Channel Revenue Management–Solution for Deductions and Settlement – Blog

channel Revenue management The functionality was released by Oracle SaaS in the first quarter of 2021.

According to market research and surveys, deductions can represent 5 to 15 percent of revenue, depending on the industry. Of that number, 5.1 to 10 percent are unlicensed or illegal. In some industries, it is much higher.

Deduction comes from customers for short pay invoices based on their understanding of the terms of trade or agreements. The deduction is standard for collecting promotions and disputes, delivery delays, invoicing errors, pricing errors, shipping fees, damages and more. The most complex challenge for the debt departments is a solution, as the approval of external debtors, such as shipping or sales, is required. The customer can pay in arrears based on his policies and procedures.

Different types of deductions

1. Trade-related deductions (e.g., promotion, coop, summaries)
2. Non-Trade Deductions (e.g., Compliance, Deficit)

Who uses the Deductions Channel management

1. Credit / AR handles the initial research and verification of all deductions
2. Sales are more involved in the initial research and verification of trade-related deductions
3. Compliance and customer service groups are involved with non-trade deductions

Benefits

1. Centralized management of the deduction provides visibility to all claims and raises recovery rates
2. An effective solution process for reducing the time required to resolve short pay and identify illegal deductions
3. Audit routes for each decision, improving internal control, reporting and compliance
4. End-to-end deduction lifecycle management with automated settlement At Oracle Financials Cloud
5. Plan and execute promotions efficiently
6. Management and monitoring of complex volume assumptions
7. Control of promotional expenses and warranty
8. Maximize profitability through fast and accurate claims processing
9. Improve productivity with efficient processes

How deductions and settlement with debts work – a process

1. Receive payment from customer for short payment
2. Create a claim investigation
3. Investigate and confirm the claim
4. Settle claims
5. Check out the claims that can be made

Business process flow

Process of receiving short payment to customer for defective items

Create a receipt and apply

Create a claim investigation

Default amount of claim; Other details can be entered if available.

The receipt now shows the full payment applied to the invoice, and a claim investigation was used for the remaining amount.

Log in to channel management

3. Research and approval of a claim

After reviewing the short payment, you can create a credit memo on the Settlement tab to resolve the claim. The credit line should be created automatically and submitted for approval.

4. Click Settle Customer Claims or run the “Settle Customer Claims” process.

The status appears as regulated on the General tab

You can get login back

5. Verification of claims in debt

The first line shows the investigation of the lawsuit that was activated. The third line shows the credit card used at the time of the settlement, and the second line shows the investigation of the claim that was not applied. The fourth line shows the invoice that was placed.

Based on Oracle’s revenue management solution, an organization can now focus on increasing the reach of the business instead of engaging in various and complex payment processes across all of its channels. As any industry knows, an efficient software solution is extremely important to reduce costs and management time devoted to payments and deductions.

This allows the company to achieve transparency and optimization in its overall financial process. It offers a complete framework for data collection, configuration adjustments and information analysis. This is a very necessary step when accurate and complete financial data is required for the whole business.

About the writer

Ramesh TelsilaSenior Solutions Architect – Enterprise Cloud Applications – Oracle