Introduction

This documentation introduces a new feature, which allows for the withholding of a certain amount from a customer's payment based on their days in arrears (late payments). This feature, also known as the "Arrears Withholding" or "Ontime Withholding" feature, is designed to help recover outstanding balances from customers who are behind on their payments.

By definition, the withholding amount is the amount of the customer's payment that is held back or withheld when they make a payment toward their outstanding balance. It is calculated as a percentage of the customer's payment amount.

On the customer's account landing page, the "Withholding Amount" button can be found in the left-hand sidebar, within the Account section.

Business objectives

The primary objectives of introducing the Arrears Withholding feature are to improve portfolio management and increase operational efficiency.

Roles and Permissions:

An admin/back-office user can select any customer to set their arrears/on-time withholding amount, which determines the percentage of the customer's payment that will be withheld to recover outstanding balances.

Acceptance criteria

If a customer is late/defaulted/normal (behind on payments), the minimum requirement for switch-on must be reached before the withholding amount is applied. This ensures that a portion of the customer's payment is allocated towards the withholding policy.

Suppose there is an amount left over in the customer's cash balance after applying the withholding criteria. In that case, the withholding criteria should be removed, and the remaining amount should be added to the customer's cash balance for future use.

Bulk withholding amount

A bulk option is also available for users with admin/back-office roles to update the withholding amounts for multiple customers simultaneously.

Example

A customer with a $2 daily rate, a 2-day minimum for switch-on, a $1 cash balance, and a 30% arrears withholding policy makes a $5 payment. The following steps occur:

• The $5 payment is combined with the customer's existing $1 cash balance, resulting in a total of $6 cash.

• Since the $6 cash balance meets the 2-day minimum for switch-on ($2 per day), the account converts to a 3-day credit status.

• The 30% arrears withholding policy is applied to the 3-day credit, resulting in a remaining credit of 2.1 days (3 days - 30% of 3 days = 2.1 days).

• These remaining 2.1 days (given out as 2 days since we cannot provide decimal days) are sent to the customer's device.

• The 0.1 days remaining is converted back to a cash value and added to the customer's cash balance.

• The customer now has 2 days of service credit on their device and a cash balance, which can be used for future payments or top-ups.