Oracle Apps R12_White Paper on Advanced Collections Setup

Oracle® Applications Release12 Advanced Collections Setup

White Paper Oracle E Business Suite

Advance Collections Setup – Oracle Applications

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The information contained herein is proprietary to TATA CONSULTANCY SER!CES L!"!TE# and may not $e used% reproduced or disclosed to others e&cept as specifically specifically permitted in in 'ritin( $y TATA TATA CONSULTANCY CONSULTANCY SER!CES L!"!TE#) L!"!TE#) The recipient recipient of this document% $y its retention and use% a(rees to protect the same and the information contained therein from loss or theft)

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Abstract This document provides an overvie' of Advanced Collections setup in Oracle Applications R*+) This 'hitepaper discusses all sections of functional desi(n document and lists the correspondin( sections re,uired to confi(ure to use the Collector-s 'or. ,ueue) !n today-s $usiness environment% cash flo' is most critical to a $usiness-s success) !n order to collect cash faster and more efficiently usin( streamlined processes offer a real competitive advanta(e) The implementation of Oracle Advanced Collections allo's or(ani/ations to proactively mana(e their overdue mana(ement efficiency% 'hilst retainin( its on(oin( customer relationships)

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About the Author San0u.ta Choudhuri is a Techno12unctional consultant in TCS) She is an !T Analyst% 'or.ed in t'o different ER3 solutions over last 4 yrs) She has $een involved in !mplementation% "aintenance% Support pro0ects durin( her tenure and has 'or. e&perience in ER3 Supply chain mana(ement and 2inance modules)

About the Domain The paper is aimed to tal. a$out the Advanced Collections Setup% to develop a $asic understandin( of ho' the main o$0ective of de$t collection has $een achieved $y settin( up an effective de$t mana(ement tool to meet the re,uirement of the customers) No'adays% many companies are $ecomin( $an.rupt $ecause of $ad de$t) !n this situation collectin( premium from its customers on time has $ecome a challen(e) The collection process should $e ro$ust enou(h to match 'ith the current mar.et situation)

Oracle Advanced Collections allo's us to $rid(e the (ap $et'een $ac.1office transactional data and front1office customer mana(ement processes% 'hile improvin( a(ent productivity and collection results) Streamlined processes apply the ri(ht collections strate(y to the ri(ht customer to help the company collect more money faster and 'ith less effort)

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CONTENTS 1.

INTRODUCTION.........................................................................................................................................6

2. OVERVIEW ..................................................................................................................................................8 3. NECESSARY SETUPS ................................................................................................................................9 4. CONCLUSION ...........................................................................................................................................25 5. ACKNOWLEDGEMENTS .......................................................................................................................25 6.

REFERENCES............................................................................................................................................26

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1. Introduction Other than normal re(ular collection method for every $usiness there should $e one effective de$t collection process in place so that money that customers has not paid on time can $e collected from them) Advanced Collection is a module in oracle e1$usiness suite 'hich provides an effective de$t collection process for the money 'hich is not collected on time) !t is very fle&i$le) !t can $e desi(ned differently for different industry% different territory and different types of customers)

What is Advanced Collections Advanced Collections module of Oracle Applications provides advanced features of de$t mana(ement) This module deals specifically 'ith customers 'ho have not paid on time 5These customer are called as #elin,uent Customers6 and tries to collect overdue amount)

Why Advanced Collection needed !n today-s 'orld collection process has $ecome very comple&) 7elo' mentioned are the points 'hich are .ey concern areas for 'hich it is needed to opt for Advanced collection) 

There is one Collection feature present in Receiva$les $ut that is not fle&i$le enou(h) There 'e can only send letters 5#unnin( Letters6 to defaulters dependin( upon ho' many days they are late for doin( the payments 5A(in( 7uc.ets6) !n Advanced Collection different collection strate(y can $e implemented for different customers dependin( upon customer-s de$t history or de$t amount) This feature is not present in Collections in Receiva$les module)

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Collectors are too $usy to contact customers 'ith overdue invoices 'ith small amount) Some customers pay these invoices $ut conse,uently% they end up 'ritin( off many of these small $alances) "any small amounts 'hen added up do not remain small at all) 8o' can 'e stop this9

