Late payment interest calculation on cleared items

[Former Member]

Hi All,

I have a requirement to charge interest on items over due considering the grace period. Interest run is scheduled monthly at the end of the month. I am able to achieve this functionality using Tolerance days and transfer days but the issue is with items which are cleared after grace period and before Interest run.

For Ex: An item is due by 05th Sep 2013. Considering grace period of 30 days, interest can be charged after 05th Oct 2013 only. Interest run is scheduled on  31st Oct 2013.

If the items is cleared on 10th Oct 2013 which is after grace period 05th and before interest run 31st Oct. In FPI1 I am not able to charge interest for this item as it is cleared before my Interest run.

But as per business rule this item is eleigible for late payment interest as it missed the due date + 30 days grace period. I tried using option all items but it is not working.

Please let me know if I am missing any configuration or condition?

Regards,

Suresh

[AmlanBanerjee · Accepted solution]

Hi Suresh,

Check the following SPRO configuration node-

IMG-->Financial Accounting-->Contract Accounts Receivable and Payable-->Basic Functions-->Postings and Documents-->Basic Settings-->Maintain Central Settings for Posting

In here check if the indicator against, "Interest Posting with Clearing is OK" is ticked or not

If not, then tick it and then check if the interest is getting posted or not for the cleared items.

Hope it helps.

Thanks,

Amlan

[Former Member]

Hi Amlan,

Thanks for the reply. Check box  "Interest Posting with Clearing is OK" is ticked but still I am not able to post interest for item which is Paid / Cleared before interest run and after due + Grace days.

My understanding is if we select all items interest will be calculated on the whole amount eventhough the item is partial cleared.

Regards,

Suresh

[AmlanBanerjee]

Hi Suresh,

Your understanding is absolutely correct.

Can you please check the application logs after you complete the interest run to see if there is any error message which is getting generated not leading to the posting of interest document.

There can be many reasons-

(a) Account assignment for posting the interest document is not there

(b) An interest lock exist for the interim period at the item level or at the contract account level.

(c) The clearing reason by which the receivable has been cleared has been maintained in the configuration for not being considered for interest run, normally done for Account maintanence.

(d) Check in the Configuration (OB83) , whether the validity period of interest key is in sync with the period for which the posting is made.

Hope it helps..

Thanks,

Amlan

[Former Member]

Hi Amlan,

When we check the check box for posting interest on cleared items, interest is automatically calculated at the time of clearing by checking all interest rules like tolerance days, transfer days and interest frequency.

This resolved my issue. Interest calculation on due Items will be posted at the time of payment or when we run interest individually or mass.

Thanks,  

Suresh

[former_member400222]

Hi Suresh,

are you calculating the interest based on some formula, if yes please let me know how do you right that formula in interest rule?

I also need to calculate but only at the time of payment and for the overdue item.

Thanks for your help.

Girdhar A

[former_member400222]

This message was moderated.