Collection policy

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Customer class allows you to define a policy for gradual and automated payment collection.

Important dates

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  • Issue date defines the moment when an invoice was issued.
  • Invoice grace period indicates the period (in days or billing periods) following the invoice issue date for a payment to be received. The invoice due date is calculated as invoice issue date + grace period. For example, if the issue date is June 1 and the grace period is 15 days, the invoice must be paid before June 16. The grace period can be zero, in which case the invoice is considered to be due upon receipt.

Gradual payment collection

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You can gradually enforce outstanding payment collection. Step-by-step service deactivation encourages customers to pay their invoices on time and helps you maintain positive relationships. You also receive additional revenue for each overdue invoice by applying service reactivation and late payment fees. The process of outstanding payment collection may include four steps. Each step is optional, independent from other steps, and can be configured individually. You can use one, two, or all of them if necessary. The description below demonstrates the way the payment collection process works when all four steps are configured:

  1. Service limitation. If a customer fails to pay invoices issued for services, the customer’s status changes to “Service limited.” This means that the customer can still use the services, but in a restricted capacity. For example, instead of the standard 100Mbps package, a customer can only use 1Mbps. While the service is limited due to non-payment, recurring charges still apply. A late payment fee is also charged each billing period. Service limitation can be lifted upon customer payment – or the next step is activated (e.g., customer suspension).
  2. Customer suspension. If invoices are still not paid within the limitation period, the customer’s status changes to “Suspended.” While suspended, the customer can no longer use the services and is charged a late payment fee for each unpaid billing period. In this case, recurring charges do not apply. The customer can resume using the services when they pay in full for all the overdue invoices that caused the suspension. Once that happens, a reactivation fee applies and the customer can use the services again.
  3. Сommitment termination for all accounts. If invoices are not paid within the service suspension period, customers benefiting from a discounted subscription rate (a so-called “commitment”) lose the discount. Services within these commitments are no longer provided. To renew the services, customers are required to repay the full cost of service backdated from the start of the commitment.
  4. Customer termination. If invoices are not paid within the previous period (commitment termination takes place), the customer record is closed and can no longer be activated.
You can set the options for payment collection either in billing periods or in days.

Let’s take a look at an example where the option for payment collection is set in days and only the suspension and termination options are configured: David, your customer, has a grace period of 21 days, a suspension time of 14 days, and a termination time of 21 days. David’s invoice was generated on May 1st, so the invoice due date is May 22nd. If David does not pay by that date, the invoice becomes overdue; 14 days (2 weeks) after that, on June 5th, his account becomes suspended; and on June 12th, 21 days after the due date, or one week after the suspension date, his account is permanently closed. The administrator can set the following options to configure the payment collection process:

  • Payment is expected within billing periods after invoice generation – this period is called the grace period. The due date of the invoice is calculated as follows: the invoice issue date + the grace period. For example, if the issue date is October 1 and the grace period is 2 billing periods, the invoice must be paid before December 1 (for a monthly billing period).
  • Late payment fee per billing period – this is a fixed fee that applies to each billing period if a customer has an overdue invoice(s). A single late payment fee applies regardless of the number of overdue invoices.
  • Limit service for customer after the due date – the number of billing periods after the due date when the customer receives the “Service limited” status. Once a customer is limited, their services are restricted but recurring fees still apply.
  • Suspend the customer after the due date – the number of billing periods after the due date when the customer receives the “Suspended” status. When a customer is suspended, their services are blocked but no recurring charges apply.
  • Reactivation fee – a fixed fee that applies each time the customer pays all their overdue invoices (that caused the suspension). The reactivation fee is included in the next invoice.
  • Terminate commitments for all accounts after the due date – the number of billing periods after the due date when all account commitments are closed (terminated). Accounts can no longer use services/features provided within the commitments. Other services remain active.
To apply a late payment/reactivation fee only for customers whose accounts have active commitments assigned, enable the ReactivationAndLatePaymentDependOnCommitments option on the Configuration server. By default, this option is disabled, which means that all customers are charged a late payment/reactivation fee in case of overdue invoices.

For example, to define the payment collection settings (grace period, service limitation and customer suspension, etc.) for residential users, the administrator performs the following steps:

  • Opens Customer class > Invoicing > Regular invoices.
  • Defines terms in billing periods.
  • Defines that payment is expected within 1 billing period.
  • Specifies a late payment fee of $2 on an overdue invoice(s).
  • Sets to limit service for customer in 1 billing period after the due date.
    To limit services immediately on the due date, set “0” for the Limit service for customer option.
  • Sets to suspend customer in 2 billing periods after the due date.
  • Sets a $10 reactivation fee.
  • Sets to terminate commitments for all accounts in 3 billing periods after the due date.Payment collection settings

The configured payment collection schema illustrates the following timeline:

Payment collection timeline

Let’s see what happens if John Doe doesn’t pay for his Turbo 100Mbps commitment for several months and tries to continue to use the services after suspension.

