Grace Days for Line Items and Minimum Numbers of Days in Arrears for Accounts
Grace Days for Line Items and Minimum Numbers of Days in Arrears for Accounts
The dunning program determines which items are to be dunned according to the payment periods defined in the line item and the date of issue of the dunning notice (which you specify during the dunning run). The baseline date for payment and the latest possible payment date (according to the terms of payment) are added together and subtracted from the issue date. If the result is a certain number of days in arrears, the item is to be dunned.
You specify the issue date 03/13/1997 for a dunning run. For an item that is due net by 03/12/1997, the dunning program would calculate the item as being one day in arrears. The item would therefore be overdue.
You can increase the payment period by granting grace days, for example, in order to take account of bank processing days or processing time for incoming payments in your company for dunning items. You can determine grace days for items (Grace period line items) or minimum numbers of days in arrears for accounts (Minimum days in arrears (account)) (see the figure below).
To determine whether an account is to be dunned, the system adds the grace days for line items to the due date, thus giving the due date for the dunning program.
You specify the issue date 03/13/1997 for a dunning run. You defined three grace days for line items. For an item due net by 03/12/1997, the dunning program would not determine any days in arrears. The item would therefore not be overdue.
As an alternative to entering grace days per line item, you can enter minimum numbers of days in arrears (see the figure above) for accounts. The dunning program only duns the open items in an account if the highest number of days in arrears determined for an item is greater than, or equal to, the days in arrears for an account. If this is not the case, no item in the account is dunned.
(I) Days in arrears
You have defined three grace days for accounts. The dunning program calculates the highest number of days in arrears as three: A dunning notice would therefore be created for the account.
(II) Days in arrears
You have defined three grace days for the line items and six days as the minimum number of days in arrears for the accounts. The dunning program calculates that the open items that are longest overdue are only five days in arrears, and the account is therefore not dunned.
(III) Days in arrears
You have defined three grace days for the line items and six days as the minimum number of days in arrears for the accounts. The dunning program identifies those items that are not in arrears (due to the grace days). These items are not dunned. Those open items that are longest overdue are six days in arrears. The account is dunned because the minimum number of days in arrears for accounts has been reached. However, the dunning program only duns those items that are overdue despite the grace days.
Determining the Payment Deadline According to Working Days
If you would like to ensure that the payment deadline in the dunning letter does not fall on a weekend or public holiday, you can define this in the dunning procedure. In the Public holiday calendar ID field in the dunning procedure, enter a public holiday calendar key.
The payment deadline is then determined from the issue date of the dunning notice and the payment terms that you specify in the print parameters for the dunning procedure. However, if this date falls on a weekend or a public holiday, the system automatically prints the next working day in the dunning notice.