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Interest Calculation - Payments
Interest Calculation - Payments
Interest Calculation - Payments
Unlike custom calculation you cannot enter principals in the panel for
calculating default interest by payments but they are read out from
the selected account card. And unlike the interest calculation by documents
interest are calculated on individual payments and not on the current
principal amount. This way you do not get the same results as by using
interest calculation by documents. The calculation is carried out based on
individual linked document The interest are calculated from due date
(excluding the very date) till the date of payment: interest are not
calculated for the due date.
Interest are calculated (similarly, as in custom calculation) based on
interest rates that have been entered in the panel for setting up interest
rates.
For a more detailed treatment of methods used in calculating interest see
General
|
Report Type
| Interest calculation can be displayed in
various ways:
Fixed interest rate (conforming method) is used in calculating
interest in the examples shown!
|
Account
| Enter account from which the principal and
interest transactions are read. It is by default the first customer account
that can be found in parameters (Administration
Panel | Settings | Program Parameters | Financials | General).
| Calculation Type
|
Select type of
calculation to be used (that is, you are offered one):
Customer - to calculate interest on receivables from
customers
Supplier - to calculate interest on payables to suppliers | Subject
| Restrict the report by individual subject. |
Payment Date (from - to)
| Enter date margins for payments on which you
want to calculate interest. Interest are calculated from due date of
receivable/payable (excluding the first day) to the date of payment.
|
Type of Interest Rate
| Open the interest rate table containing data on corresponding
rates (see setting up interest rates).
For detailed treatment see
 Use
Interest Rate from Subject.
You cannot leave the field empty. You must enter it even in case you
use interest rate frin Subjects register. Otherwise, an error is
returned (see The type of interest rate must be
specified!).
|
Subject Type
| Restrict the report by individual subject
type.
| Linked Document
| If required, restrict the report by individual linked document.
| Document
| If required, restrict the report by
individual document. | Currency
| The currency set is by default the primary currency from
program parameters
.
| Min. Amount (per Doc./per
Subject)
| Exclude the amounts smaller than the one
entered here from interest calculation. The value is by default set
to "-1" meaning that this restriction will not be used.
Example: If you enter »100«, interest calculations of those
documents where calculated interest are smaller than 100 euro, will
not be displayed. | Grace Period
| Exclude the amount from interest calculation on which interest
will be calculated only for as many (or less) days as set in the
field. The value is by default set to "-1" meaning that this
restriction will not be used.
Example: If you enter »5«, interest calculations of those documents
where interest are calculated for 5 or less days will not be
displayed.
| Nominal Int. Rate
| Here you can enter the nominal (annual)
interest rate to be used INSTEAD of the once from the table (see
interest rates). It is suitable for example when you try to
calculate interest on receivable or payable using the entered
revaluation interest and a fixed annual interest rate. For sake of
this you need not create a new interest table: for example, use
revaluation interest that can be found in default interest table and
just enter the fixed annual nominal interest rate.
The value is by default set to "-1" meaning that nominal interest
rates from the table of interest rates are used.
|
Overpayments and Prepayments
They are dislplayed for the same linked document. However, it must be
specified how are they to be displayed in the interest calculation. If
overpayment/prepayment is related to the same linked document, it
affects the amount of principle, on which interest are being calculated.
Whether interest are calculated on the amount, or not, and in what way
does it in the end affect the total interest calculation may in
practical use be agreed between the contractual parties. For examples
see Prepayments and Overpayments.
|
 Show
Overpayments
|
The amount
of prepayment/overpayment is displayed in a separate line of interest
calculation together with the date. this way it is not marked whether
interest will be calculated on prepayments/overpayments, or not! to do
so check the field:
overpayment - If the invoice was settled in the amount greater than
the one issued in receivable
prepayment - If the invoice was settled with prepayment and having
closed prepayments, in this way ensuring that prepayment amount is
assigned the same linked document number. When closing prepayments select the date from which on you want to
calculate interest as the journal entry date!
|
 Calculate
Overpayment Interest
| The interest on prepayment/overpayment will be calculated in
negative amounts, thus deducting them from the total amount. |
 Decrease
Principal by Overpayment Interest
| It is not wise to check it when using variable interest rate
(proportional method)! When using fixed interes rate (conforming
method) you must check this option every time (Calculating
interest on overpayments)
|
 Show
Actual Due Dates
|
Because the due date is not
considered as belonging to the interest-bearing period, the interest
calculation report displays the first day following the due date.
If checked, the report nontheless displays interest-bearing period including
due date.
See example of a document 345 with due date January 1st, 2000
and payment settled on February 5th, 2000:
- If checked, displays "1.1.2000 to 5.2.2000" as the interest-bearing
period
- If left unchecked, displays the actual period for which you
calculate interest, that is "2.1.2000 to 5.2.2000"
|
 Use
Interest Rate from Subject | If you entered an
interest rate to be used in calculating default interest on payments in the
Subjects register | Customer (in case you
selected Customer) or Suppliers
(in case you selected Supplier) the interest will be calculated in the
following way:
- If checked,, the interest rate table from the Subjects register will
be used. But if you have not entered any interest rate table, data from
the Types of Interest Rates
and Nominal Int. Rate
fields are used.
- If unchecked, data from the Types of Interest Rates
and Nominal Int. Rate
fields are used.
|
Other
|
Add Interest to Principal
|
It is wise to use these checboxes only in fixed intererst rate
(conforming
- Add Reval. Interest - - It is checked by default. Revaluation
interest will be added to th principal in the next interest-bearing
period.
- Add Real Interest - It is checked by default. Real interest
will be added to the principla in the next interest-bearing period.
|
 Calculate
Interest for Closed Lines
|
If you try to
calculate interest for closed documents or those when having
selected All, a question arises whether default interest should be
calculated on default interest for the period from the day when the
document was closed till the end of the of the period incuded in the
report (date TO).
- If checked, default interest will be calculated on default interest
from the day when the document was closed till the date from the To
field
- If unchecked, default interest will be calculated only till the day
on which the document was closed (It is suitable for calculating default
interest).
|
 Calculate
Lines without Subject | Typically, interest are calciulated on subject accounts where a subject is
specified. That is, it is required you set it in line of posting and closing.
To calculate default and contract interest on accounts where the subejct is not
specified (that is, they are not subject accounts) check a corresponding
checkbox so that interest are calculated for such records as well. Such as for
example calculation of default interest on overdue unpaid liabilites to state.
There is one condition, though, and that is the linked document of post and its
subsequent closing must be entered accordingly. |
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See Taskbar for a general
description of its functions.
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