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Meaning of Collection:- When money owned by the customer in exchange of goods or services that have been
delivered or used, but not yet paid.
Or we can say in simple words collection is to collect money from customers for invoices, which getting due for
payment as per defined payment terms.

Role of Collector:- In Flex, collector plays an important role because this is the person who have to deals with
site, Customers, and GBS team.

Role of collector is to collect money from customers, if any issues highlighted by the customer then collector
has to coordinate with site and GBS team to solve the issues and agrees customer to pay for the invoices.

How Collector Works:- The work of collector starts on past due invoices and the invoices which are getting due
simultaneously on issues with the past due/ current invoices. Here collector have to send SOA to the customer
and check the payment status for due and overdue invoices. If any pricing, Quantity, RMA, issues are there with
the invoices then collector has to solve the issues with the site Program team.

CPD:- CPD is the customer profiling document which is updating by the collector. In CPD we can find all the
details of customer like, site name, Sub Mep name of site, Baan company #, Triangular Billing, Invoice #,
Invoice date, Due date, Currency, Amount, Invoice submission modes, customer AP contact name and number,
Customers bank, Flex bank in which customer is paying, details of site (Program team, Controller, GM, Program
Director, GAM, BDM) etc.
Aging Report:- In aging report we can find all open invoices with CN/DN/ Misc. billings/ RMA. Aging report is the base
report on which collector works.

Days Due and Buckets:- Days due we can say if we consider todays date for reporting then days due will be
calculate as of todays date- due date = days d
Buckets is defined as number of days of an outstanding invoices. It is an standard format which flex follows to segregate the
aged invoices and current due invoice. There are certain types of buckets under which invoice falls as per their due dates.
-13 to -7 :- Under this bucket all invoices will come which is due in next two weeks. This we can say it is not overdue but it
can be due in next two weeks. (-7,-8,-9,-10,-11,-12,-13)
-6 to 0:- Under this bucket all invoices will come which is due in one week. (-6,-5,-4,-3,-2,-1,0)
1 to 5 :- Under this bucket all invoice will come which is due but they are not past due. For e.g. If we consider Fridays date
(5th feb 2016) for reporting and our invoice is due on 2nd of feb 2016 then it will comes under 1 to 5 bucket. The calculation
of PD is based on after five days of grace period. Suppose our invoice is due on 2nd Feb 2016 so after 2nd Feb we can add
five more days as grace period i.e. up to 7th of Feb. If invoice will not paid by customer up to 7th feb then it will fall under
6+ days:- This buckets includes all below buckets. In short we can say all invoices which comes under this bucket
invoices high risk and threat to collect money. All invoices of this buckets are past due invoices.
PD Calculation:- 6+ PD *100Total AR
Receivables Terminology

Delivery Order:- Delivery order is an document from a seller/ Shipping Team which instructs to release the shipment to the
buyer.(Customer contact person)
Proof of delivery:- Proof of delivery is a receipt which is showing the date and place of delivery to customer, Shipment id, Quantity,
Unit price, and on that receipt customer chopped and signed the document as a proof that they received the goods.
Packing slip:- Packing slip is a cross check document which is done to cross verify the orders quantity and the lists quantity shipped.
It is a three-way match for payment approval with a Purchase Order and invoice.
GRN:- GRN is called as Goods receipt note which is issued by buyer at customers end that goods has been delivered. No customer
will make payment unless and until GR is to be done in their system.
Below is the diagrammatical representation of how Flex AR team working on GRN issue.
RMA:- RMA is known as return material authorization where customer buyer returns the goods for defective goods or ordered
product not delivered. Customer buyer mentioned RMA # for that particular shipment returned by the buyer. In RMA / RSO Flex AR
team have to issue credit note to customer. Customer will provide a debit memo to flex which will be taken as credit against for open
Credit note issue on the following cases: -
Unit price overcharged or over billed
Goods short shipped
Faulty goods return or goods rejected by customer
Product wrongly shipped
Adjustment to be made after invoice is issued
Part # and Item codes:- is an unique identification of product code or product# used by company to identify the product.
Hub:- Hub we called as warehouse where Flex stored their goods to easily facilitate customer to pulling the goods whereas needed.
EFX:- EFX is an known as exposure management is an automated system in BAAN that allows to manage the exposure level of
customers within a predefined Credit limit and to reduce the risk of over-exposure with a customer. This tool blocks customer activi
automatically when exposed.
EFX happened in the below cases:-
Credit limit exceeds with past due
Credit limit exceeds without past due.
CMF:- Customer Maintenance Function this teams is responsible for creating and setting up customer in the ERP. Like sold to busine
partner, payment terms, address, contact number.
How to do follow up with customer

