OTM Settlement Implementation Challenges for 3PL and...

OTM Settlement Implementation Challenges

for 3PL and Others

Anand MadhiraOTM Lead Architect, SRUJAN Technologies, Inc.

Agenda

Key Settlement Functionalities for 3PL

Gaps/Challenges in OTM Settlement Process for 3PL

OTM Requested Enhancements in Finance Module

Workarounds to overcome Gaps & Challenges

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Agenda





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Planning of Order Releases into Buy

Shipments

Assignment of GL Codes to each Shipment Cost

Line

Allocation of Buy Shipment Cost

Lines

Expense Accruals Generation &

Integration with AP System

Standard Invoice Creation

Invoice Consolidation

Invoice Approval & Tolerance

Check

Voucher Generation

Voucher Integration with

AP System

Voucher Status Update from AP

System

Credit Note Invoice Creation

(If Required)

Credit Note Voucher Creation

& Integration

Freight Settlement Key Functionalities

Shipment Delivered Invoice Creation Voucher Creation Payment to SP

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Creation of Sell Shipments

Assignment of GL Codes to each Shipment Cost

Line

Allocation of Sell Shipment Charges

Revenue Accruals Generation &

Integration with AR System

Standard Bill Creation

Bill ConsolidationBill Approval &

Tolerance CheckBill Integration with AR System

Bill Status Update from AR System

Supplementary Bill Creation (If

Required)

Supplementary Bill Integration with AR System

Final Bill Payment Status from AR

System

Customer Billing Key Functionalities

Shipment Delivered Bill Creation Payment from Customer

Agenda





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Gaps/Challenges in Settlement Process for 3PL

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Gap/Challenge1 Description:

Creation of Invoice at different levels such as per Booking, Container, Voyage, Accessorial

Code & Shipment Cost Line in a Buy Shipment as per the physical invoice copy received

from the Service Provider’s.

Business Requirement:

3PL will receive physical copy of invoices through mail from the service provider’s and most

of the service provider’s sends the invoice at different levels (i.e. Invoice per

Booking/Container/Voyage/Accessorial Code) at which they expect 3PL to match, validate &

pay at the same level.


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Business Scenario:

3 FCL Buy Shipments created (having same voyage no) from 3 Order Releases.

Each of these shipments having 3 Shipment Cost Lines (OCF – Ocean Freight, BAF –

Bunker Adjustment Factor & CAF – Currency Adjustment Factor).

Service Provider sends one invoice for OCF per voyage to 3PL (Via Email).

In this case, users need to create one invoice for all the 3 OCF shipment cost lines and then

match and validate the cost with received copy of invoice and then generate the voucher for

further payment processing.


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Creation of Bill at different levels such as Booking, Container, HBL, Voyage & Per

Accessorial Code in a Sell Shipment as per the customer’s specific profile.


Greater flexibility have been given by 3PL to the customers to have their own billing profile in

which they will specify at which level they want 3PL to send the bill to them.

While creating bills in OTM, system need to check the bill level in profile based on the

customer and then create those many bill/bills.


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Business Scenario:

SDD CFS POL POD CFS SDD

First Mile Last MileOcean Shipment (Primary)

SDD SDD

1 Sell Shipment (Primary) having Origin Trucking, Freight & Destination Trucking Charges

Buy

Sell

Gaps & Challenges in Settlement Process for 3PL

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Business Scenario:

2 Bookings received from NIKE customer having 20 CBM each.

1 Sell Shipment created for 2 bookings

Booking Header

Booking IDPort of Loading

Port of Destination

Source Location

Destination Location

Total Volume

Volume UOM

Total Weight

Weight UOM

Shipper Code

Customer Code BTP

BKG_1 SIN LAX SIN_CFS LAX_CFS 20CBM 1000KG SHIPPER_1 NIKE NIKEBKG_2 SIN LAX SIN_CFS LAX_CFS 20CBM 1000KG SHIPPER_1 NIKE NIKE

