The payment collection process refers to the series of actions that facilitate receiving payments from your customers.
Goals
The primary goals of the collection process are twofold: to increase the likelihood of payment and to improve the cash flow by reducing the time it takes (on average) to receive the payment and thus reduce the amount of outstanding customer debt.
This process entails two potential outcomes: a successful outcome, where the payment is received, or an unsuccessful one, in which the payment is not received, consequently leading to the termination of the customer’s service and subsequent deletion of the customer from the PortaBilling system due to non-payment.
Stages
The payment collection process consists of the following stages:
- Invoice generation and the due date assignment – the payment collection begins on the invoice generation date. The “deadline” for customers to make a timely payment is the invoice due date defined by the payment terms. For example, if you set payment terms "net 30 days", this means the invoice is due within 30 days after the generation. The invoice payment status “paid” indicates that the customer has paid the amount owed and the collection process has been successfully completed. While other statuses like “unpaid,” “partially paid,” or, after the due date, “overdue”, indicate an ongoing collection process.
- Automatic credit card charging – you have the option to automatically charge customers’ credit cards upon invoice generation or on the due date.
- Notifications and actions if payment is past due – to prompt customers to make payments, you can notify them about the approaching invoice due date. If the payment is not received on time, and an “overdue” status is assigned to the customer’s invoice, you can notify customers about past-due payments, enforce service limitation or suspension, and apply penalties such as a late payment fee.
If the amount due is less than or equal to the set collection threshold, stage 3 is skipped.
The collection process is entirely configured at the customer class level, which means that none of the parameters can be set or modified for an individual customer.