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7usiness values their customers 'ho have $een 'ith them for many years and 'ould li.e to develop a more (entle collections strate(y to recover $ad de$t) 7ut customers 'ho have $een 'ith them for less time should have a more a((ressive collections strate(y for them so that $usiness can control their $ad de$t% (et financial relationship off to a $etter start and ultimately retain and 'eed ne'er customers out $ased on their value) 8o' to e&ecute dual strate(ies 'ithout confusin( the collectors9

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!t has often seen that customers 'ho pay on a ,uarterly or semi1annual $asis are often days or 'ee.s late) Since these payments are less fre,uent% the amounts are often lar(er and (reatly impact cash flo') 7ut% these customers are not necessarily $ad customers $ut are ha$itually late) 8o' can 'e (et these pre1delin,uent customers to pay on time 5or even early:6 'ithout offendin( them $y a collections call9

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Advance Collections Setup – Oracle Applications 

There are uni,ue collections re,uirements for each country that determine ho' and 'hen to contact delin,uent customers) Company spends lot of money in trainin( .eep collectors clear on these country1specific rules and re(ulations) !t has also seen that customers in each country often respond differently to the dunnin( and callin( process) 8o' to easily create country1specific collections $est practices strate(ies9

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Collectors stru((le 'ith customers 'ho continue to refuse to pay) They 'aste e&tra calls to these delin,uent customers 'hen they should really refer these customers to mana(ers or collections specialists 'ho can ta.e more drastic collections measures to liti(ate repossess and;or 'rite off these de$ts) Also% customers sometimes claim $an.ruptcy 'hich% 'hether this is true or not% needs to $e addressed ,uic.ly to reduce additional $ad de$t e&posure as 'ell as adhere to strict $an.ruptcy la's) 8o' to address these later sta(e delin,uencies activities 'ithout $o((in( do'n the collections process9

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Im!ortant Terms * De!"#$e"%&' #elin,uency means condition of a de$t 'hen overdue) The customers + 'ho do not pay on time are called delin,uent customer) S()*(e+&' Used for applyin( specific de$t mana(ement $usiness rules for collection) = A+!"+ ,$%-e(> #ifferent A(in( 7uc.et can $e defined in Receiva$les dependin( upon num$er of days) E)() Seven days a(in( $uc.et) Then all the transaction for 'hich payment is late for ? days 'ill come to this $uc.et) @ D$""!"+ Le((e)> #unnin( letters are notification or 'arnin( letters send to customers if they do not pay on time) Each A(in( 7uc.et 'ill $e havin( a set of #unnin( Letters) #ependin( upon the A(in( 7uc.et the customer falls dunnin( letters are sent) S%)!"+ E"+!"e/' Scorin( En(ines determines customer-s delin,uency status and  customer scorin() 4 S%)e' Every delin,uent customer is assi(ned to a value called score) Score is calculated dependin( upon many factors li.e de$t amount% de$t duration etc) C0e(e"%&' Competence is a standardi/ed re,uirement for an individual to properly ? perform a specific 0o$) Bo$ 'ise competency is defined in system and assi(n to particular person 'ho can do that 0o$) E)() Callin( Customer a competency) Some people 'ho are enou(h s.illful to call and convince customer is assi(ned to this competency)

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". Overvie# Advanced Collection is an e&tension of collection process in Receiva$les module therefore it is o$viously lin.ed 'ith Receiva$les in oracle applications) Customer information and the transaction details for 'hich customer has not paid on time% all this information 'ill come to Advanced Collection from Receiva$les module) Other than that it is lin.ed 'ith the follo'in( modules1 

R M*"*+e0e"( F$ !0e0e"(*(!"' Collectors are employee of the or(ani/ations) So they should $e set up as an employee in 8R"S) This one is mandatory)

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CRM Re/$)%e M*"*+e0e"(' roups% Roles and Resources everythin( needs to $e mana(ed $y CR" Resource "ana(ement) This module implementation is also mandatory)

