Overview of Collection Strategies in Oracle Fusion Applications

What are strategies in the Collections application?

Strategies are a series of manual or automated activities that are linked together in the order they are to be executed. These activities are called "tasks" or "strategy task". You can think of them as work items that need to be completed either manually by a collector or that the application will perform automatically. These tasks are linked together in a sequence in an order in which they are to be executed. Strategies are based on a score assigned to a Customer.

You can have a different strategies assigned for certain business units, a profile class of a customer, and remaining amount due.

What are Strategy Tasks?

Strategy tasks are the actual collection activities that are either manual or automated like phone calls or sending dunning letters. When defining these tasks, you can specify a wait time between one task and another. There's also the option there to make the task optional. Also, there's an option to escalate the task to the manager of that collector.

Some examples of these tasks include:

1. Manually calling the customer to collect payment.
2. Sending a dunning letter via fax or email
3. Escalation to a supervisor
4. A Client Visit

These tasks can be assigned to a Collector and can be found in the "Tasks Infotile" found in the Collections work area.

These tasks are going to be then collected or assigned to a Strategy Task Group which just groups tasks together and specifies what the Group of tasks will be performed based on the score.

Strategies Configurations

1. Collection Method - When you start gathering requirements for your implementation, you are going to determine what is the correct collection method for a given business unit, or a group of business units. Collections Method indicates if a certain Business Unit or Units (from reference data sets) will use Collection Strategies or a Dunning Plan. For more in-depth information on Dunning Plan, check out this separate article: Overview of Dunning in Oracle Fusion Applications.To navigate to the Collection Method task, go to the Functional Setup Manager > Financials as the offering > Collections as the functional area > “Manage Collections Method” task.
2. Data Points - Data points are pieces of data collected from the Receivables module or in the Collections module such as transaction amounts that are overdue, percent of the balance that's overdue, number of transactions that are delinquent, etc. Note: Although both are taken from the Receivables application, these Collection Data Points are different from the Credit Management Data Points. Both also share the same concepts such as Data Point Ranges, Weights and Scores.

What are Scoring Rules and Formulas?

Scoring rules evaluate and assess the collection status of a customer. And based on that collection status, we are going to assign a score to the customer. Low scores mean that the collection's condition of the customer is not so good. And when you see higher scores, then that means that the customer is better. If we are scoring customers, if we are assigning a score to them to indicate their level of collectability based from their data points.

Scoring formulas use data points to calculate scores for customers. Higher scores indicate a better chance of collectability. So if you are using the deliver, the predefined data points and the predefined scoring formulas, that is what you are going to see.

When a score is high, it just means that you have a good chance of collecting from that customer. And by the way, the range falls between one and 100. So of course, if I'm thinking about that range, a score of 80 is going to be better than a score of 45, right?

Collections Scoring and the Strategy Assignment.

This means that at some point, the collections application will need to assign these scoring formulas to customers. And this is something that can be done automatically by running a process called “Collection Scoring and Strategy Assignment” process that can be executed from the Collections Work Area.

Facilitates the assignment of scoring formulas and strategy groups to customers at different business levels. Can be at the customer level, can be at the account level, can be at the site level, depending on how your organization performs collections. When you run the process, the tasks are going to be assigned a status.

The below processes are required to be run in sequence to score customers, to create manual tasks, and execute automatic tasks:

1. Refresh Receivables Transactions for Customer Account Summaries
2. Collections Delinquency Management Process - that is the process going to look at all the transactions of a customer and determine whether they are overdue.
3. Collections Scoring and Strategy Assignment Process
4. Update Collections Summary Data – this will ensure that the data the collectors see in the Collections Work Area is accurate.

Note that if you want users to run these processes for multiple business units, they must be authorized to do so.

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