Adding or Modifying Interest Profiles

You create interest profiles to specify details about interest you charge customers.

  • Decide on the code to identify each interest profile.
  • Be sure your general ledger contains the account you want to assign as the interest income account in Accounts Receivable interest profiles.
  • If you have a multicurrency ledger, you must also determine the:
    • Code for each currency that uses the interest profile.
    • Minimum interest charge and annual interest rate for each currency you use with the interest profile.

To add an interest profile:

  1. Open Accounts Receivable > A/R Setup >  Interest Profiles.

  2. In the Interest Profile field, enter a code to identify the interest profile.
  3. In the Description field, enter a description of the interest profile.
  4. In the Interest Income Acct. field, enter the number of the general ledger account to which you post revenue from interest charges.
  5. In the Calculate Interest By field, specify whether to charge interest on each overdue document or on overdue account balances.
  6. Specify the number of days an account must be overdue before you charge interest.
  7. If you round up interest charges to a minimum amount, select the Round Up To Minimum option. Do not select the option if you have no minimum interest charge or if you charge interest as calculated, regardless of the amount.
  8. If you include previous interest charges in the overdue total on which you charge interest (that is, you charge interest on interest), select the Compound Interest option.
  9. Enter the currency code or codes (if you use multicurrency accounting) that you want to use with the interest profile.

    You must enter an annual interest rate for each currency you assign to the interest profile. You can also enter a minimum interest charge for each currency.

  10. Enter the minimum amount you charge as interest. Enter 0 (zero) if you charge interest as calculated, regardless of the amount.

    If you use multicurrency accounting, enter the minimum interest charge for each currency you use with the interest profile.

  11. Enter the annual rate at which you charge interest for the interest profile. For example, to enter a nominal annual rate of 10 percent, enter "10".

    If you use multicurrency accounting, enter an annual interest rate for each currency.

  12. Click Add.

To edit an interest profile:

  1. Open Accounts Receivable > A/R Setup >  Interest Profiles.

  2. Enter the code for the interest profile you want to change.
  3. Make your changes.
  4. Click Save.

To delete an interest profile:

  1. Open Accounts Receivable > A/R Setup >  Interest Profiles.

  2. Enter the code for the interest profile you want to delete.
  3. Click Delete.