For example, you can define credit checking
rules that utilize pre-calculated exposure information to use when comparing a
customer's current order amount against their overall exposure; if the order
transaction type utilizes this rule, and the order fails during the credit
check process, it is automatically placed on credit check hold. You can define
as many credit checking rules as you need, and if you inactivate a credit
checking rule, you also must remove it from any order types that use it.
Additionally, you can include in or exclude
from your credit check rule some or all of your open accounts receivable
balances, and some or all of your uninvoiced orders.
Order Management uses the currency of the
order you are credit checking to determine which credit limits to use in credit
checking calculations. Order Management only includes orders and invoices in
the same currency as the order you are credit checking when calculating a
customer's outstanding credit balance, unless you have set up multiple currency
credit checking.
Besides defining your credit exposure
composition, the credit check rule also determines:
- Credit check level (order or line)
- Credit Hold level (order or line)
- Conversion type used when you enable multi-currency credit check
- Use of item category credit check
- Send hold notifications to the sales order creator
- Use of pre-calculated exposure
Performance Note
In order to improve performance you can
enable the use of pre-calculated exposure. Utilizing this option, the credit
check engine will use summary balance details stored in a periodically updated
summary table.
The update is done by running a concurrent
program which accesses Order Management and Account Receivable transactional
tables. This program should be scheduled to run periodically based on your
specific business needs. You should also run this concurrent program when you
have done major changes in your set up or transactional data (merge customers,
incorporate transactions from external systems, change transaction status using
customized programs, etc.).
See: Initialize Summary Table Concurrent
Program
To define a credit check rule:
- Navigate to the Credit Check Rules window.
The
Credit Check Rules window displays.
- Enter a name for your credit check rule.
- Optionally, enter the Effective Dates for your rule.
Options Tab
- Select the entity to perform credit checking against for your rule.
Select from:
- Sales Order
- Sales Order Line
Note: If you select Sales
Order Line as your credit check level, the Use Pre-calculated Exposure check
box will be checked and protected against update
If
you choose to perform credit checking at the Sales Order level, you are limited
to the system generating header level credit holds only. The Credit Hold Level
field will default to Sales Order and is protected against update.
- Select the Credit Hold Level for your credit rule. Select from
- Sales Order: Sales Order (order
level) credit check is performed for the header Bill To site. Sales Order
level credit checking provides backward compatibility with previous credit
check versions. When credit checking rules are defining using Sales Order
as the credit check level, the credit check engine will examine order
totals and evaluate credit exposure against the credit profile attached at
header level
Holds
will be always applied at header level.
Use
order level credit check when order lines always have the same Bill To Site as
the Order Header.
- Sales Order Line: Sales
Order Line (line level) credit check is performed against order line Bill
To Sites. The credit check engine will group all order lines
belonging to the same Bill To Site and check available credit for each
specific Bill To Site. When an order line fails credit check, any
remaining lines grouped with the same Bill To Site are placed on hold.
Holds
can be placed at either the order or order line level when you use line level
credit checking.
Use
line level credit check when sales order lines are attached to different Bill
To Sites and you want to use the credit profile defined at that level.
Additionally, you can use line level credit check when you have defined
customer relationships within your system and actively use them within Order
Management. Using customer relationships, you can create sales orders with
order lines attached to different Bill To Sites owned by different customers.
Order
Header level credit checking uses header level information ignoring different
bill-to sites detailed at the line. Credit Check uses the credit profile
attached to the customer Bill-to site defined at order (header) level. Credit
checking at the Order Header level will use order totals and will evaluate
credit exposure against the credit profile attached at header level, and holds
are always applied at header level.
Special Considerations for Credit Hold
Level
- If you update the Credit Hold Level from Sales Order to Sales
Order Line, a pop up dialog box will display a message indicating that
existing sales order credit holds will need to be released manually.
Select Yes to continue or No to not commit the update.
- If you update the Credit Hold Level from Sales Order Line to Sales
Order, a pop up dialog box will display a message indicating that existing
sales order line credit holds will not be released automatically. Select
Yes to continue or No to not commit the update.
