A comprehensive, integrated approach
to cash flow management in SAP® applications
Boost business performance and gain a competitive advantage
A guide to understanding the advantages of having an integrated solution for improving
near cash business processes for companies running SAP systems and applications.
Copyright
© 2013 The Institute of Financial Operations and Dolphin Enterprise Solutions Corporation
(dba Dolphin)
All rights are reserved, including those of duplication, reproduction, use or disclosure of the
contents of this documentation, or any part of it. No part of it may be reproduced in any form,
passed on to third parties or particularly by electronic means, processed, reproduced, distributed
or used for publication without the written permission of Dolphin or The Institute of Financial
Operations. We reserve the right to update or modify the contents.
Trademarks
Dolphin Enterprise Solutions Corporation (dba Dolphin). SAP, SAP NetWeaver, ArchiveLink,
ABAP and all SAP logos are trademarks or registered trademarks of SAP AG in Germany and
in several other countries. All other product and service names mentioned are the trademarks of
their respective companies.
About The Institute of Financial Operations
The Institute of Financial Operations is a membership-based professional association serving
data capture. The Institute grew out of the merger of four associations: International Accounts
Payable Professionals (IAPP), International Accounts Receivable Professionals (IARP), the
National Association of Purchasing and Payables (NAPP), and The Association for Work Process
Improvement (TAWPI).
as a global voice, chief advocate, recognized authority, acknowledged leader, and principal
professionals.
winning Financial Ops magazine, a dynamic, content-rich website, educational and networking
volunteer opportunities.
About Dolphin
Dolphin leads the way in SAP business performance improvement and is the one partner that
manages both data and processes. Dolphin’s end-to-end solutions for procure-to-pay and orderto-cash functions deliver a competitive advantage that drives cost savings and optimizes cash
Toronto, Canada. Dolphin solutions are implemented across North America and around the world.
Among Dolphin customers are more than one-third of Fortune 100™ companies running SAP
systems.
Contact
Learn more about boosting business performance and gaining competitive advantage by visiting
www.dolphin-corp.com, emailing Dolphin at [email protected] or calling 1-888-3059033.
Download free solution sheets on improving accounts receivable and accounts payable and take
control of the corporate cash cycle in your organization.
Accounts receivable:
www.dolphin-corp.com/business-process-management/ar-cash-application/
Accounts payable:
www.dolphin-corp.com/business-process-management/accounts-payable-for-sap/
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Table of contents
Executive summary .............................................................................. 5
The current state of the industry:
.......................................................... 6
for cash management ........................................................................... 7
..................................... 8
............................................................. 9
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................................................................................ 12
Conclusion .......................................................................................... 13
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Executive summary
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processes have often been overlooked as a catalyst for improved working capital and
environment requires a comprehensive and integrated solution approach.
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Electronic payments have increased dramatically in recent years as business-to-business
payments via check have plummeted while ACH, EDI, and credit or debit card transactions
have rocketed.
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The spike in electronic payments and invoices has made commerce easier in some ways
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of commerce.
C
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M
years has restricted the general availability of credit, forcing companies to more closely
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By
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D
most complete set of integrated solutions to streamline and manage the overall procure-topay and order-to-cash cycles and deliver optimal visibility across the integrated nature of
accounts receivable and accounts payable processes.
•
D
SAP environments, including more than one-third of the Fortune 100™ using SAP, and can
•
Learn more about boosting business performance and gaining competitive advantage
Dolphin at [email protected] or calling 1-888-305-9033.
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increased innovation.
challenging conditions present an ideal opportunity to invest in aggressively gaining market share
and preparing for the future. The time to act is now. Those who wait risk losing ground to rivals
willing to make big moves.
speed of business and boost business performance.
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However, the new normal environment is rapidly changing the way customers and suppliers
management processes such as accounts receivable and accounts payable. Companies
that don’t adapt to the new norms with process innovation that incorporates an integrated
diminishing competitiveness.
The means of receiving payments on the AR side are evolving. Consider that electronic payments
have increased dramatically in recent years as business-to-business payments via check have
plummeted, while Automated Clearing House (ACH), electronic data interchange (EDI), and
credit or debit card transactions have rocketed.
The latest triennial study by the Federal Reserve shows that payments by check are down 7
also include consumer purchases. Regardless, overall payment volume is increasing and the vast
majority of new payments are electronic-based transactions.
This spike in electronic payments has made business-to-business (B2B) commerce easier in
A growing issue is the lack of standardization in electronic payment formats, which creates
which invoices the transaction refers. Corporations must be able to handle decoupled electronic
payments and remittance information, in addition to what is still a large volume of paper checks
From an AP processing perspective, traditional procedures and legacy accounting systems
unstructured nature of an AP invoice presents challenges to the automation of the paper-based
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Business partners are demanding ways to accelerate productivity and to shorten processing
of all steps in a process with associated documents, updating account information, logging
discrepancies, and controlling payment timing. Even more impactful in this interactive climate is
the opportunity to trigger or negotiate early payment.
