Calculate Interest {FARO-6}

The calculation of interest is “event” FU: “AR - Interest Transactions”. Before this program can be executed the first time, the user must create a suitable Transaction Type (TT) via {FCSO-7) and link it to this event. Both the revenue account to which the interest amount should be credited and the debtors control account must be specified in the definition of the TT.

On execution of this option, the system will firstly control that a TT is linked to the applicable event and that the TT is correctly specified, i.e. that both the credit and debit GLAs have been specified. If either or both are missing, the program will display an appropriate message and abort.

After the parameters have been specified, the system will firstly control that no interest transactions are found for the selected debtors occurring less than 30 days prior to the present system date. If any transactions are detected on any one debtor, the system will respond with: “Interest has been calculated less than 30 days ago, do you want to proceed ? (Y/N)”. If (Y)es, the calculations will proceed, otherwise the program will abort.

Note that this situation could arise if an interest calculation has previously been done for one debtor or one debtor type. In such cases, a rollback via option {FARO-7} is advised, followed by a repeat of this option.

The system calculates the outstanding aged balance per debtor and the interest on each amount. No interest will be charged on credit balances. It then creates an interest TT as specified for the accumulative interest amount: it inserts “INT” in the reference field, and the cycle of AR in the format YYMM as voucher number. If an interest calculation is done more than once for the same cycle, the system will add a suffix to the voucher number, e.g. 9205-1. This reference will be used for the rollback.

Note : For debtors that are flagged as an Open Item usage debtor, aging will be done for each invoice. The concept “Open Item” refers to the ability to match any relevant transaction to a source document (in most cases the source document will be an invoice) with the ability to know what the outstanding amount for the document will be at any time. This functionality enables the system to do aging of outstanding amounts for these debtors at invoice level.

A control report is produced, which gives the total number of transactions generated as well as their value. Also indicated on this report will be details of debtors for whom no interest was calculated because they are in credit balance, or because they are inactive, or because null values were found in the interest fields in {FARM-1}.

Prompt Text ^{* an item between square brackets [ ] is the default answer}	Type & Length	Comments
Date to be inserted with interest transactions: a <RETURN> will default to system date.	DD-MON-YYYY	Note that this date will be used for ageing of the interest transaction.
Calculations to be done for range of debtors per: 1. Debtors Codes - From / To Codes 2. Debtors types - From / To Types 3. Account Types - From / To Types	N1
Include inactive debtors ? (Y/N).	A1
Previous Interest transactions to be included ? (Y/N)	A1	Note that a (Y)es will result in interest being calculated on interest; if your institution does not follow this policy, always reply (N)o to this question.
Message will appear specifying the last calculated date, including will be the debtors, account types and debtor types.
Do you wish to continue?	A1

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Date	System Version	By Whom	Job	Description
29-May-2008	v01.0.0.0	Charlene van der Schyff	t145484	New manual format.
30-Jun-2009	v01.0.0.1	Charlene van der Schyff	t158351	Edit language obtained from proof read language Juliet Gillies.