Designing Your Debt Classes

Multiple debt classes are needed when you have different collection procedures for different types of contracts. If all contract 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 levy deposits, you will probably have a deposit debt class. Why? Because you probably respond differently if the customer doesn't pay their deposit.
• 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 contracts. Why? Because when you write-off debt in the system, you transfer the uncollectable debt from the original contract(s) to a write-off contract. The write-off contract holds this debt forever (or until it is paid). You need to use a different debt class for the write-off contracts 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 contracts must have a debt class, even those that will never have debt.