Oracle Credit Management
Agenda
A. Overview of Credit Management
B. How will Credit Management help the business?
C. Who can use Credit Management?
D. Application Responsibilities that will be used today…
E. How to setup Credit Analyst and Credit Manager?
F. Prerequisites to Implement Credit Management
G. Configuring Credit Management
H. Workflow Management
A. Overview of Credit Management
Oracle Credit Management empowers your credit personnel to continually monitor
and evaluate the credit worthiness of your business-to-business customers and
prospects. Coupled with a wealth of timely internal and external data, you can
create credit policies tailored to your business enabling you to balance your
company’s growth with your desire for financial stability.
Credit Management can be explained in 4 Business Flow areas:
1. Credit Policy Management: In Credit Policy Management, we use a unique matrix
approach to defining Credit policies, based upon the assignment of the customer’s credit
classification or risk assessment, coupled with the type of review being conducted.
Credit personnel can use checklist to determine what data points will be gathered from
the application tables, what data points are required on a credit application and in the
credit review case folder.
2. Credit Application: The credit application flow enables personnel to submit credit
application information on behalf of a customer or prospect. There are also business
events that would drive the initiation of a credit review, such as an order being placed
on credit hold due to the pre-calculate credit exposure or an externally defined user
event.
3. Credit Analysis and Decision: Within the credit analysis and decision flow, the case
folder is the central repository for all data, analyst notes, calculated credit scores and
recommendations for the credit review. Because Credit Management is a cross-org
application, data displayed in the case folder for a credit review can show transactions
counts and amounts for all operating units. Also, because Credit Management utilizes
the TCA Relationship Manager hierarchy, the data in a credit review can be consolidated
and calculated for Party / Customer Account and Site levels.
Throughout the credit application and analysis flows, you can Purchase Dun &
Bradstreet data and the information is automatically imported into OCM.
4. Performance: Credit Management provides you with comparison tools that help you
to determine if your credit policies have adequately assessed the creditworthiness of
your customers. You can access simple views into the workload and effectiveness of the
checklists and scoring models that you have set up and used in credit reviews.
Credit Management plays a key role in the revenue and risk management of the user
organization. The assignment of a credit classification to a customer identifies which
revenue recognition rules are applied.
B. How will OCM help the business?
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Improve profitability by minimizing bad debt
•
Seize revenue opportunities
•
Balance short term debt with long term financial solvency
•
Reduce resource-intensive tasks
•
Respond to global customer credit needs
•
Provide consistent purchasing power
•
Reduce Campaign-to-Cash life cycle
•
Provide soup-to-nuts financial instruments
•
Resolve credit issues faster
•
Work in ‘best practices’ environment with ‘best of breed’ tools
•
Reduce collections efforts
•
Minimize ‘valueless’ tasks and create value-added work
C. Who can use Credit Management?
1. Credit Analyst:
•
Credit Review (OCM)
Credit Application Review and Analysis
Periodic Credit Review
Special Credit Review
•
Customer Account Maintenance (AR) Review and Amend Transaction Profile
Review and Amend Credit Limits
Place Customers on Credit Hold
Release Customer Credit Holds
Process Requests for Refund of Credit Balances
Writing Off Un-Collectable Balances
•
Sales Order Review (OM)
Review Orders on Credit Hold
Place or Release Credit Holds on Sales Orders
2. Credit Manager:
Setting up Credit Management
All Activities Listed above for Credit Analyst
3. Credit Scheduler:
Workflow related activities in Oracle Credit Management
4. Application User (Requestor):
Create and Submit Credit Applications
D. Application Responsibilities that you need to setup Oracle
Credit Management:
HRMS Management
System Administrator
CRM Resource Manager
Credit Management Super User
Receivables Manager
Order Management Super User
Credit Scheduler
E. How to setup Credit Analyst and Credit Manager?
1. HRMS – Used to setup Employee in HRMS Application for Credit
Analyst/Manager.
