Designing Your Collection Classes

Multiple collection classes are needed when your organization has different overdue rules and / or procedures based on the type of customer. If all customers are treated the same way, you'll have a single collection class (call it Generic). However, if you're like many organizations, you will have multiple collection classes.

For example, 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 commercial/industrial customers, the other for residential customers.

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

The following table illustrates an example wherein two collection classes (such as Residential and Commercial/Industrial) are associated with two different divisions (such as North and South):
Account's Division	Account's Collection Class
Account's Division	Residential	Commercial/Industrial
North
South

Note: There are two very different ways to monitor your accounts for overdue debt. This chapter describes the method referred to as Overdue Processing. Refer to Collection / Write Off for a description of the other method. We anticipate that most organizations will only use a single method. If your organization opts to use both methods, you will need to set up the corresponding collection classes.