Analyze customer:- Firstly collector has to analyze their customer whether they want to make payment or not/Customer
delaying payment due to their financial condition/ Deliberately delaying the payment.
SOA:- It is a statement of account which is send by collection analyst to their respective customer. Based on SOA Customer
confirm the payment status on the same.
We can get three response from customer as below:-
Response with payment date
No Response
Response with Dispute.
Dispute: and Action taken by Collector

GRN issue: If GR# is not done in the buyers i.e. customers system then customer will not release any payment for that
particular invoices which are in GR issue and confirm s AR collector that they will not release payment.

Actions:- Collector have to check with PM team that GRN has been done in the buyers system or not if its done then
check and confirm with customer buyer to inform Customer AP team to release payment.
Incorrect Price/ Quantity/Part: If customer confirms to the collector that in the invoice the quantity/ unit price/
PO#/incorrect entity name/Bill To- Ship To address is not matching which the PO copy and they will not release the
payment until and unless they receives correct invoice.

Action:- Collector have to check with PM and ask them to provide PO copy for that invoices then if the details of PO copy
and on the invoice not matching then Collector ask PM team to reissue the manual invoice with correct details and instruct
PM team to raise RSO for the original invoices.

Invalid PO:- Same as above collector can cross verify PO copy with PM team because PM team only have PO copy
which is raised by customer, PM will advise and check with customer buyer and resolves the issue.

Cancelled PO:- Collector we have to check with PM team - PM team will advise- Check with buyer
Missing Invoice:- If customer is replying that we not received invoices then collector has to check with invoicing team to
provide us sending date. If possible we can attached sent email which invoicing team sent to the customer or while sending
SOA we can add one column of invoice sending date.
RMA :- In RMA case the collector have to check with PM team for RMA credit note once the goods received in our
Received Payment
Short Paid:- when customer release not full payment against the invoices an paid as short and taken deduction against credit
note. E.g. (Invoice is for $100 and customer released only $50 and taken $50 as deduction against credit note.)
Deductions:- Same as above E.g.
Wrong Bank:- When customer released payment in wrong bank then collector has to instruct cash application team to do
CTR to transfer into correct bank.
Cheque Payment:- Here collector have to check with customer what are the modes of payment they are having if for e.g.
cheque payment affects our 6+ then we will request customer to change the mode of payment to Wire payment. If customer
not ready then collector have to inform site people (GAM) to convince customer.
Invoice missed in payment run:- In this we will take help from PM team to check with customer and make special payment as
invoices are missed in payment. (This is the case where customer confirm to make payment but missed some invoices to pay)
Over paid:- When customer makes excess payment for a particular invoices. So for the excess amount the collector have to
park as UAC (-)
No RA:- When payment is released by the customer but unable to identify for which invoices customer makes payment then
collector have to send email to the customer for requesting RA.
Shared Payment:- If the customer is common in 2-3 collectors and customer released payment then at that time all collector
have to coordinate and confirm their portion.
AP-AR Net-off:- AP-AR net off is supplier cum customer. Where we have to received payment and we are also liable to pay
Preparation of RA :- Once the payment recognize by the collector the next step is to prepare RA and send it to cash applicator
for purging.

Credit Review:-

It is done by CMF Team. On the basis of survey below three categories are decided.

1) Credit Rating Every Company is given rating as per its market performance or credibility. Ratings are as follows .

