SAP passive cycle: what is it and what is needed?

SAP passive cycle: what is it and what is needed?

Very often, companies make the mistake to focus only on an active cycle; this includes all the operations that allow building long-lasting relationship with a client without considering a passive cycle. With this term is intended all the actions and interventions to make before the sales of the goods or service (management of the warehouse and relationship with the suppliers): this is an important step in order to guarantee the best quality to the final consumer but also keeping the costs low. Because of this, companies need digitization not only in the processes that regard clients but also for those who regard the suppliers. In this article, Technis Blu shows how to maximize the passive cycle in a company by using SAP.

#1 Supplier registry

Nowadays there are still lots of companies who just use a simple excel file to keep record of the suppliers registry. This often means not only confusion, but also a slowdown in the file openings and in information editing.

SAP perfectly knows that every single minute is highly valued for companies therefore; it presents a passive cycle, which is completely innovative and digitized which is able to speed up the operations. Within this is possible to create a supplier registry card, so that is possible to keep under control every figure needed to pay a bill or other operations. Moreover, to each supplier registry card is possible to attach specific documents (such as a contract) without having to look for them somewhere else.  SAP management allows creating a link between the different departments thanks to a centralized memory System; this allows seeing any edit made from another user in real time without risking any mistake or misunderstanding.

#2 Contract management

Companies need to deal constantly with hundreds and hundreds of documents, including contracts with suppliers. It is difficult to remember an expiry Date of a contract and renew it with a prompt response or looking for a new supplier.

The SAP passive cycle allows through specific workflows, reminders, which some days or weeks before the expiry of a contract, notice to the user the Date avoiding problems such as resulting without a supplier or becoming inefficient. Moreover, each expiry Date is shareable with the team. The same happens when the contract is renewed or substituted: the notification is accessible to anyone within the company.

#3 Prompt payments

Be in a position of a default payment against a supplier is not an ideal situation for a company but, this happens often not because the company intentionally does not want to pay, but for problems of expiry of bills.

SAP solves also this problem by realizing specific workflows, which record well in advance to the user the payment of the bill. A tool of electronic bill managed by SAP, so that is possible to control and manage constantly the bills links this System clearly.

#4 Detailed reports

The passive cycle represent, differently from the active one, all the expenses of the company. Is for this that not only is fundamental to co-ordinate every activity related to paying suppliers and managing the warehouse, but also looking for the right strategic operations to reduce the company’s expenses and maximize the revenue.

Making decisions becomes easier with the SAP managing System for the passive cycle; this creates a cost analysis updated in real time, which offers a complete overview of the activity. By studying each single cost centre, will be easier to assess the expenses and the management will have the possibility to make efficient decisions for the future of the company.

#5 Data protection

Since May 2018, the GDPR (General Data Protection Regulation) was introduced with drastic measures: this means an increased attention from the European Union member States against Data Protection. Firms, particularly, have big information quantities and need high protection to avoid falling in hacker attacks.

The SAP passive cycle safeguards the company’s internal Data and, above all, those of the suppliers through powerful protection Systems. In this way, whereas there are odd accesses, every access to the System is recorded constantly and sent to a notice centre.

Benefit of SAP passive cycle

There are many advantages in using the SAP management for the passive cycle. Particularly:

  • Electronic file storage. This allows a quick research of contracts and information which are managed efficiently thanks to a full dematerialization which not only is eco-friendly, but also productive: there is not anymore any reference to a physical paper on the desk, but every document is saved in the SAP central System.
  • Speeding up and improvement of the company’s management processes accountable and administrative.
  • Removal of transmission errors, thanks to a System which updates in real time and which is shareable with the team.
  • Improvement in Data protection

Conclusion

In this article we have deepen the knowledge about SAP passive cycles, an innovative management System able to co-ordinate the warehouse and optimize the relationships with suppliers. This is possible thanks to a full digitization of business processes with the creation of specific registry not only for clients (like the CRM), but also for those who offer goods and services to the firm. The expiry of contracts and payments are advised with adequate notice to allow the administrative and accounting staff to intervene in time. Moreover, detailed analysis and scrutinized reports are realized to achieve a minimization of the outflows. All this without giving up Data protection.

Do you wish to implement a System that manages in an optimal way the passive cycle of your company? Talk to SAP’s functional analysts who work for Technis Blu and discover what they can do for you.

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