Procountor offers the option to automatically handle collection and penal costs. The feature automatically calculates the penal costs of invoices paid late and suggests them to be added on the next invoice to be sent to that customer. Procountor also has the option to forward the invoices to a collection service that will handle the payment reminders and collection. More information on the payment reminder and collection services offered by collection companies can be found here. More about creating and sending payment reminders can be read in this article.
Enabling the automatic handling of collection and penal costs
The first step of enabling the automatic handling of collection and penal costs is to add them as products in the products register:
- Collection costs, X euros, VAT 0 %: Collection costs can be given a default price that can be edited later on individual invoices. The unit can be chosen freely, e.g. pcs.
- Penal interest, 0 euros, VAT 0 %: The penal interest is calculated according to the penal interest percentage, and the price is set as zero. The unit can be chosen freely, e.g. days.
The next step is to enable the Is the automatic handling of collection and penal costs enabled? by ticking the box in the Debt collection settings (Management > Company info > Debt collection settings).
- In Collection costs product and Penal expense product, select the products added in step 1.
- In Penal expense date margin, choose a value to determine the maximum delay in payment. If, for example, the value is set as 2, this means the calculation of penal costs starts two days after the due date of the invoice. By default, the field has no value filled in, meaning that the calculation of penal costs starts straight from the due date. The automatic calculation takes into consideration weekends and holidays.
- The minimum sum of penal interest to be calculated determines the minimum sum of the costs, and any sum smaller than this will not be included on the invoices. This means Procountor will not automatically suggest adding penal costs on the invoice of a business partner unless the costs are greater than this sum.
- Default sales invoice interest rate determines the general default interest rate.
- Default terms of payment for sales invoices is for determining the general terms of payment.
- Collection partner dropdown is used to choose a collection partner, if applicable. The options are Maksuvahti and Ropo Capital. Invoices can be forwarded to the collection services of the selected partner from Procountor. More about the integrated collection and payment notice services can be read in this article.
How automatic collection and penal costs are calculated
How penal costs are calculated:
When the collection and penal costs feature is enabled, calculation of penal costs is possible an all invoices created after activating the feature. Procountor will automatically calculate the possible penal costs for all invoices that are paid late.
If the customer pays the invoice late, i.e. the payment date is after the due date (noting the possible date margin) Procountor automatically calculates the number of days the payment was late. This data is recorded in the database.
How collection costs are calculated:
Collection costs can be saved in the program when the payment reminder is created. When a customer is sent a payment reminder through Procountor, clicking the Send button opens a new window Add collection costs where the program asks if a collection cost row should be automatically added to the customer’s next sales invoice. If Yes is selected, the costs are added on the next sales invoice sent to the customer. If No is selected, the collection costs will not be added.
To allow Procountor to calculate the collection and penalty costs for sales invoices, each invoice must be allocated to a business partner in the business partner register.
- To search for unfocused invoices, tick the option Search unfocused only in the Advanced section of Receipt search.
- Select the unfocused invoice in the search results and click More actions and Allocate to a business partner. This open a new window for selecting the correct business partner.
Invoicing the costs on the next invoice
When a new invoice is created for a customer that paid their previous invoice late, the program will automatically suggest adding the penal costs on the new invoice. Penal costs will not be suggested on the invoice if the previous invoice’s due date has passed but the invoice is still unpaid. All accumulated penal costs are invoiced together and therefore Procountor will offer the penal costs only after the outstanding invoice has been paid.
Adding of collection costs is suggested if a payment reminder has been sent to the customer, and the option for adding collection costs for the next invoice was selected before sending the reminder. The previous invoice does not have to be paid before charging collection costs, and therefore adding collection costs on the next invoice will prompted even when the previous invoice is still open.
When the invoice is created, a question appears on the screen: “Add collection costs to the invoice?” Even though the question only refers to collection costs, it may also mean penal costs or both collection and penal costs.
- If answered No, the invoice is created normally. The same collection and/or penal costs will be similarly suggested the next time an invoice is being sent to the same customer.
- If answered Yes, the collection and/or penal costs will be added on the invoice rows. Saving the invoice adds the number of the invoice the costs concern in parentheses after the product name. The same invoice can contain several collection and penal costs rows. This depends on the number of invoices that have caused late fees and costs at the time the new invoice is created. When the invoice is saved for the first time, the collection and penal costs are considered as collected and will not be suggested to be added on the next invoice created for that customer.
Removing the costs on a single customer’s invoices
If the collection and penal costs are not meant to be charged at all and they do not need to be added on the invoices, follow the steps below:
- Select the offered collection and penal costs on the customer’s invoice.
- Save the invoice.
- Remove the collection and penal cost rows on the invoice.
After this, these collection and penal costs will no longer be automatically suggested for this particular customer’s invoices.
Keeping track of the costs and invoicing the costs separately
Invoices with accumulated late fees that have not yet been invoiced can be searched with the Receipt search. After the automatic handling of collection and penal costs has been enabled in the usage settings, the option Search unpaid only will appear in the top right corner of the Advanced search field in the Receipt search.
When invoices are searched with the Search unpaid only option selected, only invoices with fees that have not yet been invoiced are shown in the search results. A new invoice can be created for these customers by right-clicking the row and selecting Create new invoice. After this, a new invoice can be created following the steps in Invoicing the costs on the next invoice, where these accumulated costs will be added on the new invoice.
Invoiced and uninvoiced collection and penalty costs can be inspected on the Collection and penalty fees report.
Invoicing the costs on imported or automatically transferred invoices
When Importing invoices, Procountor checks each invoice for any overdue fees and adds them to the invoices when they are imported (if the automatic handling of collection and penal costs is enabled). Import invoices, phase 2 (2) view has the Collection and penal expenses option ("Automatically add uninvoiced collection and penal expenses to the invoices in the invoicing data?"). By default, the option is selected, but you can also unselect it, so collection and delay costs are not included in invoices that are generated when the invoices are imported.
For invoices imported with automated invoice transfer, collection and delay charges are added automatically when the invoices are imported into Procountor in Unfinished or Unsent statuses. No charges will be added for invoices imported in other statuses. For invoices that are imported via automated transfer, it is not possible to determine whether or not costs are added to the invoice, but if you do not wish to be invoiced, they can be manually removed from the invoice before the invoice is approved and sent.
For invoices imported through Procountor API interface, collection and penal costs are not automatically suggested. For invoices imported via API, any collection and penal costs should be added to the invoices manually.