Date Description
October 1 John Doe receives a $20 invoice for his Internet service for September.
November 1 John Doe hasn’t paid for the services.
  • The September invoice becomes overdue, since the grace period is 1 billing period (October-November).
  • John Doe receives the October invoice with its $40 total:
    • $20 for the September invoice;
    • $20 for the October invoice.
December 1 John Doe still hasn’t paid for the services.
  • John Doe’s status changes to Service limited since 1 whole billing period passed since the September invoice was issued (on October 1). Now John can only use 1Mbps of Internet instead of the standard 100Mbps.
  • The October invoice becomes overdue since the grace period (1 billing period, November-December) ended.
  • A $2 late payment fee applies due to the overdue September invoice.
  • John Doe receives the November invoice with its $62 total:
    • $40 for the September and October invoices;
    • $22 for the November invoice ($20 for services plus a $2 late payment fee).
January 1 John Doe still doesn’t pay for the services.
  • John Doe is suspended since 2 billing periods passed after the September invoice due date (November 1).
  • The November invoice is overdue, since the grace period (1 billing period, December-January) ended.
  • A $2 late payment fee applies due to overdue invoices.
  • John Doe receives the December invoice with its $84 total:
    • $62 for the September, October, and November invoices;
    • $22 for the December invoice ($20 for services plus a $2 late payment fee).
January 25
  • John Doe pays $84, which covers his entire invoice debt.
  • A reactivation fee of $10 is applied and now John can use the services.
February 1
  • John Doe receives the January invoice with its $14.5 total:
    • $4.5 for seven days of service usage (January 25-31) and
    • a $10 reactivation fee.

Let’s see the alternative outcome when John Doe pays only $25 (not $84) on January 25. Though the September invoice ($20) is paid in full, services become limited due to the partially-paid (overdue) October invoice ($5). A reactivation fee is applied and then John’s status changes from “Suspended” to “Service limited.”

Benefits
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Service providers can stimulate their customers to pay for their services on time. An administrator can define conditions and penalties (late payments fees, reactivation fee limitations) that apply in relation to unpaid invoices for a particular customer class all in one place.

Shift the date for service limitation/suspension

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When service limitation/suspension takes place during a holiday (a region-wide day off) or a weekend, some customers request services to be turned back on and promise to pay once the holiday is over. However, there are usually fewer employees to process such requests during weekends and holidays, so to decrease their load; configure an automatic shift in the service limitation/suspension date (to weekdays instead of weekends and public holidays). To accomplish this, the administrator performs the following steps:

  • Goes to the Configuration server > ClusterSuite > Web cluster.
  • Selects Global environment > CustomerBillStatuses group.
  • Enables LimitsEnabled option.
  • Sets “0” for NonWorkingDaysLimit option. This means that all customers will only be limited/suspended on weekdays.Configure an automatic shift in the service limitation/suspension date
  • On the PortaBilling web interface, opens My company > Company info panel.
  • Selects Non-working days panel.
  • Selects Set weekends option and checks Saturday and Sunday in the dialog window.
  • Selects public holidays on the calendar manually or uploads a file of non-working days in .csv format.Calendar of non-working days

For example, Mary Smith didn’t pay her previous invoices, so on Sunday her services are suspended. Since it is set as a non-working day, Mary’s suspension automatically shifts to Monday so that on Sunday, Mary can use the services. On Monday, her services are suspended. Mary doesn’t pay her invoices, so her commitment will be terminated. The date of termination falls on a Saturday. Mary’s commitment is terminated, since date shifting only works for service limitation or suspension.

Reschedule the Service limited/suspended status manually

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When customer services are going to be limited or suspended (customer has an overdue invoice), the administrator sees a notification on the customer’s record. This notification shows the date the customer status will change and the invoice(s) number that caused limitation/suspension. An administrator can reschedule the service limitation/suspension date manually. To accomplish this, the administrator performs the following steps:

  • opens Mary Smith’s record;
  • clicks Reschedule;
  • selects a new date for customer limitation/suspension in the dialog window; and
  • clicks Reschedule in the dialog window.Reschedule the status manually

Automated payment collection

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You can automate customers’ invoice payments by charging their credit cards. This saves customers’ time and prevents having their service suspended since their invoices are always paid automatically and on time. You can charge customers’ credit cards either immediately upon invoice generation or on their due date.

Upon invoice generation

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When a customer’s billing period closes, PortaBilling calculates their charges, creates their invoice, and charges their credit card. After successful payment processing, PortaBilling generates their .pdf invoice file with a zero amount due and the Paid in full status.

Upon invoice due date

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In this case, PortaBilling generates the invoice .pdf file