7.1.7 Credit Control Settings
1. In the Block Area under Finance -> Set-Up -> Credit Control is the screen that enables the following settings to be enabled:
- Payment options available to leaseholders – This is used to record whether the leaseholders should pay on demand or whether the leaseholders have the option to also pay their service charge through a monthly payment schedule.
- On-hold - This option is used to exclude or include a complete block from the Bulk Credit Control batch processing.
- Batch processing on hold text – relevant wording can be input in this section to explain why a Block has been put On-hold i.e. ‘New client - Do not chase late non-payers until confirmed with the Directors’.
- Late Payment Treatment - This is the text that describes whether and how late payment charges can be applied. For example, users can use this field to record if interest can be charged on overdue service charges, and the rate at which that interest is charged (e.g. "Clause 14.5.3 on page 18 of the lease states Interest can be charged at the rate of 2% above the Bank of England base rate on any overdue service charges".)
See also: 4.2.9 Additional Settings
2. In the Workbench, there is a new menu option Credit Control -> Block Settings that allows users to filter, view, and edit, the Credit Control settings for all blocks.
3. Calculating Interest on Overdue Demands - In the Unpaid Demands menu on the individual Credit Control Case screen there is a Calculate Interest button and if used will show the interest amount which could be chargeable (if applicable) on overdue demands which are displayed on the screen.
When selected, the Interest Calculator pop-up screen presents three pieces of information:
- Late Payment Treatment - This is the text that describes whether and how late payment charges can be applied
- Calculation Date - This defaults to today's date and can be modified by the user
- Interest Rate - This is the interest rate to be charged on any late payments. Users should enter the required rate
Note: If there is any Unallocated Amount for the unit then a warning message is also displayed in tvhe Interest Calculator to prompt users to allocate the receipt(s) to the unpaid demands.
4. Once the Interest Rate has been entered, users select 'Calculate Interest'. The Interest is then calculated for each Unpaid Demand that is overdue. Overdue demands are those that are highlighted with a red Due Date and Amount Outstanding; demands that are not overdue, but are simply unpaid, are not highlighted.
Note: Interest is NOT calculated on any Opening Balances as the due date is unknown.
5. The system will calculate the number of days overdue (i.e. Calculation Date minus Due Date) for each overdue demand. The Interest amount is then calculated as follows: Interest = ‘Amount overdue’ x ‘Interest rate %’ x ‘Days overdue’ / 365
6. A 'Raise Demand' button on the Unpaid Demands tab takes the user to the Fee Collection screens (within the Block Area) for the relevant block. Users can then raise any additional charges if they wish i.e. an Ad-Hoc demand to include an overdue interest amount plus any additional late payment administration fee.
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