Reminder letters and penalty interest processing

Requirement

Some customers must be reminded to pay outstanding invoices. The penalty interest procedure is not required, but if a company wants to charge interest, it must be done legally.

M3 solution

The credit management process that is supported by M3 consists of these main activities:

1. An itemized monthly statement is sent to the Accounts Payable department for each customer with unpaid invoices. The statement includes a summary of the total debt that is split into aging buckets.
2. The statement is followed by one to three reminder letters. These are only sent to customers with unpaid overdue invoices, according to their payment terms.
3. Then, if still not paid, the total debt owed by a customer is represented by several individual invoices and handed over for legal collection.

   A penalty interest invoice can also be used as part of the collection process. In this case, the invoice or the reminder letter must indicate that interest is calculated from the due date until the payment date.

Using the proposal function, users can list invoices by reminder level, which they can review.

Using reminder categories, users can set minimum amounts, reminder level, fees, interests and up from which level items are sent to a collection proposal. Users can choose to view only open items, all items, and the balance of a connected supplier.

For reminder letters, users can create user-defined texts for preface and postscript by category, with variables for the last payment date.

In this country, most of the features are commonly used, but fees and interests are usually not accounted for, and separate interest invoices are not created.

Configuration guidelines