Generate Finance Charges - Revision history

Bjohnson at 21:49, 4 August 2022

2022-08-04T21:49:04Z

Bjohnson at 21:40, 4 August 2022

2022-08-04T21:40:41Z

Bjohnson at 21:39, 4 August 2022

2022-08-04T21:39:33Z

Bjohnson at 21:36, 4 August 2022

2022-08-04T21:36:21Z

Bjohnson at 21:35, 4 August 2022

2022-08-04T21:35:39Z

Bjohnson at 21:02, 4 August 2022

2022-08-04T21:02:26Z

Bjohnson at 20:51, 4 August 2022

2022-08-04T20:51:39Z

Bjohnson at 20:48, 4 August 2022

2022-08-04T20:48:05Z

Bjohnson: Created page with "===General Description=== '''Default Menu Location:''' Transaction>> Accounts Receivable>> Generate Finance Charges '''Screen Name:''' Generatefinancecharges '''Function:''..."

2022-08-04T20:45:14Z

Created page with "===General Description=== '''Default Menu Location:''' Transaction>> Accounts Receivable>> Generate Finance Charges '''Screen Name:''' Generatefinancecharges '''Function:''..."

New page

===General Description===

'''Default Menu Location:''' Transaction>> Accounts Receivable>> Generate Finance Charges

'''Screen Name:''' Generatefinancecharges

'''Function:''' This screen will allow users to generate finance/interest charges on outstanding AR invoices based off the Annual Rate (link) entered on the Customer's BillTo (link) attribute.

[[File:GenerateFinanceCharges.png]]

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@@ Line 89: / Line 89: @@
 '''Bill Cycle:''' Enter the billing cycle (typically month and year) if you normally use this field. It will default to the month and year of the Invoice Date.
 '''Include Old Finance Charges:''' This option allows you to charge interest on top of interest already charged (aka compound interest or capitalizing interest).
@@ Line 94: / Line 96: @@
 ''Interest is usually not charged on interest. On some occasions banks may roll interest on a note and thus charge interest on the interest, but this is not advisable and is only done in certain situations that demand that it be done.''
-'''Minimum Charge:''' Set a minimum charge per invoice. Any finance charges (sum total) not meeting this minimum will be rounded up to the number entered here.
+'''Calculate Interest From:''' Choose whether to calculate interest from the Invoice Date or Due Date.
-'''Calculate Interest From:''' Choose whether to calculate interest from the Invoice Date or Due Date.
+----
 ===Generated Invoices Tab===
@@ Line 109: / Line 113: @@
 '''Invoice Amount:''' Generated invoiced total amount

← Older revision		Revision as of 21:40, 4 August 2022
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	\| 1185 \|\| 07/12/13 \|\| 08/11/13 \|\| $500		\| 1185 \|\| 07/12/13 \|\| 08/11/13 \|\| $500
	\|}		\|}
		+
		+	If calculating interest from the Invoice Date, then the charges are calculated as:
		+
		+	(annual rate ÷ 365) * (today - invoice date) * balance.
		+
		+	For Invoice 1001, interest is calculated as (.18 ÷ 365) * 68 * 4200 = 140.84
		+
		+	For Invoice 1052, interest is calculated as (.18 ÷ 365) * 65 * 1250 = 38.34
		+
		+	For Invoice 1185, interest is calculated as (.18 ÷ 365) * 51 * 500 = 12.58
		+
		+	----
		+
		+	If calculating interest from the Due Date, then the charges are calculated as:
		+
		+	(annual rate ÷ 365) * (today - due date) * balance.
		+
		+	For Invoice 1001, interest is calculated as (.18 ÷ 365) * 38 * 4200 = 78.71
		+
		+	For Invoice 1052, interest is calculated as (.18 ÷ 365) * 33 * 1250 = 20.34
		+
		+	For Invoice 1185, interest is calculated as (.18 ÷ 365) * 21 * 500 = 5.18
		+
		+	Download a spreadsheet of these calculations. (link)
		+
		+	----
		+
		+	===Things to Consider===
		+
		+	The program takes into account when an invoice was paid and what interest is due accordingly.
		+
		+	For example, an invoice that was issued 07/01/13 (due 07/31/13) and paid in full on 08/15/13 will be included in the Interest Charge calculation on 09/01/13 since it was paid after the due date.
		+
		+	Also, if an invoice is partially paid, the program will calculate interest on a daily basis based on the daily balance of the invoice.
		+
		+	For example, an invoice of $1000 is issued on 07/01/13 (due 07/31/13) and has a $500 payment applied on 07/15/13. If calculating from invoice date, then finance charges issued on 08/01/13 will calculate interest based on the $1000 balance for the first 15 days and $500 for the last 15 days.
		+
		+	----
		+
		+	===Fields/Filters===
		+
		+	'''Due Date Cutoff:''' This date determines which invoices will be included in the calculation. Any invoice with a due date after this cutoff will not be included in the finance charges.
		+
		+	'''Invoice date:''' The invoice date of the Finance Charge invoice you will be generating.
		+
		+	'''Bill Cycle:''' Enter the billing cycle (typically month and year) if you normally use this field. It will default to the month and year of the Invoice Date.
		+
		+	'''Include Old Finance Charges:''' This option allows you to charge interest on top of interest already charged (aka compound interest or capitalizing interest).
		+
		+	''Interest is usually not charged on interest. On some occasions banks may roll interest on a note and thus charge interest on the interest, but this is not advisable and is only done in certain situations that demand that it be done.''
		+
		+	'''Minimum Charge:''' Set a minimum charge per invoice. Any finance charges (sum total) not meeting this minimum will be rounded up to the number entered here.
		+
		+	'''Calculate Interest From:''' Choose whether to calculate interest from the Invoice Date or Due Date.
		+
		+	===Generated Invoices Tab===
		+
		+	To see the invoices that have been used to create finance charges please see the line items of the invoices created.
		+
		+	'''Custno:''' Customer ID
		+
		+	'''Company:''' Customer Name
		+
		+	'''INV#:''' Invoice number
		+
		+	'''Invoice Amount:''' Generated invoiced total amount

