Payment Date and Effective Date for Payment Events

This section discusses the payment and effective dates used in payment events.

By default, the payment and effective dates are equal but the algorithm used to create the payment may calculate the dates differently based on business rules.

A payment event records a payment date and an effective date. The payment date should be the date that the payment was considered "received". This could be the system date or it could be a postmark date. The effective date is used to populate the effective date of the payment segment's financial transactions and is the date that the payment should affect penalty and interest.

The following examples illustrate when the effective date may differ from the payment date:

Note: Changing effective date. A BPA script Change Payment Effective Date is provided as an option on the payment event context menu. The script prompts you for a new effective date. It updates the payment event and its related FT and then causes penalty and interest to be recalculated.

The base package also provides an obligation type payment freeze algorithm C1-PAYADJEFD that adjusts a payment FT’s effective date if required. This algorithm checks whether the payment was received within the payment grace period for the related obligation and, if so, resets the FT's effective date to match the obligation filing due date. The algorithm provides a centralized place to implement the effective date rule rather than having to check dates whenever a payment is created or transferred. It also caters for situations where a payment event is distributed to more than one obligation.