Responsibility – HRMS Management
Navigation – HRMS Manager > People > Enter and Maintain
2. System Administration – Used to setup Application User Account
for the Credit Analyst/Manager and then assign the User Account
to the Employee defined in <Step 1> above.
Responsibility – System Administration
3. CRM Foundation – Used to assign Credit Analyst/Manager Roles to
the Employee defined in <Step 1> above.
Responsibility – CRM Resource Manager
Navigation – Maintain Resources > Import Resources
Responsibility – CRM Resource Manager
Navigation – Maintain Resources > Import Resources
F. Prerequisites To Implement Oracle Credit Management:
1. Data Quality Management (DQM): DQM is a feature available Oracle Trading
Community Architechture Application which is used to search Parties, Accounts and
Sites in various Oracle Applications including Oracle Credit Management. Oracle Credit
Management employs the Data Quality Management (DQM) search rules to identify
how search results should be displayed in the application’s search screens. To
implement DQM in Credit Management, select Credit Management Search Rule for the
DQM Matching Rule Name system option.
[Step 1] Run ‘DQM Staging Program’: This program is run from Trading Community
Manager Responsibility and is designed to populate DQM Staging Tables.
Responsibility – Trading Community Manager
Navigation – Control > Requests> Run
[Step 3] Setup DQM Synchronization: After running DQM Staging Program to
populate DQM Staging tables, one has to setup DQM Synchronization in
Realtime / Batch mode to synchronize DQM Stage tables with any new/changed
Party/Customer Data. For more detailed information on how to setup DQM
Synchronization, please refer to Oracle Trading Community Architechture
Administration User Guide
2. Populate AR Summary Tables with Transaction Data: There are two summary tables
that need to be populated before using Oracle Credit Management and Oracle
Advanced Collections Applications.
AR_TRX_BALANCES_SUMMARY_ALL: Stores current balances, such as the
amount of open invoices and open receivables. Balances are stored as current snapshots
and are not dependent on any time parameter.
AR_TRX_SUMMARY_ALL: Stores data, such as the count of open invoices and total
invoice value, which is summarized for a specified period of time.
[Step 1] Set the Profile Option ‘AR: Allow Summary Table Refresh’: Change the above
Profile Option to YES at Receivables Application level.
Responsibility – System Administrator
Navigation – Profile > System
[Step 2] Run ‘Refresh AR Summary Tables’ Concurrent Program: This populates AR
Transactions Summary Table. This table is used for credit analysis in OCM and also in
Advanced Collections.
Responsibility – Receivables Manager
Navigation – Credit Management
[Step 3] Set the Profile Option ‘AR: Allow Summary Table Refresh’: After Step 2, system
will reset the profile option to No and needs to be set back to Yes. Change the above
Profile Option to YES at Receivables Application level.
3. Schedule ‘Workflow Backgroung Process’ program: Schedule this process for Item Key
‘AR Credit Management Application Process’. Must be scheduled to run periodically
based upon the ‘turnaround time’ required by the client (From Credit Application
submission to Case Folder creation).
Responsibility – System Administrator
Management Application Process Navigation – Request >
Run
4. Make sure Workflow Deferred Agent Listener is running all the time. This is very
important and used to sychronize AR Summary Tables and DQM Staging Tables. Must
be scheduled to run periodically based upon the ‘near real time’ data requirements of
the client. For more questions on this step, please contact your DBA/SysAdmin or log a
TAR with AOL Support Team.
G. Configuring Credit Management:
• Define Credit Management System Options
Aging Bucket - *cannot be changed once saved
Default Customer Profile Class
DQM Matching Rule Name
Period for Time Sensitive Data Application
Numbering Option
Exchange Rate Type
DSO Days (Days Sales Outstanding)
Delinquent Days Sales Outstanding (DDSO)
Responsibility – Credit Management Super User
Navigation – Policy Management > System Options
• Define Lookup Types – CREDIT CLASSIFICATION (Optional)
Responsibility –Receivables Manager
Navigation – Setup > System > Quick Codes > Receivables
Lookup Code: AR_MGT_CREDIT_CLASSIFICATION (Optional)
• Define Lookup Type – CREDIT REVIEW TYPE
Responsibility –Receivables Manager
Navigation – Setup > System > Quick Codes > Receivables
LOOKUP CODE: AR_CMGT_REVIEW_TYPE
•
Bounce Apache * - Required only if you are on OCM.C or lower.
