Accounts Receivable Autolockbox its not just for bank receipts anymore Edwin C' Marwitz

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Accounts Receivable Autolockbox its not just
for bank receipts anymore?Edwin C. Marwitz
DARC Consulting
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The Roadmap for This Presentation

• Personal introduction
• Scope of the presentation
• The fundamentals of lockbox
• Four implementation examples
• Wrap-up
• Questions?

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Who Am I?

• Ed Marwitz
• Managing Principal Consultant
• DARC Corporation
• 6 years of Oracle Financials Applications
  experience
• Main area of expertise focuses on interface
  design and creation to facilitate data
  conversions and ongoing data feeds

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What Will I Cover?

• An overview of the business processes that
  AutoLockbox services
• The fundamentals of the AutoLockbox open
  interface with illustration of the three step
  process flow
• Four case studies illustrating standard as
  well as non-standard uses of the interface

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Why Should I Use This Interface?

• Automation of daily cash application
• Sources may include
• Banking institution
• Clearing houses
• Credit Service Bureaus
• A tool for conversion of legacy data as part of
  an A/R implementation

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Standard Lockbox Flow

• Customer receives invoice or statement
  indicating items to be paid
• Customer remits payment and supplies payment
  detail by invoice and possibly by line item
• Customer may also supply debit information to be
  processed in conjunction with the payment activity

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Standard Lockbox Flow

• Bank gathers data elements from customer and
  supplies the results in a lockbox transmission
  file and possibly a supplemental EDI file
• Cash file(s) are transmitted by the bank to the
  server where automated payment application will
  take place

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Standard Lockbox Flow

• AutoLockbox processes file to facilitate the
  application of all cash transactions
• AutoInvoice functionality might also be utilized
  to provide for automation of customers debits

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Data Mapping and Design

• Know your data
• Customer focused and often customer driven
• Establish data formats with the bank you get
  what you pay for
• Cost/Benefit analysis -- Determine and establish
  the level of complexity beforehand

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AutoLockbox Key Setup Steps

• AutoCash Rule Sets
• Remittance Banks
• Receipt Classes
• Receipt Methods
• Receipt Sources
• Lockboxes
• Transmission Formats

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AutoLockbox the 3 Step Process

• Step One It all starts with a file
• A form level input to the AutoLockbox concurrent
  program at submission time
• Other interfaces require interface table
  population prior to concurrent manager submission

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AutoLockbox the 3 Step Process

• Step One File format definition
• Communication of data format to Oracle A/R
• Definition of transmission format within the
  application
• Creation of matching SQLLoader file
• Oracle A/R come seeded with templates to
  facilitate these setups

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AutoLockbox the 3 Step Process

• Step One How do I know it worked?
• Reference the AutoLockbox Execution report and
  log files to verify a successful load
• AR_PAYMENTS_INTERFACE_ALL has all the proper
  records
• Verification via the Maintain Transmission Data
  form

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AutoLockbox the 3 Step Process

• Step Two Its time to validate
• Two perspectives
• What Oracle A/R requires
• What your business definition requires
• The more complex the data the more extensive the
  testing allow for plenty of duration in the
  schedule

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AutoLockbox the 3 Step Process

• Step Two Errors, where should I fix them?
• Low volume of records with errors
• Fix it in the online form
• High volume of records with errors
• Work with customers and/or the bank to improve
  the data
• Write custom modules to cleanse the data up front

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AutoLockbox the 3 Step Process

• Step Two How do I know it worked?
• Reference the AutoLockbox Execution report and
  log files
• AR_INTERIM_CASH_RECEIPTS was populated
  successfully
• These receipts are represented as QuickCash
  transactions in the standard receipt forms

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AutoLockbox the 3 Step Process

• Step Three Lets post the payments
• Same process used to post QuickCash batches
• Upon successful completion customers account
  balances are updated and the accounting entries
  are created

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Implementation Case Studies

• Case Study 1
• High volume of high quality data
• Customer education on proper use of remittance
  stub was able to increase quality of the data
• High level of validation at the bank
• Online adjustments made when needed

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Implementation Case Studies

• Case Study 2
• Utilization of AutoLockbox as a tool for
  conversion
• Investment was made up front to insure data was
  fully validated prior to passing as a file
• Full conversion utilized the Customer, Tax Rate
  and Invoice open interfaces as well

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Implementation Case Studies

• Case Study 3
• Payment activity came via credit card clearing
  house
• Front end modules were used to produce fully
  validated lockbox files
• This example serves to illustrate the ability of
  lockbox to process many different forms of
  payments

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Implementation Case Studies

• Case Study 4
• Leading manufacturer of electronic automotive
  components
• Relationship with customer created specific and
  complicated business requirements
• Data provided composed of standard lockbox file
  and EDI-820 payment transactions

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Implementation Case Studies

• Case Study 4 continued
• Customer requirements exceeded AutoLockbox
  standard functionality
• Customer payment activity supplied at the invoice
  line level
• Customer was authorized to automatically take
  debits to their account

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Implementation Case Studies

• Case Study 4 continued
• Two distinct data feeds were serviced via
• AutoLockbox for payment records
• AutoInvoice for customer supplied credit memos
• Two interfaces combined to provide complete
  account activity

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Implementation Case Studies

• Case Study 4 continued
• Look what I found!
• Pre-validation updates were achieved via a stored
  procedure executed between steps 1 and 2 of the
  lockbox process
• Utilization of Oracle supplied PL/SQL procedure
  ARP_LOCKBOX_HOOK

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Implementation Case Studies

• Case Study 4 continued
• Stored procedure not provided for in current
  Oracle manuals
• First discovered upon application of A/R patch
  set R on version 10.7 16.1 of the application
• Procedure allows for update to payments
  interface and interim receipts tables

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Conclusions to Be Drawn

• AutoLockbox consists of a three step process of
  import, data validation, and cash posting
  transfer
• Data validation may be
• Manual or automated
• Executed up front or within the process
• Various forms of payments can be processed

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Conclusions to Be Drawn

• The AutoLockbox open interface now offers a
  window to cleanse data along the way
• Full understanding of these main concepts allows
  for nearly any payment activity to be handled
  successfully

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For Additional Information

• Oracle Financials and Government Financials
  Opens Interface Manual
• Oracle Receivables Reference Manual
• Documentation embedded within the
  ARP_LOCKBOX_HOOK procedure
• Ed_Marwitz_at_DARC.com