Reminders

Reminders are sent to debtors who do not pay their invoices on time. You can also send your reminders by e-mail.

Video

Description

All outstanding items have a specific due date, which is the date by which the invoice must be paid. You can send your debtors reminders for all their outstanding items that have not been paid on or after the due date. For each debtor you can print one reminder letter that lists all the payments that are overdue (instead of one reminder per outstanding item). You can also print any entries that are not yet due for payment.

Reminder sets

Profit provides you with several reminder sets that have different reminder layouts. You can choose to send reminders based on the age of the outstanding items. for example by using the following classification:

  • Friendly reminder (10 days after due date)
  • Normal reminder (30 days after due date)
  • Serious reminder, with the message that legal action will be taken if the invoice is not paid immediately (60 days after due date).

    Note:

    This explanation is based on 'x days after due date'. However, you can also base it on the date of the last reminder, which you can specify in the reminder set.

If a debtor has several outstanding items that qualify for a reminder, Profit will list them all on one reminder, based on the oldest due date. The following situations may occur:

Outstanding items

Reminder

A reminder to be sent for one overdue payment.

Profit generates the first reminder (friendly reminder).

Two overdue payments, of which:

  • one reminder has already been sent for one item
  • a reminder has not yet been sent for the other item.

The item for which a reminder has already been sent, is the oldest, so Profit generates the second reminder (normal reminder), listing both overdue payments.

Two overdue payments, of which:

  • two reminders have already been sent for one item
  • a reminder has not yet been sent for the other item.

In addition, there is an outstanding item that is not yet due. In the reminder order, you have not selected the Include non-expired invoices also  check box.

The item for which two reminders have already been sent, is the oldest, so Profit generates the third reminder (serious reminder), listing both outstanding items. The item that is not yet due is not included.

Two overdue payments, of which:

  • two reminders have already been sent for one item
  • a reminder has not yet been sent for the other item.

In addition, there is an outstanding item that is not yet due. In the reminder order, you have selected the Include non-expired invoices also check box.

The item for which two reminders have already been sent, is the oldest, so Profit generates the third reminder (serious reminder), listing both outstanding items.

This reminder also lists the outstanding item that is not yet due.

 

Reminders for outstanding items with payment instalments

If you generate reminders for outstanding items with payment instalments, Profit checks the expiry date of the invoice as well. However, this only works well for a first reminder. For every reminder with payment instalments, Profit always only uses the report of the first line of the reminder set. Sending a second, third or fourth reminder letter (for example to charge the collection costs), currently only works for invoices without payment instalments in Profit. In this case, if a second or subsequent reminder letter is required, you can convert the invoice with payment instalments to an invoice without payment instalments. To do so, deselect the Payment instalments check box in the properties of the outstanding item. The complete outstanding amount of the invoice is then included in the next reminder.

Interest on reminders

Profit calculates the interest on reminders if this has been specified in the administration settings. The settings also include the interest percentages. An interest percentage is always valid for a certain period (range of dates). If the interest changes, you record a new line with the new percentage in the settings. Profit prints the interest due on the reminders if you have linked a suitable report layout to the reminder in the settings.

Profit will only calculate the interest for outstanding items that you create a finalised reminder for. The interest is not added to the outstanding item (which means it retains its original value). When you reconcile receipts with outstanding items, you can enter the interest received. Again, this depends on the administration settings.

Profit calculates the interest on reminders for an invoice for a maximum of one year, starting from the date of the invoice. After that, you can enter the interest due on the invoice as a separate payment due. The calculation of the interest due on an invoice is based on the specified percentages and corresponding validity periods during which the invoice is due. The formula is as follows:

( ((1st period percentage/100)/365) * (number of days due - interest-free period in days) + ((2nd period percentage/100)/365) * number of days due + …… +
((nth period percentage/100)/365) * number of days due) * outstanding invoice amount.

Example:

  • Annual rate 1st period  = 10%, 2nd period  =8%
  • Interest-free period = 15 days
  • Invoice amount due = 1,000 Euro

    Number of days overdue = 20 days in 1st period and 30 days in 2nd period

    The interest is calculated as follows:

    ( ((10/100)/365)*(20-15)+((8/100)/365)*30 )*1000 = 7.945205

    The balance due plus the amount in interest is the total amount payable for the invoice on the reminder: 1000 + 7.95 = 1007.95 Euro.

This is assuming the year has 365 days.

Note:

Profit calculates the interest on reminders for outstanding items starting from the due date, that is, if the entire outstanding item has not been paid. However, if there has been a partial payment for an outstanding item, Profit calculates the interest from the date of the partial payment, and not from the due date of the outstanding item.

Preparation

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