MD.

055 Report Functional Specification

Advanced Collections Custom Score Engine

Author: Creation Date: Last Updated: Document Ref: Version: #.0 Lanre Ladipo May ! "0#0 May #$! "0#0

Approvals:

<Approver 1> <Approver 2>

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Contents
Document Control............................................................................................. ii Revie(ers.................................................................................................... ii Contents........................................................................................................... iii &ntroduction................................................................................................. # *asic *usiness +eeds..................................................................................# Assumptions................................................................................................ " *usiness Rules 'o( components (ill ,e scored..........................................% Application Setup Re)uirements.................................................................% Concurrent -rogram -arameters.................................................................. -rogram /utputs......................................................................................... 0 E1ception 2andling.....................................................................................0 /pen and Closed &ssues for t'is Delivera,le..................................................... /pen3Closed &ssues.....................................................................................

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$ntroduction /racle Advanced Collections module provides functionality and tools needed to manage collections processes effectively in today4s comple1 economies! gro(ing ,usinesses! and increased glo,ali5ation. 6'e module (ill allo( t'e credit group to improve overall cas' flo( ,y ,etter management of customer interactions! focusing on priority accounts! timely account revie(! and centrali5ed environment of credit data. /ne 7ey tool in Advanced collections is t'e t'e Scoring Engine. 6'e collections scoring engine 'as (eig'ted components t'at drive creation of delin)uent! pre8delin)uent or current transaction in t'e system. 6'is allo(s t'e collections department to designate an appropriate collections strategy or dunning plan. Alternatively! customers can ,e scored ,ased on certain criteria and allo(s collectors to focus on accounts (it' largest ,alances o(ed t'at impact DS/! AR turnover and most important cas' flo( %asic %usiness Needs Advanced Collections module 'as preconfigured score engine componenents. Security 6ec'nologies Credit Department assessed seeded score components and (ould li7e to create ne( scoring engine ,ased on specific ,usiness needs. /racle allo(s collections organi5ations to create or configure any num,er of scoring components t'at are specific to
,usiness needs.

S6 Credit team in alignment (it' t'e Corporate Credit Leaders'ip team and 9CF pro:ect 'as defined a scoring engine model t'at ,est meets ,usiness practices for effectivie collections. 6'e model provided 'as (eig'ted score components on ('at data to ,e scored.
Component
&ears in %usiness Factor 0.# 9eig't #00 Range #5; <rs #0 8 #5 <rs 5 8 #0 <rs. %85 yrs > % years #0; <rs 5 8 #0 <rs % 8 5 <rs. # 8 % <rs > # years Score +otes

#00 =0 %0 8$0
&ears as $R Customer 0.#5 #00

0 0 0 0 0 0 0 0 0 0

Account Level

Account Level

0 =0 %0 0
'delin(uent to total AR

0.%

#00

00 50 0

>#0? #0.#? 8 #5? #5.#? 8 %0.0? %0.# 8 %5.0?

0 0 0 0

*ill 6o Account Level 6otal AR ,al 3 -ast due ,al

850
$R Ris) Rating 0.#5 #00

%5?; #8% $ 5 =

0 0 0 0 0 Account Level

00 "5 8#00

Average Da s Late

0.%

#00

>5 =8#0 ##8"0 "#8%0 %#;

0 0 0 0 0

.5 50 #0
850 #.0

*ill 6o Account Level (ould li7e to see formula to validate calculation

Customer Score Range Ran7ing

Low Range 0 $# .5 *coring Ran)ing #igh Range *tatus -oor Customer Rating. 2ard $0 Strategy Avarage Customer Rating.. .$ Medium Strategy @ood Customer Rating.. Soft #00 Strategy -oor Customer Rating.. 2ard Strategy Avg Customer Rating.. Medium Strategy @ood Customer Rating.. Soft Strategy

An e1ampleA
*coring +ngine Calculator Actual Component Value Value *core <ears in *usiness #5 50 <ears (it' &R 5 ?delin)uent to total AR 0 #00 &R Ris7 Rating 5 Average Days Late #0 -inal Customer *core ,eig ht 0.# 0.#5 0.% 0.#5 0.% *cor e 5 %0

./

Assumptions
Scoring Components are eac' assigned a (eig't and t'e sum total of all components e)uals one

6ransactions to ,e scored are S6 &nvoices! S6 De,it Memos and S6 C'arge,ac7s Custom Score components (ill functions (it' seeded Concurrent -rograms to assign correct scores and strategies
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-ayment Sc'edule Class of De,it Memo! C'arge,ac7! or &nvoice Amounts Due more t'an 0 -ayment Sc'edule not paid are not in Dispute Custom score components can ,e ,uilt and integrated (it' e1isting -arty scoring engine Since ne( scoring components and Filter Bie(s re)uire SCL statements or functions a solid tec'nical (it' AR 7no(ledge is re)uired

%usiness Rules how components will be scored!

