Overdue tolerance

By default, an account becomes overdue if the minimum amount due (MAD) is not paid by the due date. The overdue tolerance feature enables you to set up additional rules that tell the Pismo platform to ignore overdue amounts if they fall within a tolerance range. In other words, if the overdue amount is within a specific range, the platform does not consider the account to be overdue, and overdue charges are not applied.

To configure overdue tolerance, set the following program parameters.

Parameter nameDefinition
Overdue tolerance percentageA percentage of the overdue amount that is used by the Overdue tolerance method to determine if the account should be considered overdue. Must be greater than 0 and less than or equal to 100.
Overdue tolerance amountA fixed amount that is used by the Overdue tolerance method to determine if the account should be considered overdue. For example, $70.
Overdue tolerance methodThe method to apply:
0 — Do not use.
1 — Maximum value. Between the Overdue tolerance amount and (MAD x Overdue tolerance percentage), use whichever value is greater. If the difference between the payment and the overdue amount is less than or equal to this value, the account is not considered overdue.
2 — Minimum value. Between the Overdue tolerance amount and (MAD x Overdue tolerance percentage), use whichever value is lower. If the difference between the payment and the overdue amount is less than or equal to this value, the account is not considered overdue.

Examples

Example 1

Suppose you set the program parameters as follows.

Parameter nameValue
Overdue tolerance percentage10%
Overdue tolerance amount$70
Overdue tolerance method1 (Maximum)

Suppose that:

  • Minimum amount due (MAD) is $100.
  • A payment is made of $80.
  • Payment is received after the due date.

The overdue amount is:
minimum amount due - the payment = 100 - 80 = $20.

Since the tolerance method is set to 1, the platform uses the higher of the following values:

  • Overdue tolerance amount : $70
  • Calculated tolerance percentage: MAD x Overdue tolerance percentage = 100 x 10% = 100 x 0.1 = $10

Because $70 is greater than $10, the platform uses $70 as the actual tolerance value. The overdue amount is $20, which is less than $70, so the Pismo platform does not consider the account overdue.

Example 2

Suppose you set the program parameters to the same values as in Example 1, except that Overdue tolerance method is set to 2.s

Parameter nameValue
Overdue tolerance percentage10%
Overdue tolerance amount$70
Overdue tolerance method2 (Minimum)

Suppose that:

  • Minimum amount due (MAD) is $100.
  • A payment is made of $80.
  • Payment is received after the due date.

The overdue amount is:
minimum amount due - the payment = 100 - 80 = $20.

Since Overdue tolerance method is set to 2, the Pismo platform uses the lower of the following values:

  • Overdue tolerance amount : $70
  • Calculated tolerance percentage: MAD x Overdue tolerance percentage = 100 x 10% = 100 x 0.1 = $10

Because $10 is lower than $70, the platform uses $10 as the actual tolerance value. The overdue amount is $20, which is greater than $10, so the Pismo platform does consider the account overdue.

Example 3

Suppose Overdue tolerance amount is set to $70, and Overdue tolerance percentage is not set. In this case, Overdue tolerance method is not applicable and is ignored by the platform.

Parameter nameValue
Overdue tolerance percentageNot set
Overdue tolerance amount$70
Overdue tolerance methodN/A

Suppose that:

  • Minimum amount due (MAD) is $100.
  • A payment is made of $80.
  • Payment is received after the due date.

The overdue amount is:
minimum amount due - the payment = 100 - 80 = $20.

The overdue amount is $20, which is less than $70, so the Pismo platform does not consider the account overdue.

Example 4

Suppose Overdue tolerance percentage is set to 10%, and Overdue tolerance amount is not set. In this case, Overdue tolerance methods is not applicable and is ignored by the platform.

Parameter nameValue
Overdue tolerance percentage10%
Overdue tolerance amountNot set
Overdue tolerance methodN/A

Suppose that:

  • Minimum amount due (MAD) is $100.
  • A payment is made of $80.
  • Payment is received after the due date.

The overdue amount is:
minimum amount due - the payment = 100 - 80 = $20.

Calculated tolerance percentage: MAD x Overdue tolerance percentage = 100 x 10% = 100 x 0.1 = $10

The overdue amount is $20, which is greater than $10, so the Pismo platform does consider the account overdue.

Example 5

Suppose you set the program parameters as follows.

Parameter nameValue
Overdue tolerance percentage10%
Overdue tolerance amount$70
Overdue tolerance method1 (Maximum)

Suppose that:

  • Minimum amount due (MAD) is $50.
  • No payment is made.

The overdue amount is:
minimum amount due - the payment = 50 - 0 = $50.

Since Overdue tolerance method is set to 2, the Pismo platform uses the greater of the following values:

  • Overdue tolerance amount : $70
  • Calculated tolerance percentage: MAD x Overdue tolerance percentage = 50 x 10% = 50 x 0.1 = $5

Because $70 is greater than $5, the platform uses $70 as the actual tolerance value. The overdue amount is $50, which is less than $70, so the Pismo platform does not consider the account overdue.