What is the relevant payment due with installments?
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Installments split an open invoice amount into smaller parts and spread the payments due over a larger period.
Applying staged payment plan with installments
Once applied, installments impact the creation of SEPA Direct Debit orders and dunning reminders. In both cases, JustOn takes the relevant amount due only:
- If at the time of exporting SEPA Direct Debit orders only one installment of a payment plan is due, only this part will be subject to a corresponding bank transfer order.
- If, for example, at the time of a dunning run only the second and third installments of a payment plan are overdue, only this portion will be subject to the produced reminder.
This example illustrates this behavior:
There is an invoice of 100,00 with four equally distributed monthly installments of 25,00, like
| Title | Date | Amount |
|---|---|---|
Installment 1 |
2020-12-05 |
25,00 |
Installment 2 |
2021-01-05 |
25,00 |
Installment 3 |
2021-02-05 |
25,00 |
Installment 4 |
2021-03-05 |
25,00 |
Now think of the following sequence of events:
1) You have JustOn create SEPA direct debit orders on December, 1st. Consequently, it will produce an order of 25,00, due on 2020-12-05. Assume the payment succeeds, so the remaining open invoice amount will be 75,00, with the next payment of another 25,00, due on 2021-01-05 – according to the payment plan.
2) You have JustOn create SEPA direct debit orders on January, 1st, which produces a direct debit order of 25,00, due on 2021-01-05. Now this payment fails. It becomes overdue in accordance with your dunning configuration, like after 14 days.
3) You have JustOn create SEPA direct debit orders on February, 1st, which again produces a direct debit order of 25,00, due on 2021-02-05. Assume this payment also fails, becoming overdue after another 14 days.
4) You execute a dunning run on February, 20th. The two overdue installment payments of 25,00 each will be subject to the dunning – producing a total dunning amount of 50,00.
The remaining installment payment of 25,00 will not immediately become due with the dunning. It will be subject to the next payment cycle when creating SEPA direct debit orders on March, 1st.
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