Relevant configuration
Accounts receivable cycle
Billing parameters
Collection cases at customer versus invoice level
Zero Friction supports a collection process to follow up on debtors with overdue invoices. This process can be activated in your organization's configuration settings. The process consists of several user-definable steps that occur at defined intervals. Examples of these steps include sending a first reminder to the customer, a second reminder, a payment reminder, a reminder call, and so on.
There are two ways the collection process can be configured:
At customer level
At invoice level
At the customer level, this means the collection process groups all overdue invoices for that customer into a single collection cycle. When an invoice is overdue, it is added to a collection cycle, and the system performs step 1 of that cycle. When a customer accumulates overdue invoices, they are grouped into the same collection cycle, which may already be in step 3 based on the first overdue invoice. This way, the collection process for subsequent overdue invoices is not restarted from step 1. They are added to the total sum of the outstanding collection cycle, and the cycle simply continues at the current step.
At the invoice level, this means that each time an invoice is overdue, a new collection cycle is created and starts from step 1. This way, each overdue invoice for that customer follows all steps of the collection process, and multiple collection cycles are initiated for that customer.
Different steps
There are two types of steps that can be defined in Zero Friction:
Manual intervention
Communication
Manual intervention means that manual intervention is required by the user. This could, for example, be sending a reminder to inform the customer of the unpaid invoice. Another example could be defining a final step in the collection process as handing over all overdue invoices to an external party, such as a debt collection agency. This external party then continues to follow up.
Communication means the system automatically sends a communication message to the debtor. For example: a first reminder email, a second reminder letter by mail, a payment reminder, etc.
Standard templates for collection communications are available in Zero Friciton and are fully customizable.
Costs
For each step in the collection process, the user can define whether fees will be charged to the customer. The types of fees are explained below:
Fixed
This means that a fixed amount must be paid for this step.Percentage of outstanding amount
This type means that a user-defined percentage is used to calculate the cost.Layered percentage of outstanding amount
This surcharge type is defined in tiers, with a minimum and maximum amount defined, and a percentage used if the overdue invoice falls into that tier.
Charge depreciation
You can configure what happens to the additional collection costs after a customer pays the invoices included in the collection cycle. This also affects whether or not the collection case is automatically closed.
When paying these invoices, the additional collection costs incurred during the collection process may be refunded to the customer or not refunded at all.
No depreciation
Once the customer has paid the invoices that were part of the collection cycle, the additional costs will not be refunded. The customer must pay all additional costs associated with the collection process. The collection cycle will only be closed once they have paid in full.Outstanding amount
Once the customer has paid the overdue invoices in the collection cycle, any outstanding additional costs will be refunded. If any costs have already been paid, they will not be refunded. Only the unpaid costs will be. Any remaining costs will be credited, and the collection cycle will be closed.Invoice amount
Once the customer has paid the invoices in the collection cycle, the additional costs will be fully credited and, if already paid, refunded. The cycle will be automatically closed upon receipt of the amount due.
If a customer hasn't paid their overdue invoices, the collection cycle remains open until the user decides to close it manually. The user is also presented with the three options above regarding how to handle the collection costs for that customer.
Statuses
A debt collection case can have one of the following statuses:
Active
The debt collection case is still active. The customer has not yet paid the outstanding invoices in full.Manually closed
The collection case has been manually closed by the user. This means that the overdue invoices have not been paid in full and that the user has decided, for whatever reason, to close this collection cycle.Automatically closed
The collection box is automatically closed by the system. This occurs when the customer has paid the outstanding invoices (including surcharges).
Step statuses
Each step in the collection cycle can have different statuses:
In treatment
The step is in the "Pending" status. It is waiting for all parameters (for example, the day) to be met before executing.Waiting for manual transmission
The user must manually send the reminder documents by post as there is no email available for that customer.Closed
The user can choose to manually close a step. This means the step is marked as completed and the collection cycle continues with the next step.In progress
This means the step is still executing. This is a temporary status, and after completion, it will transition to another status.Skipped
The user can choose to skip a step in the collection cycle. They perform the skip action, and the collection process proceeds directly to the next step.Generate documents
This means the system is generating documents in the background. This is a temporary status, and after the documents are generated, it will change to another status.Failed
The step was not performed correctly and failed. The user needs to see why and correct it manually. It's possible an email address was missing to send the reminder to the customer.Print
The step is printing a document (reminder letter or similar document).