A solution for easily managing processes associated with credit checks and holds 

As every business owner knows, customer creditworthiness can change over time. As a result, constantly staying on top of creditworthiness can be a significant challenge. Classifying customers based on their risk level, assigning appropriate credit limits, and monitoring and controlling customer sales orders have never been easy tasks, but Oracle Fusion Order Management helps client organizations overcome these challenges. Once a credit check option is enabled for a customer in Order Management, all subsequent sales orders can undergo a thorough credit check validation at the time of order booking and again at the time of order picking.

How it works

Order Management allows users to categorize customers into low, medium, and high-risk groups based on their payment history, purchasing value, reputation, and other factors. It then assigns each customer a credit amount and automatically applies a credit check hold whenever the customer’s sales order value exceeds its assigned credit amount. Additionally, there is the option of enabling a credit check for certain customers and disabling it for others.

In addition, Order Management allows users to define the specific currencies associated with a customer’s credit limit. Also, customer orders can be placed on a credit check hold at the time of sales order booking — even though the customer has not exceeded its credit limit — by enabling a credit hold at the customer account level.

In certain cases, Order Management supports applying a credit hold on a sales order with a value that is less than the customer’s credit limit. For example, if a customer’s credit limit is $10,000 USD, users can apply a credit check hold on any order with a value exceeding $2,000 USD by entering an order amount limit at the customer account level.

Implementing effective credit control involves:

• Conducting detailed analysis of all customers for creditworthiness in order to categorize them as low, medium, and high risk.
• Identifying which customers need to be enabled for credit check control and setting their credit amount.
• Determining whether to allow order booking with credit check or allow order booking pending credit review.
• Choose whether to enable credit check control during order picking — i.e., just before shipping. (This may be appropriate if the order fulfillment cycle is longer, resulting in a considerable time lapse between order booking and order shipping.)
• Deciding whether to apply credit check holds on all orders regardless of the credit limit or apply credit check holds based on an order value limit.
• Identifying which roles can remove credit check holds.

Order Management provides the following options for credit check management:

Option #1: Screen orders at submission time
Option #2: Screen orders during fulfillment (at picking/shipping)
Option #3: Use both Option #1 and Option #2

Case folder feature in Fusion Credit Management

Whenever there is a credit check failure in Order Management, a case folder is created that allows the Credit Analyst to review the failure. When case folders are successfully closed, the order is automatically processed in Order Management. When case folders are declined, the order is automatically reverted to a draft. In a few cases, a credit check hold on a sales order can be released by a user with the appropriate permission in the case of a rush or urgent order.

Credit exposure insights

When a new sales order is submitted, Order Management will check whether the total order value is within the available credit amount. If the total order value is less than the available credit amount, the order will be booked and processed (unless it fails the credit check process). Using Oracle Transactional Business Intelligence (OTBI), users can also create a custom report on customer credit exposure to ascertain the overall available credit of all customers.

Leveraging credit checks during order import

In most business scenarios, sales orders are created in Order Management via Order Import using either Web Service or FBDI (file-based data import). Oracle provides an option for either initiating the credit check process or not.

In the event of a credit hold, the customer’s primary contact will receive an email notification if that feature is enabled. Keep in mind, however, that Order Management will send email notifications when any hold is applied, not just a credit check hold.

In short, implementing a comprehensive Oracle Fusion Order Management credit check control process helps organizations minimize financial risks by categorizing all customers based on their risk levels and, ultimately, by managing cash flows more effectively.

 

 

Inspirage can help

Implementing a robust subscription management solution is key to facilitating efficient processes and generating a real impact for your business. Inspirage delivers value to our customers by achieving those results.

As the Integrated Supply Chain Specialists, with recognition from Gartner, IDC, and winners of Oracle’s 2021 Game Changer Award for SCM Service Delivery Partner of the Year, Inspirage is uniquely qualified to be your success partner. Whether you are upgrading your on-prem system or have decided to move to the cloud where continuous improvement is built-in, our team is prepared to guide you on your transformational journey.