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What is Credit Management and Why is used

Posted on December 3rd, 2012 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

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Oacle Credit Management is designed to balance the desired receivables portfolio risk, thus reducing exposure of revenue collection and recognition. Automated revenue recognition transactions increased the timeliness of cash availability to the organization

Oracle Credit Management , a member of receivables and revenue management helps to improve the timeliness of the credit decision making process based on the credit data collected for customers and prospects. It helps to achieve:

  • Established credit policies and standards for customers and prospects across the enterprise
  • Periodic credit review and assessments
  • Flexible credit scoring models for customers and prospects
  • Monitor existing customers’ payment practices throughout the business relationship
  • Seamless integration with Dun & Bradstreet

HOW THIS HELPS

  • 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

Oracle Credit Management focus on four major Business Flow areas covering majority of key capabilities:

  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. 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 : 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.
  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.

LICENSE REQUIREMENT

Credit Managment is licensed through the Core Financial and Receivables License, you should be able to use Credit Management without issue with either of these licenses enabled.

IS THIS OU SPECFIC MODULE

Remember OCM is not designed to segregate data by operating unit. Therefore this is designed to be more location or operation specific.

In other words, the typical client world that implements OCM has one location that does the credit reviews for all customers, or perhaps a few credit centers that evaluate customer credit by country or locale. Because of this, the focus is not on which customers you can see in the LOV, but rather who is assigned a credit request based on conditions and information in that request.

Check out the data sheet for Credit Application , here.

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