Arrears on services

Arrears are the surcharge you bill a client for paying their service charge late.

First things first, and the biggest surprise: by default arrears are ZERO. Prestafolio charges no surcharge to anybody until you set the rate. If you expected to see arrears and you do not, this is almost certainly why.

The two pieces of arrears

Arrears depend on two things configured in different places:

In other words: how much is charged is a business decision; how much lateness is tolerated before charging is a per-contract decision.

Enabling arrears

1. Go to Accounting → Settings.
2. Set the service arrears rate (% per day).
3. Save. That is it: it applies to every open charge of every service.

Details:

• It is a daily percentage rate: 0.5 means 0.5 % per day.
• It accepts up to 4 decimals and ranges from 0 to 100.
• Only the account owner can change it. An agent cannot: it defines how much extra money the client is charged.
• Setting it to 0 disables arrears on all services.

How it is calculated, exactly

Days late = days elapsed since the charge's due date Days accruing = days late − the contract's grace days Arrears = pending base balance × (daily rate / 100) × days accruing

Three important points:

• They are simple, not compound: a bit is added each day; arrears do not generate arrears.
• They are computed on the pending base balance, not on the original amount. If the client pays something and lowers the base, future arrears get cheaper.
• Grace is exceeded strictly: with 10 grace days, on day 10 there are still no arrears; they start on day 11.

Example

A service of RD$ 3,000.00 monthly, 5 grace days, rate 1 % per day. The charge came due 20 days ago and nothing has been collected.

With the rate at 0 % (the default), the arrears on that same charge would be RD$ 0.00 and the total due exactly RD$ 3,000.00.

Arrears are computed on the fly, never stored

The arrears you see are not saved anywhere: they are recalculated every time you open the screen. Practical consequences:

• They grow on their own every day that goes by without collection.
• If you change the rate, the arrears of every open charge change instantly, retroactively too.
• If you raise a contract's grace days, the arrears on its overdue charges drop or disappear immediately.
• A paid or voided charge projects no arrears: it has no balance left to collect.

Be careful about dropping the rate to 0 "just to test": the surcharges you saw accrued on your overdue charges vanish from the screen instantly (arrears already collected do not: that is money in the drawer and it is untouched).

Arrears already collected are deducted

If you collected arrears in a previous payment on that same charge, the system subtracts them from the surcharge it computes later. The same arrears are never demanded twice. The full step-by-step example is in Charges and collections.

Where you see arrears

• In the service detail: each charge shows its pending base, its projected arrears and the total due today.
• In the arrears book: the list of all overdue charges, oldest first, with their days late and their surcharge.
• In the app: when a charge crosses its grace period, a notice appears.

What the system tells the client

Once a day, if a charge has passed its grace period, the client is sent an arrears email with what they owe (base + surcharge) and how many days late they are, as long as they have an email on file. You get the notice in the app whether or not the client has email.

At most one notice per contract per day, even if the contract has several overdue charges piled up.

That notice collects nothing, deducts nothing and changes no charge status. It only notifies. The only one who moves money is you, when you record the collection.

A paused service still accrues arrears

Pausing stops the issuance of new charges, but charges already issued and unpaid stay alive and their arrears keep running day by day. If you want to stop the arrears on a specific charge, you must collect it or waive its arrears.

Waiving arrears

With the services:override-mora permission, when collecting you can turn on Waive arrears: the surcharge drops to zero and you collect only the base.

• It is recorded on the charge (you can see how much was waived): useful for audit.
• It is not booked as income, because you never collected it.

In accounting

The arrears you do collect are recorded in Penalty income (4102), the same account as loan arrears, because they are the same in nature. The service base goes to Service income (4103).

None of this is booked when the charge is issued: only when it is collected.