Accuracy is the twin brother of honesty; inaccuracy, of dishonesty –
Nathaniel Hawthorne
The impact of COVID-19 will have far reaching consequences on consumer’s ability to earn an income and as a result to service their financial commitments.
The TPN community relies on the accuracy of the data reported on the credit bureaus to make financial assessments to provide housing, school placement and other business transactions.
Accuracy of data is the bedrock of decision making
During these uncertain times tenants and landlords, parents and schools, consumers and suppliers may enter into Deposit Utilisation Agreements or Deferment of Rent / School Fee Agreements. TPN and our clients must ensure the accuracy of consumers’ credit profiles are correctly reported to reflect the terms of these arrangements.
The first step to ensure data is accurately submitted to TPN and consequently to the consumer’s credit profile, is to ensure the accounting software correctly reflects any payment arrangements entered into with the landlord / property manager / School.
Data can then be submitted to TPN via the normal data export mechanisms with confidence.
Definitions
Consumer: tenant, parent, person receiving the goods or service.
Supplier: landlord, property manager, school, the business providing the goods or service.
Scenarios:
- The Consumer pays their account
on time:
- The Supplier invoices the
Consumer for the first
- The Consumer pays their
account on the first
Treatment in the accounting system:
Payment captured on the first.
Data import to TPN:
Correctly imported into TPN as Paid on Time.
Payment captured on the first.
Data import to TPN:
Correctly imported into TPN as Paid on Time.
- The Consumer does not pay their
account and has not lost their income:
- The Suppler invoices the
Consumer for the first
- The Consumer does not pay and
does not indicate their income has been affected by the State of Disaster
Treatment in the accounting system:
No payment is captured and there is an amount outstanding.
Data import to TPN:
Correctly imported into TPN as Did not Pay.
No payment is captured and there is an amount outstanding.
Data import to TPN:
Correctly imported into TPN as Did not Pay.
- The Consumer’s income is
affected by the State of Disaster and they enter into the Deposit
Utilisation Agreement for the total invoiced value:
- The Supplier invoices the
Consumer for the first
- The Supplier and Consumer
enter into the Deposit Utilisation Agreement for the total invoiced value
- The deposit is released from
the trust account / savings account
Treatment in the accounting system:
Payment is captured to reflect the signature date of the Deposit Utilisation Agreement.
Data import to TPN:
Correctly imported to TPN as Paid on Time.
Payment is captured to reflect the signature date of the Deposit Utilisation Agreement.
Data import to TPN:
Correctly imported to TPN as Paid on Time.
- The Consumer’s Income is
affected by the State of Disaster and they enter into the Deposit
Utilisation Agreement for part of the invoiced value:
- The Supplier invoices the
Consumer for the first
- The Supplier and Consumer
enter into the Deposit Utilisation Agreement for part of the invoiced
value
- The part of the deposit is
released from the trust account / savings account
- The Consumer is also required
to settle the balance of the invoice
Treatment in the accounting system:
Payment is captured to reflect the signature date of the Deposit Utilisation Agreement.
Payment from the tenant is reflected on the date of payment.
Data import to TPN:
Depending on whether the tenant makes the part payment and the timing of the payment will impact the payment profile flag on TPN in the normal way.
Payment is captured to reflect the signature date of the Deposit Utilisation Agreement.
Payment from the tenant is reflected on the date of payment.
Data import to TPN:
Depending on whether the tenant makes the part payment and the timing of the payment will impact the payment profile flag on TPN in the normal way.
- The Consumer’s Income is
affected by the State of Disaster and they enter into the Deferment of
Rent / School Fee Agreement for the invoiced value:
- The Supplier invoices the
Consumer for the first
- The Supplier and Consumer
enter into the Deferment of Rent / School Fee Agreement for the total
invoiced value
Treatment in the accounting system:
Journal credit the invoice in the deferred month.
Journal debit the invoice as per the Agreement in the future dated month(s).
Data import to TPN:
For the current month, the tenant will not receive an adverse rating.
For future months, the tenant will receive payment profile ratings reflective of their future payments. In other words, if the invoice is deferred to 50% in June and July, then in June R10,000 current invoice plus R5,000 then the deferred April invoice means the Consumer is due to pay R15,000.
Journal credit the invoice in the deferred month.
Journal debit the invoice as per the Agreement in the future dated month(s).
Data import to TPN:
For the current month, the tenant will not receive an adverse rating.
For future months, the tenant will receive payment profile ratings reflective of their future payments. In other words, if the invoice is deferred to 50% in June and July, then in June R10,000 current invoice plus R5,000 then the deferred April invoice means the Consumer is due to pay R15,000.
- If R15,000 is paid on the
first = Paid on Time
- If R15,000 is paid after the
first = Paid Late
- If R10,000 is paid = Partially
Paid
- If zero rand is paid = Did not
Pay
It has never been more important to ensure the submission of data to credit bureaus to benefit Consumers who have maintained their debt repayments and financial commitments are rewarded with positive updates on their credit profiles.
Some consumers will maintain some of their financial commitments but fall behind on others. It is essential in times like these that Suppliers continue with their data submission, as Consumers need the benefit of every positive payment update to improve their credit scores. It is prejudicial to suspended data submission and potentially negatively affect those Consumers who have paid and which is not reflecting (especially if they have fallen behind on other accounts which are reported on).
It is especially important that data is submitted so that when the State of Disaster is lifted landlords, property managers and Schools are not entering blindly into agreements with applicants simply because of a lack of data.
Please feel free to reach out to the TPN Data Team and submit your data to data@tpn.co.za
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