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$. Necessary Setu!s Setup is very important for Collections) Once the setup is done collection process 'ill continue e&ecutin( usin( the collection strate(ies defined at the time of set up) !t is also possi$le to modify or create a ne' strate(y) 7elo' mentioned are the detailed steps re,uired for Advanced Collection setup * + = @  4 ? D  *F ** *+ *= *@

S(e 1 – Create Responsi$ility S(e 2 – Assi(n Responsi$ility 3rofile options S(e 3 – Set up Employees S(e 4 – Assi(n Users to Responsi$ilities S(e 5 – Assi(n Resource Roles and Used !n S(e 6 – !mport Resources S(e  – Create Collectors S(e 8 – Set up Level for #unnin( S(e 9 – Set1up Scorin( Component S(e 1 –Setup Scorin( En(ine S(e 11 – Create Ena$le the AR transactions summary ta$les

Collector Setup: Step 1: Create Responsibility 2irst responsi$ilities for Advanced collection 'hich 'ill $e used $y collectors need to $e created) E& – Collections A(ent Responsi$ility> System Administrator Navi(ation> Security II Responsi$ility II #efine

Step 2 – Assign Responsibility Profile options Responsi$ility> System Administrator Navi(ation> 3rofile II System Assi(n all the re,uired profile options for Advanced Collections Setup

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Step 3 – Set up Employees Collectors are first employees of the or(ani/ation) So it is re,uired to set them as Employee first) Re/"/!7!!(&' 8R"S "ana(er N*!+*(!"' 3eople II Enter and "aintain

Step 4 – Assign Users to Responsibilities Responsi$ilities are created for Collectors% no' these responsi$ilities should $e assi(ned to respective user) Re/"/!7!!(&' System Administrator N*!+*(!"' Security II User II #efine

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Step  – Assign Resource Roles an! Use! "n No' each user 'ill have their separate roles) So 'e need to create roles no') Re/"/!7!!(&' CR" Resource "ana(er N*!+*(!"' Resource "ana(erIISetupIIRoles

E)() Collections "ana(er% Collections A(ent

5. 1C)e*(e Re

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Step #– "mport Resources Resource as first defined in 8R"S then the resource should $e imported as Employee in the system) Once the import is complete the resource is visi$le in the system and the resource cate(ory is Employee) Later the resource should $e ta((ed 'ith Collection A(ent or any other relevant role) Then only the employee can a$le to 'or. as Collector) Re/"/!7!!(&' CR" Administrator N*!+*(!"' Resource "ana(erII"aintain ResourcesII!mport Resources

6.1 I0)( Re/$)%e

6.2 A//!+" Re ( Re/$)%e

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Step $ – Create Collectors The collector has to $e defined in the system so that he;she can perform the collection activities) Re/"/!7!!(&' Receiva$les Super User N*!+*(!"' Set up II Collections II Collectors

.1Ce%() C)e*(!"

.2 Ce%() !/ *//!+"e ( (:e %$/(0e)

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Step % – Set up for &unning Plan #unnin( 3lans are simple collections methods) They automatically send notices to delin,uent customers and% optionally% assi(n a follo' up call to a collector) Strate(ies support simple or comple& collections activities) They automatically e&ecute predefined activities to mana(e delin,uent or pre1delin,uent customers)
Re/"/!7!!(&' Collections Administrator N*!+*(!"' Setup Chec.list IICollections "ethod SetupII Create #unnin( 3lans

One must run the follo'in( concurrent pro(rams in Oracle Advanced Collections to e&ecute dunnin( plans> J IEX: Promise Reconciliation> This pro(ram updates the open promise information in Advanced Collections 'ith payments received in Oracle Receiva$les to determine outstandin( items) J IEX: Scoring Engine Harness> This pro(ram sends the results of the scorin( en(ine harness to Oracle One1to1One 2 ulfillment to send out dunnin( Correspondence) J IEX: Create Dunning and Broken Promise Call Backs> !f 'e have dunnin( call$ac.s as part of our dunnin( plan% need to run this pro(ram to create call$ac. 'or. items to a collectors tas. list in the Collectors
Step ' – Setup for Collection Strategies: Use collections strate(ies as an alternative to dunnin( plans% to automate the collections mana(ement process and support comple& collections activities) Strate(ies can $e used to recover delin,uent transactions such as invoices from Oracle Receiva$les% cases as identified $y Oracle Lease "ana(ement% or loan transactions from Oracle Loans) A strate(y is a series of manual or automated tas.s% .no'n as 'or. items% lin.ed to(ether in the order in 'hich they 'ill $e e&ecuted) Each 'or. item is a collection activity to recover a delin,uency% such as ma.in( a phone call or sendin( a letter% and can $e reused and included in many strate(ies) A strate(y is associated 'ith a collections o$0ect% such as customers or accounts) The collections o$0ect is the data level 'e do $usiness at)

