Charging Interest on Overdue Accounts - Open Items

A common Accounts Receivable task is to charge interest on one or more overdue accounts (i.e. accounts with open and unpaid items).

To charge interest - on Open Items:

Position on any table of accounts (blue).

This can be anywhere accounts appear as rows of a (blue) table, including reports.
Either position on the account you want to charge interest for or else mark a block of accounts.

If no block is marked then the current account is processed.

If you want to explicitly select a number of accounts to be charged then use the Block>Start and Block>End commands to mark the accounts in a block.

Note: total accounts and branch folders will be skipped.
Issue the Tools>Charge Interest>Open Items command.

A charge interest open items settings window will appear such as that shown below.
Fill in the settings fields.

The meaning of each setting is described later in this section.
Click the <Continue> button or press <F5> to charge interest on open items.

When <Continue> is clicked, transactions are created to record the interest.

Charge Interest - Open Items - Settings Field Summary

Note: The interest rate used by the open item charge interest tool is set on the customer's Trade/Tax Info table. The value 2 set on the customer's Interest Rate field is interpreted as a monthly rate by this interest charge tool.

NOTE: that a record of the calculation performed is put in the notes view of the interest transaction.

Line	Field	Values	Comments
1	Date of interest charge		Interest transactions created, if any, will have this date.
2	Date of last interest charge		Interest amount calculated will be the incremental addition since this date.
3	Interest account		The name of the account to balance the interest charge transaction (e.g. for Accounts Receivable an Interest revenue such as "Charged on Overdue Accounts").
4	Journal		The journal used for interest charge transactions.
5	Interest description		The description on the customer's ledger interest charge posting.
6	Method (simple, compound)	simple compound	Simple interest will calculate interest only on the original overdue transactions. Compound interest will add to that any interest calculated on previous interest charges.
7	Interest identifier		This is a keyword which is used to identify prior interest charges. If this keyword is found in a transaction's description (case insensitive), then the transaction is known to be a prior interest charge.
8	Charge interest for full age?	yes no	`yes` will ignore the Trade/Tax Info value for the grace period. See Trade/Tax Settings for Customer Accounts for more.
9	Use separate journal entries	yes no	`yes` will create a separate transaction for each account. `no` will create a single transaction with a distribution detail item for each account.

Sample Interest Transaction

Above is a sample result showing a monthly interest charge.