The CIS can be used to develop a penalty cost for late payers by utilizing the Extra Cost routine for additional costs on a revenue basis. Multiple extra cost items can be set up for this purpose, based on the delay period.
For example, to reflect an average 1% of revenue penalty per month after the first month (using simple interest), three extra cost items might be set up as follows:
|
Title |
Rate |
| Late Payer 30 to 60 Days |
0.5% |
| Late Payer 60 to 90 Days |
1.5% |
| Late Payer 90+ Days |
2.5% |
This can be set up using the extra cost maintenance routine (accessed using the Profile Maintenance item Extra Costs.) Determine the percentage penalty you wish to use and assign an alpha designation each of the items. In the Add mode, on the Action menu, enter the alpha code and title. Then, for cost application, select percent of revenue, and then the penalty amount. (Do not forget to account for the first 30 days not being past due.) When all items are set up press escape to exit the maintenance options.
When any of these items are selected by the user, when costing a specific customer, an extra cost will be calculated which reflects the appropriate penalty. The code may be indicated for a customer in the Customer Profile as well.
Updated February, 2005