All About Delinquency

When accounts have an overdue balance on their invoices for a certain period of time, they enter delinquency. When this occurs, remediation is taken to put mechanisms in place to receive the payment, work with the customer to build plans to help or identify when a disconnection may be required. gaiia offers a comprehensive delinquency module to help you manage this entire process and this document will provide a comprehensive overview on it.

The Delinquency Timeline

To better understand when delinquency occurs, it is helpful to understand the timeline of events that occurs before a customer is considered delinquent. In subsequent sections, managing a delinquent account, communication, automation and the delinquency module will be discussed in further detail.

Relevant Billing Settings

While not all billing settings impact delinquency directly, they are helpful in understanding the general series of events that take place before the account becomes delinquent.

• Invoice Day -> The day each month an account's invoice is generated.
• Auto pay Day* -> The day each month auto payment is done for an account (if configured). 
• Days to become overdue after invoice day -> How days must elapse before an invoice is considered overdue.
• Days before payment due reminder* -> How many days after an invoice was issued before a reminder is sent to the account if no payment was received.
• Minimum due for delinquency -> The minimum outstanding balance (considered overdue) that an account must have before they are considered. For example, if an account had an overdue balance of $1.00 and this setting was $10.00, the account would not be eligible for delinquency.
• Days to become delinquent after an invoice becomes overdue -> How many days must elapse on an overdue invoice before the account becomes eligible for delinquency.
• Pending payment delinquency grace period -> If an account is paying through ACH or a bank account, they often take many days to process. During this period, a "Pending" payment is added to the account indicating it is currently processing. If this is the case and an account could be eligible for delinquency, it will be delayed by the number of days specified in this setting. 

*Does not directly affect delinquency

When an Account is Considered Delinquent

An account will be considered delinquent in gaiia when they meet all of the criteria below:

1. They have one or more invoices that have been overdue for a specific number days
   1. Determined by the "Days to become delinquent after an invoice becomes overdue" billing setting.
2. The balance due on these overdue invoices exceeds the minimum amount due that would be considered for delinquency
   1. Determined by the "Minimum due for delinquency" billing setting.
3. There are no pending payments on the account that would prevent delinquency
   1. Determined by the "Pending payment delinquency grace period" billing setting.
4. A grace period was not already applied to the account extending the delinquency date (discussed in the "grace period" section below).

Delinquency Timeline Example

Using the knowledge above, this section will provide a flow to outline how a customer moves into delinquency. Naturally, this is an illustrative scenario and used to help provide general education on delinquency.

Example Settings

Invoice Day -> 1st

Auto pay Day -> Same day

Days to become overdue after invoice day -> 10

Days before payment due reminder -> 5

Minimum due for delinquency -> $10.00

Days to become delinquent after an invoice becomes overdue -> 5

Pending payment delinquency grace period -> 5

Example Timeline

July 1st

• An invoice is generated for the account
• Invoice due date is July 11th
• Invoice communication is sent
• Auto pay is attempted on the invoice

July 6th

• A payment reminder communication is sent to the account

July 11th

• The invoice is considered overdue
• An overdue communication is sent to the account

July 16th

• The account becomes delinquent
• [Depending on setup] Delinquency communication is sent

Additional Settings to Further Customize Delinquency

Apply a Fee when a Customer Becomes Delinquent

This setting will allow a fee (such as a late fee) to also be applied on the account upon the account entering delinquency. gaiia will automatically charge the customer this fee when the account becomes delinquent. In order to set this up, the appropriate fee must first be created within the product catalogue and then selected with the billing settings. Only accounts becoming delinquent after this fee was setup will have it applied.

Prorate the Suspended Subscription when the Account Become Delinquent

While not a common practice, in the event an account's services are suspended due to delinquency, gaiia can create a prorated discount for the length of time the account was suspended.

Managing Accounts through the Delinquency Module

As accounts enter delinquency, there is likely remediation done to resolve things with the account, communication and a general flow that is taken. The delinquency module is designed to help support that process allowing for each delinquent account to be placed through a series of steps, track actions taken, assign different accounts to user to manage them and, in general, keep a tab on all of these accounts.

Delinquency Module Overview

The delinquency module provides a dedicated area within gaiia that lists all of the delinquent accounts and provides tools to manage and track actions taken.