@@ Line 37: / Line 37: @@
 ! Invoice Number !! Invoice Date !! Due Date !! Balance
 |-
-| Example || Example || Example
+| 1001 || 06/25/13 || 07/25/13 || $4200
 |-
-| Example || Example || Example
+| 1052 || 06/30/13 || 07/30/13 || $1250
 |-
-| Example || Example || Example
+| 1185 || 07/12/13 || 08/11/13 || $500
 |}

@@ Line 35: / Line 35: @@
 {| class="wikitable"
 |-
-! Header text !! Header text !! Header text
+! Invoice Number !! Invoice Date !! Due Date !! Balance
 |-
 | Example || Example || Example

@@ Line 34: / Line 34: @@
 {| class="wikitable"
 |-
 ! Header text !! Header text !! Header text

← Older revision		Revision as of 21:02, 4 August 2022
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	The following invoices will be included in the finance charge:		The following invoices will be included in the finance charge:
		+
		+	{\| class="wikitable"
		+	\|+ Caption text
		+	\|-
		+	! Header text !! Header text !! Header text
		+	\|-
		+	\| Example \|\| Example \|\| Example
		+	\|-
		+	\| Example \|\| Example \|\| Example
		+	\|-
		+	\| Example \|\| Example \|\| Example
		+	\|}

← Older revision		Revision as of 20:51, 4 August 2022
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	----		----
−	~~[http:~~//~~www~~.~~abiscorp~~.~~com~~/~~faq~~/~~index~~.~~php?title=Bill_To BillTo]~~	+
		+	===Daily Interest Rate===
		+
		+	Interest is calculated on a daily basis according to the annual rate (converted to daily rate) and the daily balance of each invoice.
		+
		+	To calculate the daily interest rate (R), the program divides the interest rate (I) by the number of days in the year (D).
		+
		+	R = I / D
		+
		+	For example, an annual rate of 18% is calculated as a .049315% daily rate (R = 18/365).
		+
		+	''Remember to enter the ANNUAL RATE on the Bill To screen.''
		+
		+	----
		+
		+	===Finance Charge Calculation===
		+
		+	The Daily Rate is used to calculate the interest on each outstanding invoice.
		+
		+	For our example, we will assume that today is 09/01/13 and that the Annual Rate is 18%. We will also assume that no prior payments have been made on the invoices.
		+
		+	The following invoices will be included in the finance charge:

@@ Line 5: / Line 5: @@
 '''Screen Name:''' Generatefinancecharges
-'''Function:''' This screen will allow users to generate finance/interest charges on outstanding AR invoices based off the Annual Rate (link) entered on the Customer's BillTo (link) attribute.
+'''Function:''' This screen will allow users to generate finance/interest charges on outstanding AR invoices based off the [http://www.abiscorp.com/faq/images/9/97/GenerateFinanceChargesBillTo.png Annual Rate] entered on the Customer's [http://www.abiscorp.com/faq/index.php?title=Bill_To BillTo] attribute.
 [[File:GenerateFinanceCharges.png]]
 ----