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This chapter contains the following:

Overview of Channel Revenue Management Cloud

How Supplier Ship and Debit Works

You can use Channel Revenue Management to create a supplier program and activate it so eligible supplier accruals can be automatically applied at order capture. Here's how the distributor's supplier ship and debit business process works in Channel Revenue Management.

This figure shows the supplier ship and debit flow.
  1. The distributor requests a special price or the supplier issues a special price.

  2. An agreement between the distributor and the supplier is reached with the supplier providing an authorization number to the distributor.

  3. The distributor defines a supplier ship and debit program capturing the supplier, date effectivity, customer eligibility, and product eligibility.

    • Channel Revenue Management gets supplier sites already defined in Procurement and associates them to a supplier ship and debit program.

    • Date eligibility can be based on requested ship date or ordered date.

    • Customers from Trading Community Hub are used to define customer eligibility.

    • Item and unit of measure attributes from the Product Information Management work area can be used to define product eligibility rules.

    • The supplier incentive can be defined as a flat amount, a new cost, or a percentage.

    • A supplier ship and debit program must belong to the same business unit as the supplier site.

  4. The distributor activates the supplier ship and debit program. Approvals are optional.

  5. The distributor creates a sales order and eligible program accruals are applied automatically or by request.

  6. Earned accruals are tracked and accrued. Manual adjustments can be created for accruals that were missed or needed correction.

  7. Supplier claims are generated on demand or scheduled on a periodic basis.

  8. Supplier claims are sent to Payables to collect payment from the suppliers, and accruals are relieved.

  9. After payment, the claims are closed.

Business Process Flow:

This figure shows the supplier ship and debit business
flow.

Overview of Managing Supplier Channel Programs

Here's what you can do:

  • Create a program.

  • Edit a draft program.

  • Submit a program for approval.

  • Activate a program so channel incentives can be applied to sales orders.

  • Edit active programs in a limited fashion.

  • Terminate active programs, locking them down from update and further application to sales orders.

Overview of Managing Adjustments

Here's what you can do.

  • Create a positive or negative accrual adjustment.

  • Reverse an accrual.

    Once created, you can't edit or delete an adjustment. You must create a reversal adjustment to negate an original adjustment.

How Channel Incentives are Applied to Sales Orders and Converted to Accruals

Here's how channel incentives are converted to accruals.

This figure shows the process of creating channel
accruals.

Here's how Channel Revenue Management creates accruals from sales orders:

  1. Create sales orders in an order capture application specifying the customer, bill to, and ship to information. Add the line items with their quantity, unit of measure, and other fulfillment line details. The order capture application gets the list of all eligible programs.

    • Incentives applied automatically: Eligible channel programs are applied automatically to the sales orders, unless specified otherwise in the program type of your program.

    • Override incentives: You can add manual programs for each of the line items of your order. You can also remove the programs that were automatically applied.

      Note: Some programs can't be declined if defined as such in their program type definition.
    • Price components: You can see the price breakdown along with the program details for each of your line items in the Amount dialog box.

  2. Invoice the orders. This makes the amounts available as incentives in the order item lines eligible for accrual creation.

  3. Run the Create Accruals scheduled process to convert the eligible incentive amounts to accruals. A supply chain application administrator can create the channel accruals on demand or schedule it as a batch process on a periodic basis. Channel related charge lines from the order capture application are created as channel transactions.

How Channel Claims Are Processed

On a periodic basis, a distributor creates supplier claims to collect on channel incentives. Typically, earned incentives are gathered and associated with a claim.

This figure shows the process flow for supplier
claims in Channel Revenue Management.
  1. After an accrual is captured in Channel Revenue Management and earned, it's eligible to be picked up in a supplier claim. Manual adjustments are also reflected in supplier claims.

  2. A supply chain application administrator can generate a supplier claim on demand or schedule it as a batch process on a periodic basis, using the Generate Supplier Claims scheduled process.

    • The process can generate a single claim for a single supplier site, or multiple claims, at least one claim for each supplier.

    • Various parameters can be used to identify the earned accruals and manual adjustments to be included for claim generation.

    • The generated claim can be immediately sent to Payables for supplier payment or sent to the claim analyst for review and approval.

  3. The Financials cloud integration can be configured to collect payment from the supplier.

  4. Claims are settled by a Payables integration that checks when payment has been successfully debited and retrieves settlement details such as debit memo number or check number to confirm the claim settlement.

  5. A general accounting manager can relieve paid accruals in Channel Revenue Management on demand or schedule it as a batch process on a periodic basis using the Create Accounting scheduled process.

  6. After payment, a supply chain application administrator can close the settled claims on demand or schedule it as a batch process on a periodic basis using the Close Settled Claims scheduled process.

  7. If the supplier declines a claim line, the distributor investigates and creates a manual adjustment to reverse the accrual.

Here's how you can claim the supplier accruals:

  1. Schedule the Generate Supplier Claims process. This creates claims for the channel accruals and manual adjustments.

    • Claim status: Settlement Pending

    • Each claim settlement line contains the program and the line items on which it was applied.

  2. Import these claims to Payables using the Import Payables Invoices process. The claims are now available in Payables for payment.

  3. Process the Payables invoice.

  4. Close the claims after payment is confirmed by running the Close Settled Claims process. This updates the claim with:

    • Claim status: Settled

    • Invoice or payment instrument details issued by Payables

How Channel Activity is Accounted

Here's how channel activity is accounted:

This image shows the channel accounting process
flow.

Accrue Earned Supplier Discounts

  1. When an order is created in an order capture application, eligible program discounts are calculated and applied as channel incentives on an order line.

  2. After the order is fulfilled, it's eligible to be brought into Channel Revenue Management as a channel accrual. A supply chain application administrator can create these accruals on demand or schedule it as a batch process on a periodic basis.

  3. Accruals that were missed or needs correction can be added as manual adjustments.

  4. After a channel accrual is earned based on its program rules, it's eligible to be posted to the general ledger.

  5. A general accounting manager can post earned accruals to the general ledger on demand, or schedule it as a batch process on a periodic basis. The integration to General Ledger supports the Subledger Accounting architecture to derive the accounting.

Relieve Supplier Accruals

  1. You can create claims against the accruals using the Generate Supplier Claims process.

  2. After a claim is created (or approved) and is pending settlement, it's eligible to relieve its accruals by posting to the general ledger.

  3. A general accounting manager can post relief of accruals to the general ledger on demand or schedule it as a batch process on a periodic basis. The integration to General Ledger supports the Subledger Accounting architecture to derive the accounting.

  4. Sweep the unprocessed channel journal entries from closed accounting periods to open or future enterable periods using the Sweep Channel Transaction Accounting Events process. Run the Create Accounting process to post these to GL.

  5. After payment, close the settled claims using the Close Settled Claims process.