- Override Manual Release check box: This checkbox enables an order
or line which had failed credit checking and then was subsequently
manually released to be eligible for additional credit check processing.
Select from:
- Yes: Manual Released Holds will be overridden. You must also enter
a value within the Days to Honor Manual Release field.
- No: Manual Released Holds will be honored. The field Days to Honor
Manual Release will be non-updateable.
- Days to Honor Manual Release: The field is used in conjunction with
the Override Manual Release check box. If you enable the Override Manual
Release check box, you must enter a numeric value greater than zero within
this field.
7.
Manual Released Holds Checking Procedures
Each
time a credit check failure occurs for order or order line, the corresponding
order or order line is placed on credit check hold. However, prior to the
credit check holds actually being applied, the credit check process determines:
- if a manually released credit check hold exists and
- if your credit check rule enables override of manually released
holds (in conjunction with the value for Days to Honor Manual Release).
If
Override Manual Release is not enabled for your credit check rule, then
manually released holds are honored and no additional credit checking will
occur.
If
Override Manual Release is enabled, the credit checking process will validate
if the release date is within the interval defined by the value of Days to
Honor Manual Release. If the value is within the range defined, then manually
released holds will be honored and additional credit checking is not performed.
If the value is not within the range defined, credit checking can occur again
and credit check holds can be applied if the order or lines fails the credit
check process.
Note: The value of
OE_HOLD_RELEASES.CREATION_ DATE is used by the credit check process to
determine if the duration defined for the credit check rule is within range for
additional credit checking: when any hold is released for an order or line,
Order Management inserts a record within OE_HOLD_RELEASES.
- Select the conversion type to use when performing credit checking
using your credit rule. The LOV for this field is limited to the values
you define within the Oracle General Ledger Conversion Rate Types window.
- Select the Check Item Categories check box for your credit
rule if you wish to perform credit checking for sales orders by Item Categories
defined for Order Management.
- Select the Send Hold Notifications check box if you wish to
send hold notifications whenever a credit hold is placed for a sales order
or order line. The notification is sent to the creator of the order.
Determine
the type of credit exposure to use when defining your credit check rules by
selecting the Exposure Tab within the Define Credit Check Rules window.
10. Exposure Tab
- Select the Use Pre-calculated Exposure check box for your
credit rule if you wish to perform credit checking against pre-calculated
exposure summary tables.
- When the first credit check rule that has the Use Pre-Calculated
Exposure check box checked is successfully saved, the following message
will display:
This
credit check rule uses pre-calculated exposure. Please run the Initialize
Credit Summaries program to update the pre-calculated data.
- If the Use Pre-calculated Exposure check box is checked and the Include
Open Receivables balance check box is checked, then Shipping
Horizon Days is protected against update and is NULL.
- If the Use Pre-calculated Exposure check box is checked and the Include
Uninvoiced Orders check box is checked, then Open Receivables Days
is protected against update and is NULL.
- Select the Include External Credit Exposure check box if
you wish to include external exposure details imported into Order
Management during the credit checking process.
When
an Oracle Order Management sales order is credit checked, the exposure data
from the external system is included in the overall exposure check. The default
value for this check box is un-checked (exclude external exposure details when
performing credit checking).
11. Receivables Balance
Region
13. Select the
Open Receivables Balance check box for your credit rule if you wish to include
open receivables balances.
You must enable either the Include Open Receivables
Balance check box or the Include Uninvoiced Orders check box in your credit
check rule. You can activate both, but you cannot toggle both off.
If you select both the Pre-calculated Exposure and
Open Receivables Balance check boxes, you are unable to specify Open
Receivables Days.
14. If you
enabled Include Open Receivables Balance in your credit check rule, you can
indicate whether to Include Payments at Risk when calculating a customer's
outstanding balance.
Receipts at risk are remitted receipts that have
not been cleared, or discounted (factored) receipts that have not been risk
eliminated. If the performance of credit checking requires improvement you can
toggle off this option.
