Interest on Arrears Overview
In Microsoft Dynamics NAV, finance charge terms can include interest on arrears if you have amounts outstanding from customers or amounts outstanding for vendors.
Calculating Interest on Arrears
For each finance charge term, you can define how the interest is calculated, and you can define 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. The calculated interest amount is posted to the related general ledger accounts. This calculated interest amount is also printed in the report.
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.