Shipment Charges

Shipment IDService Provider Bill-To Party Volume

Volume UOM Weight

Weight UOM Charge Code Unit Rate UOM Quantity Cost

SHIPMENT_1 APLL NIKE 40 CBM 1000 KG OTRU 10 USD MILE 100 1000 USD

SHIPMENT_1 APLL NIKE 40 CBM 1000 KG OCF 1200 USD CTR 1 1200 USD

SHIPMENT_1 APLL NIKE 40 CBM 1000 KG BAF 200 USD CTR 1 200 USD

SHIPMENT_1 APLL NIKE 40 CBM 1000 KG CAF 100 USD CTR 1 100 USD

SHIPMENT_1 APLL NIKE 40 CBM 1000 KG DTRU 15 USD MILE 120 1100 USD


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Business Scenario:

NIKE customer wants bills to be created & issued per booking level as specified in the billing profile. So now

system needs to create 2 bills (one per booking for NIKE) in this case.

OTM Bill Per Booking (BKG_1)

BILL ID Bill-To Party Charge Code Charge Code Description Unit Rate Rate Amount Total BILL Amount

BILL_1 NIKE OTRU ORIGIN TRUCKING 10 USD 500 USD

2150 USD

BILL_1 NIKE OCF OCEAN FREIGHT 1200 USD 600 USD

BILL_1 NIKE BAF BUKER ADJUSTMENT FEE 200 USD 100 USD

BILL_1 NIKE CAFCURRENCY ADJUSTMENT FEE 100 USD 50 USD

BILL_1 NIKE DTRU DESTINATION TRUCKING 15 USD 900 USD

OTM Bill Per Booking (BKG_2)

BILL ID Bill-To Party Charge Code Charge Code Description Unit Rate Rate Amount Total BILL Amount

BILL_2 NIKE OTRU ORIGIN TRUCKING 10 USD 500 USD

2150 USD

BILL_2 NIKE OCF OCEAN FREIGHT 1200 USD 600 USD

BILL_2 NIKE BAF BUKER ADJUSTMENT FEE 200 USD 100 USD

BILL_2 NIKE CAFCURRENCY ADJUSTMENT FEE 100 USD 50 USD

BILL_2 NIKE DTRU DESTINATION TRUCKING 15 USD 900 USD


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GL Code Assignment for Invoice/Bill Objects.


In day to day business of 3PL, there will be many bills/invoices created. Operations will have

ad-hoc/missing charges but not added in shipment and also sometimes 3PL receives actual

invoice from carrier with additional cost which is not part of original shipment.

So in this case Ops user's will add new line items in Bill/Invoice to accommodate these ad-

hoc/missing charges. After the line item is added they require GL Code to be auto assigned

to the newly added line items.


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Allocation of newly added line items in Invoice/Bill.


Once the Invoice/Bill is paid, 3PL wants all the line item costs/charges to be allocated back to

the related booking lines (order release lines) as there may be line items which are added

directly into the Invoice/Bill due to the last minute ad-hoc or missing costs/charges.

This allocation is required to generate the margin view report at different levels using the

allocation data from buy/sell shipment & invoice/bill objects in order to compare the expense

incurred vs the revenue generated.


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Population of Line Items in Parent Invoice/Bill.


In day to day business of 3PL, there will be many standard invoices/bills will be created.

These invoices/bills will consolidated as per the business needs every day which means

there will be many parent invoices/bills will be created having more no of child invoices/bills

associated to it.

In Parent Invoice/Bill, users require line items to be populated which are grouped by unique

Cost Type & Accessorial Code of all related line items of child invoices/bills. This will provide

users a single place to review the grouped charges instead of going through multiple child

invoices/bills line items to review.


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Business Scenario:

Creating consolidated bill/invoice using 2 Standard Bills/Invoices having same service

provider and system should create Parent Bill/Invoice by grouping charges based on unique

Cost Type and Accessorial Code as shown in the below diagram.

Agenda





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Requested Enhancements in Finance Module

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Below are the Enhancements released by Oracle as requested to fulfil the

challenges faced in one of the 3PL implementation.

New Agents Events added for Invoice & Bill Objects in OTM v6.3.5.

New Auto Assign Type ID’s added for Invoice & Bill Objects in OTM v6.3.5

Split Invoice/Bill Functionality has been added in OTM v6.3.7

Note: Above enhancements provided more flexibility and also made the settlement

process in Finance Module more user friendly for 3PL and other industries.

