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Credit Check Loop Hole - Logistics team can ship infinite amount of goods
#1
Hi,

I need to seek the attention of credit experts out there and give your opinion on this; potentially is a big issue for Oracle, but would like input from Credit Management people.
  • In the credit check rules there is shipping horizon days, this allows for future orders to be excluded from credit exposure value.
  • Our company is set to 22 days
  • We have credit check set to check all orders at pick release - after pick release there is no further financial system control, goods normally delivered within 2 days, sometimes same day.
  • We supply to up to 500 national locations for a single customer and each shipment has separate invoice and normal value is $500 to $2000 USD each shipment
  • So we a receive a national order which splits in our system to 500 separate sales orders, the order has a scheduled shipping date of 30 days from now.
  • The customer has not paid for two months and the available credit limit is approx $50k, the orders we received is valued at approximately $700k but does not go on credit hold, as the credit exposure calculation excludes it as the order scheduled shipping date is over 22 days.
  • The customer contacts us a few days later and requests urgent shipment for the $700k order (which is scheduled for 26 days time)
  • The Order management/logistics team pick release the orders and then dispatch all orders to the customer
  • Oracle finalises its processes overnight and the next day the account balance exceeds the credit limit by $650k because the $700k was invoiced.
So we have account balance that is in excess of the credit limit by a sizeable amount - no orders went on hold - thoughts? Is oracle malfunctioning?
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#2
Hi PhlipS
You can control the credit Days Control through the Credit Check Rules Setup.
Navigation Path: Order Management > Setup > Rules > Credit
Fields to Control: Days to Honor Manual Release
Setup Screen Shot: Attached
More Explanation : You can give number of days in the 'Days to Honor Manual Release' which you want to be work after the Order has been released for credit hold. For example if you will give 2 days then the shipping department can perform the n number of shipment against this order without any further hold.
If you want to control the credit check on each and every delivery then simply uncheck the 'Override Manual Release' field.

Thanks & Regards,
Irfan Arshad
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#3
   


(02-07-2014, 06:01 PM)shirfan Wrote: Hi PhlipS
You can control the credit Days Control through the Credit Check Rules Setup.
Navigation Path: Order Management > Setup > Rules > Credit
Fields to Control: Days to Honor Manual Release
Setup Screen Shot: Attached
More Explanation : You can give number of days in the 'Days to Honor Manual Release' which you want to be work after the Order has been released for credit hold. For example if you will give 2 days then the shipping department can perform the n number of shipment against this order without any further hold.
If you want to control the credit check on each and every delivery then simply uncheck the 'Override Manual Release' field.

Thanks & Regards,
Irfan Arshad

Hi
Further to this, if your shipping horizon days are 22 then it's mean that your total exposure includes only uninvoiced orders scheduled to ship within 22 days of the current date. Orders scheduled to ship after 22 days are not included.
Regards,
Irfan Arshad
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