Oracle Fusion ERP - Mastering Supplier Management

How to Leverage Site Assignments and Standing Offers

Effective supplier management is a critical aspect of maintaining healthy cash flow and fostering strong business relationships. This guide explores the intricacies of managing supplier discounts through early payment offers, focusing on site assignments, campaigns, and standing offers. We'll delve into the steps for enrolling suppliers, managing enrollments, and setting APR thresholds to optimize savings.

Site Assignments

Purpose of Site Assignments

Site assignments link supplier sites to business units, enabling flexibility in enrolling suppliers with varying APR rates based on geography. When setting up a new supplier record, a supplier manager assigns the supplier site to an existing business unit. The site assignment controls which business unit can transact with which supplier site. In standing offers, the site assignment provides the freedom to enroll a supplier site for one business unit and not another, allowing different APR rates based on geography.

Viewing Site Assignments

On the details page for a supplier, you can view all the site assignments related to one or more business units. Site assignments display in alphabetical order and include the following information:

• Site Assignment Name: Name or code for the site assignment.
• Business Unit: Name of the business unit that the site is assigned to.
• Enrollment Status: Indicates whether the supplier has ever been enrolled using this site assignment (Past, Future, Current, None).
• Number of Invoices: Total number of invoices processed for this site assignment.
• Site Balance: Total outstanding balance pending for the supplier relative to this site assignment.
• Payments to Date: Total amount of payments disbursed to the supplier relative to this site assignment.

Enrolling Suppliers for Standing Offers

A standing offer defines the APR and effective date range for dynamic early payment discounts. Each standing offer applies to one or more supplier site assignments. Here’s a step-by-step guide to enrolling suppliers in standing offers:

Step-by-Step Guide to Enrolling Suppliers

1. Search and Select Supplier

• Navigate to the Suppliers Tab: Start by going to the "Suppliers" tab on the Payment Discounts page. This is where you can view all available suppliers.
• Search for the Supplier: Use the search functionality to locate the supplier you wish to enroll. You can filter suppliers by various criteria such as supplier name, location, or status. If you're not sure of the exact name, use keywords or partial names to narrow down the list.
• Select the Supplier: Once you have identified the supplier, click on their name to access their detailed view. This view provides information about the supplier’s current site assignments and their payment history.

2. Compare APR Recommendations

• Review APR Recommendations: On the supplier’s detail page, you’ll find APR (Annual Percentage Rate) recommendations categorized as Good, Better, and Best. These recommendations are generated based on potential savings and the supplier’s payment history.
• Understand Potential Savings: Evaluate these APR recommendations to understand how each rate would impact your savings through early payment discounts. The recommendations are for comparison purposes, helping you decide which APR to offer based on your financial goals and supplier relationships.
• Select an APR: Choose the APR that best aligns with your objectives. You can opt for a higher APR if you want to offer more attractive discounts or a lower APR to maintain tighter control over discount rates.

3. Create Enrollment

• Initiate Enrollment Creation: Click the Create button in the Early Payment Offers area. If this button is disabled, ensure that a campaign exists before proceeding.
• Choose a Campaign: From the list of available campaigns, select the one you want to use for this enrollment. Campaigns group standing offers and define the terms and conditions for early payment discounts.
• Define Enrollment Details: Proceed to configure the enrollment details. This includes setting the APR rate and the effective date range for the offer. Ensure that these settings align with the chosen campaign and the supplier’s requirements.

4. Select Site Assignments

• Review Site Assignments: On the enrollment page, you’ll see a list of site assignments associated with the supplier. All site assignments are selected by default.
• Select Relevant Site Assignments: Deselect any site assignments that should not be included in this enrollment. Choose only the site assignments where you wish to apply the standing offer. This allows for more targeted and specific discount offers.
• Adjust Dates and APR: If needed, adjust the APR for the selected site assignments and update the effective date range to match your campaign’s terms. Ensure there are no overlaps in date ranges to avoid conflicts.

