Late Payment Charges

In Oracle Revenue Management and Billing, the Late Payment Charges (LPC) are calculated and applied to the eligible accounts based on the customer class configuration and/or policy settings. The ORMB system offers the following mechanisms:

  • Identification and calculation of the overdue or delinquent bills.

  • Deployment of the correct late payment charge rate based on the configuration.

  • Billable charge generation for late payment charges.

The system introduces an account-level characteristics to define the eligibility of the late payment charges. Additionally, the system also provides enough flexibility to conduct daily prorated late payment charge calculation which can be aggregated monthly or can retain the existing functionality of calculating the unpaid amount for the entire month regardless of the unpaid days. Note that subsequent bills can also include previously billed late payment charge fees.

The following features are introduced in this release:

  • Account exclusion feature from the late payment charge calculation.

  • Overriding of grace days at algorithm and account level.

  • Overriding of late payment charge calculation method at account level.

  • The late payment charge is calculated on daily basis using a global default annual rate of 12% which is bound to vary; therefore, the daily rate is calculated using the following formula:

    • Daily Rate = 12% Annual Late Payment Charge / Number of Days in a Year

  • Provision for a customer specific late payment charge rate (either higher or lower than the default) is aligned with the specific contractual agreements.

  • Daily accumulation of interest on the unpaid balance, starting the day, following the due date, and continuing until the complete payment takes place.

  • Late payment charge calculations are based on specific late payment charge calculation date, using the effective late payment charge rates, which are either set at the global or policy level.

  • In a scenario where the late payment charge is imposed, subsequent payment analysis showed that payment date came before the bill due date, making it evident that a manual adjustment is essential to reverse the late payment charge.

  • When an unpaid bill subjected to the late payment charge is canceled, then the previously applied late payment charge must be reversed through manual adjustments.

Note: The Late Payment Charges (LPC) functionality must be enabled at the customer class level.

To implement this feature, following changes are made to the system:

  • A new business object named C1-LatePaymentCharge is introduced in this release.

  • A new batch named C1-CRELP is introduced in this release.

  • A new feature configuration named C1-LPCCALC is introduced in this release.

  • A new lookup named LPCC_​OPT_​TYP_​FLG is introduced in this release.

  • A new characteristic named C1-LPCCM is introduced in this release.

  • The following algorithms are introduced in this release:

    • C1-LPIODB

    • C1-LPCALC

    • C1-LPCC

    • C1-BCLPC

    • C1-BLPCD

The system also provides the ability to setup the configuration of late payment charge even at the account level. The following new characteristic types are introduced in this release:

  • C1-LPCGD – Used when you want to define the LPC grace days at the account level. If you define this characteristic type for an account, the system will consider the given LPC grace days while calculating the late payment charge date for the bills of the respective account. Note that this characteristic type is considered for late payment charge date calculation only when the Late Payment Charge option is selected for the customer class.

  • C1-LPCEX – Used when you want to exclude the account for the LPC calculation. The valid value is Y. If you set this characteristic type for an account to Y, the system will not calculate late payment charge for any of its bill segments which are eligible for LPC calculation.

Note that if the C1-LPCGD characteristic type is not defined for an account, the system will consider the LPC grace days of the respective customer class when the customer class is eligible for late payment charge. The POSTPROC batch is enhanced to consider the account level LPC grace days, if configured, while calculating the late payment charge date for the bill.