The main point of reference is the delinquent accounts list that provides key information on that delinquent account. The following information can be seen:

• Name -> The name of the account
• Delinquent Since -> The date the account became delinquent
• Step -> The current delinquency step the account is in (refer to the section below for more details)
• Step Since-> How long the account has been in their current delinquency step
• Step due date -> Defines how long an account should remain in that step before intervention is required
• New payment received since -> Indicates if a payment was made on the account that could resolve the delinquency and the date it occured
• Assignee -> The user currently managing the delinquent account
• Need intervention -> Whether activity occurred on the account that receives user intervention (such as resolving delinquency in the event of a payment)

At any point, each row in the list can be clicked on to take the user directly to the account profile.

The actions menu in each row allow certain actions to be performed:

• Assign to me -> Assign the delinquent account to your user (allowing you to take actions on the account)
• Unassign -> Unassign the user currently assigned to the delinquent account
• Details -> View the current delinquency details of the account and provides an interface to move the account to a different delinquency step (discussed in more detail in a section below)

Each row is also expandable allow for quick reference of the dates an account was placed in each delinquency step.

Delinquency Steps

Within the delinquency module, an account can be placed in a number of different steps to track the status of an account's delinquency.

The steps are as follows:

• New -> The default step most accounts are placed in when they become delinquent. It is intended to be the first step of the delinquency process where further action is then taken. No additional actions occur within gaiia when an account is placed in this delinquency step. It requires manual intervention through the delinquency module.
• Suspended -> The account will have their services suspended. This can trigger further manual intervention to start the suspension workflow or can be automated using the appropriate settings.
• Disconnected -> The account will have their services disconnected. This simply places the account in the delinquency step for tracking. An additional cancellation workflow will need to be triggered manually.
• Paid by customer -> Resolves the delinquency status on the account. Can be automated to apply with user intervention when a payment is received or requires a user to explicitly place the account in this step.

Moving an Account into Delinquency Manually

There may be cases where an account needs to be made delinquent outside of the typical workflow. This can be done directly within the delinquency module. In the search bar at the top of the screen, search for the account that needs to become delinquent. When found, select the account and it will become delinquent starting at the first step in the delinquency process.

Managing a Delinquent Account

A key part of the delinquency module is managing a delinquent account and moving them through the various steps (or resolving the delinquency).

In order to manage a delinquent account, they must be first assigned to your user. The process can then begin by using the "Details" option available for each row shown in the delinquency list.

A "Details" window will appear providing key details on the user and delinquency. Most notable is the "Change step" button which will allow you (if assigned to that account) to update the delinquent step of the account.

Adding Automation to Your Delinquency Process

gaiia can help automate some of the delinquency process for you, requiring less intervention from your users. This is configured through a few additional billing settings that further customize how the delinquency process will work.

Relevant Billing Settings

The following billing settings all contribute to helping automate the delinquency process.

First delinquency step when an account becomes delinquent

The first step all accounts will enter when they become delinquent. This allows you to further customize the delinquency process and bypass steps that may not fit within your current process. Such as suspending customers immediately upon delinquency instead of first taking remediation steps.

Automatically move the account out of delinquency when it has been resolved

This setting will determine whether a user needs to manually move the account out of delinquency (by moving them to the "Paid by customer" step) or gaiia can resolve it automatically. Keep in mind, delinquency on an account can be considered resolved when:

1. The account makes one or more payments that brings their balance due below the minimum threshold needed to be considered delinquent.
2. A grace period is applied to the account.

Automatically suspend an account when transitioning them to the suspended delinquency step

When enabled, this will automate the process of suspending an account if they are placed in the "Suspended" delinquency step. This means the suspension workflow will automatically be triggered as soon as the account is placed in this status, whether automatically by gaiia or manually by a user through the delinquency module.

Tip: If you set the first delinquency step to "suspended", all accounts will be automatically suspended when they enter delinquency. 

Automatically reactivate a suspended account when delinquency has been resolved

This setting will allow you to automate the process of reactivating an account if they have been suspended due to delinquent. Like if done manually by a user, a reactivation workflow will be triggered automatically by gaiia (if the setting is enabled) that will be done as soon as delinquency is resolved.

Apply a Grace Period

There can be times where you wish to issue a grace period to an account to delay delinquency for a number of different reasons. When applied, this will either resolve the the delinquency status of the account or push out the date when they would be considered delinquent.

To apply a grace period to an account, please follow these steps:

1. Find the account you wish to apply the grace period to.
2. Navigate to the "Billing" tab of the account and select the "Invoices" section from the menu on the left.
3. Click the "Grace period" button.
4. In the pop-up that appears, use the "Extended delinquency date" field to set the new date that the account can begin to be considered for delinquency again.
5. Click the "Confirm" button to apply the grace period.

Please note: The maximum number of grace days you can apply is determined by the "Maximum amount of days for manual grace period" billing setting.