The interest rate to charge on an item is determined as follows:
First, agrē uses the defaults specified for the customer (set up in Manage Customers)
If no customer rate exists, agrē looks next for a term group rate (set up in Manage Term Groups)
If that rate is not set, agrē uses the rate specified for the location (see below)
If that is not set, agrē uses the rate specified for the company (see below)
The interest rate on chargeables (invoices, interest items, or adjustments) can be changed or deleted directly at any time.
Similarly to interest rates, default Due Date and Chargeable Date are determined in the following order:
Term Group dates
Customer Account Credit tab # of Days
Location dates (see below)
Company dates (see below)
Location # of Days (see below)
Company # of Days (see below)
The due date and chargeable date can be changed directly on invoices, interest items, and term groups at any time.
Contributions from the Miscellaneous tab include:
Project
Location is ignored;
Calculate Interest always uses the customer's home location for postings.
Use the Manage Interest Settings window to specify default Company and/or Location interest settings for invoices.
To set default interest settings:
* indicates a required field. Other fields are optional.
Navigate to Accounts Receivable > Interest Charges> Manage Interest Settings.
The Manage Interest Settings window opens.
(Config U) In the Location box, select <Company> or the location that you want to apply default interest settings to.
Note
If you want to use the same default interest settings at all locations, select <Company> from the Location dropdown list. Location level default interest settings will override company level defaults. If you only have one location, <Company> is not displayed.
Click Retrieve Interest Settings.
The rest of the window is available for use.
Interest Settings
Select the Calculation Method.
The Calculation Method is set at the Company level.
Balance Forward
Daily
Suggested Interest = Outstanding Charge * [(MonthlyRate * 12) / 365] * Number of Days
Number of Days is based on Chargeable Date.
Chargeable Date is included in Number of Days.
(optional) In the Grace Days box (Daily only), type the number of grace days.
In the Default Interest Rate* box, enter the interest rate percentage to apply to chargeable items.
If you never want to charge interest, enter a value of zero.
For Daily , enter the effective Monthly Rate.
For <Company> level settings only: select a Default Location for postings.
The default is the Customer's Home Location <Customers's Location> but can be changed (e.g. Head Office).
In the GL Account* box, select a GL account for the interest charges to be posted to.
Tip
Click Add to add a new GL account.
The setting you choose for Include Partially Outstanding Items in Grace Period (Balance Forward only) will depend on how you want agrē to handle partially paid items.
The default value is unchecked.
Example: A customer has an invoice dated August 2 for $40,000 due and chargeable on September 30.
Your grace period is until October 3.
On October 2, they make a partial payment of $25,000.
Note
If the customer was to pay off the entire amount before the end of the grace period, they would be charged no interest on that item whether the box was checked or not (that's what grace days are for).
This setting applies only when a partial payment is made before the end of the grace period.
When calculating interest:
Leave the box unchecked if you want the interest charges based on $40,000, the outstanding balance as of September 30 (because they did not pay off the entire amount owing before the end of the grace period on October 3) Charges will be posted as of September 30.
Check the box if you want the interest charges based on $15,000, the outstanding item balance as of October 3 (the end of the grace period).
agrē will treat the grace date as if it was the actual due date. Charges will be posted as of September 30.
Tip
You can ignore this setting if you do not use a grace period when calculating interest.
The Charge Interest on Interest setting controls the 'Charge interest on this adjustment?' flag of each calculated interest charge.
The default value is checked.
If you want to charge interest on interest, leave the box checked.
All new calculated interest charges will be flagged to have interest charged.
If you don’t want to charge interest on interest, uncheck the box.
All new calculated interest charges will be flagged to not charge interest.
Note
This setting has no effect on Interest Adjustments that are added manually to a customer's account (they will be chargeable by default).
Caution
If you have changed this setting, upon Save the Change Outstanding Interest Charges window will open.
agrē will prompt: You changed the 'Charge Interest on Interest' setting. Do you want this change applied to all outstanding interest charges?
Click Yes and all outstanding interest changes will have the new setting applied.
Click No and all outstanding interest charges will retain their existing setting.
Click Cancel to return to the Manage Interest Settings window (no settings on existing items will be changed).
This prompt is only offered when an interest setting is edited (i.e. if there was a Company setting and then you added a new location setting agrē won’t ask).
Tip
You can manually change the Charge Interest? flag on any individual interest charge from the Customer Account. In the Advanced group, click on Manage Outstanding Items.
Due Dates and Chargeable Dates
Note
There are two ways that you can specify invoice due dates and chargeable dates; you can use either method or both.
The first way is to create a date range time frame; all invoices created (i.e., entered into the system) in that time frame are due on the same day and start accruing interest on the same day. For example, you may specify that all invoices dated from May 1 to May 30 are due and chargeable on June 30 (or due June 30 and chargeable July 1).
The second way is to specify the number of days after invoices are created (i.e., entered into the system) that they are due and start accruing interest. For example, you may specify that all invoices are due 30 days after they are created and start accruing interest 31 days after they are created (or 1 day after they are due).
If you have date ranges specified, agrē uses the defaults from the date ranges first. If no date ranges are specified at the location or company levels, agrē uses the defaults specified in the If no date range exists section for the location selected.
Under Date Ranges for Invoice Due Dates and Chargeable Dates, click Add Row.
The Add Interest Dates Row window opens. All invoices created during the date ranges selected in the Add Interest Dates Row window use the default interest settings specified.
In the Start Date box, optionally change the start date.
Today’s date is the default. All invoices created on or after this date (up to the end date) are due on the specified due date.
In the End Date box, optionally change the end date.
One month after the start date is selected by default. All invoices created on or before this date (up to the start date) are due on the specified due date. The end date must be after the start date but before the due date and chargeable date.
In the Due Date box, optionally change the due date for invoices.
After the due date, invoices can begin accruing interest.
In the Chargeable Date box, optionally change the date that invoices start accruing interest.
One day after the invoice due date is selected by default.
Interest is calculated based on the Chargeable Date, not the due date.
If the Due Date is before the Chargeable Date, the span between can be considered the Grace Period.
Click Update.
The Add Interest Dates Row window closes and the updated date range appears in the list on the Manage Interest Settings window.
Tip
To remove an entry from the list, select the entry and click Remove Row.
Note
You can add multiple date ranges. Repeat the above steps to add another date range. The default start date for the next date range is one day after the end date of the previous date range added.
If no date range exists
In the Set Due Date to invoice date plus* box, enter the number of days after invoices are created (i.e., entered into the system) that they are due.
For invoices that are due in a month, type 30 (e.g. 30 days).
For Set Chargeable Date to* either
in the Invoice Date plus box specify the number of days after invoices are created (i.e., entered into the system) that they start accruing interest (e.g. 31 days).
Typically, invoices start accruing interest either they day they are due (e.g. 30 days) or one day after the invoice due date (e.g. 31 days).
- or -
in the Due Date plus box specify the number of days after the due date that they start accruing interest.
Typically, invoices start accruing interest either they day they are due (e.g. 0 days) or one day after the invoice due date (e.g. 1 day).
Note
When creating invoices during a “no date range exists” time period and you have selected Due Date plus, if you change the Due Date, the Chargeable Date will roll with it.
Click Save.