Interest rates as part of Payment Terms

[Former Member]

Dear Experts,

I have the following scenario :-

- Client has a Payment Term of 28 days for its Customer

- If the Csutomer pays within 14 days, they are not chanrged any inerest (hence client gives 14 day inerest free credit to its Customers)

- Once 14th day is passed client start charding Interest @2% upto 28th day.

- Once 28th day is passed then (Due Date crossed) client start charging Penalty @5%.

In other words, although the Due Date is 28th day, as per agreement with its Customers, our client can charge Interest after 14 days. If the customer pays within 14 day - they pay NO Interest. Once 28th day is passed, Penalty is charged on the due amount.

Can you please guide, if this can be made possible in standard SAP using Payment Terms.

To determine these rates, I could not find the configurations. Do I need to go by the Function Module DEBIT_INT_RATE_DETERMINE ?

[ramakrishna_ailanani · Accepted solution]

Hello Venkat,

AS per my knowledge you can not calculate interest using Payment terms. In payment terms you can calculate discounts.

I think you need to use Function Module DEBIT_INT_RATE_DETERMINE