Definition - What is SAP FS-CD(Collections and Disbursements) ?
In the insurance sector, SAP has made its presence felt in quite a large way. All the processes that are present in this sector, such as policies, claims as well as calculations, are now being dealt by SAP. Earlier, these systems had no way of communicating directly with those who were availing them; but things have changed with the integration of important SAP modules like FS-CD. What SAP FS-CD (which Collection and Disbursement) does is that it communicates with the users availing these services and provides an invoice regarding these systems.
The basic purpose of Collections and Disbursements for the insurance industry is that it acts as a sub-ledger for the main calculating systems, so that the main ledger is not over burdened with extra responsibilities and data is sent into it through different interfaces. It also allows one to map invoicing by using brokers and other coinsurance business and performs all tasks on a cross-LoB basis, which includes open item accounting, payment processing, incoming payment processing, correspondence as well as dunning. This provides all sorts of functions that are required for sub ledger accounting in the insurance sector.
The functions and workings of the SAP FS-CD are all part of the Business Function Set provided by SAP. As you already know, SAP FS-CD is a settling system and it must be provided with the data required by the administrative systems. The administrative systems include Commission Management, Claims Management, Reinsurance Management and Policy Management. This effectively means that every system that is somewhat involved with the entire process of calculation of claims, as well as settlements, must provide the information in this sub-ledger for better performance.
SAP FS-CD courses are attracting interested candidates with their in-depth knowledge of comprehensive SAP solutions that meet the many challenges faced by insurance organizations globally. Along with all the sub-modules related to Collection and Disbursements (FS-CD), they offer short overviews of other components related to SAP for Insurance Product Family:
Most courses catering to this field include:
- FS-CD - Collections and Disbursements tools and techniques;
- Handling of cross-industry tasks linked to collections/ disbursements;
- Management of accounts receivable/ payable;
- Handling of premium and other insurance related payments;
- Ways of processing incoming payments, and so forth.
A career in SAP FS-CD provides plentiful opportunities to managers and consultants alike and encompasses the processes of:
- Posting: The basic functions of this module can be used in the actual master data for posting/ processing relevant documents. Not only that, it also creates the master data, posts manually, and processes documents for future correspondence purposes.
- Business Transactions: SAP FS-CD helps you post and process business transactions in an easy and automatic manner. The required definitions for controlling the general procedures involved with customizing need to be set for optimum performance.
- Broker Collections: This component allows insurance companies to initiate the payment process for brokers and communicates with their customer base via brokers, if the need arises. The broker can be an individual agent or a small company.
- Coinsurance: This component is required if the company shares risks with other companies in the insurance industry and coinsurance business is the leading insurer. A co-insurer needs to have two contracts, one for premium shares and one for claim shares. Premiums and claims from policy holders are posted to their contracts. Depending on the agreed proportion, the amount is distributed for the leading company and its participating co-insurer.
- Payment: SAP FS-CD is highly advanced when it comes to dealing with payments of premiums as well as claims. It is extremely malleable and can be customized to suit all needs.
This insurance specific solution from SAP proves to be beneficial for every policy holder or agency that handles payment processing and billing cycles. SAP FS-CD consultants and certified professionals are being hired by acclaimed companies globally and are notching high pay scales in the industry.
Along with basic know ledge of SAP based components, it is important for aspirants to have a diploma/ degree in insurance from a recognized university/ college/ institute. Good communication skills are an important requisite for this course.