How To Create A Late Fee Product

Overview

A Late Fee is a charge that is added to a customer's invoice in the event of delayed payments that is dictated by the payment terms defined for the customer.

 

Procedure

Step 1. Create a new product.

Go through the motion of creating a new product by referring to the How To Create A New Product section. When asked to specify the Rating Method, select Late Fee.

 

 

Step 2. Specify the rate details

You have the ability to skip defining the default rate for the product for later definition when provisioning to a customer or when it is added to a package as a package product. For the purpose of this process, we will define the default rate for the product that you created.

Click the Specify Default Rate check-box and enter the rate corresponding to the currency code that the product will be used for.

Refer to table 1 below for the field definitions to help you populate the rate details.

 

Click Submit to save the changes.

 

Terms Defined 

Table 1
Field Name Description
Propagate Charges to Hierarchy When this is checked, the discount/fee will be applied to all customers in the system regardless if the discount/fee is included in the contract/rate class or not.
Late Fee Type

Indicates the manner of adding the late fee to the invoice that is being closed. Available options are:

  • Fixed Fee: A flat fee will be added to the invoice regardless of the amount and age of the unpaid balance.
  • Percentage: The percentage of the past due balance will be taken and added to the overall amount. The behavior is further influenced by the Late Fee Against Balance field.
Late Fee Against Balance

Indicates the multiplier/factor that will be used to compute with the late fee percentage. This is only application if Late Fee Type is set to 'Percentage'. Available options are:

  • Last Bill Cycle: The last balance due from the last billing cycle will be taken when computing for the percentage.
  • Total Late Balance: The total unpaid balance due from all previous billing cycles will be taken when computing for the percentage.
  • Annual Percentage Rate: The number of late days will be used as the factor for getting the percentage. The system will begin with the first late day, takes the entire balance, and divides by 365 to find a “per day late fee”, for each day, a charge is placed on the invoice which is totaled from (late fee balance/365)*late fee rate. This charge is logged, and is only applied once per day per account, even across multiple invoices, one day will never be charged twice.
Tiered Rate Type

Only applicable for Tiered Pricing, this allows for choosing the behavior of how usage data is handled for tiered rates. Available choices are:

  • Bulk: Applies the rate of the final tier to all the usage units.
  • Incremental: Applies the rate for usage allocated to each tier respectively
Tier Calculation Level

Only applicable for tiered pricing, this indicate the aggregate level of the tiered rates. Available options are:

  • Package: Calculates aggregation within the package only and if multiple packages, instances of the product within each contribute to will be considered.
  • Product: Calculates aggregation at the usage that belongs to the same product instance.
  • Account: Calculates aggregation at individual levels of hierarchy if account is part of hierarchy.
  • Invoice: Calculates aggregation for all instances of the product on the invoice.
Split Usage Crossing Bands When dealing with large chunks of data, enabling this option will allow the splitting of usage data across bands. Disabling the option will have the large chunk rated against the lower band.
Pricing Type

Indicates the type of pricing that the product will use. Available options are:

  • Standard Pricing: Specify the rate in currencies configured on the platform. This is the basic per usage unit charge.
  • Tiered Pricing: Specify tiered rates. This enables the flexibility of indicating different rates based on the number of usage units.
Rate

Pricing rate of the product.

Min Charge

Minimum charge when this product is charged to the customer. If the computed rate multiplied by the # of consumed units is less than the minimum charge, the minimum charge will be reflected on the customer's invoice.

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