Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
1998-12-09
2003-03-11
Trammell, James P. (Department: 3621)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
Reexamination Certificate
active
06532450
ABSTRACT:
BACKGROUND OF THE INVENTION
1. Field of the Invention
The present invention is directed to a financial management system that provides full business support for the offset of payments to parties against delinquent debts when the payments, debts and receivables are tracked by different groups or entities.
2. Description of the Related Art
As part of their business processing, many organizations perform accounts payable and accounts receivable functions. In larger organizations (such as the federal government and multinational corporations) these functions are typically supported by the use of a financial management system (such as the American Management System—AMS—Momentum™ system). Many large organizations (like the federal government or the multinational corporations) have distinct operational entities (e.g., federal agencies in the federal government or independent entities with the corporation) that each perform financial management functions such as accounts payable and accounts receivable. Each of these operational entities run the financial management system in support of their operations.
One of the key business functions in accounts receivable is the management of delinquent debt (i.e., overdue, uncollected receivables). One mechanism for managing delinquent debt is to offset any payments to the debtor by the amount of the delinquent debt. Traditionally, for organizations with distinct operational entities, there were no mechanisms in place that could link one entity's delinquent debts with another entity's payments. For example, federal agency ABC may have delinquent debt with a vendor while federal agency XYZ is making payments to the same vendor.
Recently, there have emerged third-party mechanisms (such as the Treasury Offset Program (TOP) supported by Treasury FMS in the federal government) that provide for the centralized collection of delinquent debt for the purpose of offsetting payments to debtors. Systems such as TOP handle the issuance of offset payments through the matching of payments against delinquent debts. TOP specifications are defined in the Treasury Offset Program Agency Implementation Guide of May 1997, published by Debt Management Services of the Financial Management Service of the U.S. Department of Treasury incorporated by reference herein.
The traditional financial management systems do not provide for the support of such offset programs. What is needed is a system that fully supports the offset of payments in a situation where different organizational entities handle different aspects of the offset process.
SUMMARY OF THE INVENTION
It is an object of the present invention to provide a system that captures offset payment information and keeps the financial management system records (e.g., general ledger, budget, etc.) managed by different entities updated for the offset transactions.
It is another object of the present invention to provide flexible identification and selection of debts as well as payments suitable for offset.
It is an additional object of the present invention to provide automatic calculation and assignment of charges associated with the offset referral process.
It is another object of the present invention to provide for the transmission of delinquent debt information in multiple formats, including extensible mark-up language (XML).
It is still another object of the present invention to provide automatic notification of debtors in multiple media (e.g., letter, e-mail, phone message) when debt is referred for offset and when a payment is offset.
It is another object of the present invention to allow for the electronic receipt of offset payment information in multiple media formats.
It is also an object of the present invention to provide automatic referral to credit bureaus when debt is referred for offset.
It is an object of the present invention to provide an ability to track bankruptcy information and relate it to debts referred for offset.
It is a further object of the present invention to provide direct online access to the offset payment system from within the financial management system.
It is another object of the present invention to provide reconciliation between the separate financial management systems for payables and receivables and the offset payment system.
It is also an object of the present invention to allow external indirect online access via Web and telephonic queries to debt and payment information related to offset payments to, for example, allow determination of debt and payment status.
It is another object of the present invention to provide an ability to flag financial transactions and extract data when referral thresholds are met.
It is still another object of the present invention to provide an ability to extract offset information in support of debtor data warehousing and work flow operations.
The above objects can be attained by a system that includes a financial management system handling receivables and a financial management system handling payables which both send offset information to and receive offset information from an offset payment system. The system designates, in the respective separate receivables and payables systems, debt and payments that are suitable for offset using threshold criteria such as age, amount, party, etc. The system allows administrative fees and other charges to be added to the debt at the time of the referral. During the referral of the debt to the offset payment system, the debtor as well as other parties, such as credit bureaus, are informed or notified of the delinquent debt. When an offset occurs the system feeds the amount of the offset back to the receivables and payables systems to update the records therein to reflect the amount offset and that the amount was an offset. The system also updates the records of the systems when a payment is made by the debtor after a referral has occurred, when a decision is made to write-off the debt as well as when the debtor is involved in bankruptcy.
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Baker Michael Vernon
Brown Zipora
American Management Systems, Inc.
Elisca Pierre E.
Staas & Halsey , LLP
Trammell James P.
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