Requested Enhancements in Finance ModuleNew Agents Events added for Invoice & Bill Objects in OTM v6.3.5

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Challenge Faced:

In day to day business of 3PL, operations will have last minute ad-hoc/missing charges to be added in

Invoice/Bill due to the many business reasons where they will add new line items in Invoice/Bill or modify the

existing line items to accommodate these ad-hoc/missing charges. After the line item is added/modified they

require a workflow to be execute as per the business rules.

How it was Addressed?

By using the below 4 new agents events, the above challenge has been addressed using OOTB solution to

raise an agent and execute workflows whenever Invoice/Bill Line Items are Added/Modified/Deleted.

Requested Enhancements in Finance ModuleNew Auto Assign Type ID’s added for Invoice & Bill Objects in OTM v6.3.5

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Challenge Faced:

3PL wants to derive finance related fields such as Control Entity, Cost Centre etc.., by looking up different

field values exists within the same object for each Shipment Cost Line, Invoice & Bill Line Item whenever the

respective record is created.

The issue here is today users cannot utilize the Auto Assignment functionality to insert these financial values

as remarks/refnums in the shipment cost and invoice/bill line items respectively.


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Below are the three new auto assign types provided in OTM v6.3.5 in order to address the challenge

mentioned before. Now by using this fix financial codes can be easily auto assigned based on certain

parameters at shipment cost level as remarks & invoice/bill line item level as refnums.

SELL_SHIPMENT_COST_REMARK

INVOICE_LINEITEM_REFERENCE_NUMBER

CUSTOMER_BILL_LINEITEM_REFERENCE_NUMBER


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Setup done as shown below:


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Setup done as shown below (Cont..,):

Requested Enhancements in Finance ModuleSplit Invoice/Bill Functionality has been added in OTM v6.3.7

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Challenge Faced:

Creation of Invoice at different levels such as per Booking, Container, Voyage, Accessorial Code & Shipment

Cost Line in a Buy Shipment as per the physical invoice copy received from the Service Provider’s.

Creation of Bill at different levels such as Booking, Container, HBL, Voyage & Per Accessorial Code in a Sell

Shipment as per the customer’s specific profile.


This functionality of splitting invoices/bills helped in addressing the challenge partially as some of the service

provider’s and customer’s do required invoices/bills at accessorial code & shipment cost line level.


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Setup done as shown below:


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Setup done as shown below (Cont..,):

The split rule gid added as a new parameter to the following processes,actions,agents & parameter setGenerate All Auto-Pay Invoices Shipment Action - Create Invoice Agent Shipment – Create Bill

Generate Bills Parameter Set Agent Shipment – Generate Invoice

Requested Enhancements in Finance Module

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Below are the Enhancements raised to Oracle (yet to be considered for

release) to fulfil the gaps & challenges faced for 3PL implementation using

complete OTM OOTB features.

Creation of Invoice/Bill per Order Release Line Allocation Record.

Extension of the GL Code Assignment Functionality to Invoice/Bill Objects.

Population of Line Items in Parent Invoice/Bill.

Agenda





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Gap/Challenge 1 Creation of Invoice at different levels such as Booking, Container, Voyage & Per Accessorial

Code in a Buy Shipment as per the physical invoice copy received from the Service

Provider’s.

Workaround Solution After the Buy Shipment Costs are allocated back to order release lines then using agent

workflow system will call stored procedure to create standard invoice per each order release

line allocation record.

Using Invoice finder set, users will manually search and select the records to create parent

invoice as required.

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31 | APL LOGISTICS CONFIDENTIAL


Freight Settlement Process Flow used in one of the 3PL Implementation:Allocation of Buy

Shipment Cost to ORL

Stored Procedure:

Invoice Creation

Service Provider

Manual Generation of

Parent Invoice

Ops User

Invoice Approval AP System

System triggers the agent workflow after the allocation to create standard invoice

Physical Invoice Copy

Create Parent Invoice as per the

invoice received from the service provider

Voucher Generation Integration with AP System


Freight Settlement Process Steps used in one of the 3PL Implementation: Allocation

o Allocate Buy Shipment (One Per Container Per Service Provider) Costs back to Order Release Line Level (ORL – Booking Line).

Invoice Creationo Auto Creation of Standard Invoice for each Allocated Order Release Line Record.

