Oracle Order Management Credit Check/Exposure

This note explains credit checking attributes and how they affect credit exposure and the application of credit check holds when placing orders.

Credit Check Setups:

1. Payment Terms
2. Customer
3. Credit Limit
4. Credit Rules
5. Transaction Type

1. Payment Terms

(N) Receivables > Setup > Transactions > Payment Terms

Or

(N) Order Management > Setup > Orders > Payment Terms

The Payment Term used when placing the order must be credit check enabled. Modify the Payment Term so that Credit Check Attribute is selected.

2.      Customer

Enable Credit Check box for a Customer either at Header or Address Level, depends on customer's business needs.

(N) Customer > Standard > [ Profile: Transactions tab]

3. Credit Limit

Credit Limits need to be set up for one or more of the following:

1. Item category level

(N) Setup > Credit > Define Credit Profiles

2. Site level

(N) Customer > Standard > [Address – Profile Amounts]

3. Customer level

(N) Customer > Standard > [Profile Amounts]

4. Party level (This level is applicable only if Credit Management is installed)

5. Operating Unit Default level.

(N) Setup > Credit > Define Credit Profiles

Given below is the Example for the Customer Site level credit Check Hold.

4. Credit Rules

Credit Check Rules defines how and when the credit rule is to be applied.

(N)  Order Management > Setup > Rules > Credit

Option Tab:

Mention the Level of Credit Check and Credit Hold.

Override Manual Release:

This check box enables an order or line which had failed credit checking and then was subsequently manually released to be eligible for additional credit check processing.

• 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-updatable.

Exposure Tab:

Use Pre-Calculated Exposure:

This prevents the exposure from being calculated in real time. The Initialize Credit Summaries process must be run on a regular basis to obtain latest account balances from Accounts Receivable.

Please run the Initialize Credit Summaries program to update the pre-calculated data.

Note on “Initialize Credit Summaries Table” Concurrent Program:

Order Management enables you to periodically rebuild a credit exposure image (orders, invoices and payments) for all customers or customer sites for all possible credit rule definitions. When you submit the, The Initialize Credit Summaries Table concurrent program, changes to customer or customer site credit exposure are calculated and updated, based upon your exposure setup for each credit check rule defined. Exposure information is stored in a summary table so that the credit check process can refer to summary credit data as opposed to real time transactional data, reducing the effort needed to evaluate credit standing.

Include Open Receivables Balance and Include un-invoiced Orders:

Either one or both of the attributes must be selected (the application will ensure that at least one of these is chosen).

Include Open Receivables Balance:

The Open Receivables balance will be used to calculate the credit amount available to the customer. The balance used is the customer balance taking into account any cleared payments. If Pre-Calculated flag is set the receivables balance used will be the balance of the account when the Initialize Credit Summary process was last run.

Include Payments at Risk:

Selecting this attributes will also include in the customer balance payments, which are at Risk, ie. Payments that have not yet been cleared.

Include un-invoiced Orders:

Un-invoiced orders will be included in amount of credit that is available. ie. Un-invoiced orders that have been booked will reduce the amount of credit available.

5. Transaction Types

(N)  Order Management > Setup > Transaction Types > Define

In the Order Management Transaction Type, attach the Credit Check Rule on the Main Tab in the Credit Check Rule Region,

Select credit check rules to use when performing checking credit at either Booking, Pick Release and Purchase Release (for drop shipments), Packing, or Shipping within the corresponding Credit Check Rule fields.

You can select a credit check rule for each field within the Credit Check Rule region, or choose to select combinations that suit your business purposes. For example, you can choose to select a credit check rule for booking only, or booking and shipping.

If you leave any of the Credit Check Rule fields blank, no credit checking will occur when an order or order line reaches the corresponding workflow activity within the order or line flow, using the order or order line type specified.

To check the Credit Check Rules,

Enter the Order with the transaction type which we assigned the Credit check Rule,

Select the Credit check enabled Payment Terms

enter the line details and book the order. The pop up window appears showing that a credit hold has been applied based on the site profile. 

Sales Order, additional Order Information popup form will show the hold.

We can know the credit check hold orders/lines from the following reports

1. Lines on Credit Check Hold Report
2. Orders on Credit Check Hold Report