Collection-Unpaid Acounts

MLM is wonderful for collection providing up to date information on the status of each invoice and payment.

Create a new Record with "File" and "New Record". See also Creating the first Record and Data entry screen Basics.

In these examples we will include late and unpaid accounts receivables with regular or irregular payments made by the debtor.

Example 1 :

Irregular invoices and irregular payments by debtor

5 bills sent to client at various dates - interest always starts 30 days later

• 4500 - May 10, 2005 (interest starts June 9, 2005)
• 3450 - June 2, 2005 (July 2)
• 5500 - June 2, 2005 (2 bills on same date) (July 2)
• 12,000 - October 1, 2005 (October 31)
• 7500 - January 15, 2006 (February 14)

Client pays irregularly :

• 2000 - August 1, 2005
• 2500 - September 15, 2005
• 5000 - October 20, 2005 - turns out to be NSF with 25 fee
• 7500 - January 10, 2006
• 10,000 - June 5, 2006

How much is stilled owed on December 1, 2006? Monthly interest of 2% compounded monthly (could also be simple interest).

First enter basic information in the Data entry window. In order to have all invoices and payments in a neat table, our starting principal (first amount due of 4500) will not be included as Principal but will be our first "payment" of minus 4500.

Press on "Compute". The preliminary Results Table is produced below.

Notice that "Line Status" has been changed to "Invoice".

We also added a comment on the far right. In this case we added Invoice 1234 for reference.

We now simply add lines with the icon on the right that reflect all the events. We first included all the invoices (we also could have added invoices and payments in a chronological order).

Let's now add the payments made by the customer. Either position the cursor BELOW where the line is to be inserted and press on . A new line with 0.00 payment will be added. Or, you may right click on the mouse and select "Insert" and "Payment(s)".

The following window will appear from which to insert the payment at the appropriate date and amount.

We added each of the payments and line statuses for reference and reporting purposes. The 5000 NSF check on October 20 has the special line status called "Returned Ch.". When this choice is made, the window below appears in which to include the amount that can then be used for reporting purposes.

A 25 fee was also charged on that same day (the minus 25 on October 20). These fees will bear interest. If no interest can be charged on these fees, then add the -25 on the very last line - December 1, 2006 and add a comment.

Comments were placed at the end of each line.

The balance due on December 1, 2006 is thus 16,958.91.

Example 2:

Collection by what should have been regular payments

Debtor owes an amount that cannot be paid in one unique payment. There is an agreement with the collection agency by which the debtor will repay in equal payments BUT the debtor does not respect the payment schedule.

• 50,000 owed on January 5
• Debtor agreed to pay 2500 every 2 weeks starting February 1
• Interest rate of 24% annually compounded monthly

First enter the normal schedule. We know the 2500 payment but not the number of payments - MLM will calculate automatically when left at 0.

MLM will calculate 23 payments (22 at 2500 and one last payment of less than 2500).

Irregular events occur in the collection:

• Missed payment on March 1, 2006
• April 12 payment is paid 5 days late
• NSF check on April 26, 2006 which imply the payment of a 25 fee
• July 6, 2006 payment of only 1000
• Extra 5000 payment on August 13, 2006

These are simply entered one by one in the schedule (the 5 incidents and the fee have been highlighted in blue). The Lien Statuses "Unpaid Pmt" and "Partial Pmt" will open a window in which to enter the payment that should have been made: