Merck achieves fully integrated order to cash
Industry
Pharmaceutical and biotechnology industry
Revenue
$60.12 billion
Employees
72,000
Headquarters
Darmstadt, Germany
Merck is the oldest pharmaceutical and chemicals company in the world. Headquartered in Darmstadt, Germany, the business employs around 72,000 people across 66 countries with global revenues of $60.12bn.
Merck’s credit and collections challenges
As a global company with a broad customer base and numerous debtors, Merck required a way to comprehensively manage order to cash processes in a way that allowed it to fully leverage the huge volumes of financial data siloed in various systems throughout the business.
This was most obvious in the area of credit management, where limits and approvals were calculated manually using an in-house procedure that required data to be entered into SAP by hand from numerous sources. Collection and disputes processes were also almost entirely manual, leading to delays to payments and poor working capital availability.
Key facts:
- Up to six weeks for credit approvals
- Manual procedure using multiple internal and external sources
- Manual processes for collection and disputes causing major delays
Merck’s transformation approach
Merck sought to introduce an automated and visually user-friendly solution for the basic processes of calculating, setting, and monitoring customer credit limits. And for the verification and processing of all outstanding debtor receivables and liabilities to ensure a smooth and efficient inbound payment system that limits bad debt, defaults, and poor customer relationships.
To this end, the company aimed to create a global credit limit guideline that could be automatically applied with minimal manual intervention, and to create an accurate overview of all outstanding debt, payment discrepancies, and correspondence with customers plus a fully transparent record of actions taken by the business.
Merck partnered with Serrala thanks to our FS² Credit and Collections modules’ capacity to allow all of this within the existing SAP environment by leveraging ERP data and extending the capabilities of the ERP itself.
The result – credit decisions, limits and changes applied in minutes and simple, customer-oriented collection procedures
FS² Credit automatically determines credit limits for customer based on independent credit scoring, total current liabilities and payment history. Limits are also automatically checked on a daily basis and adjusted up or down as required. Furthermore, the solution provides total visibility of all actions taken within the system – reducing blocked orders, making escalations and follow ups easy, and ensuring all workflows are fully traceable and transparency.
FS² Collections permits a complete overview of all customer correspondence and documentation, including payment history and an accurate and up to date view of all outstanding payments. Predefined workflows trigger events automatically and ensure tasks are assigned to the right team members for processing. Customer-oriented payment agreements can be made instantly based on pre-defined rules and escalated only when necessary.
Together, Serrala solutions help Merck reduce its teams’ workloads, foster inter-team collaboration, and guarantee continuously improving high quality across all O2C processes worldwide – improving working capital management and customer relationships.
Business Need
Merck is the oldest pharmaceutical and chemicals company in the world. Headquartered in Darmstadt, Germany, the business employs around 72,000 people across 66 countries with global revenues of $60.12bn.
Merck’s credit and collections challenges
As a global company with a broad customer base and numerous debtors, Merck required a way to comprehensively manage order to cash processes in a way that allowed it to fully leverage the huge volumes of financial data siloed in various systems throughout the business.
This was most obvious in the area of credit management, where limits and approvals were calculated manually using an in-house procedure that required data to be entered into SAP by hand from numerous sources. Collection and disputes processes were also almost entirely manual, leading to delays to payments and poor working capital availability.
Key facts:
- Up to six weeks for credit approvals
- Manual procedure using multiple internal and external sources
- Manual processes for collection and disputes causing major delays
Solution Implemented
Merck’s transformation approach
Merck sought to introduce an automated and visually user-friendly solution for the basic processes of calculating, setting, and monitoring customer credit limits. And for the verification and processing of all outstanding debtor receivables and liabilities to ensure a smooth and efficient inbound payment system that limits bad debt, defaults, and poor customer relationships.
To this end, the company aimed to create a global credit limit guideline that could be automatically applied with minimal manual intervention, and to create an accurate overview of all outstanding debt, payment discrepancies, and correspondence with customers plus a fully transparent record of actions taken by the business.
Merck partnered with Serrala thanks to our FS² Credit and Collections modules’ capacity to allow all of this within the existing SAP environment by leveraging ERP data and extending the capabilities of the ERP itself.
Results Achieved
The result – credit decisions, limits and changes applied in minutes and simple, customer-oriented collection procedures
FS² Credit automatically determines credit limits for customer based on independent credit scoring, total current liabilities and payment history. Limits are also automatically checked on a daily basis and adjusted up or down as required. Furthermore, the solution provides total visibility of all actions taken within the system – reducing blocked orders, making escalations and follow ups easy, and ensuring all workflows are fully traceable and transparency.
FS² Collections permits a complete overview of all customer correspondence and documentation, including payment history and an accurate and up to date view of all outstanding payments. Predefined workflows trigger events automatically and ensure tasks are assigned to the right team members for processing. Customer-oriented payment agreements can be made instantly based on pre-defined rules and escalated only when necessary.
Together, Serrala solutions help Merck reduce its teams’ workloads, foster inter-team collaboration, and guarantee continuously improving high quality across all O2C processes worldwide – improving working capital management and customer relationships.
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