CUSTOMER ORDERS Technical Field

The present invention relates to a computer-applied method and system for evaluating customer orders particularly in terms of credit and risk and thereby approving or rejecting the related order as a result of this evaluation.

Background of the Invention

Today, a credit and risk assessment process is carried out by almost all companies providing sales service for orders taken from customers. The said process operates with a quite simple logic and companies demand various guarantees from companies to be co-operated for the first time in order to minimize risks. The said guarantees may generally be financial instruments such as letter of guarantee and mortgage. Additionally, a decision can be made about reliability and financial status of a customer by receiving customer inquiry service and a credit limit can be determined for the related customer in accordance with the decision made.

Customers can carry out purchasing transactions from vendors within the related credit limits determined for them. This method, which is mentioned particularly for vendors who release their products to the market through dealers, is practiced as a quite standard trade practice.

In the event that orders of customers having a certain credit limit exceed the said certain credit limit, an approval mechanism is activated in order that the said order is accepted by the vendor. In orders that exceed the credit limit determined for the customer, approval is demanded from authorized persons -namely the related directors of the vendor in general- for these orders via the said approval mechanism. The said authorized persons make a decision of approval or rejection for the said order particularly by examining the financial status of the customer.

In case where a vendor working with a large number of customers, it is a difficult process for authorized persons to know the related customer well among many customers and to make a decision by evaluating his/her financial status and it is also error-prone.

As it is seen, no smart control system is used in the state of the art while companies carry out a quite meticulous inspection in case of a customer to be co operated for the first time according to conditions changing in time and decision of approval or rejection is managed by authorized persons by means of manual transactions for orders exceeding the credit limit.

Financial states of customers may vary adversely or positively in time. Processes such as updating, approving the credit limits of customers for future orders become difficult and error-prone for vendors who do not take into account the change in the financial status of the customers.

Nevertheless, the first practice to be performed by a customer with a bad financial status in order to improve his/her status is to continue to supply the products that s/he has previously supplied, then sell these products and to improve his/her financial status with the income from the sales. Therefore, it is crucial for a customer to be able to supply products so as to improve his/her financial status. Accordingly, in order not to experience difficulty in procurement processes, customers may give incomplete and/or incorrect information in time while they share information about their current financial states with vendors. And this causes vendors to make wrong decision about customers and therefore to make loss because of the said customers. Pace and complexity of daily life prevent companies from taking necessary actions regarding current states of their customers in time. Accordingly, estimating risk status of customers by conducting market survey on a regular basis and integrating this into decision support systems used within the company may be a quite demanding activity. Vendors usually handle collection problems they experience with their customers, by initiating legal action. On the other hand, even if a legal action has been initiated against the related customer, companies may encounter loss of sales in the related period due to the fact that no sound process proceeds.

Today, information systems including customers’ all order history, payment performance data, and other financial data about business done with vendors are used by almost all vendors. However, evaluating any risk appetite about the activity of the vendor that is conducted in the market by using the said data can be scarcely realized.

In methods being used in the state of the art, commonly, each customer of a vendor is evaluated individually and independently from other customers. Under normal conditions, the fact that a customer exceeds his/her defined credit limit in a certain extent for example such as 5% is evaluated such that s/he does not pose a great risk for the vendor. Nevertheless, in the event that all customers of the said vendor exceed their defined credit limits in the ratio of 5%, the risk taken by the vendor increases considerably. Therefore, making a decision according to the risk appetite determined by the company would be a more sound solution by evaluating customers of vendors in connection with each other at least in accordance with certain criteria.

On the other hand, the process that runs for approval of customer orders getting stuck in credit blockage causes loss of sales in vendors. Acting in a controlled way about this matter, vendors extend the requested process for sales confirmation by inquiring the financial status of the related customer in detail in case of any credit limit excess. In such case, even if approval is given for the related customer order later, it may cause the vendor to have revenue loss due to late sales. In addition, the fact the customer contacts another vendor instead of waiting for the related approval process may also lead to loss of customer and therefore loss of sales again.

The Turkish patent document no. TR2014/16125 discloses a system and method for providing invoice-based service to risky customers. The invention disclosed in the said document enables to receive deposit from customers in order to reduce the risk of the order.

The Turkish patent document no. TR2018/16497 discloses a method for following up credit monitoring data of customers, who work on balance-credit, which affect their credit repayment performances based on the data indicating the customer volume of the company; detecting before a certain time that probability of non-payment of receivables -which are called as bad debt- on the basis of an algorithm; and risk assessment in additional credit/balance allocation requests. The invention disclosed in the said document only relates to monitoring payments of the sales made.

Due to all these reasons, there is need for a computer-applied method and system for evaluating customer orders automatically almost without any manual intervention particularly in terms of credit and risk, and thereby approving or rejecting the related order as a result of this evaluation in the state of the art.

Summary of the Invention

An objective of the present invention is to realize a computer-applied method and system for evaluating customer orders automatically almost without any manual intervention particularly in terms of credit and risk, and thereby approving or rejecting the related order as a result of this evaluation Detailed Description of the Invention

“Computer-Applied Method and System for Evaluating Customer Orders” realized to fulfil the objective of the present invention is shown in the figures attached, in which:

Figure l is a flow diagram of the inventive method.

