Payment Arrangement for Bills
A payment arrangement is an agreement with a customer to payoff severely overdue debt in installments. Bills sent to customers with payment arrangements contain charges for both their current services and their payment arrangement installment amount.
Organizations that practice open-item accounting who collect on overdue bills may allow customers to pay off their overdue bills in installments by setting up a payment arrangement for one or more bills. This transaction is used to maintain bill-oriented payment arrangements.
Refer to Bill-Oriented Payment Arrangements for background information.
Open this page using page.
Description of Page
The SA (service agreement) Info is a concatenation of important details about the payment arrangement service agreement (PA SA). The SA ID is the unique identifier of the PA SA. These values only appear after the PA SA exists on the database.
The Current Balance that appears beneath SA Info contains the PA SA's current balance. When you initially set up a PA SA this balance will be zero. It is only non-zero if the customer has not paid a billed installment.
Payoff Balance beneath SA Info contains the PA SA's payoff balance. The payoff balance is the total amount to be paid off over the PA SA's life. It is only non-zero after delinquent funds have been transferred to the PA SA. This balance is only displayed when it differs from the Current Balance.
Refer to Current Amount versus Payoff Amount for more information.
Account ID is the account associated with the PA SA.
The occurrences of Current and Payoff Balance beneath Account are the account's respective balances. These values are displayed to help you confirm exactly how much the customer currently owes versus how much they will have to payoff over time (remember, after you transfer funds to a payment arrangement, the amount transferred is reduced from the account's current balance).
The Unpaid Bills grid contains a row for each of the account's unpaid bills.
Adjacent to each Unpaid Bill is its Unpaid Amount and a check box used to select the bill. Every selected bill's unpaid amount will be transferred to the PA SA when you click the Create button.
The system automatically indicates that all unpaid debt should be transferred to the payment arrangement. It does this by checking each bill by default.
Total Candidates is the sum of ALL unpaid bills (not just the selected bills).
New Payoff Balance contains the PA SA's payoff balance. This is the total amount of debt that will be paid off over the lifetime of the PA SA. This value equals the current payoff balance on the PA SA plus all selected debt from the Candidate SAs scroll.
The next fields work in unison.
- If you want to define the number of future bills that the customer has to payoff the selected unpaid amount, enter the number of Installments. When you tab out of the field, the system sets the Arrange Amount equal to New Payoff Balance / Installments.
Arrange Amount may not add up. The Arrange Amount is rounded up so that if you multiply the number of installments by the calculated installment amount, the result will be greater than the PA SA's payoff amount. Don't worry - only the actual dollar amount of the PA SA's total debt will be billed by the system. The last installment will be slightly lower than the other installments.
- If you want to define the amount charged on future bills to payoff the unpaid amount, enter the Arrange Amount. For example, if the customer agrees to pay off their delinquent debt by paying an additional $50 on each bill, you'd enter "50" in this field. Note - If you enter a dollar amount in this field and tab out, the system will calculate the number of installments and display the number in the Installments field.
Define the CIS Division and SA Type of the payment arrangement service agreement.
Payment arrangement SA types. There is a field on SA type called Special Role. Only those SA types with a role of Payment Arrangement may be selected.
Clicking the Create (or Change)button causes the system to perform the following:
- It creates / updates a payment arrangement service agreement (PA SA). It sets the installment amount on this service agreement equal to the installment amount specified on the page.
- It transfers unpaid debt from the selected bills to the PA SA. The adjustment type used to transfer these funds is defined on the PA SA's SA type.
- It links the "transfer from" adjustments to the unpaid financial transactions on the bills. This will cause the unpaid FT's to be linked to Balanced match events. This means that any Active Overdue Processes for the bills should Inactivate (i.e., cancel) because the bills will no longer be consider unpaid. Refer to How Are Overdue Processes Cancelled for more information..
- It reduces the current balance on the PA SA by the amount of debt transferred to the PA SA. Why? Because when delinquent debt is transferred to the PA SA, its current balance increases. Because current balance contains the amount the customer currently owes, this balance must be reduced because the customer is going to pay off the debt in installments (and therefore they don't currently owe anything). The adjustment type used to transfer these funds is defined on the PA SA's SA type.
Clicking Break causes the PA SA to become broken. Please refer to the note below for what transpires when a PA is broken.
Break logic is in a plug-in. Please be aware that the logic that is executed when a payment arrangement is broken exists in a plug-in algorithm (plugged-in on the account's Collection Class Overdue Rules). The base package algorithm performs many functions (refer to Breaking A Bill Oriented Payment Arrangement for the details). The bottom line is that when a PA SA is broken, the originating bills will have their debt reinstated and this will again be subject to the Overdue Monitor. Because this logic is in a plug-in, you can develop alternative logic and plug it in if the base package logic is not satisfactory.
Clicking Cancel causes the PA SA to become canceled. Cancellation should be used when you want to "logically delete" a PA SA because it shouldn't have been created.
The logic described above for breaking a payment arrangement is executed when a user cancels a payment arrangement; the only difference is that the PA SA is marked with a different characteristic type / value than when it is broken.