Finance process. Taking advantage of R6 Accounts Receivable and Collection Management to maximize revenue and cash flow. R6 Functional Overview

R6 Functional oveRview

products customers orders billing finance

Finance process

Taking advantage of

R6 Accounts Receivable and Collection Management

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Table of Contents

1. Infonova Finance ... 3

1.1 R6 AR Functionality ... 3

1.1.1 Payment Management Service... 5

1.1.2 Receivables Management Service ... 6

1.1.3 Payment Channel Management Service ... 7

1.1.4 Transmission Management Service ... 8

1.1.5 Reporting Management Service ... 8

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1.

Infonova Finance

Many companies in today’s telecommunications world rely on unwieldy, outdated Financial Management Systems that are not automated, not integrated, and severely inflexible. These inefficient systems are one of the main causes for high operating costs, dissatisfied customers, reduced profits and depressed cash flows. Financial management is responsible for managing financial aspects of a company like Financial Planning, Auditing and Accounting Operations as Accounts Receivable, Accounts Payable, General Ledger, Balance Sheets and Payroll.

Infonova has developed R6 Accounts Receivable to cover the receivable management processes for a Mass Market customer base. Highly integrated functions and processes need to be introduced to provide market leading Accounts Receivable capabilities, to minimize bad debt and maximize revenue opportunities, whilst harnessing customer information to support a self service philosophy.

R6 AR is a fully integrated system that manages the entire lifecycle of a customer order all the way through invoices, statements and collection issues. It addresses the need to improve customer retention and delinquency and charge-off rates, while reducing costs. Infonova R6 Accounts Receivable provides numerous benefits:



Cost reduction through high degree of automation and efficiency



Advanced customer service

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Gain visibility into key metrics



Customer retention and loyalty



High efficiency and time reduction

1.1

R6 AR Functionality

R6 Accounts Receivable (A/R) is the core of the financial management system. Its central purpose is to reconcile payments to invoices, and to trigger collection processes where applicable. The Accounts Receivable component triggers or receives payments, handles payment-reversals or payment-dishonours, triggers refunds, and assigns payments to customer accounts and invoices.

The R6 Accounts Receivable process is initiated, when a customer receives an invoice for payment. The process includes managing and validating payments, debiting and crediting customer accounts, balance management, reconciliation, and reporting. Infonova R6 AR interacts with various internal and external system components like R6 CRM and R6 Invoicing. For example, Accounts Receivable receives invoice data from Billing, and payments from the customer through various payment channels.

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Accounts Receivable

Infonova R6

External Systems

Billing

Transmission Management Payment Channel Management GL Reporting Management Payment Management Receivables Management General Ledger

ImpEx

Collection

Vendor PaymentChannel Gateway Credit Card (Client)

Database Replication

Figure 1 - Accounts Receivable Data Flows

For payment methods like direct debit via bank-transfer or credit card, Accounts Receivable manages and triggers payment transactions. R6 AR supports debit or credit transactions outside the normal billing or payment process, such as disputes. It is the source of truth for customer’s balances. Therefore, it manages the balance information required by Collections (external) and reports receivables information to the General Ledger System. In this way Accounts Receivable functions as a sub-ledger of the General Ledger System.

Billing is the owner of the customer accounts and holds all relevant service information. It sends invoice data as well as credit notes and discounts to accounts receivable and

Collections Management. In turn accounts receivable provides an accurate balance for each account to billing. This is a critical process, especially for pre-paid or credit limited products or services.

R6 does not include General Ledger functionality. Accordingly R6 Billing accumulates and reports billing and revenue information to external General Ledger Systems such as SAP. R6 AR also passes summarized receivables data to the external General Ledger System.

R6 AR offers the capability to interface with various payment channels. This includes realtime interfaces, e.g., Credit Card Payment Gateway as well as file-based interfaces, e.g., Bank, Partners.

