How to Use Municipal Property Tax — Collections, Arrears & Enforcement

Once tax notices are issued, the collections process begins. This guide covers recording payments, batch payment imports, managing arrears, applying interest and penalties, setting up payment plans, processing tax sales, writing off uncollectible debt, and handling credits and refunds.

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Getting Here

1. Open the main sidebar and select a Bookkeeping Client.
2. In the client sidebar, expand Municipal Government → Property Tax → Collections & Arrears.
3. Click any of the eight sub-pages.

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Tax Collection

Path: Collections & Arrears → Tax Collection

The Tax Collection page is where you record and manage tax payments. Every payment is linked to a property, and optionally to a specific notice.

The Collections Table

The page uses infinite scroll with filters for payment method, tax year, and date range, plus a search bar.

Recording a Payment

1. Click the Record Payment button.
2. Fill in the payment form:

3. Click Save.

The system posts the payment to the property's tax receivable account and updates the notice balance. If the payment fully satisfies a notice, the notice status changes to Paid.

Viewing a Payment

Click the eye icon to see payment details including the GL transactions created.

Voiding a Payment

If a payment was recorded in error:

1. Click the Void button on the payment row.
2. Enter a Reason for voiding.
3. Click Confirm Void.

The system reverses the payment, restores the notice balance, and creates reversing GL entries. The original payment record is preserved and marked Voided.

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Batch Payment Import

Path: Collections & Arrears → Batch Import

When you receive many payments at once — for example, from a bank file or a lockbox service — use the batch import to process them all at once.

Importing Payments

1. Click the Import Payments button.
2. Upload a CSV or Excel file containing payment records.
3. Map the columns:

4. Preview the mapped data.
5. Click Import.

The system creates a payment record for each row. A summary shows how many payments were imported successfully and any rows that had errors (e.g., invalid roll numbers).

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Tax Arrears

Path: Collections & Arrears → Tax Arrears

Tax Arrears are unpaid tax balances that have been carried forward from prior years. This page gives you a focused view of delinquent accounts.

The Arrears Table

Viewing Arrear Detail

Click the eye icon to see a full breakdown:

• Arrears by Year — Each tax year shown separately with original amount, payments, charges, and remaining balance.
• Payment History — All payments applied to this arrear account.
• Charge History — Penalties and interest applied.
• Notice History — The original notices that created the arrears.

Recording a Payment on Arrears

From the arrears detail view, click Record Payment. The payment form works the same as on the Tax Collection page but is specifically applied to the arrears balance.

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Interest & Penalties

Path: Collections & Arrears → Interest & Penalties

This page manages the automatic charges that accrue on overdue accounts. It is organized into three tabs: Charges, Charge Rules, and History.

Tab: Charges

Shows all penalty and interest charges that have been applied to accounts. Filter by charge type, posted status, and year.

Tab: Charge Rules

This tab shows the same rules configured in Settings → Charge Rules (see the Setup & Configuration guide for full details on creating rules).

Running Charges

Two action buttons sit at the top of the page:

Before running, check the Dry Run toggle to preview what charges would be created without actually posting them. Review the preview carefully, then run without dry run to post.

Previewing Charges

When you click Run with dry run enabled, a preview dialog opens showing:

• Each property/notice that would receive a charge.
• The rule that triggered it.
• The calculated amount (showing the rate and how many days past due).
• The timing label (e.g., "30 days after due date").

You can expand each row to see the full charge details. If you are satisfied, run without dry run to post.

Manual Charges

To apply a one-time charge manually:

1. Click Add Manual Charge.
2. Select the Notice to charge.
3. Choose Charge Type (manual penalty or manual interest).
4. Enter the Amount.
5. Add a Description.
6. Toggle Auto-Post to post to the GL immediately, or leave it off to review first.
7. Click Save.

Tab: History

Shows a log of all charge runs — both dry runs and posted runs. Each log entry shows:

• Run date and time.
• Type (penalty run or interest run).
• Notices processed.
• Charges created.
• Total penalties and interest applied.
• Any errors encountered.
• Who triggered the run.

