score value, which is correlated with a risk category. The higher the score value, the lower the risk category for the customer. A percentage of last sales revenues or optionally sales forecast is predefined to each risk category in order to deliver an own credit limit recommendation for a specific credit segment or credit control area. The resulting credit limit recommendation should cover the expected open amounts on average corresponding to the incoming sales orders and invoices under consideration of their payment terms. An easy formula for a recommended credit limit considering only invoices is:

Credit limit = Average monthly turn-over x payment deadline in months

Resources

Save time on credit risk assessments with process automation and gain access to real-time information.

It is becoming more & more important for companies to be able to do faster and more accurate credit assessments.​ By automating your manual credit risk actions you will improve efficiency, minimise errors as well as save time & operational costs

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