Arrears Process - New

A Schedule of Arrears can be configured to automatically issue notices or letters based on an individual owner’s circumstances. This process supports the billing of arrears fees at the time of generation, creating an efficient workflow and ensuring a clear audit trail through notations recorded directly on the owner’s account.

Arrears schedules can be customised using parameters such as minimum arrears balances, levy period criteria, or total outstanding amounts. Different fees can be applied at each stage of the arrears process, along with the preferred delivery method for notices. Running arrears reports prior to generating notices is recommended, as this helps identify overdue owners and can be completed either globally or per building.

This article outlines how to run overdue arrears reports and complete the arrears process using global arrears processing in Report Distribution.

How Does Arrears Work?

When an arrears letter or notice is produced, it states the total amount outstanding, including interest and arrears notice fees (if applicable). It also puts a ‘flag’ on the lot account to say ‘I have generated letter number X’.

If the owner pays and their balance either reaches $0.00 or the balance threshold set in Receipt Entry Configuration, then the arrears flag is ‘reset’. So when the lot account falls into arrears again, they will be sent the first letter or notice in the arrears schedule.

What often happens is that an owner will pay the amount of their levies, but not necessarily pay the arrears fee and/or the outstanding interest, which is accruing daily, i.e. even if the owner pays the outstanding levy, the owner's account balance doesn’t actually reach $0.00 or the balance threshold set in Receipt Entry Configuration, and subsequently does not reset their arrears flag.

The implications of this are that when the next levy period is generated and the owner doesn’t pay and falls into arrears again, the system will not produce an arrears notice until the owner qualifies for the next notice or letter in the arrears schedule.

Before continuing with the arrears process you should be across the following configuration settings.

Receipt Entry Configuration

See Receipt Entry Configuration for more info.

1. Open the Receipt Entry menu.
2. Click File > Configure. 

Clear Arrears Flag
If enabled, the owner's arrears flag will be cleared automatically when their payment is receipted and their account balance becomes zero, or below the pre-configured tolerance allowance (see below). This is a global setting and will affect all users.

Clear Arrears Flag Tolerance
This field is only available if the Clear Arrears Flag setting (above) is enabled. Type in the amount that an owner's balance needs to be reach in order to reset their arrears flag. For example, if you set this to 50, and an owner's payment leaves them with a balance of $50.01, their arrears flag will not be reset.

Levy Arrears Process

This is the recommended process to complete a global arrears run across your portfolio. 

1. Levy Arrears Pre-Issue Report

Produce a Global or per Building Pre-Issue Report to Excel which provides a report of owners currently overdue for the selected buildings, columns will display what arrears notice will be issued, the lot, unit number, amount of levy arrears outstanding. This report can then be checked before issuing the Arrears Notices. 

1. Search or select Levy Management.
2. Select Reports /Levy Arrears Pre-Issue.
3. Tag all or subset of buildings then Proceed. 

2. Arrears Manager

After reviewing the Levy Arrears Pre-Issue report, set any lots to Disable, Clear or Delete arrears flags in Arrears Manager as required from Levy Arrears Manager. 

1. Search or select Levy Management.
2. Select Options/ Levy Arrears Manager.
3. Highlight the lot to take the following action:
   • Disable/ Set No Arrears: Click on the Disable or Enable button to adjust.
   • Clear: Click on the history icon and highlight the previously issued notice line item and click Clear. 
   • Delete: Click on the history icon and highlight the previously issued notice line item and click Delete. 
   • Unclear: Click on the history icon and highlight the previously issued notice line item and click Unclear.

3. Global Levy Arrears Issuing 

The issuing of arrears notices will follow the schedule configured in Arrears Notice Setup. This can be completed Globally for all buildings or exclude any buildings which may require a more hands on approach such as new developments, buildings soon to be lost, new buildings, contentious buildings.

1. Search or select Levy Management.
2. Select Reports /Levy Arrears to open the Report Distribution Levy Arrears Notice screen. Review cog wheel configuration and adjust if required.
3. From the Building section ..., tag all buildings (untag any buildings which may require a more hand on approach such as new developments, buildings soon to be lost, new buildings, contentious buildings).
4. Review Distribution Method, ensure Save Report is selected to store a copy of the Arrears Notice. 
5. Click Report + to include any additional reports with the Arrears Notice distribution. 
6. Click Proceed. 

4. Review Log

On completion of issuing the Levy Arrears Notices, view the log for any issues or unexpected results. This log can also be checked to determine when a lot had the Arrears Notice flag set to Disabled.

1. Search or select Levy Management.
2. Select Options/ Levy Arrears Manager.
3. Click on View Log and then Refresh button. This option will produce all arrears log data into Log Viewer for review and further searching and filtering if required.