Collections management key concepts

Article
06/03/2022

Before you start to set up or work with collections, you should understand the following concepts:

Customer aging snapshots contain aged balance information at a specific point in time.
Collections customer pools help you organize your work.
Collections agents can have their own customer pools.
List pages organize collections customers, activities, and cases.
All collections information for a customer is on one page, and you can take action from that page.
Interest and fees can be waived, reinstated, or reversed in one step.
Write-off transactions can be created in one step.
Not sufficient funds (NSF) payments can be processed in one step.

This article describes each concept.

Customer aging snapshots

An aging snapshot contains the calculated aged balances for a customer at a specific point in time. This information is shown on the Aged balances list page and the Collections page. An aging snapshot must be created before you can view information on the collections list pages (Aged balances, Collections activities, and Collections cases).

For each customer, an aging snapshot has an aging snapshot header and detail records that correspond to each aging period in the aging period definition.

The aging snapshot header contains the total amount that is due, credit limit, packing slip amount, sales order amount, number of disputed transactions, and total amount of the disputed transactions for the customer account. All transactions for the customer are included in the calculation of these amounts. The total amount that is due, credit limit, packing slip amount, and sales order amount are shown in the Credit information FactBox on the Collections page.

For each aging period in the aging period definition, a detail record is created in the aging snapshot. Each detail record contains the ID of the aging period and the total amount of the transactions that have dates in the aging period. Transactions are assigned to an aging period, such as 30 days past due. The date is relative to the Aging as of date value that you specify when you create the aging snapshot. This information is shown on the Aged balances list page and in the Aged balances FactBox on the Collections page.

Collections customer pools

Customer pools are queries that define a group of customer records. You can use these grouped records to view information for the customer accounts that are included, and to manage collections or aging processes for them. You can use customer pools to filter information on the collections list pages. You also can use them to filter the customer accounts that are included when aging snapshots are created.

Collections agents

By default, users can view all customer information on the collections list pages. Collections agent records let you determine the customer pools that can be used to filter information on the collections list pages and the Collections page.

Collections agents work with customers to make sure that payments are collected in a timely manner. They are workers who are assigned to users on the User setup page.

Collections list pages

The following list pages help you organize collections information:

Aged balances – The columns on this list page show customer balances and aged amounts by aging period. This information is stored in an aging snapshot. The aging periods are determined by the aging period definition that is used. The aging period definition is taken from the customer pool, if a customer pool was specified for the pool query. If the pool doesn't have an aging period definition, the default aging period definition that is specified on the Accounts receivable parameters page is used. If no default aging period definition is specified, the first aging period definition on the Aging period definitions page is used.
Collections activities – The columns on this list page show activities that are identified as collections activities. These activities are created on the Collections page. You use activities to track the collections-related work that you do.
Collections cases – The columns on this list page show information for cases that belong to a case category that has a case type of Collections.

Aging snapshots

An aging snapshot must be created before you can view information on the collections list pages. Information is shown only for customers that an aging snapshot has been created for. The records that are shown on the list page can be filtered further, as described here:

By default, users have access to all customers who have an aging snapshot.
If customer pools exist, a user must be set up as a collections agent to use the pools to filter information on the collections list pages. Information is limited to the customers who are included in the selected customer pool.
If a user is set up as a collections agent, only the pools that are selected for that collections agent are available on the collections list pages. If the Allow agent to view all customer pools option is selected on the Collections agent page for the collections agent, all pools are available for that agent.

Collections page

You can use the Collections page to view, manage, and take action on collections information, activities, and cases for a customer.

The upper section of the page shows cases for the selected customer, the middle section shows transactions for the customer, and the lower section shows activities for the customer. You can create collections cases to track collections information for one or more transactions and activities. The information in the upper and lower sections can be filtered by case.

FactBoxes show aged balances and credit limit information for the selected customer. This information is stored in the aging snapshot. As you require, you can update the aging snapshot with current information.

The Action Pane contains buttons that let you view related information for the selected customer, case, transaction, or activity. You can also perform common actions, such as changing the collections status of a transaction, sending email through the integration with your email provider, reimbursing customers, processing NSF payments, and writing off uncollectible balances.

Waiving, reinstating, or reversing interest and fees

You can waive, reinstate, or reverse whole interest notes, or the fees and transaction interest that are part of interest notes. On the Collect tab on the Action Pane of the All customers list page, select Interest note, Transaction interest, or Fee.

These adjustments affect only interest notes, and the interest and fees that they include. For information about how to write off all the charges that a customer owes, see the Creating write-off transactions section of this article.

For more information see, Create an interest code with a range and Process interest.

Creating write-off transactions

You can write off bad debts by selecting Write off on the Collections page and the collections list pages.

When you write off transactions for a customer, all transactions for that customer are automatically marked for settlement. The amount that is written off depends on the net amount of the marked transactions. The write-off transaction is created in a general journal and can contain up to three types of journal lines:

The first type of journal line contains the customer write-off entry. If the marked transactions contain multiple combinations of currency codes, dimensions, and posting profiles, a separate journal line is created for each combination.
The second type of journal line contains the general ledger write-off entry. If the marked transactions contain multiple combinations of currency codes, dimensions, and posting profiles, a separate journal line is created for each combination.
The third type of journal line contains the general ledger write-off information for sales taxes. This journal line is created only if the Separate sales tax option is selected on the Accounts receivable parameters page. If the marked transactions contain multiple combinations of sales tax payable accounts, dimensions, and sales tax codes, a separate journal line is created for each combination. The write-off transaction is created in the transaction currency. For more information see, Create a write-off journal for a customer.

Process NSF payments

You can process NSF payments by selecting NSF payment on the Collections page. When you select this button, the payment is canceled. If an NSF fee applies for the customer, a charge transaction is created in a payment journal. The amount of the fee is based on the settings for the automatic charges. The automatic charges that apply to NSF payments are specified by the charges group that is selected on the Bank accounts page for the affected bank account.