15. If you
enabled Include Open Receivables Balance, enter a value to indicate the range
of dates for open receivables you wish to include for your credit check rule.
·
Negative Number--Includes past due, current, and
future open receivables up to X days beyond the current date.
·
Positive Number--Includes open receivables with
invoice dates X days earlier than the current date.
·
No Value--Includes all open receivables.
12. Uninvoiced Orders
Region
Note: If you do not select the Include Uninvoiced
Orders check box, you cannot select any check boxes within the region.
16. Select the
Include Uninvoiced Orders check box if you wish to include uninvoiced orders
for your credit rule.
If you enabled Include Uninvoiced Orders:
·
Indicate whether to include Freight and Special
Charges for uninvoiced orders when performing credit checking.
Select the Freight and Special charges check box to
include Freight and Special Charges.
·
Indicate whether to include Tax information for
uninvoiced orders when performing credit checking
Select the Tax check box to include Tax information
for uninvoiced orders. Credit checking calculations on open receivables always
include tax amounts and are not affected by the Include Tax option. If the
performance of credit checking requires improvement you can toggle off this
option.
·
Indicate the number of scheduled shipping horizon
days for your credit rule for uninvoiced orders to be included in your total
credit exposure when performing credit checking.
For example, if you enter 45, the total exposure
includes only uninvoiced orders scheduled to ship within 45 days of the current
date. Orders scheduled to ship after 45 days are not included when calculating
exposure.
Note: If the Use Pre-calculated Exposure check box
is checked, Scheduled Shipping Horizon Days is protected against update.
·
Indicate whether to Include Orders Currently On
hold. Select the Include Orders Currently On hold check box to include orders
on hold within the exposure calculation for your credit rule.
17. Indicate the
Maximum Days Past Due.
The Maximum Days Past Due field value specifies the
number of day that you will allow an invoice to be past due before holding the
customers orders. During the credit checking process, Order Management will
verify that no invoices for the customer have been past due beyond the number
of days you specified with this field. If there are any such past due invoices,
the order is placed on credit hold.
18. Save your
work.
Defining Credit
Usage Rule Sets
The Define Credit Usage Rules window
enables a user to create and maintain credit usage rule sets that can be
assigned to Credit Profiles.
Credit Usage Rule Sets define the set of
currencies that will share a predefined credit limit during the credit checking
process, and enable the grouping of currencies for global credit checking.
Usage Rules Sets ensure that if credit checking is enabled, that all
transactions for specified currencies go through the currency conversion
process and are summarized by currency prior to the credit checking process.
- You can define a usage rule set for a single currency or multiple
currencies.
- You can choose to assign a global usage rule (all currencies) and
then exclude one or more currencies from the rule set.
- You can choose to define multiple usage rules for multiple
currencies within the usage rule set.
- You can choose to add or delete new Currency records for an
existing Usage Rule Set.
Usage rule sets consist of at least
one usage rule/currency combination, and once a rule set is assigned to an
Oracle Entity, the rule set provides processing defaults for determining credit
availability during multiple currency credit checking processing routines.
To define credit usage
rule sets:
- Navigate to the Define Credit Usage Rules window.
The
Define Credit Check Usage Rules window displays.
- Enter a name for you rule set in the Usage Rule Set Name
field.
- Select the Global Exposure check box if you wish to enable the
Usage Rule Set for global exposure (across operating units). The default
value for this check box is un-checked (do not enable Global Exposure for
the usage rule set).
If
you are unable to select the Global Exposure check box, submit the Credit Limit
Usages Report. Review the report output and un-assign any usage rule sets with
different Global Exposure options for the same credit profile.
- Select the value Currency in the Usage Type field.
- Enter a currency in the Currency field.
The
Currency field can contain any Currency Code currently defined. The Currency
field may also use the lookup All Currencies to indicate the usage rule
is for all currencies defined.
- Chose to exclude a specific currency for your usage rule by
selecting the Exclude check box. The default is unchecked, or No.
