Process Credit Monitoring

This instruction explains how you use the transactions and supporting documentation created in 'Credit Monitoring. Create Transactions' (RMS410) to follow payment trends and credit for selected payers.

If you are a credit manager, you probably use it on a daily basis.

Outcome

The payer's current credit status is analyzed, based on the displayed reasons for including the payer in the credit monitoring routine. Actions are registered for each reason according to the company's credit policy.

Reconsider the credit policy applied to the customer based on the result of the analysis. When necessary, you redefine the credit policy in 'Customer. Open' (CRS610), panels J and K.

  • Changed action status for a payer in (RMS420/B) updates the credit monitoring file (FCRMHD).
  • Action codes specified for reasons in (RMS421/B) update file (FCRMDH) and the accounts receivable balance file (FSLBAL).
  • Any changes of follow-up date or stop date in (RMS422/E) update the accounts receivable file (FSLEDG) and the file for invoice details in credit monitoring (FCRMIN).

Before you start

  • The starting conditions in Managing Customer Credit must be met.
  • Transactions must be selected for credit monitoring in 'Credit Monitoring. Create Transactions' (RMS410).
  • Action codes must be defined for credit monitoring in 'Credit Monitoring Action. Open' (RMS010).

Follow these steps

Define information to be displayed on the panel

  1. Start 'Credit Monitoring. Process' (RMS420/B).

    The panel displays the columns for last run date, payer, name, and amount overdue from the accounts receivable balance file in the local currency, active tickler notes (marked as an asterisk), and ten status fields used to indicate which criteria have been used for selecting transactions, as defined in 'Settings – Credit Monitoring' (RMS905). An additional status column indicates if action already has been taken for all records selected for a payer.

  2. On the B-panel, select a sorting order:
    • 1='Per payer': Any payer connected to the credit manager in 'Customer. Open' (CRS610) and with transactions selected for credit monitoring are displayed.
    • 2='Past due amount': Payers are sorted according to the total past due amount in descending order.
    • 3='Per credit manager': All credit managers are listed with their connected payers. (This view is set by the senior credit manager, who may review all credit managers.)
  3. Select one of these alternatives:
    • If sorting order 1 or 2 is selected, specify a credit manager in the Credit department reference field.
    • If sorting order 3 is selected, specify a senior credit manager in the Senior credit manager field.
  4. Create a selection of payers by entering 1 in the relevant columns for selection criteria (reasons) used.

Check information on payer level in other programs

To review further financial information for credit monitoring purposes, select any of these options on the B panel to access the desired program:

  • 11='Customer/payer': Checking credit-related information for the payer in 'Customer. Open' (CRS610/J, K) and/or blocking the payer from customer order entry in (CRS610/J).
  • 12='AR balances': Checking the accounts receivable balance file for financial information on the payer in 'Accounts Receivable. Display Balances' (ARS225/B)
  • 13='AR transactions': Checking accounts receivable records in 'Accounts Receivable. Display' (ARS200/B)
  • 14='Payer analysis': Checking age distribution for previous payments and creating a payment forecast based open customer invoices in 'AR Payment Forecast/Age Distribution. Display' (ARS260/E)
  • 16='Tickler notes': Reviewing or creating a tickler note connected to the payer in 'Payer. Connect Tickler Note' (RMS440/B)
  • 17='Display payment pattern': Checking a payer's payment trend in 'Payer. Display Payment Pattern' (ARS270/B).

Review reasons for credit monitoring and the transactions and values on which reasons are based

  • Select option 'Open record' for the payer to analyze on panel (RMS420/B).
  • Panel 'Credit Monitoring. Display per Payer' (RMS421/B) is shown. These fields are displayed:
    • Credit department reference
    • Payer
    • Credit group*
    • The payer's telephone number and contact person
    • Payment terms connected to the payer in (CRS610)
    • Active tickler notes ('*' asterisk is displayed)
    • Reasons for including the payer in the credit monitoring routine as defined in (RMS905) and action codes

      Value 1 and Value 2 (The information in columns Value 1 and Value 2 depends on the reasons displayed – see Configure Credit Monitoring

If the selected payer is connected to a credit group in 'Customer Credit Group. Connect' (CRS316), the field ‘Credit group12’ is displayed on (RMS421/B) to indicate that the payer is connected to a credit group. In that case, Value 1 and Value 2 for credit limits 1, 2, and 3 are retrieved from the credit group, not from the payer. Payers that are connected to a credit group are only selected for monitoring of the credit limits in (RMS420) and (RMS421), if the credit limits defined for the credit group have been exceeded.

Register action for reason

  1. Use any of the available options to analyze the transactions or other factors on which the reasons are based in order to decide what to do:

    11='Invoices': This option is valid for reasons Due date passed, Follow-up date passed, and Stop date passed.

    If option Invoices is selected, 'Credit Monitoring. Display Invoices' (RMS422/B) is activated. The following columns are displayed, depending on the reason selected: Due date/Follow-up date/Stop date, invoice number, number of days passed, invoice amount, currency, outstanding amount. If reason Stop date is selected, columns Stopped by and Payment reminder stop are displayed as well.

    The other options are the same as displayed in panel (RMS420/B).

  2. On panel (RMS422/B), select any of these options:

    To review invoice details, select option 11='Display invoices' for an invoice to access 'Customer Invoice. Display Separate' (ARS215/B).

    To add or change the follow-up date or stop date, select option 20='Change date' to access 'Credit Monitoring. Display Invoices' (RMS422/E).

  • Once you decide which action to take based on this information, register it by specifying an action code for the reason in question in panel (RMS421/B).

    Action codes are defined by the user in 'Credit Monitoring Action. Open' (RMS010).

    Tip: To connect an optional comment to the payer, press F6=Freetext on panel (RMS421/B). Type your comment on the text panel and press Enter to return to the previous panel.

  • Return to panel (RMS420/B).

    If an action code is set for all reasons for a payer, the action status is automatically set from 0 to 9.

  • When all payers are processed, select new transactions to be reviewed in 'Credit Monitoring. Create Transactions' (RMS410).

    Since this affects previously selected transactions, see Select Transactions for Credit Monitoring and Payment Reminders before proceeding.

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