Customers submit claims for various reasons such as to claim compensation from your organization for losses caused due to shipping problems, invoice errors, promotional payments, or quality issues.
Sometimes the reason for the claim may not be identified so thus is unknown. You can use internal claim types and reasons to identify the reason for which the claims have been raised and classify these claims.
Claim types and reasons also enable you to close the loop on claims processing and settlement, and to analyze claim problems. Depending on the claim type or reason, the process of claim research and resolution may be different. You can have any number of internal claim types and reasons. Your Claims Administrator can set up claim types and reasons based on your business needs.
Claim types and reasons together enable you to classify claims, and identify problem areas that need improvement. For example, you may have a large number of claims with the type--shipping and the reason--damaged goods. With this knowledge, you can improve your shipping methods and reduce the number of shipping claims arising due to damaged goods.
Claim Types
Claim types serve the following specific purposes:
Setups for integration purpose
Organizations can store setups required for creating transactions or adjustments in Oracle Receivables as well as in Order Management. The Oracle Receivables setups mainly drive the accounting, while the Order Management setups drive the workflow of a Return Material Authorization (RMA). These setups are as follows:
Integration Setups
| Transaction Type | Description |
|---|---|
| Credit Memo | Used when a claim or a deduction must be settled with a new credit memo. Must be set up in Oracle Receivables. |
| Debit Memo | Used when a debit claim or an overpayment must be settled with new debit memo. Must be set up in Oracle Receivables. |
| Chargeback | Used when a deduction must be settled with a chargeback. Must be set up in Oracle Receivables. |
| RMA | Used when a claim or deduction must be settled with an RMA (return order). Must be set up in Order Management with a workflow tied to it. The workflow must have Invoicing Activity to generate a credit memo to close out the claim or deduction. |
| Write-off Adjustment Receivable Activity | Used when a deduction must be settled with a write-off. Must be set up in Oracle Receivables as an adjustment type receivable activity. |
| Receipt Write-off Receivable Activity | Used when an overpayment must be settled with a receipt write-off. Must be set up in Oracle Receivables as a receipt write-off type receivable activity. |
Default Receivable Clearing Accounts
When accruals are created either from a Lump sum, Accrual, Net Accrual, Scan data or Volume offer, such accruals may be treated as liabilities by some companies. These liabilities must be tracked in the General Ledger. Oracle Trade Management enables GL integration by creating Debit Sales or Expense, and Credit Liabilities accounting entries.
If a claim or deduction is associated to such accruals and the settlement method is a credit memo, then Oracle Trade Management creates entries for Debit Liabilities and Credit Receivables.
The debit entry for the liabilities account reverses the liabilities created when the accruals were created. Because the claim is being settled for such accruals, and the customer will be paid by a credit memo, these liabilities must be reduced. The credit entry for Oracle Receivables clearing account offsets the debit entry that the credit memo creates to reduce revenue of the customer account.
Default Vendor Clearing Accounts
If a promotional claim must be settled by a check instead of a credit memo, then accounting entries for Debit Liabilities and Credit Vendor Clearing will be created. The liabilities account used will be the same as the account used when accruals were created. The Oracle Receivables or Oracle Payables Clearing accounts that will be used during claim settlement are derived from the following setups:
As defined in the Claim Type, and the Account Generator workflow updates if any.
As defined in System Parameters, and Account Generator workflow updates if any.
Claim Reasons
Claim Reasons serve the following specific purposes:
Action Default
Action is a template of tasks. Based on the claim reason, certain repetitive tasks may need to be performed every time. Such tasks are defaulted automatically based on the claim reason. Therefore, you need not enter the tasks manually every time.
Setups for Integration Points
When a chargeback is created to settle a deduction, the chargeback reason must be passed from Oracle Trade Management to Oracle Receivables for integration purposes. Optionally, credit memo reasons can also be passed from claims in Oracle Trade Management to credit memos in Oracle Receivables.
For information on creating claim types and reasons, and application integration, see the Oracle Channel Revenue Management Implementation Guide.