Customers raise claims or take deductions for many reasons, for example, claiming compensation for damaged goods or for promotional accruals for which they are eligible. Distributors raise supplier ship and debit claims to compensate for the loss incurred on sales to end customers at a rate lower than their acquisition cost or expected margin. Distributors and retailers raise price protection claims to compensate for the loss in on-hand inventory value or loss incurred on inbound price lists and outstanding purchase orders when vendors decide to reduce the price of their products.
Settling claims and deductions involves determining whether a claim is valid and validating proofs. For more information on price protection claims, refer to the Oracle Price Protection User’s Guide. For more information on supplier ship and debit claims, see Supplier Ship and Debit Overview, Oracle Channel Revenue Management User Guide.
The claims module enables organizations to shorten the claims-processing cycle, and reduce claims and associated costs. Information related to all claims is stored in a centralized manner. This enables you to access accurate views of promotional spending and other variable costs. You can research, validate, and settle deductions and claims. You can also identify invalid and duplicate claims and prevent unauthorized claims and deductions.
The following information describes features in the Claims module of Oracle Trade Management.
| Feature | Description |
|---|---|
| Accounting Only Settlement | Used when distributor ship and debit request for refunds is not approved by the supplier. This method directly balances the distributor accounts for the loss incurred without interface to Oracle Payables. |
| Configurable Settlement Workflow | Allows companies to create custom settlement methods in addition to the seeded methods. You can settle promotional claims with the custom settlement method. |
| Netting Settlement | Formerly referred to as Contra Change. Use this settlement method for deduction and overpayment. When you select this settlement method the program sends out a workflow notification to users with a Netting responsibility notifying them to manually run the netting batch process. This refers to the action of applying a receipt on another receipt. In Trade Management’s context, it means settling a deduction or overpayment claim by another claim, an AR transaction, or an AR receivable activity. |
| Mass Approval of Claims | Enables users to review multiple rule-based settlement matches and approve them. |
| Mass Settlement | Use this to search for related account transactions and enforce claim security. |
| Multi-Org Access Control (MOAC) for Claims | You can view and/or update claims across operating units provided you have the correct access privileges. Claims remain org-striped. |
| Oracle E-Business Tax Integration | Oracle Trade Management provides for Oracle E-Business Tax integration which allows you to obtain an accurate estimate of the tax impact of the claim lines.
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| Rule-Based Settlement | Defines rules to automate the matching of claims and deductions with open AR credits and unpaid customer accruals by tasks and attributes, and to automate the approval requirements for these matches. |
| Settlement by AP Debit | When a company wants to accrue promotional money owed to it by another company they can use Oracle Trade Management to either charge a claim or deduct from the other organization. For example, distributors may claim price protection refunds from the supplier to cover the losses incurred on on-hand inventory as a result of dropped product prices. In Oracle Trade Management when you deduct from the other organization you can create a transaction in the Oracle Payables to reduce the balance owed to the other organization. This feature is available for claim and debit claim, but not for deduction and overpayment. When you select this method for settlement, Trade Management automatically passes a payables credit entry into the Payables’ interface table. The Payables Open Interface Import program then converts the payables credit entry into an Accounts Payable document that reduces the company’s balance owed. |
| Settlement by AR Credit | Used when retailers claim price protection accrual owed them by distributors as a result of losses incurred on on-hand inventory and existing purchase orders when the supplier drops the price of a product, |
Oracle Accounts Receivable Deductions Settlement provides support for the following Payables related settlement methods:
Accounts Payable Default Payment
Electronic Transfer
Wire Transfer
The following information applies to all three of the settlement methods listed above:
Available on the settlement screen for claims and additionally on trade profiles, promotional payments and offer’s advanced options screens.
When you run settlement fetcher the payment details updated on the claim will carry the details of the payment including transaction type and number, date, amount, and status.
The vendor site LOV is filtered so that only the vendor sites set up as “pay to” enabled in Accounts Payable will be available in the LOV for selection.
All the validations that are performed for check settlement method will also be performed for these three methods as well.
| Settlement Method | Description |
|---|---|
| Account Defaults Payment | A payment method can be associated with every supplier site. The payment method specified on the supplier site suggests the payment preference and can be used to default a payment method on the invoices generated for the supplier. The payment method associated with the supplier can be check, clearing, electronic, or wire. The accounts default payment allows the system to decide, based on the payment preferences setup on supplier site, what the default payment method for invoices interfaced in Accounts Payable should be. Details include :
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| Electronic Transfer | Electronic transfer refers to electronic fund transfer and is a payment method used in Payables to compensate suppliers/vendors. This new settlement method is similar to the existing check settlement method.
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| Wire Transfer | When a claim is settled with a wire transfer settlement method, the invoice generated in Payables displays payment method of ‘Wire’. |