VendorPayables Over due Interest calculation.

[Former Member]

Hi Gurus,

Help needed plzz..

needed to caliculate interest on over due payables. There are net 30 payment terma in the system. if for some reason i entered an invoice with invoice date which is 31days or more behind the current date then i need to caliculate interest on the late payment and show it in a report. Or post to an expence account with the same account assignments as the invoice.

say, current date: 07/03/2007 mm/dd/yyyy

invoice date : 05/15/2007

if net 30 days payable term is applied to the invoice and i entered it on current date i.e the posting date. this invoice will get paid immediately in the next payment run, but before i pay that invoice i would have to include the interest caliculate from 06/15/2007 to 07/05/2007(say my next payment run was on 07/05/2007). this like 18 days over due .

How can i caliculate interest on this one the interest rate to be used is 3% .

Gurus please advice on how i need to set up the interest Indicator and all other stuff. i know where i need to set most of the things in interest cali. config., but i need advice on what settings to make, so that we meet the requirement.

help ......

[Former Member · Accepted solution]

Interest calculation is controlled by settings made in the interest indicator in the master record. You make additional specifications for each interest calculation.

Interest is calculated using the debit interest rate defined for the interest indicator in the system. Credit interest rates are used when interest is being calculated on items paid prior to their due date.

There are different ways to calculate interest:

· To calculate and post interest on only cleared items, in the Accounts Receivable or Accounts Payable menu, choose Periodic Processing ® Interest Calculation ® Arrears ® Without Open Items. The system calculates interest as of the due date for net payment.

· To calculate and post interest on open and cleared items, in the Accounts Receivable or Accounts Payable menu, choose Periodic Processing ® Interest Calculation ® Arrears ® With Open Items. The system calculates interest as of the upper limit date of the last interest run.

· To calculate interest on open and/or cleared items without posting the interest, in the Accounts Receivable or Accounts Payable menu, choose Periodic Processing ® Interest Calculation ® Arrears ® Without Postings. The system calculates interest as of the due date for net payment.

In each of the above cases, the relevant fields have default entries or only the selection criteria required are displayed.

· To calculate interest any other way, in the Accounts Receivable or Accounts Payable menu, choose Periodic Processing ® Interest Calculation ® Arrears ® Free Selections .

For more information about calculating interest on arrears, see the report documentation:

RFDUZI00 Calculation of Interest on Arrears (Customers)

RFKUZI00 Calculation of Interest on Arrears (Vendors)

There are two fields in the company code data area of customer and vendor master records that are relevant for the calculation of interest on arrears:

Interest indic.

The program that calculates interest on arrears uses the interest indicator specified in the customer master record. The most important specifications for the interest calculation run are stored under the interest indicator. They include, for example, rules determining which items are selected for interest calculation and how the interest is calculated.

The interest indicator must be assigned the interest calculation type Item interest calculation.

Last key date

After each interest calculation run, the program enters the upper limit of the calculation period into this field by batch input. This is the date you have specified for the calculation run.

Hope that helps...

Thanks,

Nandita

Assign points if helpful

[Former Member · Accepted solution]

Hi Nanditha,

Thanks for the input, can you emphasise on specfic config. that i need to make to meet the requirement.

i kinda know already how each program works in the interest caliculation scenario.

But to this specfic requirement, i dnt understand what to do..

More help needed for the dumbie... lol