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Payment Plan Basics

A payment plan is a schedule of equal regular payments set up on an account when a debtor has contracted to pay a debt in a timely consistent manner. Transactions are posted for the entire plan with dates ranging into the future as far as necessary to satisfy the debt. Posted Dates are left blank to be filled in when each payment is received.

The Payment Plan feature was designed for our users who are credit grantors. Collect! automatically handles background tasks for your company when you set up a payment plan for your customers. It depends on one important rule, "The accounts MUST pay their payments in a timely manner for the amounts required."

If this rule is not true in your case, if you will take any amount sent by your customer, at any time, then using payment plans may take an enormous amount of management time to adjust for these inconsistent payments. Instead, let Collect! handle these types of requirements with the Promise Payment Contact method, and don't use the Payment Plan button on the debtor's Financial Detail form.

Payment Plans work expertly when you take a total dollar amount, add any preset fees or charges, consider any down payments, and divide the value equally over a set number of payments. Or, if you use a set payment amount, Collect! will figure out the number of payments needed. This is a very efficient and robust feature that can quickly set up an account for a scheduled payment scheme.

This feature may be further automated using the Post Payment Options form to set up what Collect! will do when the payment is posted, if the payment is too much or too little, or if the payment is late.

Payment plans basically have to handle a few different situations. The easiest is when there is no financial information associated with a debtor, and the payment plan system can build its information from a clean slate. Other scenarios include debtors with existing payment plans, and debtors with previously paid transactions, but without a payment plan.

When you create a payment plan for a new debtor, transactions, are scheduled without a posted date. The lack of a Posted Date means they haven't been posted yet and as such are promises only. These transactions are used when printing the coupon booklets. Coupon booklets is simply another report in the Collect! report system.

When you open a debtor with a previous payment plan, Collect! checks how many payments have been made, if there are any payments in arrears, and gathers other data from the transactions belonging to the debtor. When you try to change an item in the Payment Plan form, you are asked if you'd like to reschedule the payment plan. If you select YES, the debtor's current Owing is used as an owing amount and a new payment plan can be scheduled as needed. When the new payment plan transactions are posted, existing transactions with blank posted dates (i.e. unpaid promises) are first deleted and then the new transactions are posted.

For backward compatibility, Collect! is able to analyze an existing debtor's financial history. The debtor's current Owing is used when you set up a payment plan for an existing debtor. Two cases exist - one where the debtor has an entry in the Principal field, and one where a list of transactions posted to the Principal account determine the debtor's accumulated owing. This Owing is used to determine the individual payment amounts within the payment plan.

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Payment Plan form

tip.gif Collect!'s Billing Tree Service is a fully featured alternative that enables you to automatically manage and post payments according to schedule.

Accessing Payment Plan

There is only one way to access the Payment Plan form. Providing you have access to the various menus and forms, you can access the Payment Plan form in the following way.

1. Select the Principal field on the Debtor form to display the Financial Detail form.

2. Select the PAYMENT PLAN tab to open the Payment Plan form.

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Billing Tree Service For Payment Schedules

Billing Tree Service enables you to process credit card and ACH payments electronically through Collect!'s Billing Tree connection. This is a full-featured solution for managing single and recurring payments made by credit card or by bank draft. External payments posted at the Billing Tree web site are also reconciled and posted within Collect!. Recurring scheduled payments are fully managed within Collect!'s promised payment system.

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See Also

- Payment Plan Topics
- Run Plan on Last Payment Date
- Billing Tree Service

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