Overdue

The Bill Type field is used to specify individual overdue status. Multiple bill types aging definitions can also be defined. It defines the bill type for which aging rules defined from the Overdue Status to Effective Date fields. Overdue rule definition is made based on the Bill Type so that different rules can be set up for different types.

It helps to identify the aging rules that determines worst ageing status for the arrangement. This is required for Lending Product lines. For other Product Lines, it may be left blank.

Commitment plan deposits (Savings Plan) have notional payments defined in Payment Schedule, which are selected as EXPECTED. To age these bills as well as to record the missing payments and store the expected due amount, the Overdue Property Class allows the bills selected as EXPECTED to be aged.

For a deposit arrangement, wherein notional payments are expected, the Overdue Product Condition is defined as follows for recording missing payments, storing the expected due amount and ageing the expected bills.

The Status field denotes the overdue or ageing status of the arrangement. The list of values allowed is equal to the list defined in EB.LOOKUP file with the ID in the AA.OVERDUE.STATUS*<odStatus> format.

Each status rule defines when ageing of a bill occurs and the conditions to apply for the ageing activity.  The status rules are defined in sequential order. Each OVERDUE status that overdue amounts can age through is specified by the user in EB.LOOKUP.

Each overdue status can then be used to specify the ageing conditions and any associated accounting.  Within the specified AC.ALLOCATION.RULE, the event corresponds to the status.

The ageing process can take place depending on the number of days after the bill was due or by the number of overdue bills. This is denoted by the value selected in the Type field. This field is associated multi-value field starting from Overdue Status to Effective Date. Allowed inputs are:

• DAYS - The value in the Ageing field denotes number of days
• BILLS - The value in the Ageing field denotes number of bills

The number of days or bills (relative to the amount due date) before an amount attains this Overdue Status is specified in the mandatory Ageing field . There are two types of ageing: by days and by bills.

When bills are to be aged by days, give the number of days (numeric value) from the make due date. If it is by bills, then give the number followed by 'B' character. In both cases, the number defined should be in ascending order.

An overdue definition should either be fully based on days or by bills, that is., it is not possible to define an overdue status based on days and another status by bills. A value of zero in this field indicates that the bill will move the overdue status on the same day the bill was made due. However, a value of zero cannot be set to more than one overdue status.

For each Overdue Status defined, a notice may be sent to the customer informing them of the status of their arrangement. The Notice.1.1 Days field represents the calendar days post to an ageing status that a chaser advice to be sent.

Notices can be sent out periodically until an arrangement is no longer in this Overdue Status by adding a frequency in the Notice.1.1 Frequency field.

Both notice days and frequency can be given, in which case, the system produces advice after the notice days and then based on the frequency set the advices would be sent.

If notice days are not given, system cycles the notice dates with the base as ageing status date.

The user can specify that if a bill reaches a certain status, all other bills for the arrangement are aged to the same status. This is achieved by selecting either Yes or No from the Age All field. This field is set to Yes for a higher overdue status.

This functionality is typically used for a non-accrual status which results in all bills becoming non-accrual when a single bill reaches this status.

The Susp field represents whether the arrangement needs to be suspended when the current aging status is reached. Choosing field Susp with a value of ‘YES’ would result in the suspension of P&L entries from the date of suspension and the posting of accruals to a special CRF category.

When few bills have aged and are in different / same overdue statuses based on the overdue definition of the arrangement, on full settlement of one or more bills, the aging statuses of the remaining bills will be recalculated. This full settlement can be of two ways:

• Full repayment of the outstanding amount of the bill.
• Delinquent settlement such that the settled bill does not age further.

However, for the above recalculation to happen the Status Mvmt field in overdue property condition should be set as YES for the aging statuses for which recalculation is required.

The activities that trigger these are:

• LENDING-APPLYPAYMENT-PAYMENT.RULES
• LENDING-UPDATE-OVERDUE

When the oldest bill moves to AGE.ALL.BILLS status, say NAB, all the due and aged bills move to this status. If the oldest bill is deemed to be settled (as per delinquency setup) or settled financially, then the rest of the un-settled bills move to their respective aging status depending on the overdue definition. The balances also are reversed accordingly to reflect the new aging status.

When user changes the overdue definition using the UPDATE activity, all the unsettled bills are reclassified as per the changed overdue definition.

The Move Bal field denotes if accounting entries are to be raised for the overdue status movement. If this field is set to YES, accounting entries are needed for status movement, the current status will be debited and previous status which has move balance set to YES or DUE balance type will be credited.

