cancel
Showing results for 
Search instead for 
Did you mean: 

Question on Interest for AR

Former Member
0 Kudos

Can someone confirm if the interest procedure looks at all open items for a range of customers and applies interest payable, in the form of a debit note to the customer, that could be printed and sent to them.

Or does it look at all of the cleared invoices against a customer, and work out the interest against the actual paid items. By this I mean if an invoice is paid, 20 days late, interest is calculated on the actual amount overdue, rather than for open items, which is at a given point in time.

the reason I ask is, I have a client asking for the first option, but what happens if say interest calcs are produced once a month and an invoice is overdue by say 50 days, the first month it would be 20 days and then the next month would it be 30 days or 50?

Any config notes would help as well.

Points will be awarded.

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Hi,

In the configuration, we can set whether the cleared items should be considered for Interest calculation. In Transaction code OB82, there are four radio buttons:

- Open & Cleared items.

- Open Items and Items cleared with a payment.

- No open items only cleared items.

- No open items - only items cleared with a payment.

You can select the option as per the Business requirement.

Thanks

Murali.

Former Member
0 Kudos

OK, that is great.

Can you confirm that debit notes can be raised.

What happens in the example of where an invoice has had interest charged on it once, what happens when it is due a second time?

Former Member
0 Kudos

Hi,

Yes debit notes can be raised. Basically, there are two steps one is Interest Calculation and the second step is Interest Posting. If Interest posting is activated / configured a debit is posted to Customer account. The frequency of interest calculation can also be set to say a month.

Please check the following nodes in configuration:

IMG> Financial Accounting > Accounts Receivable & Payable > Business Transactions > Interest calculation.

Thanks

Murali.

Answers (0)