Setting Up Rules for Overdue Charges

Overdue Charging - Setup 1 Page

OVERDUE_CHG_TABLE1

Define overdue charge IDs and some basic rules for how to calculate overdue charges.

Overdue Charging - Setup 2 Page

OVERDUE_CHG_TABLE2

Define the conditions under which items should be excluded from overdue charges.

Create Overdue Charge Document

Select to create an overdue charge document to send to a customer. This document contains only overdue charges, not any of the customer's existing open items, and does not affect the customer's balance.

Create Charge by Item Line

Select to create a separate line item for each overdue charge. This selection enables users to see a separate line for the principal and each overdue charge type on the payment worksheet. It also enables the user to pay each of the charges before reducing the principal of the item. If you deselect this check box, users will see a single line item that includes a lump sum amount of the principal and all overdue charges.

Create A Group To Post Charges

Select to create an overdue charge group to be posted and to increment the customer's account based on the charges. This option does not create a document of any kind, but creates one overdue charge group per business unit requested on the run control. The process creates a group that has a group type of F.

If you need to create a statement that has new overdue charges invoices and the customer's existing open items:

1. Select the Create A Group To Post Charges check box on this page.

2. Generate overdue charges.

3. Run the Receivables Update process for the business units of the newly created overdue charge group.

4. Generate the statement.

One Time Charge Flag

Select to indicate whether the Overdue Charges Application Engine process (AR_OVRDUE) should create an overdue charge only once or multiple times by checking for a last assessed date. If you select this check box, the process creates an overdue charge only once for an item; otherwise, the process continues to create overdue charges until the item is closed.

Include Prior Charges

Select to include prior overdue charges in the calculation of the current balance.

Assign Once Per Item

Select to have the system check to determine whether any overdue charges exist for any of the current items that qualify for overdue charging for this specific overdue charge ID. If a charge exists for one or more items, the system does not calculate a new charge; however, the system calculates this type of overdue charge for any qualified items that do not have any charges assessed against them. After these charges are assessed against these items, the system prevents them from being charged again.

Overdue Charge Rate Type

Select the value that determines how the system calculates the overdue charge. Values are:

• Fixed Amt (fixed amount): Creates an administrative, financial, or punitive charge for the amount that you enter in the Fixed Amt (fixed amount) field.

• Interest Percentage: Calculates a charge based on the number of days that an item is overdue and the percentage rate in the Percent field.

• Item Amt Percentage (item amount percentage): Calculates a charge based on the past due item amount and the percentage rate in the Percent field.

  This is an example:

  If the overdue original amount is USD 1,000 and the item amount percentage is 10%, the first time you run the overdue charge process, the system creates an overdue charge of USD 100. When you run ARUPDATE, the item new balance is USD 1,100.

  When you run the overdue process again and also:

  • Select the Include Prior Charges check box, the overcharge is 1100*(10/100) = USD 110.

  • Deselect the Include Prior Charges check box, the overcharge is 1000*(10/100) = USD 100.

• Prime Plus: Calculates a charge using the prime rate that you enter on the Overdue Charges run control page plus the percentage rate that you enter in the Percent field.

Days Between Charges

Enter the number of days that the system must wait before reassessing overdue charges for items that have already been evaluated for overdue charging. The Overdue Charges process uses this value differently depending on whether an item has already had an overdue charge assessed.

If an item has a previous overdue charge, the system compares the value in the Days Between Charges field to the number of days between the date of the current overdue charge run and the date of the previous overdue charge.

Grace Days

Enter the number of grace days that the system uses in combination with the basis date to determine whether the item is overdue for items that has had no previous overdue charges. If you want the trigger for the overdue charges and the amount of the overdue charges to be calculated based on the same day, enter 0.

Overdue charge calculations use the grace days that are defined here, not the grace due days that are associated with the business unit, customer, or item. Those grace days refer to the due date, which may not be the same as the overdue charge basis date.

Days in Calculation Year

Enter a number to determine the number of days in the year, such as 365 or 366, that represents an annual basis for the interest calculation. The system uses the basis date to determine how many days the item is overdue.

Field Name

Select the date field that is used as the basis date for calculating the overdue charges. Values are:

ACCOUNTING_DATE: The date that the account entry was entered into the system.

ASOF_DT: The as of date that is entered on the pending item.

DUE_DT: The date that a transaction is due.

USER_DT1 to USER_DT4: An additional date that is defined by the user.

Entry Type

Displays the entry type that you defined for overdue charges. All overdue charge items have this entry type.

Entry Reason

Select one of the entry reasons that is assigned to the overdue charge entry type. The system uses this entry reason for all overdue charge items that the Overdue Charges process creates using this overdue charge ID. The entry type and entry reason determine the correct accounting distribution for each charge. To process an overdue charge manually or automatically, the automatic entry type and reason code must be identical to the item entry type and reason code.

Add An Item, Minimum Item Charge, and Minimum Business Unit Charge

Select either a detail level or summary level for overdue charges.

If you want a detail level, deselect the Add An Item check box and enter a minimum item charge. The overdue charges appear as activity against the original item, and one overdue charge appears for each open item using the same item ID as the open item. This method has the effect of adding the overdue charge to the original item and increasing its balance.

If you want a summary level, select the Add An Item check box and enter a minimum business unit charge. The system combines all overdue charges in one new item that posts to the customer's account. For example, if a customer has 10 past-due items that qualify for overdue charges, the system creates one overdue charge. This method increases the customer's balance without affecting the balance of the original item. This method enables you to increase the calculated charge to a minimum amount for a customer and business unit combination.

Currency

Select a currency for the Minimum Item Charge and Minimum Business Unit Charge fields to calculate overdue charges.