Overview of Advanced Collections in Oracle Fusion Applications

What is Oracle Advanced Collections?

Advanced Collections provides a comprehensive solution for managing and running the day-to-day collection operations. Advanced Collections can help an organization improve its cash flow, increase collection efficiencies, optimize customer relationships and instill corporate and fiscal discipline.

It allows the collectors to focus and track their on their collection activities with the help of Infotiles, which are containers of important information your collectors need to focus on.

Who uses Oracle Advanced Collections?

Collectors are responsible for following up payments from delinquent and pre-delinquent Customers, tracking their activities and sending dunning letters. They will be responsible in minimizing the risk of financial exposure and making sure that the owed money is collected.

Below is a quick video Demonstrating how to setup Collectors:

Advanced Collections Infotiles

We have predefined Infotiles for Advanced Collections in the Work Area:

1. Delinquent Infotile - Once an invoice is delinquent, it will get picked up by the processes and allocated against the particular collector with all of the delinquent invoices. Delinquent means that the invoice is still unpaid after its payment term.
2. Promises Infotile - Collectors can see if a customer has broken a Promise to Pay. Promise to Pay is, as the term implies, a promise made by the customer to pay their overdue invoice. If such promise is broken, you can apply collection strategies to that customer to perform Dunning, a phone call, an escalation, etc.
3. Strategy Tasks Infotile - This Infotile shows the Strategies collectors need to work on, such as following up on a payment by making a phone call, or sending a dunning letter. Strategies are Tasks that can either be manual or automated. For more information on Strategy Tasks, check out a separate article, Overview of Collection Strategies in Oracle Fusion Applications.
4. Activities Infotile - This is where you've got other activities that aren't work items from a strategy that you need to complete. So you can create them yourself, or somebody else might create them and assign them to you. And as you can see, when you're in here, the strategy task, you could complete it, cancel it, or reassign it to somebody else if you wanted to. A credit analyst can reassign a case folder to different credit analyst without needing an approval

Advanced Collections Features

Advanced Collections provides a way for Collectors to raise disputes, record payments, record a Promise to Pay.

1. Disputes - Disputes happen when a Customer has a concern regarding the Invoice they are being billed, it may be for a number of reasons such as billing error, a hardware issue, a promised discount, etc. The customer informs the collector about this and the collector can then go in and raise a dispute in behalf of the customer. Once approved, this will then go on to become a Credit Memo. For more information on disputes, check out a separate article, Overview of Collection Disputes in Oracle Fusion Applications.
2. Payment
3. Promise to Pay - As previously mentioned, a Promise to pay is a promise made by the customer to pay their overdue invoice. Payment promises are made after the transaction's payment term is overdue. For Example, if the invoice date is 1-May-2019 and the payment term for that invoice is NET 30, then the due date for an invoice. would be 31-May-2019. However, the customer failed to pay the invoice, thus, a promise to pay can be created to collect either a partial payment or a full payment.
   

Collections Case Folder

Allows you to group together related transactions to increase collection efficiency. Typically, they have the same bill-to customer which is used by a collector to take action on that collections cycle. You can use it to group similar transactions together, perform your collections activity against the entire group simultaneously.

For more full-detailed Tutorials and Tips, check out #TheOracleProdigy at https://lifeofanoracleprodigy.blogspot.com/

Follow The Oracle Prodigy on Facebook (https://www.facebook.com/theOracleProdigy/) and Twitter (https://twitter.com/D_OracleProdigy)

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.

For more full-detailed Tutorials and Tips, check out #TheOracleProdigy at https://lifeofanoracleprodigy.blogspot.com/

Follow The Oracle Prodigy on Facebook (https://www.facebook.com/theOracleProdigy/) and Twitter (https://twitter.com/D_OracleProdigy)

Overview of Dunning in Oracle Fusion Applications

What is Dunning?

Dunning is the business practice of letting delinquent customers know about their overdue payments for their transactions. This is usually done through a printed letter, and can be delivered via fax, printed letter, or as a PDF attachment.

How are delinquent transactions identified for Dunning?

These transactions are identified automatically from the program called “Collections Delinquency Management Process”. This program runs and identifies those delinquent transactions that need to be included in a dunning letter.

How is a Customer Site Enabled for Dunning?

There are a couple of additional setups required to enable a Customer to be receive Dunning Letters.

1. Enable “Send Dunning Letters” at the Customer Profile Class Level
2. The Customer Site should have a Business Purpose of “Dunning”
3. The Customer Site should have a contact with a "Dunning" responsibility. If there is no specific contact that will receive the letter, the template can be addressed to a generic title, such as "Accounts Payables Manager".
4. Additional Setups in the Manage Collections Preferences task
5. Additional Setups in the Manage Dunning Configurations task

Dunning Features

Oracle already has a pre-configured dunning letter template that can be personalized and can be sent automatically from the system. The templates can be edited so that it meets your business requirements, such as putting in your company logo, or changing the wording in the template itself.

Oracle also offers the flexibility to exclude certain customers from dunning. There might be situations where your organization might decide that certain customers are going to be exempt from receiving dunning letters.