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()er)ie* of Scoring: Scorin( forms the foundation of collections activities) Oracle Advanced Collections uses scorin( in t'o 'ays> J To determine transaction status> current% delin,uent% and pre1delin,uent)
Set up Scoring Components: Re/"/!7!!(&' Collections Administrator N*!+*(!"' Setup Chec.list IICollections "ethod SetupII Create Scorin( Components

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9 C)e*(e S%)!"+ C0"e"(/

Step 1+ – Set up Scoring Engine:

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,-at is Scoring Engine. 2or each scenario 'e 'ill $e havin( a score En(ine) Each en(ine is consists of many score components) S%)e C0"e"(/' "any ,ueries to(ether find out the final score) Each score component 'ill $e attached to one ,uery) "any such components to(ether are responsi$le to find out total score for a particular scenario) Each component 'ill $e assi(ned to certain 'ei(ht) #ifferent hi(h and lo' value ran(e 'ill $e defined for each component and each ran(e 'ill have certain value) The final score that 'e 'ill (et is product of value that 'e 'ill (et from ,uery and 'ei(ht)

Re/"/!7!!(&' Collections Administrator N*!+*(!"' Setup Chec.list IICollections "ethod SetupII Create Scorin( En(ine

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S%)!"+ E"+!"e De(*!/

1 C)e*(e S%)!"+ E"+!"e

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Step 11 – Setup of ,or/ "tem: Each strate(y is made up of one or more 'or. items) A 'or. item is a tas. to $e E&ecuted manually or automatically and is driven $y a 'or.flo') The 'or.flo' notifies the collector to perform a tas. or initiates the automatic process) Every 'or. item has an associated 'or.flo') J M*"$*' a tas. to $e completed $y a collector or specialist) !t is displayed as an entry on the Strate(y
Create ,or/ "tem 0emplate: Re/"/!7!!(&' Collections Administrator N*!+*(!"' Setup Chec.list IICollections "ethod SetupII Create
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11. C)e*(e W)- I(e0 Te0*(e

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Step 12 – Create Collection Strategies: Re/"/!7!!(&' Collections Administrator N*!+*(!"' Setup Chec.list IICollections "ethod SetupII Create Collection Strate(ies

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12. C)e*(e Ce%(!" S()*(e+!e/

Step 13 – Concurrent Programs  Create !elinuencies

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Advance Collections Setup – Oracle Applications Re,uest Set M!EH> Oracle Collections Concurrent Re,uest Set- needs to $e run fre,uently for follo'in( purposes) #ata flo' in Advanced Collections from Receiva$les #elin,uency Status #etermination Customer Scorin( Strate(y Assi(nment Oracle Collections Concurrent Re,uest Set- consists of Concurrent 3ro(rams> !EH> 3romise Reconciliation !EH> Scorin( En(ine 8arness !EH> Strate(y "ana(ement !EH> 3ur(e Score 8istory Ta$le • • • • •

• • • •

Step 14 – Set up Profile (ptions Uni)ersal ,or/ ueue Universal
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14. U"!e)/* W)- =$e$e

%. Conclusion !t can $e concluded that $y usin( the Oracle Application Advanced Collections module de$t collection process of any company can $e mana(ed easily and effectively) #ependin( upon the different need of different or(ani/ations the different strate(y can $e defined and different 'or. item can $e set)

&. Ac'no#led(ements •

Su!es- Upa!-yay : Provided some valuable inputs.

1

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). *eferences *) Oracle Advanced Collection !mplementation  User uide +) https>;;metalin.)oracle)com

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Oracle Apps R12_White Paper on Advanced Collections Setup

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