Historically, companies relied on the payment terms set up at the beginning of a relationship.
In this cost-sensitive and competitive atmosphere, both buyers and suppliers realize that there
Interactive communications can allow for accelerated payment discounts and, at the same time,
Most companies, even those running ERP systems such as SAP applications need better
the general availability of credit, forcing companies to monitor more closely their corporate cash
Investors and shareholders seek higher margins and a disciplined approach to spending. Lean
workforces rely on all the resources available to them to accomplish the tasks at hand and ahead.
Even modest investments in research and development and innovation can pay big dividends
later. Every dollar matters.
broader organizational goals and should be treated as such. Ask a manufacturer who has a plant
shut down because the electricity bill did not get paid. If the AP function is strategic, the answer
No opportunity for business performance improvement should go ignored for companies that
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•
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R
utilization.
Improved visibility of the process.
Increased worker productivity.
Better responsiveness to audits, discrepancies and disputes.
Early payment discounts.
Cost containment.
Improved customer and vendor engagement.
Traditional uncontrolled paper, or unstructured, document-based processes are time-consuming,
error-prone, and susceptible to fraud. Boosting overall process speed and transaction visibility
affects a corporation’s ability to forecast cash requirements, take advantage of cash or early
or suppliers.
discrepancies likely account for 1 percent to 4 percent of total sales and could be as high as 10
percent in some circumstances. These discrepancies typically take up to 60 days and require
substantial internal resources to resolve, with costs to process a single discrepancy running
as high as $300 per transaction. With the proper tools and processes in place, this can be an
enabling real-time access to information affecting the supply chain and production. The increased
visibility that comes from reducing the delay of accurate information enables business decision
makers to better manage the bottom line based on facts, not assumptions.
The accounts receivable payment landscape is changing and businesses must evolve with it.
take advantage of early AP discounts or have high days payables outstanding suffer the same
fate.
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Dolphin’s business process solution suite is built on a single platform, the Dolphin Process
Tracking System (PTS), which provides a consistent set of SAP-centric process optimization
and automation solutions for accounts payable, accounts receivable, order management, and
other document-centric business processes. Dolphin offers the industry’s most complete suite of
SAP environments.
and its scalability allows for corporate growth without vast infrastructure changes and phased
rollouts.
Our understanding of the interrelationships between data and processes makes Dolphin the ideal
partner for SAP-approved solutions that drive positive results and improve business performance.
Even for companies using SAP’s Receivables portfolio (formerly Financial Supply Chain
Management or FIN-FSCM) to help the business recognize and analyze interrelated events
that affect working capital such as payment terms, pricing and inventory, Dolphin is uniquely
solutions address and add value to more components within the entire process than any other
third-party provider.
management solutions. Images, transaction tracking, and data and documents related to the
transactions such as original purchase orders, delivery tickets, bills of lading, and sales orders
centralized visibility and a comprehensive processing dashboard, the InfoCenter. The intelligence
contained in various data points captured throughout the process is made available to the end
users through a rich analytics platform within the SAP ERP called the Dolphin Launchpad. This
System for accounts receivable and accounts payable. They are tightly integrated with the SAP
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The Dolphin accounts receivable solution provides customers with payment presentation
and making them accessible from the clearing payment document within SAP. Dolphin’s solution
handling process so that you can apply cash faster. Common challenges such as short pays
and incorrect deductions can be solved quickly and easily. Many Dolphin customers are seeing
their DSO (days sales outstanding) as well as their DDSO (delinquent days sales outstanding)
decrease, without increases in headcount or overtime costs.
In addition, Dolphin’s discrepancy handling module for managing residual items and deductions
management tracking element, the solution allows full visibility through the life cycle of the
discrepancy case. Automated reminders and escalations help to get these open items resolved
quickly and reduce the risk of write-offs of aging deductions. The Dolphin InfoCenter provides
insight and ability to take action from a single source of information.
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The Dolphin accounts payable solution enables sustainable cost reduction for organizations
using the SAP application to process accounts payable. By automating paper-based image and
data capture to reduce overall errors and shorten cycle time, productivity is increased. As in our
accounts receivable and other solutions, the Dolphin InfoCenter dashboard provides transparent
visibility throughout the process.
The AP solution is designed to enable customers to be more strategic by capturing information in
real time, automating and tracking the process, and taking control of cash discount opportunities.
Careful cash management can enable disciplined companies to take advantage of early payment
discounts from vendors and even negotiate additional discounts when dynamic discounting has
delivers reduced cycle time and facilitates timelier posting of invoices to put companies in a
Conclusion
accuracy of data that is the lifeblood of companies in this age of information.
it easier for organizations to do business. Having one partner and a single, integrated platform
results are optimized process standards, 360-degree visibility into individual transactions and the
total process, and greater overall control of cash management.
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