Figure 2 is a schematic representation of the inventive system.

The components illustrated in the figure are individually numbered, where the numbers refer to the following:

1. System 2. Database

3. Server 100. Method

The inventive computer-applied method (100) for evaluating customer orders comprises steps of: detecting current credit limit of customers from whom order request is received (101); comparing the current credit limit detected and the order amount included in the order request (102); if it is detected as a result of the comparison transaction that the order amount included in the order request is equal to the current credit limit detected or less than this limit, approving the order request (105); if it is detected as a result of the comparison transaction that the order amount included in the order request is higher than the current credit limit detected, determining the order risk by using at least the data about the qualifications of the order and the data about the previous order history and the financial movements of the related customer (103); comparing the order risk determined and the parameters of the pre determined company risk appetite (104); if the order risk determined as a result of the comparison transaction is within the parameters of the company risk appetite, approving the order request (105); and if the order risk determined as a result of the comparison transaction is beyond the parameters of the company risk appetite, rejecting the order request (106).

When an order request containing at least customer information, product information requested to be purchased and information about order amount in itself is received from customers, first of all the current credit limit of the customer that is recorded in a database preferably updated at certain periods is detected by using the customer information included in the request (101). Then, the customer’s current credit limit detected and the order amount information included in the order request are compared (102) and if it is detected as a result of the comparison transaction that the customer’s current credit limit is equal to the order amount information or higher than this, the order request is approved (105). If it is detected as a result of the comparison transaction that the order amount included in the order request is higher than the current credit limit detected, the order risk is determined by using the data about the qualifications of the order and preferably the data about the previous order history and the financial movements of the customer from a database wherein the data about the previous orders of the customer are recorded (103). In determining the qualifications of the order, the order request is classified on the basis of parameters such as preferably the amount information of the order, the group information of the related customer, the group information of the product to be ordered. After determining the order risk, the order risk determined is compared with the parameters of the company risk appetite pre-determined by the company (104). The risk transaction parameters determined by the company are recorded in a database preferably updated periodically on the basis of product and/or customer group. The said risk transaction parameters essentially comprise the data about the highest risk that the company wants to take for certain product and/or customer groups depending on the situation of the market. If it is detected as a result of comparing the order risk determined and the risk transaction parameters that the order risk determined on the basis of the qualifications of the order, the previous order history and the financial movements of the related customer is within the risk transaction parameters determined by the company, approval is given for the related order

(105). However, if it is detected that the order risk is beyond the parameters of the risk appetite determined by the company, approval is rejected the related order

(106).

In one embodiment of the invention, the inventive method (100) also comprises the step of notifying (107) at least one pre-determined authorized person about the case in the event of rejecting an order received from the customer (106). In such case, for example an authorized person having a manager duty may decide on whether to approve or reject the non-approved order request by evaluating the order request via manual transactions.

In a preferred embodiment of the invention, the order request information approved by the authorized person is preferably recorded in a database. In this embodiment, the recorded data are processed at certain periods by using machine learning methods and the conditions for approving the order request -which was not approved at the step 106- later are detected and then rules are created in relation to these conditions. These rules created are then recorded in order to be used in non-approved order requests. Thereby, after the order risk created in accordance with the order request received from any customer and the parameters of the company risk appetite pre-determined by the company are compared (104), in the event that the said request is rejected (106) the recorded rules are run and if the related request complies with these rules, the incoming order request is approved. Thus, in other words the said order requests can be approved in accordance with the data about the approved order requests realized by the authorized persons previously without sending the order requests which were rejected (106) as a result of comparing the order risk created at first and the parameters of the company risk appetite pre-determined by the company (104) to any authorized person (107). In this case, authorized persons for example such as director are prevented from wasting time with such transaction.

With the inventive method (100), it is ensured that vendors can classify order requests received from customers on the basis of parameters such as product type that is subject to order, customer group from whom the order was taken, amount of order; transaction of calculating the order risk based on this classification realized and the customer’s previous order and financial history, approving or rejecting the order request based on comparison of the calculated order risk with the risk appetite parameters that are determined by the company on the basis of the classification without any manual intervention, depending on current data of the customer, the market and the vendor. Thereby, companies are substantially prevented from suffering loss based on order by achieving high success in risk estimation by using current data.

The inventive system (1) for evaluating customer orders comprises: at least one database (2) which records the data about the pre-determined parameters for classifying at least one order request received, the data about the previous order history and the financial movements of the customers realized previously and the data about the customer credit limit determined by the company and the parameters of the company risk appetite; and at least one server (3) which is configured to compare the data about the customer credit limit and the order amount information included in the order request by connecting to the database (2) when it receives an order request containing at least customer information, product information requested to be purchased and information about order amount in itself; if it is determined as a result of the comparison transaction that the order amount included in the order request is equal to the current credit limit detected or less than this limit, to approve the order request; if it is determined as a result of the comparison transaction that the order amount included in the order request is higher than the current credit limit detected, to classify the order by using the classification parameter data recorded in the database (2); to determine an order risk on the basis of the classification of the order and the previous order history realized by the customers -who are recorded in the database (2)- previously and their financial movements; to compare the order risk determined and the parameters of the risk appetite recorded in the database (2); if the order risk determined as a result of the comparison transaction is within the parameters of the company risk appetite, to approve the order request; and if the order risk determined as a result of the comparison transaction is beyond the parameters of the company risk appetite, to reject the order request.