Consolidate Invoiceo Consolidate the Standard Invoices manually as per the physical invoice copy received from

Service Provider.

Invoice Approvalo Approval of the Parent Invoice by the authorized user.

Integrationo Voucher gets generated after the approval and sent to finance system through integration for

further processing.

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Workarounds to overcome Gaps & ChallengesOTM Invoice Header Screen

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Invoice Header level details will be displayed in this section copied from related child invoices

Invoice Line Items will be displayed in this section which are grouped from the selected child invoices

Refnums & Remarks will be displayed in this section which are copied from related child invoices/shipments


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OTM Invoice Line Item Screen

Invoice Line Item details will be displayed here having grouped cost values as per the service provider invoice copy.

Financial details will be displayed here which will be used by AP system for accounting purposes.

Refnums & Remarks will be displayed in this section which are copied from related child invoice line items/shipment cost lines.


Gap/Challenge 2 Creation of Bill at different levels such as Booking, Container, HBL, Voyage & Per

Accessorial Code in a Sell Shipment as per the customer’s specific profile.

Workaround Solution After the Sell Shipment Charges are allocated back to order release lines then using agent

workflow system will call stored procedure to create standard bill per each order release line

allocation record.

Using Bill finder set, users will manually search and select the records to create parent

invoice.

System will then call stored procedure through agent workflow to create parent bill as per the

customer specific profile.

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36 | APL LOGISTICS CONFIDENTIAL


Customer Billing Process Flow used in one of the 3PL Implementation:Allocation of Sell

Shipment Charges to

ORL

Stored Procedure:

Bill Creation

Ops User

Search for Standard

BillsBill Approval

AR System

System triggers the agent workflow after the allocation to create

standard bill

Bill IssuanceIntegration

with AR System

Search for Standard Bills to create Parent Bill as per the customer specific profile.

Stored Procedure:

Parent Bill Creation


Customer Billing Process Steps used in one of the 3PL Implementation:

Allocation

o Allocate Sell Shipment Charges (One Per Container Per Shipment) back to Order Release Line Level (ORL – Booking Line).

Bill Creation

o Auto Creation of Standard Bill for each Allocated Order Release Line Record.

Consolidate Bill

o Consolidate the Standard Bills semi-automatically as per the customer specific profile.

Bill Approval

o Approval of the Parent Bill by the authorized user.

Integration

o After the approval, bill will be send to finance system through integration for further processing.

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Workarounds to overcome Gaps & ChallengesOTM Bill Header Screen

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Bill Header level details will be displayed in this section copied from related child bills

Bill Line Items will be displayed in this section which are grouped as per the customer profile

Refnums & Remarks will be displayed in this section which are copied from related child bills/shipments

Involved Parties related to bill will be displayed in this section which are copied from child bills/shipments


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OTM Bill Line Item Screen

Invoice Line Item details will be displayed here having grouped charges as per the customer profile

Refnums & Remarks will be displayed in this section which are copied from related child bill line items/shipment charge lines.


Gap/Challenge 3 GL Code Assignment for Invoice/Bill Objects.

Workaround Solution After the new line item has been added in invoice or bill objects then system will fire an agent

workflow listening to event called “INVOICE - LINE ITEM ADDED OR REMOVED” to find out

the GL Code from the GL tables using the accessorial code of the newly added line item.

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Gap/Challenge 4 Allocation of newly added line items in Invoice/Bill.

Workaround Solution Invoices/Bill Line Items will be allocated back to the related booking lines (using agent

workflow by calling the stored procedure) based on the level at which they were created after

the invoice/bill gets paid.

Note: This functionality is required in order to generate the profit margin report at different levels

(i.e. Booking, Container, Voyage etc..,) to compare the Expense Incurred vs Revenue

Generated.

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Gap/Challenge 5 Population of Line Items in Parent Invoice/Bill.

Workaround Solution After the parent invoice/bill is created, using agent workflow system will call stored procedure

to populate the line items into the parent invoice/bill by consolidate the line items from the

related child invoices/bills.

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www.srujantechnologies.com

www.srujantechnologies.com

Anand Madhira

[email protected]

+91 966 – 677 – 7598

OTM Settlement Implementation Challenges for 3PL and...

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