Note: If the field Currency
has value of All, the Exclude check box is non-updateable.
- Save your work.
Assigning Credit
Usage Rule Sets
The Assign Credit Usage Rules form enables
a user to assign credit usage rules sets for multiple currency credit checking
to Credit Profiles.
To assign credit usage
rules:
- Navigate to the Assign Usage Rules window.
The
Find Credit Profiles window displays.
Find Credit Profiles Window
Before you can assign a Usage Rule Set to a
Credit Profile, you must first select the Credit Profile Type and then
locate the corresponding Credit Profiles.
Certain query processing logic has been
disabled within the Find Credit Profiles window;
- If the value of the Credit Profile Type field is Profile Class,
then fields Operating Unit, Customer, Bill To Site, and Item Category are disabled.
- If the value of the Credit Profile Type field is Customer,
then fields Profile Class, Operating Unit, and Item Category are disabled.
- If the value of the Credit Profile Type field is Operating Unit
Default, then fields Profile Class, Customer, Bill To Site, and Item
Category are disabled.
- If the value of the Credit Profile Type field is Item Category,
then fields Profile Class, Operating Unit, Customer, Bill To Site, and
Overall Credit Limit fields are disabled.
Once you have entered your search criteria,
select the Find button to either locate your existing credit profile
usage rules or to define new usage rules for an existing profile.
The
Assign Credit Usage Rules window displays.
- The data appearing in the upper region of the window defaults from
the Credit Profile you have queried. This information is protected against
update.
- The multi-row section of the Assign Usage Rules widow enables you
to select Credit Usage Rule Sets to use with the credit profile.
You
select a Name from the List of Values, and the included and excluded
currencies fields will display currencies that the usage rule set consists of.
These values are protected against update from this window.
For
detailed field information, see Defining
Credit Profiles, Step 3 and 4.
- Save your work.
Note:
- Upon saving your usage rule assignments, a message is displayed to
ask if you wish to cascade changes to usage rule assignments for existing
customers with the Customer Profile Class you are saving.
- New customers created using Customer Profile Classes with
previously defined credit usage rules do not automatically inherit the
Customer Profile Class usage rule assignments. You must manually create
these assignments.
Defining Credit
Profiles
Organization Credit Profiles are a set of
criteria that define an operating unit's credit policy for credit control and
order credit checking. Credit Profiles include the credit limit and pertinent
data needed to determine total credit exposure for orders undergoing credit
checking.
Credit Profile Limits Hierarchy when
performing credit checking:
- Customer Site Profile
- Customer Credit Profile
- Operating Unit Default Credit Profile
Note: Item Category
Credit Profiles are used if you enable Item Category Credit Check for a credit
check rule.
The Credit Profile window enables users to
create and maintain credit information for Operating Units and Item Categories.
Operating Unit Default Credit Profiles can
assist in further defining your credit policies by providing global defaults if
no other information is present during credit checking.
To create a new credit profile, users must
specify what type of credit profile to create, and depending on the credit
profile type chosen, appropriate fields within the window become updateable or
non-updateable.
ATTENTION:
·
You cannot define Credit Profiles for Customer or
Customer Site by directly navigating to the Credit Profile window.
·
Credit Profiles for Customer and Customer Sites are
initially defined when entering credit information in the Credit section
of the Profile-Transactions tab of the Customer and Customer Site
windows. See Oracle Receivables, Customers.
·
You must then assign a Credit Usage Rule to your
Customer or Customer Site if you want to enable multi currency credit check.
See
Credit Profile Types
- Customer: Enables you to define credit limits by currency for
Customers.
- Customer Site: Enables you to define credit limits by currency for
Customer Sites.
- Operating Unit Default: Enables
you to set credit limits and terms, by currency, within a given operating
unit.
Operating
Unit Default Credit
Profiles enable you to effectively enforce a formal credit checking process for
all order transactions/currencies from any customer, provided you define an Operating
Unit Default Credit Profile for each currency you process order
transactions for.
