Designing Your Debt Classes

Multiple debt classes are needed when you have different collection procedures for different types of service agreements. If all service agreement debt is collected the same way, then you'll have just one debt class (call it Generic ). However, if you're like many organizations, you will have multiple debt classes. The following points will help you understand why:

• If you have both regulated and unregulated service, you probably have different debt classes for each type of service. Why? Because your local regulators control how you collect and cutoff overdue, regulated debt. For unregulated debt, your organization controls how overdue debt is collected.
• If your customers make charitable donations, you will have a charitable contribution debt class. Why? Because you probably send a different type of letter when the customer falls into arrears on their charitable contributions. You also can't cut off their water service if they don't make their charitable contributions.
• If you levy deposits, you will probably have a deposit debt class. Why? Because you probably respond differently if the customer doesn't pay their deposit (e.g., you may decide to cut off their electric service until the deposit is paid).
• If you allow customers to make payments on Non-Billed Budgets, you will probably have a Non-Billed Budget debt class. Why? Because you probably respond differently if the customer doesn't pay their Non-Billed Budget (e.g., you may decide to expire the Non-Billed Budget but not affect their other service since the Non-Billed Budget is a way for customers to prepay for upcoming bills).
• If you write-off uncollectable debt, you will need another debt class for write-off service agreements. Why? Because when you write-off debt in the system, you transfer the uncollectable debt from the original service agreement(s) to a write-off service agreement. The write-off service agreement holds this debt forever (or until it is paid). You need to use a different debt class for the write-off service agreements because they aren't subject to collection criteria.
• If you use the system to charge your organization's company usage, you'll need another debt class (we refer to it as the "N/A" debt class below). Why? Because all service agreements must have a debt class, even those that will never have debt.