Dunning in Collections also includes the assignment of follow-up call activities in the form of Collection Tasks. You can assign a collector to do follow up phone calls and record the customer interaction in the application. There is also the ability to resend dunning letters even if they were already previously sent.

There's also the ability also for a collector to see the dunning history. You can view the correspondence history of dunning letters that have been sent to the customer and when they have been sent and what was the method (Email, Printed, etc). This includes who was the contact that received the letter.

Oracle also provides the ability to set thresholds to know when a customer is eligible to be sent a Dunning Letter.

Manage Collections Preferences

The Manage Collections Preferences page contain some important setups and defaults, such as the return email address for dunning correspondence, maximum number of transactions to send with dunning letters, default aging method, etc.

To Navigate to this page, go to the Functional Setup Manager > “Financials” offering > “Collections” functional area > Search for the Task "Manage Collections Preferences".

The Global Preferences section applies to all Business Units, while the Preferences and Correspondence section could be business unit specific, depending your reference data sets are mapped to your business units.

Below is a video demonstration showing you how to set Collections Preferences and Correspondence in Oracle Fusion applications:

There are two types of Dunning Thresholds: "minimum dunning amount" and "minimum dunning invoice amount".

Dunning Thresholds

In "minimum dunning amount", this means that this amount is the minimum dunning amount set for all overdue transactions to have correspondence generated. For example, you might have a minimum dunning amount that's $100. There are two overdue transactions for Customer A, one for $55 and another one for $40. When you add up those two transactions, the total will be $105. This means this Customer is eligible to be sent a Dunning Letter.

In "minimum dunning invoice amount", it's similar to the "minimum dunning amount" but only at the transaction level. For the same earlier example, the minimum dunning invoice amount set is $100. There are two overdue transactions for Customer A, one for $55 and another one for $40. This means this Customer is NOT eligible to be sent a Dunning Letter.

Dunning Methods

Aged method – The collection letters are going to be sent to customers based on the oldest aged transaction. Aging means that you're going to be looking at the balances of the customer transactions (invoices and debit memos). These transaction balances will be grouped in “buckets”  such as 1 to 30 days, 31 to 60 days, 61 to 90 days, and so on.

Staged method – This method is based on collection letters being sent based on the number of days since the last dunning letter was sent. It doesn't really look at the oldest aged transaction. It looks at the number of days since the last dunning letter was sent.

Dunning Configuration Tasks

This page is what dunning configurations the system will use such as, Dunning method, Aging Buckets, and the Set ID the system will use. You might decide that you have one dunning configuration for all business units, or maybe specific dunning configurations for specific business units.

To Navigate to this page, go to the Functional Setup Manager > “Financials” offering > “Collections” functional area > Search for the Task "Manage Dunning Configurations".

Dunning Letter Templates

Oracle delivers four dunning letter templates, the soft, medium, hard, and final. These templates correspond to the number of days the delinquent customer hasn’t remit the payment.

For Example, if the transaction is overdue between 1 and 30 days, the system will send a Soft Dunning Letter. If it's 31 to 60 days, you're going to send a medium dunning letter. The difference with these letters are the wordings. These letters will be more assertive as time goes on. And then, at the end, you have a final demand letter, and that will be when transactions fall in this bucket, 91 days or older.

Modifying the pre-defined Dunning Letter Templates

If you're interested in seeing or editing the wording in these templates and how they look, The pre-defined Dunning Letter template can be modified using the Business Intelligence Publisher tool. To do this, Navigate to Tools > Reports and Analytics > Browse Catalog > Shared Folders > Financials > Collections.

Note that you should have the relevant Business Intelligence roles to be able to do this.

Next, go to the “Correspondence” folder and open the “Collections Send Dunning Letters” report. This will show you the Soft, Medium, Hard and Final Dunning Letters. You can download, view, edit and upload the templates from this screen.

Below is a video demonstration of Modifying Collection Dunning and Dispute Letter Templates in Oracle Fusion Applications:

Validate Customer Dunning Setups

There is a report that you can run to the validate dunning setups aptly called “Validate Customer Dunning Setup report”. This will help you in identifying issues with these required customer setups. It is best practice to run this report to make sure that your customers are set up correctly. The mandatory parameters are business unit and business level. In the business level parameter denotes that there are three levels that you can perform collections at, Customer Party, Account, and Site level. You can also run the report for specific customers if you wish to do so.

Send Dunning Letters Program

The program “Send Dunning Letters” allows a collections user to run the standalone delivery of Dunning Letters. What this process does is it generates a the dunning letter, even if it has already been previously sent. If the contact method is email, then it will send an email to the dunning contact of the customer along with the attached report in PDF Format.

The “Send Dunning Letters” process can also be launched automatically after the “Collections Scoring and Strategy Assignment” process runs. “Collections Scoring and Strategy Assignment” process is applicable if you’ve implemented the strategies feature in Collections. If not, then you can run or schedule the program “Send Dunning Letters” on its own.

For more full-detailed Tutorials and Tips, check out #TheOracleProdigy at https://lifeofanoracleprodigy.blogspot.com/

Follow The Oracle Prodigy on Facebook (https://www.facebook.com/theOracleProdigy/) and Twitter (https://twitter.com/D_OracleProdigy)