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Figure 2 - Accounts Receivable - Financial Transactions R6 AR holds the following services:

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Payment Management Service



Receivables Management Service



Payment Channel Management Service



Transmission Management Service



Reporting Management Service

1.1.1

Payment Management Service

R6 AR has a payment management service, responsible for the assignment of payments and contra-payments (dishonors, reversals, refunds). It also triggers refunds, outbound payments and pre-authorization:

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

Assignment of payments to contra-payments

Incoming contra-payments are assigned to existing payments. If no matching payment can be found, the contra-payment is assigned to the default account (if a matching payment comes in later, it is assigned automatically).



Triggering of refunds

For each refund request, a refund order is created and processed asynchronously. As soon as the refund order is authorized, the information is sent to Payment Channel Management for further processing via the correct outbound payment channel. If the order is acknowledged successfully by the external payment channel (e.g., for credit cards this happens immediately), the refund is assigned to the original payment as contra-payment. If it fails, AR offers the capability to switch the payment channel (e.g., from credit card to cheque) and retry it.

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Triggering of pre-authorizations

To avoid frauds R6 AR uses pre-authorizations to check whether a customer’s bank account exists and, optionally, if it is covered. This can either be verified via a credit card pre-authorization (if applicable), or by transferring a small amount of money to check whether the bank account exists.

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Triggering of one-off payments (manually or via outbound payment channel)

Payment Management allows to trigger payment orders for once off payments (usually initiated by the front end, e.g., for credit card payments). These orders trigger outbound payment requests to external systems (synchronously (e.g., credit card gateways) or asynchronously (e.g., bank)). On failure highly complex retry scenarios for synchronous payments are provided (e.g., voiding of payments if state is unclear, multiple retries, switch from void to refund after specified time span, system-down mode…)

1.1.2

Receivables Management Service

Receivables Management is responsible for the assignment of payments to invoices, management of adjustments, floating adjustments, disputes, write-offs, debt sales as well as the management of direct debit arrangements and the triggering of direct debit payments. Receivables Management holds the following features:



Assignment of payments to invoices

In order to maintain correct account balances, R6 AR assigns incoming payments to invoices by the rule “oldest first”. If a payment cannot be fully matched, it is split. Thus, one payment may be matched to multiple invoices, while one invoice can be assigned to multiple payments. Payments are not matched against adjusted and disputed parts of invoices, only against the reduced amounts that have to be paid. During the matching process, invoice and account balances are updated.

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

Management of adjustments, floating adjustments, disputes, write-offs and debt

sales

Incoming adjustments may decrease or increase the effective amount (usable for payment matching) of an invoice. In the first case, payment parts may have to be unmatched if the total sum of assigned payments exceed the invoice charge sum, reduced by the adjustment. If the credit sum of an incoming invoice exceeds the debit sum or if the invoice balance becomes negative due to a negative adjustment, a financial transaction called floating adjustment is created. This transaction may be matched to other invoices as adjustment in order to allow the customer to fully exploit the credit he received.

Disputes on invoice charges are replicated to R6 AR where they reduce the assignable invoice amount. If a dispute is resolved in favor of the operator a payment for this amount will automatically be allocated to the next invoice. R6 AR supports the write-off of invoices (partially or fully) as well as write-off reversals. This information is reflected in the relevant GL reports. Additionally the sale of a debtor to an external debtor’s agency is supported. The selling amount is reflected in the relevant GL reports. Payments coming in after an account has been sold are automatically forwarded to the agency (as a cheque refund).



Management of direct debit arrangements

R6 AR allows an end-customer via WebAC or Customer Self Management to set up, cancel, modify and suspend direct and flexible Direct Debits. To check a customer’s bank account R6 AR triggers automated pre-authorizations, when Direct Debits are set up, or payment methods are modified.



Triggering of direct debit payments

R6 AR is capable of determining when a Direct Debit payment is to be triggered. This trigger may depend on the direct debit type (Direct Debit, Flexible Direct Debit), the account balance, and the amount that has already been debited since the last

invoice. Direct Debit payment requests are sent to the bank (for bank account based Direct Debits) or to a credit card gateway.

