Tasks to be completed when creating an operating procedure (from creation to publication)

  1. Enter the Title of the procedure.
  2. Add the following Labels Labels: 
  3. Fill all fields as described
  4. Once the procedure is completed, publish it using the PtP Procure to Pay approval workflow

 

Table of contents 

By default the table of contents displays Heading 1 & Heading 2 (other levels can be added)


Scope

1. Remove the icon(s) when not applicable

2. Add countries when the procedure is for a specific country (optional)

ERP

3. Remove the icon(s) when not applicable

 

References

4. Add the link to SAP procedures (when it exists)

Attachments

5. Add the link to attachments (to be stored in AODocs or GDrive) or external links  

1. Objective and Scope

This document describes:

  • The global process overview

  • The vendor master data flow and information that must be updated at the different systems.

  • “Supplier Financing Program" Process Flow

    • NAM/EMEA

    • LAM/APAC

  • The procedures and controls implemented

  • The different tasks that must performed by different teams/persons along the process.

2. Supplier Financing: what for?

2.1 Suppliers & Solvay context

  • Payment terms have been significantly worked out over the past years especially for large suppliers

  • Suppliers do look after cash and are not keen on increasing payment terms without any counter benefit

  • Cash management (forecast, flexibility, …) is an increasing area of focus for suppliers

  • Solvay benefits from attractive financing rates on markets, potentially more attractive than suppliers in some cases

2.2 Supplier Financing ambition

  • Focus on large suppliers only (~>2/3m€ spend)

  • Bring to the table an added value innovative system for both suppliers and Solvay

  • Enhance cash management optimization for both parties

  • Enable flexibility and tailoring approach for both parties


3. Supplier Financing: how does it work?

3.1 Guiding principles

Solvay negotiates extended payment terms in exchange of what:

  1. Solvay processes received invoices and approves them

  2. When invoice approved, supplier can ask for payment before invoice maturity systematically or punctually

  3. If so, supplier paid by banking partner upon request & charged at a cost based on LIBOR & Solvay credit standings, for instance, DB proposed fee: 1,48% APR

Solvay pays  banking partner at maturity while continuing to manage PO, reception & invoice workflow

3.2 Benefits for Solvay

  • Enhanced supplier relationship management through the provision of innovative added value service to suppliers

  • Increased payment terms & enhanced working capital

  • No recurring costs for Solvay (“project” resources & systems set up only)

  • Flexible on boarding model as Solvay selects suppliers to be integrated and can adapt pricing mechanisms to suppliers

  • Structural working capital optimization rather than end of period short term optimizations

3.3 Benefits for the supplier

 

  • Able to manage cash efficiently & with flexibility (automatic discounting  or invoice cherry picking discount): conversion of receivables into cash when and if desired

  • No service, set-up or unused credit lines fees

  • Captures Solvay financial markets attractiveness when relevant

  • Represent an alternative supplier  “low cost” funding lever

  • At least, on time payment secured

4. Global Overview

5. Vendor General Master Data  Flow

6. PRS – Master data Creation/Update

  • JP Morgan as vendor  & Update it with correct Bank account

    • Currently there are 3 JP Morgan Vendors Created*

 

Note:

 SFP program is now running for Solvay Sodi in Bulgaria (CoCd 3438).

 

The set up is the same except for the factoring company. 
The only difference is instead of being JP Morgan it will be ING Bank (Vendor number 502562995).
The first vendor to be set up was vendor 602607403 so in case of doubt, you can use this vendor as a reference.



*Vendors were created based on the Region, each vendor is maintained with a different Bank Accounts.

 

 

  • Update VIP code “SFP” for vendors in the Program


 

  • Update permitted payee for vendors in the Program


 

  • Maintain SFP Cockpit

    • SM30 - Z1Y_SFP_SEL_ERP    Supplier Financing Cockpit

Note:

 T-Codes: 

Z1Y_SFP_COCKPIT_ERP
Z1Y_SFP_SEL_MANT

 

6.1 Vendor Master Data - Procedure

6.1.1 When a new vendor joins the program, the following actions must be taken: 

Master Data:

 

  • Vendor Master Data - General View

    • VIP code “SFP”

    • Permitted payee (JP Morgan)

  • Alternative payee customizing (Z1Y_SFP_SEL_ERP)

    • Combination of Company + Vendor + Payee

  • Vendor Master Data - Company Code View and purchasing/plant view

    • Update the correct payment terms

  • NAM/EMEA - Ensure Vendor master data is aligned with PI1


Transactional Data

 

  • Update open items(AP)

    • Update Payee

    • Update due date / payment terms

  • Update payment terms for all open POs (PO’s without GR/IR)-


6.1.2 When a new company (affiliate) joins the program, the following actions must be taken:

  • LAM/APAC - Update Variant (Z1Y_SFP_COCKPIT_ERP) PF1/WP1

    • Varint: LAM

    • Varint: APAC

  • NAM/EMEA - Update Variant (Z3Y_SFP_COCKPIT) - PI1

    • PI1 variants:

      • EMEA

      • NAM

 

7. Supplier Financing: Who does What?

  • PSCE Perfomance Manager (J. Capellano) selects suppliers

  • PSCE Perfomance Manager (J. Capellano) signs contract

  • PSCE informs PtP SC AP + Data of each region

  • PtP Data sets up SFP master Data (clarify scope based on company code = payment terms at all levels)

  • PtP  AP confirms cut-off (clarify scope based on company code)

  • PtP AP updates payment method and criterias for payment in Payment Factory or in local payment

  • PtP AP runs job with daily file sent to JP Morgan (with open items from Vendor) - file per region (same program with different variants)

    • If doesn’t run...null and run again

  • JP Morgan confirms reception (PtP doesn’t monitor sending today)

  • Solvay pays JP Morgan at invoice due date = Payment Terms for JP Morgan

    • Credit notes due dates (to be confirmed)


  • SFP Cockpit I and FI II- Update Permitted Payee at the time of posting

  • Comex (External Commerce) - external supplier invoices - generated by SC CUR (to confirm) - Load to cockpit?

  • Suppliers receives payment advice from JP Morgan

  • JP receives payment advice from Solvay