5. Final Steps

• Review and Confirm: Before finalizing the enrollment, review all selections including the APR, site assignments, and date ranges. Confirm that all details are accurate and align with your campaign and business objectives.
• Submit Enrollment: Click Submit to finalize the enrollment. The system will process the enrollment and apply the standing offer to the selected site assignments.
• Handle Errors: If any errors occur during submission (e.g., overlapping date ranges), you will need to correct them. Go back to resolve the issues and resubmit the enrollment.
• Monitor Enrollment: After submission, monitor the enrollment through the Payment Discounts page to track its status and effectiveness. You can view details about the enrollment, including which suppliers have accepted the offer and any changes to the terms.

By following these detailed steps, you can efficiently enroll suppliers in standing offers, ensuring that your early payment discounts are effectively managed and optimized.

Managing Enrollments

Managing enrollments involves several tasks such as updating existing standing offers, extending end dates, or ending site assignments. This section outlines the steps and considerations for effectively managing these enrollments.

Updating Enrollments

1. Search and Select Supplier

• Access the Payment Discounts Page: Go to the "Payment Discounts" page where you manage supplier enrollments.
• Locate the Supplier: Use the search functionality or filters to find the supplier whose enrollment you wish to update. Filters might include criteria like supplier name, site assignment, or current enrollment status.
• Select the Supplier: Click on the supplier’s name to view their detailed enrollment information. This view will show all current standing offers and site assignments related to this supplier.

2. Manage Offers

• Access Enrollment Management: In the Early Payment Offers area, click Manage. This will take you to a section where you can make modifications to existing enrollments.
• Make Specific Updates:
• Handle Date Overlaps: Ensure that the new end dates do not overlap with other existing dates. Adjust as necessary to avoid conflicts. Use the Next button to move forward, and if errors are present, click Back to correct any issues.
• Submit Changes: After making the necessary updates, review all changes for accuracy. Click Submit to finalize the updates. If there are no issues, the system will confirm the updates. If errors are present, correct them and resubmit.

Viewing Enrollments

Viewing enrollment details provides insight into the performance and status of your standing offers. This can be useful for auditing and ensuring compliance with discount terms.

1. Select Business Unit

• Navigate to the Correct Business Unit: On the Payment Discounts page, select the business unit associated with the enrollments you want to view. This ensures you are looking at the relevant data for that specific unit.

2. View Offers

• Search for the Supplier: Use the search functionality to locate the supplier whose enrollment details you want to view.
• Access Enrollment Details: Click on the supplier’s name or the specific site assignment to open the enrollment details. Here’s what you can review:
• Audit Trail: Use the enrollment details for auditing purposes. This information can help investigate why certain invoices were discounted and verify the accuracy of applied discounts.
• Return to Supplier Details: After reviewing the details, click Back to return to the supplier's detail page or navigate to other sections of the Payment Discounts page as needed.

By effectively managing and viewing enrollments, you can ensure that your early payment discount programs are running smoothly and providing the expected benefits.Currency and APR Settings

Setting conversion currency and APR thresholds ensures accurate and beneficial discount offers. Here’s how to set these parameters:

Set Conversion Currency

• Purpose: Display monetary values in a single reporting currency using the specified conversion rate type (e.g., Corporate). This setting is for viewing purposes only and does not change accounting values.
• Setup: Specified on the Settings page by payables administrators.

Set the APR Threshold for Recommendations

• Purpose: Define the APR range for calculating early payment discounts, reflecting business goals such as expected return rates and controlling maximum discounts.
• Recommendation: Set a range appropriate for your organization. Typical industry benchmarks are a minimum of 8% and a maximum of 50%, translating to discount ranges from 0.2% to 12.5% based on days paid early.
• Setup: Specified on the Settings page by payables administrators.