A, B, C These ratings are considered as Good

D, F - These ratings are considered as Risk.

2) Credit Limit As per customers rating Credit Limit will be decided. Limits will be decided by segment VP. It is not only
decided by VP, it is the corporate and the Credit team involved in taking decisions.

3) Credit Terms As per customers confirmation Flex sets certain days of time limit for customer to pay off the dues
(credit). Credit terms for Flex are as follows

N30, N40, N45, N60 .. (For A, B, C rating customer)

For D & F Rating Customer

Cash In Advance (CIA) Payment is received prior to the transfer of ownership of the goods.

Cash With Order (CWO) Payment is made at the time of order.

Cash On Deliver (COD) Payment is made on delivery

INCO Terms :- this should have been explained as- for taking the ownership of risk of shipment/ transferring the
ownership of risk on based of INCO terms and then the examples of INCO terms are as below-

Ex Works, Freight On Board (FOB), Delivery At Place (DAP), Delivery Duty Unpaid (DDU)
Invoicing Process:-

Types are

1) Manual Creates Debit Note/ Credit Note - for manual adjustments

2) TFX Triangular invoicing (SO posting Sales invoice)
3) Miscellaneous expenses invoices

Invoice Submission Modes:-

1) Hard Copy- due to customer requirement we send them hard copy through courier.
2) Soft Copy
3) Uploading- where customer has a defined portal where we manually input the details of invoice and save it in
customer portal i.e. uploading
4) EDI this is synchronizing customer system and Flex system for transferring the invoice details. A set is up done at
both parties and invoices are sent and processed as per the standard requirement
5) FAX this is E- Fax
Triangular Billing For Nanjing :-

For Triangular Billing three parties comes in picture, these are

Logistic co. , Financial co. and Customer.

1) PO is raised by customer to Financial Baan co. (166,897,870)

2) Financial co. forwards the PO to Logistics co. (137) financial co does not forward the same PO, it re issues the PO
to logistics. Whereas all the details from the PO remain same.
3) Logistics co. manufactures the goods and directly ships the goods to customer end.
4) Billing is done as Logistics bills to financial co. and financial co. bills to end customer.
5) Then customer pays to financial co. and financial co. pays to Logistics.
1) Business group expertise-- Flex deals in below four areas
a)High Reliability Solutions, b)Industrial and Emerging Industries, c)Integrated Network Solutions, d)High Velocity

2) AR Management- Invoicing- Collection- Cash Application- Reporting

Invoicing:- Invoicing is the first and the foremost process. It is done once the manufacturing is completed and
shipment is done.
Collection:- Once invoice sent to the customer the collection team comes in the picture. Collectors have to follow up
with the customers on due or overdue invoices and confirms payment.
Cash Application:- Once the payment received from customer the cash applicator applying it and purge the invoices.
Reporting:- On every Monday collectors have to prepare the report for their respective site , also there is an team who
is publishing the overall status of GBS.

3) O to C process:- order to cash cycle is starts with- Quotation which is advertise by Flex to its customer- PO
raise by customer to Flex- Sales order is created by OM team of flex- Invoice processed- Customer release the
payment- cash application.

4) Triangular Billing:- TFX is an part of invoicing where the customer place an PO to billing company- billing
company resend the PO to logistics company- Logistics company manufactures the goods and shipped to the customer,
but the billing will be from logistics to financial and from financial to end customer .
E.g.:- 809- 135- End Customer.
5) Site:- Site is an location where goods are manufactures.
Site Name(Parent)- Based on the location where entity is situated.(Mech Senai 3 Malaysia 135)
Legal Entity:- Under which the company is registered (Flextronics international Asia pacific ltd)
Baan Company:- Unique number provided to identify the entity. (135)
Mep:- Combination of Parent company and financial company.

Customer Matrix:- this is not customer matrix, it is Flex internal Top Management Matrix for us to reach customer so the title can
be Flex Internal purpose Matrix for customer

PM director

GAM (global
account manager