Customer Payment Delay Prediction

Introduction

Predicted customer payment delay days enables accurate cash planning in short term and medium term related to customer late payments or early payments.

In IFS Cloud, a machine learning based prediction model is trained with the customer historical data. Future payment delays or early payments are predicted using machine learning algorithms. The model can be retrained at any time to get the most accurate predictions.

Basic Data Setup

To use the predicted customer payment delay days in Accounts Receivable Analysis and in Cash Planning, the machine learning model needs to be trained and activated.

This needs to be done in the Solution Manager/Automation and Optimization/Machine Learning/Machine Learning Models. After training, the model needs to be set to “Active” status to be able use the customer payment delay prediction.

The model can be retrained based on the business requirement to get the most accurate prediction with the recent customer transactions.

Customer Selection for the Payment Delay Days Prediction

To use this functionality, customers, need to be enabled for Use Predicted Payment Delay in Application Base Setup/Enterprise/Customer/Payment. This option controls which customers should be included in the payment delay predictions. If this option is enabled for a customer, the Pre-defined Payment Delay is overridden from the Predicted Payment Delay.

Predicted Payment Delay at Customer Invoice creation

The customer payment delays are predicted for each installment in invoices. Hence the predicted payment delay days are displayed at the customer invoice creation in the Installment and Discount Plan. Machine learning model is called each time the installment plan and discount is created or updated.

Note that the predicted payment delay days are applicable only to customer Instant Invoices, Project invoices and Customer Order invoices.

Analysis in Accounts Receivables

The Customer Predicted Payment Delay can either be analyzed in Customer Installment Analysis page, in Multi-Company Customer Invoices with Interest and Fine Analysis page or in IFS Lobby. Since the Payment delay is predicted per customer invoice installment, these analysis pages will provide an overview to query for the payment delay days. Using predicted payment delay will facilitate the collection process within a company and focus on relevant customers to take necessary action.

Analysis in Cash Planning

Use of Predicted Payment Delay for customers is an option in the Cash Planning scenario level. Cash planning transactions can be analyzed and compared with more accurate cash flow dates with the predicted payment delay days. If the “Use Predicted Payment Delay” is enabled in the scenario level, the cash flow date will be adjusted with the predicted delay days to reflect a more probable cash flow.