What is a collections dispute?
A Dispute is a situation where a customer is questioning the balance of a transaction, either in partial or in Full. Disputes could also be related to different reasons as well e.g. customer dissatisfaction about the product or service quality etc.
For example, a customer called in and Disputed a product because the delivered product was defective, thus, this can be a basis for a refund or a discount.
Disputes can also be raised even if those transactions are not yet due, there could be various reasons including tax errors, pricing errors due to which the customer would create a dispute.
For example, a customer called in and Disputed a product because the delivered product was defective, thus, this can be a basis for a refund or a discount.
Disputes can also be raised even if those transactions are not yet due, there could be various reasons including tax errors, pricing errors due to which the customer would create a dispute.
How do collectors handle collection disputes?
In terms of the processing flow, they navigate to the Collections work area and go to the Transactions tab. There, you would be able to see a list of overdue transactions, as well as specific details on those transactions.
The collector would then pick a specific Dispute section. The collector would handle the dispute based on the interaction with the customer. It could be something like a line subtotal, a percentage of the balance. It can be a specific invoice line, or it might even involve a portion of the tax.
The collector would then pick a specific Dispute section. The collector would handle the dispute based on the interaction with the customer. It could be something like a line subtotal, a percentage of the balance. It can be a specific invoice line, or it might even involve a portion of the tax.
After selecting that specific Dispute section, then the collector should enter a reason, which is very important for reporting and tracking purposes. The reason can be something like a discount. The customer was perhaps expecting at discount that he or she was promised.
There are comments attributes or comment boxes that the collector can use to input details that will be visible to the customer, and another that will allow the collector to input internal comments not visible to the customer.
Once these steps have been done, then what the collector will do is click on the Submit button to submit the dispute. At this point, the Credit Memo Request Approval is launched. Once approved, the a Credit memo will automatically be created and will deduct the value from the customer invoice.
Configurations for Dispute Processing
Collections Preferences
In the "Manage Collections Preferences" page, under Global Preferences, look for the "Correspondence" settings. There is a setting there that specifies if whether or not to send a dispute notice to the Customer. The idea here is that we will notify the customer that we acknowledge that they have raised a dispute on a transaction. There is a predefined BI Publisher template ("Dispute Confirmation Letter") that includes wording in it that the customer will receive when they get notified of a dispute. You can customize this as your organization requires.
Dispute Reason, Amount and Quantity
Tracking the Dispute Reason will help with reporting. Oracle already has predefined Dispute reasons but you may add more if organization requires their own dispute reasons.
To add more Dispute Reasons, go to the Functional Setup Manager > Financials offering > Collections Functional area > search for the task "Manage Collections Lookups". Search for the Lookup "IEX_DISPUTE_REASONS". You can see there some of the sample Dispute Reasons that are going to be available to the collector such as Receivables error, cancellation, credit and re-bill, duplicated billing, free product, late payment. You may add more by clicking on the "+" Icon and populating the required fields.
The dispute amount is going to default based on the section that you select such as Subtotal, Tax, and Invoice Lines. Note that the Amount and Quantities cannot be greater than the actual current Amount or Quantity.
Credit Memo Request Approval Process
As mentioned, the collector can initiate the dispute in the Collections work area by navigating to the Transactions tab and picking the transaction in question and raising a dispute. The collector would select a section in the transaction (i.e. line, tax, etc.) and would populate the disputed amount and/or quantities and click on the Submit button. The Credit Memo Request Approval workflow process is then is launched. The Credit Memo Request Approval is a workflow process managed by the Approval Management Extensions engine (AMX), which dictates to whom the approval goes to. This is usually the collector's direct manager.
Receivables Transaction Types
Make sure that receivables transaction types are configured for dispute processing. For example, a transaction type of invoices, debit memos, chargebacks must be associated with a Credit Memo type for dispute,
Make sure that receivables transaction types are configured for dispute processing. For example, a transaction type of invoices, debit memos, chargebacks must be associated with a Credit Memo type for dispute,
That way, when the Credit Memo Request Approval process is initiated, and receivables attempts to create a credit memo, it will be able to do so. It will look at the invoice, it will look at the transaction type, and from there, it'll know which Credit Memo Type to use.
Below is a quick video a demonstrating a Collection Disputes in Oracle Fusion Applications:
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