Oracle Financials Strategy

Turbulent financial markets and tight credit have many companies and their employees on edge. What better time to leverage your existing ERP investment and sponsor an easy win for the finance organization?

We asked John Killen, Oracle's Global Solution Architect for Cash Management and Treasury, for a tip on a quick ROI feature that will be applicable to a majority of Oracle Financials customers.

Here is what John had to say:

If you or your clients continue to rely on manual processes to account and reconcile certain cash activity in your bank accounts, you are not alone. I regularly meet with cash, accounting, and IT managers around the world who are in the same position. They are very pleasantly surprised when I show them a feature they already own, which is delivered in Oracle Cash Management and supplements other bank reconciliation functionality. Since much of this manual effort arises from first notice or repetitive bank statement items like daily sweeps to / from your own internal bank accounts, net credit card deposits, bank fees, tax payments, etc; it is possible for Oracle to automate the procedure programmatically.

The feature provides a single screen that allows you to easily build and maintain rules that will match reference text within bank statement lines to automatically generate accounting and reconcile the activity. It turns an often tedious and time-consuming process into a fully automated and scheduled program. Once you implement this feature, you should have more time to consider other related areas like cash positioning and forecasting, cash pooling, and in house banking – all areas increasingly important during these challenging economic times.

And what are the customers saying about this feature?

“It works even better than expected. It saves us at least a few hours every day.” – Treasury Manager, US Based Manufacturer.

The feature was originally released in 11i and called Journal Entry Mappings and then enhanced and renamed in R12 as Bank Statement Cashflow Mappings. PeopleSoft Cash Management has a similar feature called Bank Statement Accounting. For more information, please review the Cash Management User Guide or support documentation available from Metalink. Alternatively, feel free to contact John directly.

At the beginning of a year filled with many financial management challenges, here are two good questions to ask: “Is my company using credit risk policies and scoring models that were formulated last year or the year before? And what is my collections department using to determine who to collect from?”

Lyle Wallis, vice president of research for the Credit Research Foundation (CRF), was interviewed in the Jan 2009 issue of Oracle’s Financials Management newsletter http://www.oracle.com/newsletters/archives/archives_financialmanagement.html in an article entitled “Reduce Credit Risk with Accurate Scoring Models”. Wallis mentions automation as the only way to deal with the thousands of customers whose credit risk and worthiness is changing drastically. So along with everything else the global financial and economic crisis is causing us to re-think, companies need to re-jigger their credit and collections scoring models to “segregate customers that may be good credit risks from those in jeopardy of going out of business in the months ahead.” In other words, we need to evaluate what currently constitutes ‘good’ and ‘bad’ credit risk and criteria for collectability, and adjust operational policies, strategies, and metrics accordingly.

The abovementioned article touches on how companies can use technology to create scoring models to better identify and efficiently manage customers at most risk now and in the future. Oracle’s Credit to Cash products not only streamline the credit and collections scoring process, they also automate work assignment so collections agents focus on those customers who need that personal touch while automating collections activities for those customers who don’t. And once you’ve re-jiggered your scoring models, you may be surprised to learn who those customers are!

If you read the article in the Oracle newsletter and want to know more about what other companies are doing, Wallis has recently written one white paper, “Managing Receivables in the Midst of Today’s Economic Environment”, https://www.crfonline.org/publications/2008economy.pdf and one occasional paper, “Lessons for Businesses to Learn from Today’s Credit Crisis” https://www.crfonline.org/publications/Lessons_CFO.pdf available from the Credit Research Foundation.

Happy Reading! And Happy Re-jiggering!