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Payment Plans

Path: Collections & Arrears → Payment Plans

Payment plans let property owners pay off arrears in installments over time instead of a lump sum.

The Payment Plans Table

Setting Up a Payment Plan

1. Click New Payment Plan.
2. Fill in:

3. Click Create Plan.

The system creates the installment schedule. As payments are received against the plan, the progress tracks automatically.

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Tax Sales

Path: Collections & Arrears → Tax Sales

When a property has been in arrears for three or more years, it may be eligible for tax sale — a legal process where the municipality sells the property to recover unpaid taxes.

The Tax Sales Table

Initiating a Tax Sale

1. Click Initiate Tax Sale.
2. Select the Property from the list of tax-sale-eligible properties.
3. The system pre-fills:
   • The arrears balance.
   • Estimated legal and advertising costs.
   • The reserve bid (arrears + costs).
4. Set the Sale Date.
5. Click Initiate.

Managing the Sale Process

The tax sale progresses through statuses:

• Preparing — Internal review of the file.
• Published — Public notice advertised as required by legislation.
• Sold — The sale occurred. Enter the winning bid amount and purchaser information. The system calculates any surplus (bid minus arrears minus costs) payable to the former owner.
• Redeemed — The owner paid the arrears before the sale and the sale is cancelled.
• Cancelled — The sale was cancelled for other reasons.

Update the status as the process advances using the action menu on each sale row.

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Write-Offs

Path: Collections & Arrears → Write-Offs

When tax debt is determined to be uncollectible (bankruptcy, property abandoned, etc.), it can be written off per council resolution.

The Write-Offs Table

Processing a Write-Off

1. Click New Write-Off.
2. Select the Property.
3. The system shows the current arrears balance. Enter the Write-Off Amount (may be the full balance or a partial amount).
4. Select a Reason — Bankruptcy, Deceased with No Estate, Uncollectible, Abandoned Property, or Other.
5. Enter the Bylaw/Resolution Number authorizing the write-off.
6. Add Notes.
7. Click Submit.

The write-off requires approval. Once approved, clicking Post creates the GL entry debiting the write-off expense account and crediting the tax receivable.

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Credits & Refunds

Path: Collections & Arrears → Credits & Refunds

When a property owner overpays their taxes, or a supplementary notice results in a credit, you can issue a refund or leave the credit on account for future taxes.

The Credits Table

Issuing a Refund

1. Click on a credit with Open status.
2. Click Issue Refund.
3. Select the Refund Method — Cheque, EFT, or Apply to Next Year.
4. Enter the refund Amount (may be partial).
5. Add a Reference (cheque number, EFT confirmation).
6. Click Process Refund.

The system creates the refund transaction and updates the credit status.

Applying a Credit to Another Notice

1. Click on a credit with Open status.
2. Click Apply Credit.
3. Select the target Notice.
4. Enter the Amount to apply.
5. Click Apply.

The credit reduces the target notice's balance. If the full credit is used, its status changes to Applied.

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How the Collections Flow Works

Here is the typical lifecycle of a tax account:

1. Notice Generated → Owner receives a tax bill.
2. Payment Received → You record it in Tax Collection.
3. Payment Applied → The notice balance decreases.
4. If Not Paid by Due Date:
   • Charges apply based on active Charge Rules.
   • The notice status becomes Overdue.
5. If Unpaid After Year-End:
   • The balance transfers to Tax Arrears.
6. If Multiple Years Unpaid:
   • The property may become Tax Sale Eligible.
   • The owner may request a Payment Plan.
7. If Uncollectible:
   • Council approves a Write-Off.
8. If Overpaid:
   • A Credit is created and may be Refunded.

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Next Steps

For special charges that appear on tax notices beyond the standard mill rate calculation, see the Requisitions & Local Improvements guide.

For year-end processes, including arrears transfer and fiscal year rollover, see the Reporting, Compliance & Year-End guide.