How to: Set Up Interest on Arrears

For each finance charge term, you can specify how interest on arrears must be calculated. You can set up finance charge calculations with different interest rates for different periods.

When you apply a finance charge term with interest on arrears to a customer or vendor, interest on arrears will be calculated. Then, you can run the Calculate Interest on Arrears report to view details about interest on arrears for customers or vendors.

After you run the report, if a customer owes interest on arrears, the information about the amount of interest on arrears to pay is added to the customer statement.

To set up interest on arrears

1. In the Search box, enter Finance Charge Terms, and then choose the related link.

2. In the Finance Charge Terms window, select the required finance charge term entry, and then, on the Actions tab, choose Int. on Arrears.

3. In the Interest on Arrears window, on the Home tab, choose New.

4. Fill in the fields as described in the following table.

   Field	Description
   Starting Date	Specify the date from which you want to calculate interest on arrears. Important The start date for the first interest transaction cannot be later than the earliest posting date for the finance transactions.
   Interest Rate	Specify the rate of interest to be calculated for the arrears.
   Description	Specify the description for the interest on arrears.

5. Choose the OK button.

The following procedure describes how to apply interest on arrears to a customer, but the same steps also apply for interest on arrears to a vendor.

To apply interest on arrears to a customer

1. In the Search box, enter Customers, and then choose the related link.

2. Select the customer to whom interest on arrears must be applied, and then, on the Home tab, in the Manage group, choose Edit.

3. On the Payments FastTab, in the Int. on Arrears Code field, select the appropriate finance charge term that includes interest on arrears.

4. Choose the OK button.

See Also

Reference

Interest on Arrears
Int. on Arrears Code
Calculate Interest on Arrears

Concepts

Interest on Arrears Overview

Other Resources

Finance Charge Terms