For
example, if a transaction is entered and no credit limits exist at the customer
or customer site levels for the specified order currency, the Operating Unit
Default Credit Profile for the transaction/currency entered will be used to
determine credit availability.
Note: The Operating Unit
Credit Profile is used as the default profile for all customers that do not
have an individual credit profile either at customer or site level.
- Item Category: Enables
you to set order credit limits, by currency, for one or more Item
Categories. This type of profiles enables you to specify limits for the
maximum amount on each order for an item category irrespective of a
customer or site.
Note: Only categories
associated with the default category set for the Order Management functional
area are supported.
Unlike
the Operating Unit Default Credit Profile that defines credit limits for
specific operating units, Item Category Credit Profiles are applicable across
operating units. Item Category profiles are global credit profiles and are
transaction currency based: the credit limits defined for an item category are
for individual transactions (orders) only. There is no overall system credit
limit for a category.
Item
Categories enable you to set order credit limits/profiles for one or more item
category (applicable for all customers). For example, an Item Category Credit
Profile can specify that the maximum order value cannot exceed $10,000 USD for
any order lines that contain an item associated with the Item Category Computers.
This is extremely useful if your business practice requires item-based
insurance coverage.
- Navigate to the Define Credit Profiles window.
The
Credit Profiles window displays.
- Select a value for your Credit Profile Type in the Credit
Profile Type field. Valid Values are
- Item Category
- Operating Unit Default
Based
upon the Credit Profile Type you chose, certain fields become protected
or non-updateable.
Note:
o
If Credit Profile Type = Operating Unit Default,
the Item Category field is disabled.
o
If Credit Profile Type = Item Category, the
Overall Credit Limit field is disabled.
Enter
remaining fields that require a value, or update any fields that contain a
default value based upon the Credit Profile Type selected:
- Operating Unit:
Select
an Operating Unit name from a list of values if you are defining a
Operating Unit Default Credit Profile.
- Item Category:
Select
an Item Category name from a list of values if you are defining an Item
Category Credit Profile.
- Effective Date From/ Effective Date To:
Select
the Effective Date From and Effective Date To for your Credit
Profile.
Note: When defining
Credit Profiles for Operating Unit Default and Item Category, the
Effective Dates From/To cannot overlap previously defined Credit Profiles for
the same Operating Unit Default or Item Category, regardless of the currency.
- Tolerance: Enter a numeric
value in the Tolerance field. Tolerance values are used to calculate
extended exposure limits during credit checking.
For
example, supposed you enter a value of 5 for Tolerance, and an Credit
Limit of $10,000 USD. During credit checking, the exposure credit limit would
actually be $10,500 USD. ((Tolerance + 100)* Credit Limit / 100).
- Currency: Select a value in the Currency field
to limit the Credit Profile to a specific currency.
- Order Credit Limit: Enter a
value in the Order Credit Limit field, based upon the Credit
Profile Type. New orders may not exceed the value entered in the Order
Credit Limit field if the checking processing defaults to the
operating unit level.
- Overall Credit Limit: Enter a
value in the Overall Credit Limit field for an Operating Unit Default
Credit Profile Type. Total exposure within an operating unit for the
particular customer may not exceed the value entered in the Overall
Credit Limit field if credit checking processing defaults to the
operating unit level.
The
following fields are for future use and are for information purposes only. Values
that are ignored during the credit checking process are:
- Credit Check
- Credit Hold
- Credit Rating
- Next Review Date
- If you wish to enable multi currency credit check, you must assign
Credit Usage Rule Sets to your Credit Profile. Select the Assign Rule Set
button. The Assign Rule Set button is only enabled for the
following Credit Profile Types:
- Item Category
- Operating Unit Default
To
assign Credit Usage Rules to Customer or Customer Sites Credit Profile Types,
you must use the Assign Credit Usage Rules window.
Oracle
Order Management Suite Implementation Manual, Release 11i, Assigning
Credit Usage Rule Sets
- Save your work.
