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.