*coring Ran)ing Component Customer <ears in *usiness Customoer <ears (it' &R ? Deli)uent to 6otal AR &R Ris7 Rating Parameter Customer D-artyE Customer D-artyE *il 6o Account *ill 6o Account Rule -ull <ear from 2FG-arty DFF Attri,ute# to calculate value from current year ie "0#08"00# H . Ise value for scoring -ull <ear from 2FG-arty DFF Attri,ute" and calculate value from current year ie "0#08"00# H . Ise value for scoring 6otal AR *alance3-ast Due *alance Customer is assigned a value #8.. Select value from Ris7GCode loo7up Description &n Advanced Collections! Average Days Late Metric calculates only open invoices comparing due date to system date as follo(ing vs AR Average Days Late ('ic' calculates only closed invoices comparing due date to applied date
Use $+0 seeded metric to score as following Avg Da s late is calculated as sum 1da s late2 3 number of items

Average Days Late

*ill 6o Account

Application *etup Re(uirements Add DFF to -arty &nformation to populate <ears in *usiness! <ears (it' &R and Last updated Date. Last Ipdated value (ill ,e constant J0#8KA+8"0#0L

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AR Setups Add Corporate &R Ris7 Rating in ARGLoo7upGCodes M see attac'ed

&R Ris7 Rating Met'odology.pdf

Customer Setup Add DFF field for <ears in *usiness! <ears (it' &R and Last Ipdated Balue

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Add Ris7 Rating on all active customers MIse Code value in calculations of &R Ris7 Rating component Inder S6 IS AR Customer Admin Responsi,ility. Cuery a Customer . +avigate to t'e -rofile 6ransaction 6a,. &R Ris7 Code is assigned in t'e Ris7 Code field

Advanced Collections *etups

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Create ne( scoring engine M Ise Collections 26ML Administrator

Add Components Customer <ears in *usiness! Customer <ears (it' &R! -ercentage Delin)uent 6otal to AR! &R Ris7 Rating! and Average Days Late DADLE Define Score component details (it' (eig'ts and ranges as indicated in attac'ed model
S6 Scoring Engine -roposal ACM 05#"#0.1ls1

Assign Score components to Score 6ypes

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Re8use seeded -arty Scoring Filter to assign scoring engine

Concurrent Program Parameters After scoring components are defined! add to engine and run t'e follo(ing concurrent programs to generate score Inder S6 IS Collections Forms Administrator! Su,mit Single Re)uest to Run &EN Scoring 2arness and pass follo(ing parameters . Runs engine for *ill 6o " Runs engine to create delin)uencies # Runs engine to Score CustomerD-artyE

Run &ENA-opulate Iniversal 9or7 Cueue DI9CE

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Program 4utputs 6otal calculated score (ill ,e vie(a,le in Iniversal 9or7 Cueue in t'e Collection Score field

+5ception #andling &f Scoring Engine 2arness program fails All t'e standard e1ceptions s'ould ,e 'andled programmatically in -L3SCL procedure and t'e appropriate message in log file3output file. An error report s'ould ,e produced giving t'e details of t'e erroneous data records. 6'e report s'ould state error message for *usiness Isers to ta7e corrective action.

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4pen and Closed $ssues for this Deliverable

4pen3Closed $ssues

$D

$ssue36uestion

Resolution3Respons e

Response -rom

Action

#. @ood customer -re delin)uent Calls until (e get payment confirmation Call ,ac7 if (e 'ave a ,ro7en promises. &f no payment confirmation (it'in t'e mont's getting approval from 6L;*CM to move it to t'e second JscoringL average ". Fair customerA -re delin)uent Calls until (e get payment confirmation #st dunning letter Call after #0 days of sending t'e #st letter "nd dunning letter after "0 days of t'e first letter Call after #0 days after t'e "nd dunning letter %rd Dunning letter #0 days after t'e "nd dunning letter Collection Agency DCollection Agency process to ,e follo(ed E %. *ad customer A -re delin)uent calls A if payment confirmation (e stop 'ere ot'er(ise follo( ,elo( #st dunning letter Call after #0 days of sending t'e #st letter "nd dunning letter after "0 days of t'e first letter Call after #0 days after t'e "nd dunning letter %rd Dunning letter #0 days after t'e "nd dunning letter Collection Agency D Collection Agency process to ,e follo(ed E

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