In a preferred embodiment of the invention, the server (3) is configured to run a computer-applied method (100) for evaluating the above-mentioned customer orders.

In the database (2) included in the inventive system (1): the data about parameters for example such as amount of order, customer group, product group which are pre-determined for classifying at least one order request received; the data about the previous order history and the financial movements of the customers realized previously; and the data about the customer credit limit determined by the company and the parameters of the company risk appetite containing the information of the highest risk that the company can provide depending on the current market situation, certain product groups, certain customer groups, order amounts are recorded. In one embodiment of the invention, the database (2) is configured to be managed and updated by the server (3). By updating the data recorded in the database (2) at certain periods, it is ensured to keep the data updated and to make more sound decisions. In an alternative embodiment of the invention, the inventive system (1) can be configured such that the data about parameters for example such as amount of order, customer group, product group which are pre-determined for classifying the order request are recorded in one database; the data about the previous order history and the financial movements of the customers realized previously are recorded in another database; and the data about the customer credit limit determined by the company and the parameters of the company risk appetite are recorded in another database.

The server (3) included in the inventive system (1) is in communication with the database (2) and it is configured to manage the database (2) by means of transactions such as reading the data in the database (2); processing data by extracting; deleting, changing data; or entering new data. When an order request including at least customer information, product information requested to be purchased and information about order amount is received from the customer; the server (3) connects to the database (2) at first and detects the current credit limit information of the customer that is recorded in the database (2) by using the customer information included in the related request. Afterwards, the server (3) compares the detected current credit limit information of the customer and the order amount information included in the order request and it approves the order requests if it detects as a result of the comparison transaction that the current credit limit of the customer is equal to the order amount information or higher than this. If the server (3) detects as a result of the comparison transaction that the order amount included in the order request is higher than the current credit limit detected, it connects to the database (2) and classifies the related order by using the order classification parameters in the database (2) and the information included in the order request received from the customer. Then, the server (3) creates an order risk for the related order by using the order classification parameters and the data about the previous order history and the financial movements of the customer recorded in the database (2). The server (3) compares the order risk created with the parameters of the company risk appetite pre determined by the company and approves the related order if it is detected as a result of the comparison transaction that the order risk determined on the basis of the qualifications of the order, the previous order history and the financial movements of the related customer is within the risk transaction parameters determined by the company. However, the server (3) rejects the related order if it detects that the order risk is beyond the parameters of the risk transaction parameters.

In a preferred embodiment of the invention, the server (3) is configured to provide an interface on an electronic device such as computer for receiving order request from the customer. It is ensured that the data about the customer request are transmitted to the server (3) and thus the server (3) is triggered, through use of the interface provided on the said electronic device by customer and/or company officials.

In an embodiment of the invention, the server (3) is configured to notify at least one at least one pre-determined authorized person about the case in the event of rejection of an order received from the customer. In a preferred embodiment of the invention, the server (3) informs the authorized person over an authorized person over electronic mail and/or an interface provided on an electronic device such as computer. In such case, for example an authorized person having a manager duty may decide on whether to approve or reject the non-approved order request by evaluating the order request via manual transactions.

In a preferred embodiment of the invention, the order request information approved by the authorized person is preferably recorded in the database (2). In this embodiment, the server (3) processes the said data in the database (2) at certain periods by using machine learning methods and it is configured to detect the conditions for approving the order request -which was not approved previously- later for the order request approved by the authorized person and to create rules in relation to these conditions. The server (3) records the data about these created rules in the database (2). Thereby, the server (3) is configured to run the rules recorded in the database (2) in the event that the said request is rejected after comparing the order risk created in accordance with the order request received from any customer and the parameters of the company risk appetite pre determined by the company, and to approve the incoming order request if the related request complies with these rules. Thus, in other words the said order requests can be approved in accordance with the data about the approved order requests realized by the authorized persons previously without sending the order requests which were rejected as a result of comparing the order risk created at first and the parameters of the company risk appetite pre-determined by the company to any authorized person. In this case, authorized persons for example such as director are prevented from wasting time with such transaction.

With the inventive system (1), it is ensured that vendors can classify order requests received from customers on the basis of parameters such as product type that is subject to order, customer group from whom the order was taken, amount of order; transaction of calculating the order risk based on this classification realized and the customer’s previous order and financial history, approving or rejecting the order request based on comparison of the calculated order risk with the risk appetite parameters that are determined by the company on the basis of the classification without any manual intervention, depending on current data of the customer, the market and the vendor. Thereby, companies are substantially prevented from suffering loss based on order by achieving high success in risk estimation by using current data.

Within these basic concepts; it is possible to develop various embodiments of the inventive system (1) and method (100); the invention cannot be limited to examples disclosed herein and it is essentially according to claims.