How is the Pay on Time Rate calculated?
The L3M Pay on Time (PoT) Rate is a component of the Operational Health Rating. The PoT rate is a percentage calculated as:
1 - (Overdue amount from transactions closed in the L3M lookback period) ÷ (Total amount invoiced from transactions closed in the L3M lookback period)
- For calculation of this metric, an invoice is considered overdue if it remains unpaid > 30 days after the transaction close date.
- The L3M (Last 3 Months) lookback period factors in a 1-month maturity period to allow for invoices to age after transaction close
For example:
- The L3M window for the October snapshot includes transactions closed from Jun 1 to Aug 31, and payments made against those invoices by Sep 30.
- If your Flex transactions closed from Jun 1 - Aug 31 total $100,000 invoiced, and you have a $3,000 overdue balance from those transactions as of Sep 30, your PoT Rate is 97%.
When is a Flex payment considered overdue?
According to the Flex contract, payment is due to Zillow either at close of escrow, or within 15 days of the transaction close date for non-escrow payments. For calculation of the Pay on Time metric, a payment is considered overdue if it remains unpaid more than 30 days after the transaction close date.
You can find more details about the Operational Health Rating on the Flex Compliance Policies webpage.