•
Define Scoring Models – Scoring Model is a measurement tool. In Credit
Management, scoring is used to evaluate the risk represented by a Customer or
Prospect or carried by a Lease or Loan.
Involves the following….
1. Selecting Data Points
2. Define Scoring Formula
•
Associate Scores to Data Points ranges of values
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Define weights if weighted average is the selected Credit Policy/Scoring
Model
Responsibility – Credit Management Super User
Navigation – Policy Management > Scores
Define and Assign Automation Rules - For any scoring model, you can define a set of
automation rules to implement credit decisions without user intervention. Such
automation is implemented when the credit risk is minimal. Automation Rules are
associated to Scoring Models.
Responsibility – Credit Management Super User
Navigation – Policy Management > Automation Rules
•
Define Credit Checklists - Define / Record your credit policy for a given
combination of Credit Classification and Review Type:
•
Select the Data Points
•
Optionally assign a Scoring Model
Responsibility – Credit Management Super User
Navigation – Policy Management > Checklists
•
Define Customer Profiles
The Credit Profile tab is used to define customer defaults for Credit Management.
You can define:
•
Classification
•
Periodic Review Cycle (Optional)
•
Credit Analyst (Optional)
•
Credit Tolerance (Used if Integrated w/OM)
•
Credit Checking (Used if Integration w/OM)
• Define and Assign Credit Usage Rule Sets
Define and Assign Credit Usage Rule Sets - Credit Usage Rule Sets define the set of
currencies that will share a predefined credit limit during the credit checking process,
and enable the grouping of currencies for global credit checking. Usage Rules Sets
ensure that if credit checking is enabled, that all transactions for specified currencies go
through the currency conversion process and are summarized by currency prior to the
credit checking process.
Confirm the Credit Usage Rule Sets are Assigned to your Profile Class / Operating Unit /
Party / Account / Site / Item Category.
Responsibility – Receivables Manager
Navigation – Setup > Credit > Define Credit Usage Rules
Responsibility – Receivables Manager
Navigation – Setup > Credit > Assign Credit Usage Rules
H. Workflow Management:
This section covers the following topics:
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•
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Credit Analyst Assignment Rules
Reassigning Credit Reviews
Reassign Credit Analyst Program
1. Credit Analyst Assignment Rules: Credit Management uses the Rules Engine, a
component of the E-Business Suite, to let you define rules that control the correct credit
analyst assignment.
On the Credit Analyst Assignments page, use the Rules List tab to:
•
Select a default credit analyst. Credit Management uses this default when no rule
either exists or applies during a particular credit review.
•
Define the rules that indicate how credit analysts are automatically assigned to case
folders. Credit Management evaluates the rules that you create in sequential order.
2. Reassigning Credit Reviews: Access the Reassign Credit Reviews page using the
Credit Scheduler responsibility. Enter search criteria, then select one or more reviews
for reassignment. Reassigned reviews appear in assignees’ queues without additional
notification.
Use the Reassign Credit Reviews page to move selected credit applications and case
folders among credit personnel. Reassignment might be necessary to rebalance
workload between credit analysts. You can also use this page to assign credit analysts to
unassigned credit applications.
3. Reassign Credit Analyst Program: Over time, personnel changes might require a
change to the credit analyst who is assigned to an account, credit application, or case
folder. For example, a credit analyst might take a personal leave of absence, or leave the
organization entirely.
Use the Reassign Credit Analyst concurrent program to specify the required analyst
changes. This program executes a mass update on a batch basis, moving a credit
analyst’s entire work queue to another credit analyst’s work queue. This program also
updates the credit analyst assignment in the related customer profile class, so that
future credit reviews automatically reflect the new credit analyst assignment.