overview of credit management
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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 ManagementA. Overview of Credit ManagementA. Overview of Credit ManagementA. 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 ManagCredit ManagCredit ManagCredit Management can be explained in 4 Business Flow areas:ement can be explained in 4 Business Flow areas:ement can be explained in 4 Business Flow areas:ement can be explained in 4 Business Flow areas:
1. Credit Policy Management:1. Credit Policy Management:1. Credit Policy Management: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.
2.2.2.2. Credit Application: Credit Application: Credit Application: 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:3. Credit Analysis and Decision:3. Credit Analysis and Decision: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: 4. Performance: 4. Performance: 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?B. How will OCM help the business?B. How will OCM help the business?B. How will OCM help the business?
• 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?C. Who can use Credit Management?C. Who can use Credit Management?C. Who can use Credit Management? 1. Credit Analyst: 1. Credit Analyst: 1. Credit Analyst: 1. Credit Analyst:
• Credit Review (OCM)Credit Review (OCM)Credit Review (OCM)Credit Review (OCM) Credit Application Review and Analysis
Periodic Credit Review
Special Credit Review
• Customer Account Maintenance (AR) Customer Account Maintenance (AR) Customer Account Maintenance (AR) 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) Sales Order Review (OM) Sales Order Review (OM) Sales Order Review (OM) Review Orders on Credit Hold
Place or Release Credit Holds on Sales Orders
2. Credit Manager: 2. Credit Manager: 2. Credit Manager: 2. Credit Manager:
Setting up Credit Management
All Activities Listed above for Credit Analyst
3. Credit Scheduler: 3. Credit Scheduler: 3. Credit Scheduler: 3. Credit Scheduler:
Workflow related activities in Oracle Credit Management
4444. Application User (Requestor): . Application User (Requestor): . Application User (Requestor): . Application User (Requestor):
Create and Submit Credit Applications
D. Application Responsibilities that you need to setup Oracle D. Application Responsibilities that you need to setup Oracle D. Application Responsibilities that you need to setup Oracle D. Application Responsibilities that you need to setup Oracle
Credit Management: Credit Management: Credit Management: 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 Navigation – Security > User > Define
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
Select
Search
Import
Responsibility – CRM Resource Manager Navigation – Maintain Resources > Import Resources
Select
Search
F. Prerequisites To Implement Oracle Credit Management:
1. Data Quality Management (DQM):1. Data Quality Management (DQM):1. Data Quality Management (DQM):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 RuleCredit Management Search RuleCredit Management Search RuleCredit 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: 2. Populate AR Summary Tables with Transaction Data: 2. Populate AR Summary Tables with Transaction Data: 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: AR_TRX_SUMMARY_ALL: AR_TRX_SUMMARY_ALL: 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 Tabl[Step 1] Set the Profile Option ‘AR: Allow Summary Tabl[Step 1] Set the Profile Option ‘AR: Allow Summary Tabl[Step 1] Set the Profile Option ‘AR: Allow Summary Table Refresh’: e Refresh’: e Refresh’: e Refresh’: Change the
above Profile Option to YES YES YES YES at Receivables Application level.
Responsibility – System Administrator Navigation – Profile > System
[Step 2] Run ‘Refresh AR Summary Tables’ Concurrent Program:[Step 2] Run ‘Refresh AR Summary Tables’ Concurrent Program:[Step 2] Run ‘Refresh AR Summary Tables’ Concurrent Program:[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 Step Step Step 3]3]3]3] Set the Profile Option ‘A Set the Profile Option ‘A Set the Profile Option ‘A Set the Profile Option ‘AR: Allow Summary Table Refresh’R: Allow Summary Table Refresh’R: Allow Summary Table Refresh’R: Allow Summary Table Refresh’:::: After Step 2,
system will reset the profile option to No No No No and needs to be set back to Yes. Yes. Yes. Yes.
Change the above Profile Option to YES at Receivables Application level.
3. Schedule ‘Workflow Backgroung Process’ program: 3. Schedule ‘Workflow Backgroung Process’ program: 3. Schedule ‘Workflow Backgroung Process’ program: 3. Schedule ‘Workflow Backgroung Process’ program: Schedule this process for
Item Key ‘AR Credit Manage‘AR Credit Manage‘AR Credit Manage‘AR Credit Management Application Process’ment Application Process’ment Application Process’ment 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 Navigation – Request > Run
4.4.4.4. Make sure Workflow Deferred Agent Listener Workflow Deferred Agent Listener Workflow Deferred Agent Listener 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.
Management Application Process
G. Configuring Credit Management:G. Configuring Credit Management:G. Configuring Credit Management:G. Configuring Credit Management:
• Define Credit Management System OptionsDefine Credit Management System OptionsDefine Credit Management System OptionsDefine 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 Define Lookup Types Define Lookup Types Define Lookup Types –––– CREDIT CLASSIFICATION (Optional) CREDIT CLASSIFICATION (Optional) CREDIT CLASSIFICATION (Optional) CREDIT CLASSIFICATION (Optional)
Responsibility –Receivables Manager Navigation – Setup > System > Quick Codes > Receivables Lookup Code: AR_MGT_CREDIT_CLASSIFICATION (Optional)
• DefDefDefDefine Lookup Type ine Lookup Type ine Lookup Type ine Lookup Type –––– CREDIT REVIEW TYPE CREDIT REVIEW TYPE CREDIT REVIEW TYPE CREDIT REVIEW TYPE
Responsibility –Receivables Manager Navigation – Setup > System > Quick Codes > Receivables LOOKUP CODE: AR_CMGT_REVIEW_TYPE
• Bounce Apache * Bounce Apache * Bounce Apache * Bounce Apache * ---- Required only if you are on OCM.C or lower.
• Define Scoring ModDefine Scoring ModDefine Scoring ModDefine Scoring Modelselselsels – 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
• 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 ChecklistsDefine Credit ChecklistsDefine Credit ChecklistsDefine 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 ProfilesDefine Customer ProfilesDefine Customer ProfilesDefine 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)
Responsibility – Receivables Manager Navigation – Customers > Profile Class
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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:H. Workflow Management:H. Workflow Management:H. Workflow Management:
This section covers the following topics:
• Credit Analyst Assignment Rules
• Reassigning Credit Reviews
• Reassign Credit Analyst Program
1. Credit Analyst Assignment Rules: 1. Credit Analyst Assignment Rules: 1. Credit Analyst Assignment Rules: 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: 2. Reassigning Credit Reviews: 2. Reassigning Credit Reviews: 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: 3. Reassign Credit Analyst Program: 3. Reassign Credit Analyst Program: 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.
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