Multiple collection classes are needed when any debt class has different collection rules depending on the type of customer. If all customers within all debt classes are collected the same way, then you'll just have a single collection class (call it Generic ). However, if you're like many organizations, you will have multiple collection classes.

Consider unregulated debt. For commercial/industrial customers, you probably don't worry until they owe you more than, say, $100 after 20 days. For residential customers, you probably don't worry until they owe you more than, say, $5 after 20 days. In this situation, you will have at least two collection classes: one for large customers, the other for residential customers.

In our example, we are assuming you have two collection classes: Residential and Commercial/Industrial.