Compare Suppliers

Comparing suppliers helps you make informed decisions by analyzing key metrics such as outstanding balance, discounts taken from early payment offers, total payments disbursed, recommended APR, and liquidity score. Here’s how to compare suppliers:

Steps to Compare Suppliers

1. Select Category and Filters:
2. Change Display and Compare:

Supplier Comparison Dialog Box

The Supplier Comparison dialog box allows you to compare metrics such as outstanding balance, discount and payment amounts, APR, and liquidity score.

Campaigns and Standing Offers

Understanding Campaigns and Standing Offers

A standing offer extends ongoing early payment discounts to suppliers through enrollments and campaigns. You can apply discounts in a payment process request for all applicable invoices that are ready for payment before their due date. The amount of discount offered adjusts dynamically based on the APR and the number of days paid early.

Using Campaigns

Campaigns group standing offers to suit how you work with your suppliers. Here are some ways to use campaigns:

• Geography: Use a campaign with a built-in increase for areas with higher interest rates.
• Supply Chain vs. Indirect Spend: Use campaigns for critical supply chain suppliers to help them cash in early and potentially reduce lead time.
• Small or Local Business: Use campaigns to offer special rates to support local small businesses.

Creating Campaigns

You can create campaigns to send early payment offers to suppliers. Here’s how:

Step-by-Step Guide to Creating Campaigns

1. Go to Campaigns Tab:
2. Create Campaign:

Adding Suppliers to a Campaign

You can add multiple suppliers to a campaign by applying selection criteria and defining your offer terms. Here’s how:

Steps to Add Suppliers

1. Go to Suppliers Tab:
2. Select Suppliers:
3. Select Campaign:

Working with Campaigns

You can create multiple campaigns and use them across business units. Here’s what you can do on the Campaigns tab:

• Search for Campaigns: Search by name.
• Filter Campaigns: Filter by current, past, future, or all statuses.
• Sort Campaigns: Sort by attributes like name, APR, number of discounts taken, and number of suppliers.

Editing Campaigns

After creating a campaign and adding suppliers, you can edit default values or update supplier site assignments. Here’s how:

Steps to Edit Campaigns

1. Edit Campaign Details:
2. Update Multiple Suppliers:
3. Update Email Recipient:
4. Edit Individual Supplier:

Selecting APR Values

The allowable APR range is controlled by payables discounts administrators to ensure that the APR offered is within program parameters. This prevents offering discounts that aren't beneficial for the company. For example, if your company’s APR on a loan is 6%, the administrator might set the minimum APR at 10% to ensure that discounts are lucrative.

Changing Campaigns

You can't directly change campaigns for existing standing offers. However, you can end-date all active enrollments and create new enrollments using the desired campaign.

Conclusion

Managing supplier discounts through early payment offers is a strategic way to enhance cash flow and build strong supplier relationships. By effectively utilizing site assignments, campaigns, and standing offers, businesses can achieve significant cost savings and operational efficiencies. This comprehensive guide covers the essential aspects of supplier management, from enrolling suppliers to setting APR thresholds, ensuring that you are well-equipped to make the most of these opportunities.

Implement these strategies to streamline your supplier payment processes and optimize the benefits of early payment discounts. By leveraging these tools, you can drive financial efficiency and foster more robust supplier partnerships.

If you need further assistance or want to explore how these strategies can be tailored to your specific needs, reach out to me, Robert Thomas, at [email protected]. I'm here to help you maximize the value of your early payment discount programs and achieve your financial goals.

Oracle SCM Cloud FAQ

What is Oracle SCM Cloud? Oracle SCM Cloud is a comprehensive suite of applications designed to streamline and enhance supply chain operations. It encompasses modules for planning, procurement, manufacturing, logistics, inventory, and order management.

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What are the key steps in implementing Oracle SCM Cloud? Implementing Oracle SCM Cloud involves setting clear objectives, engaging stakeholders, providing comprehensive training, and developing a data migration strategy. This structured approach ensures a successful deployment.

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