The associated balance for the status can be used as the basis for calculation of an interest class of Property (example Penalty Interest).

If the user has chosen to move balances upon ageing of a bill, the accounting entries can have effective dates corresponding to the status change, the previous status change, or the due date. This allows for the ability to have a grace period and a following status which can be effective from the original due date. This is indicated in the Effective field. The allowed values are DUE and STATUS or it can be left blank.

• DUE - The value date is the bill due date
• STATUS - The value date is the ageing status effective date
• Blank - The value date is the bill's financial date

Deferment of ageing allows the loan customers to repay the instalments falling on a holiday without any penalty until the EOD of the immediate working day.

The Pre Grace attribute is used to defer the ageing activity. It has the following two options:

• Forward - When an instalment falls on a holiday, first ageing of such instalments is delayed. A complete working day is given for the loan customer to repay the instalments without making the instalment overdue. When the customer fails to repay the instalments by the EOD of the immediate working day, a penalty is charged from the instalment date or the ageing status changes the date depending on the configuration in the Effective Date field of the Overdue property class.
• None - Ageing is calculated from the payment date irrespective of whether the payment falls on a holiday or a working day.

Arrangement Status Determined By Status of the following Bill Type is an optional field to indicate which of the bill type aging rules determine overall arrangement aging status, and the resolved status is updated in Arr Age Status in AA.ACCOUNT.DETAILS.

As part of conversion, this field is updated as PAYMENT as only the bills that have Bill Type as "PAYMENT" were picked up for ageing.

A payment tolerance is an amount or percentage of the billed amount which can remain “due” without becoming Overdue. The Pay Tolerance field represents the tolerance percentage that needs to be applied on the bill's original amount.

The tolerance percentage is applied on the bill amount that was issued. It is then compared with the current outstanding amount in bill. If the repayment of a bill is within the specified tolerance the user can specify in the Tol Action field that the bill is considered to be ‘Repaid’ which results in accounting to move the remaining balance.  Alternatively the user can specify that the bill does ‘Remain’ in the current status but it is not aged.

The Ccy field denotes the tolerance currency. If the currency defined in bill matches the Ccy, then the tolerance amount is taken from the Amount field.

The Amount field represents the tolerance amount that can be set for the bill's outstanding amount. If the currency defined in bill matches the Ccy, then the tolerance amount is taken from this field. If the outstanding amount is within the tolerance, then bill is either not aged or will be considered as repaid based on the setting in the Action field.

The Action field denotes the action to be taken when the bill amount is within the tolerance set. If it is set to REMAIN and if the bill amount is within the tolerance, the overdue status will not be changed and remains in the same status.

• It is possible to allow actual settlement of repayment amount towards overdue bills, which is still based on the settlement sequence defined in Payment Rules Property Class – which is by Property or by bill date and Property within the bill.
• The Age Bills field denotes whether to consider the current bill for further aging when the bill is deemed to be settled (that is Delinquent Amount in the bill is zero and Arr Age Status is settled). Valid options are: Bill Status or Settle Status.
• The bill may be deemed as settled from delinquency stand point but may contain outstanding dues at the end of the settlement allocation. (Refer to the Status Mvmt field for the required setup)
• This can be specified using the Bill Settlement field with a value of Bill Total and Age Bills set to Bill Status.
• The Delinquent Amount field in AA.BILL.DETAILS holds the outstanding delinquency amount pertaining to that bill.
• After make due, Delinquent Amount is equal to the Outstanding Total Amount, while repayment, if the repayment amount is equal to the bill amount, then the Delinquent Amount field is marked as ‘0’ and the bill is marked as settled and the bill is not considered for ageing. If the Outstanding Total Amount still exists for the bill, when further repayments are made the Outstanding Total Amount in the bill is settled first. The overdue status is also updated in Account record.
• The delinquent bill is settled and the Arr Age Status field is marked as SETTLED in the AA.ACCOUNT.DETAILS record.
• Consider the case where 2 bills are made due to an extent of 100 each. A repayment is made to an extent of 100 where the repayment sequence is by BILL.PROPERTY (Seq: Account, Interest), as per delinquency setting the 100 should settle the 1st bill and make the field DELIN.OS.AMT as 0.

The below table describes the delinquency processing before and after repayments.

Balances Before Repayment:

Balances After Repayment (Repayment by Bill property (Account, Interest))

In the Balance Maintenance Property class, the Delinquent Amount field is captured during the BILL.CAPTURE activity for the arrangement.