1.1.3

Payment Channel Management Service

R6 AR supports various payment channels like bank transfer, cash payment, phone self service or online self service. To make all those incoming and outgoing data readable R6 AR supplies a payment channel management service that transforms each kind of data into an appropriate format.

Payment Cannel Management holds the following features:



Transformation of incoming data

After incoming payment information is made protocol independent by Transmission Management it is brought to a form common for all payment channels. This is done by cutting off all data specific for one payment channel (e.g., Post office

information). The data is then posted as financial transactions to the Payment Management where it is processed.



Transformation of outgoing data

All requests for outgoing transactions (once-off payments, refunds, direct debit payments) are transformed by Transmission Management to a form readable by the protocol of the specific payment channel that is used (e.g., file format, credit card gateway protocol..).

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

Credit card scenarios

Due to the complex nature of credit card gateway interaction, Infonova R6 AR includes a comprehensive error handling. This service covers all possible error paths including a system-down mode to avoid unnecessary system load, voiding of

payments with undefined states, automated switching from void to refund, retries until a defined state is reached, etc.

1.1.4

Transmission Management Service

R6 AR provides a transmission management service. It is responsible for handling all protocol-specific processes required to transmit data via payment channels, and the assignment of acknowledgement files to their original files. Transmission Management holds the following features:



Handling of incoming file data

Incoming files are processed by ImpEx which calls file specific file handlers. These call Payment Channel Management after cutting off all data that is not required there.

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Handling of outgoing file data

Outgoing file data is prepared and queued by Payment Channel Management. Transmission Management adds data specific for the file format (e.g., constant values) and prepares data structures for the corresponding ImpEx handlers that send the files out.



Credit card gateway protocol handling

Usually each specific credit card gateway offers its own protocol (e.g., based on a generic client, SOAP…) to trigger payments, refunds and/or voids. To hide these protocol specific details from the inner parts of the system, Transmission

Management completely encapsulates them.

1.1.5

Reporting Management Service

To maintain a high level of transparency, R6 AR offers a reporting management service. This service is grouping all data needed for reports, generating the corresponding General Ledger, aged debtors and aged disputes reports, and the financial transaction history overview. Reporting Management holds the following features:



General Ledger report generation

R6 AR provides daily General Ledger receivables reports that contain financial transactions, write-offs and debt sales grouped by creation date, settlement date or data batch (e.g., per file). The supported output format is currently MS Excel.



Aged debtors/aged disputes report generation

R6 AR provides standard aging reports. These reports are grouped by aging buckets and user groups, one containing the aging of outstanding invoice amounts (aged debtors report), the other containing the aging of open disputes (aged disputes report). Both reports are available on account level as well.

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1.2

R6 Collections Management

R6 Collections Management covers all processes from dunning to collections to the point of write-offs and closing accounts depending on A/R and customer management. Collections Management handles customers, which do not pay their invoice in time. If the customer has an overdue balance the account is managed in a collections handling process. Collections management includes all processes affiliated to accounts receivable with the possibility to trigger various actions over a time period. The system administrator has the possibility to define a strategy path by defining collection management rules.

The collections system holds detailed account balances from accounts receivable and uses this information to initiate and manage a collections process or strategy path to activate payment. In this context the system provides the capability to configure each dunning path, enabling flexibility in timing and type of activities in that dunning path (customer e.g. receives first payment notification after 60 days per mail and the second notification after 90 days per mail). These notifications are sent using R6 Notification Management.

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Truly Transformational Solutions

Infonova was founded in 1989 and delivers highly automated IT solutions for Telco, Media & Convergent as well as Utility companies. Infonova’s BSS solutions have been implemented for incumbent, attacker and cable operators supporting triple & quadruple play service portfolios.

Encapsulating decades of knowledge, Infonova’s latest BSS product, Release 6 is a fully J2EE concept to cash platform that supports real multi-tenant concept to cash operations for fully convergent and complex business models.

To learn more, visit our Web site at www.infonova.com. Contact