Creating Payment Arrangements

When you create a payment arrangement, you are actually creating a service agreement. This service agreement is just like other service agreements in that:

  • It holds debt.
  • It is periodically billed.
  • When a payment is received, the service agreement's debt is reduced.
  • If the service agreement becomes delinquent, a collection process is initiated to collect the overdue debt.

Debt is transferred to a payment arrangement service agreement (PA SA) from the customer's delinquent service agreements (SAs) at the inception of the payment arrangement.

When you transfer delinquent debt from the delinquent SAs to the PA SA, the debt is removed from the delinquent SAs. If you transfer all debt from the delinquent SAs, the customer will no longer be in arrears in a given debt class (and if the customer is no longer in arrears, active collection and severance processes will be cancelled).

Note:

Use the Payment Arrangement Request Transaction. You could do the above functions by adding a new service agreement and creating transfer adjustments. However, this is tedious. Rather, use the Payment Arrangement Request process. This process is recommend when requests for payment arrangements require eligibility checking and other prerequisites such as down payments and approvals. When a payment arrangement request is granted, it creates the PA SA, transfers debt to it, and sets up the installment amount.

You can also create the payment arrangement service agreement directly using the Payment Arrangement transaction if you don’t require any prior eligibility checks, down payments or approvals. This transaction is also used if you need to break or cancel the payment arrangement.