Related Information Examples & Tutorials
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Payment Plan - Step By Step

What is a Payment Plan? 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.

When you have proceeded through the steps below:

  • You should be more familiar with the concept of payment plans
  • Be able to start a payment plan on a Debtor
  • Be able to automatically track planned payments and any account activity regarding the payment plan.

We will cover:

  • Payment Plan Details
    - Entering Payment Plan information
    - Viewing the Debtor form
    - Viewing the Transaction List

  • Posting A Payment Plan Payment
    - Filling in a planned payment transaction
    - What Collect! does when you post a planned payment
    - Reviewing Unfulfilled Promises
    - When an NSF Check is returned

  • Special Settings
    - Automatically Manage Promises
    - Payment Plan Actions
    - Payment Values
    - Payment Plan Setup

Payment Plan Details

To start a Payment Plan for an account, we must first access the Payment Plan form while on the debtor's account.

1. Once the Debtor form is displayed, select the Principal field to open the Financial Detail form.

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


Accessing the Payment Plan form

3. Once the Payment Plan form is displayed, fill in the details of your payment agreement.

In the field labeled Payment period select the interval of the payments. The default is ' Monthly' for one payment per month.

In the field labeled Number of payments enter the number of payments and Collect! will calculate the dollar amount of each payment. Or, you can enter a payment amount, instead, in the field labeled First payment in the Amount column and Collect! will calculate the number of payments.

There are many options available on this form. You only need to fill in the ones that apply to the agreement that you have contracted with the debtor.

Click to view details.
Payment Plan form with Details

The example shown above displays an initial discount, a service charge and a down payment. Collect! takes into account all discounts, down payments and charges when calculating the dollar amount of the plan payments.

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Adjusting Values And Lump Sum



If necessary, you may adjust the Down Payment and First Payment dates. You may also adjust any of the Payment amounts. Collect! will redistribute the payments over the period you have entered in the Number of Payments field.

For example, you may want the Monthly Payment, in the example shown, to be $200, with any remaining amount paid as a lump sum in the last payment. Simply change the First Payment amount to $200 and Collect! will redistribute the amounts, resulting in a lump sum final payment of $1165.95, in the example shown below.


Payment Plan form with final Lump Sum

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Posting The Payment Plan



After you have entered all of the Payment Plan details in the Payment Plan form, select the OK button to post the Payment Plan. Collect! gives you a chance to confirm your choice before it creates all the transactions for the plan.


Prompt to Post the Payment Plan

Select YES. Collect! will quickly create as many transactions as necessary to schedule all the payments for the plan. Then you will see a message letting you know how many planned payments were posted to the account.


Payment Plan Schedule Completed

Select the OK button to close the message window. You will be returned to the Debtor screen.

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Viewing The Debtor Form



By default, Collect! runs a contact plan when a Payment Plan is posted to an account. You may see that the Status has changed to PPA or " Payment Plan Active" and that a line has been written to the debtor's Notes.

Click to view details.
Debtor Screen with Promise Date

The 'Promise' field shows the date that the first payment is due. If the promised payment is not received by this date, the Promise field will turn RED.


Debtor Screen with Promise Date Delinquent

tip.gif To automatically refresh the financials on the Debtor form, switch ON 'Automatic recalc' for the Operator. This switch is set in the Operator form.

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Viewing The Transaction List



You can view the list of transactions on the account to see all the transactions posted for the Payment Plan. To do this, select the TRANSACTIONS tab to display the list of transactions posted to the account.


Payment Plan Transactions

1. By default, Payment Plans use the Transaction Type 151 for planned payments.

2. Service charges and discounts are posted according to the Payment Plan details. Planned payments start on the date set in the Payment Plan 'First Payment' field.

3. The default Payment Period is 'Monthly', so the planned payments are scheduled one month apart as far as necessary into the future to satisfy the debt.

4. The last payment is adjusted if necessary to complete the payment. In the example shown, if we let Collect! perform all the calculations without modifying any values ourselves, the last payment is $226.90, while each monthly planned payment is $226.83.

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Posting A Payment Plan Payment

All of the payments scheduled for the account are present now as transactions with Payment Dates ranging into the future and no Posted Dates.

When a payment is received, you simply locate the appropriate transaction. The transaction already has the Payment Date filled in and the amount of the Payment.


Planned Payment Transaction with no Posted Date

Select the calendar icon next to the Posted Date field. The Calendar will be displayed, set to today's date. If you do not need to modify this, select OK to put today's date into the Posted Date field.


Planned Payment Transaction with Posted Date

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Reviewing Unfulfilled Promises

Daysheets provide a convenient way to review promised payments. Select Browse from the top menu bar and then select Daysheets from the drop-down choices. Select a Date to review. This will display the Daysheet for the chosen date.

Select the PROMISES button.


Select Promises for a Daysheet

This will display any promised transactions that have not been posted on this due date.


Unpaid Payment Plan Payments Due Today

These payments are now delinquent.

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When An NSF Check Is Returned

When an NSF check is returned, you need to post two transactions to continue with the planned payments.

1. Post a new Payment transaction with a NEGATIVE value to indicate NSF. You can use the same Payment date as the payment that went NSF and today as the Posted Date. This will negate the payment that went NSF.

2. Then post another Payment transaction with NO Posted Date and the same Payment Date as the payment that went NSF. Enter the plan's Payment Amount as a POSITIVE value in the To Us field. This will reactivate the planned payment that went NSF and is now outstanding.

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Special Settings

Several settings in Collect! influence how planned payments are handled. These are described below.

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Payment Plan Actions

Use Payment Posting Options to run contact plans for Overpayment, Underpayment, and Full Payment.


Payment Posting Options Payment Plan Actions

Each code in the Payment Plan Actions section is a contact plan set up in the database to be evaluated when Collect! posts a planned payment. These are demonstrated in the Demodb database and may be copied to your Masterdb. You may modify the events in the plans if you need to. Please refer to the Help topic, Payment Plan Actions for details and tips.

tip.gif If you do not want to run any contact plans, just erase the codes from each one of the Payment Plan Actions.

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Payment Values

Set up default values to consider as over or under payment in the Payment Values form accessed through the ADVANCED button on the Payment Posting Options form.


Payment Values form with defaults entered

These defaults will be evaluated whenever a planned payment is received. They will affect whether or not one of the payment plan actions executes.

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Payment Plan Setup

The Payment Plan Setup form stores default values and transaction types that apply to payment plans. You can set an initial charge amount, discount, payment amount, late payment fee, down payment amount, interest rate, number of payments, payment period and a contact plan to run when you start the plan for an account. Special transaction types may be assigned for posting payment plan transactions. The payment plan transaction types must exist in your system.


Payment Plan Setup form

All options on this form are used as default settings when you create a new plan. Default amounts are automatically loaded into each new payment plan. This reduces typing and minimizes errors. You will be able to change any of these settings on an individual basis when you set up the plan for a particular account.

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Summary

Schedule a Payment Plan when you can be reasonably sure that an account will be paid consistently and on time. This sets up regular payments as transactions with no Posted Date ranging into the future as far as necessary to satisfy the debt. Posted Dates are filled in when each payment is received.

Additional settings are available for automatically handling payments and defaults may be set for entering new plans.

If you cannot be sure of consistent and timely payment, please use Promise contacts instead.

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See Also

- Payment Plan Topics
- Run Plan on Last Payment Date
- Introduction To Promises

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