Designing Write-Off Controls

Set up a matrix using the collection classes you designed when you were designing your collection procedures ( Designing Your Collection Procedures ).


SA's Write-Off Debt Class	Account's Collection Class Residential	Account's Collection Class Commercial/Industrial
Normal Write Off
N/A

Each cell should have a "write-off control" that defines what to do when the system detects finaled debt that hasn't been paid. This is true even of the "N/A" write-off debt class. Why? Because you may want the system to write-down these stopped SAs when they have a small balance. For example, if you have a write-off service agreement that subsequently receives a partial payment that leaves a small amount owing, you probably want the system to generate a write-down adjustment (so that the write-off service agreement will close). We'll initially fill in the matrix for the "N/A' write-off debt class.


SA's Write-Off Debt Class	Account's Collection Class Residential	Account's Collection Class Commercial/Industrial
Normal Write Off
N/A	Attempt to reduce the SA's balance to zero using the following methods: Synchronize current balance with payoff balance. If the debt is < $10 and > $-1, write down the debt using a write-down adjustment.	Attempt to reduce the SA's balance to zero using the following methods: Synchronize current balance with payoff balance. If the debt is < $10 and > $-1, write down the debt using a write-down adjustment.

Note:

If the Write Off Monitor encounters debt associated with a non-defined collection class and write-off debt class, it will issue an error.

For each cell that isn't designated as N/A, you need to answer the following questions:

Are you allowed to transfer debt to other non-closed service agreements linked to the account? If so, you need to define the algorithm used to do such. Refer to Setting Up Write-off Control for more information about this algorithm.
Are you allowed to write-down small amounts of debt (or small credits)? If so, you need to define the algorithm used to do such. Refer to Setting Up Write-off Control for more information about this algorithm.
Should you refund credit balances with a check? If so, you need to define the algorithm to do such. Refer to Setting Up Write-off Control for more information about this algorithm.
If debt remains after doing the above, how do you write it off (e.g., do you first refer the debt to a collection agency and only write it off after waiting 30 days)?

We'll fill in the above matrix with our assumptions:


SA's Write-Off Debt Class	Account's Collection Class Residential	Account's Collection Class Commercial/Industrial
Normal Write-Off	Attempt to reduce the SA's balance to zero using the following methods: Attempt to transfer debt to another active service agreement linked to the account. If the debt is < $10 and > $-1, write down the debt using a write-down adjustment. If the debt is <= $-1, create an A/P adjustment to refund the credit to the customer. If debt remains: Highest priority: If customer has a non-cash deposit, create the non-cash deposit write-off process. Otherwise, create the default write-off process for residential debt.	Attempt to reduce the SA's balance to zero using the following methods: Attempt to transfer debt to another active service agreement linked to the account. If the debt / credit is < $10 and > $-10, write down the debt using a write-down adjustment. If the debt / credit is <= $-10, create an A/P adjustment to refund the credit to the customer. If debt remains: Highest priority: If customer has a non-cash deposit, create the non-cash deposit write-off process. Otherwise, create the default write-off process for commercial debt.
N/A	Attempt to reduce the SA's balance to zero using the following methods: Synchronize current balance with payoff balance. If the debt is < $10 and > $-1, write down the debt using a write-down adjustment. Because this debt class isn't eligible for further write-off processing, criteria used to process debt are not necessary.	Attempt to reduce the SA's balance to zero using the following methods: Synchronize current balance with payoff balance. If the debt is < $10 and > $-1, write down the debt using a write-down adjustment. Because this debt class isn't eligible for further write-off processing, criteria used to process debt are not necessary.

We can now use the information in the above matrix to design the necessary Write Off Process Templates and Write Off Event Types.