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INTEREST CALCULATION

Follow the following steps to configure the interest calculation.

IMG Menu Path: Financial Accounting> Accounts Receivable and Accounts Payable> Business Transactions> Interest

Calculation Interest Calculation Global Settings

Interest Calculation Global Settings

Define Interest Calculation Types

Depending on the requirement create an Interest Indicator for Item and Balance Interest.

Give the Interest Indicator (your choice)

Select the interest cal. Type as

P > Item Interest Calculation

S >Balance Interest Calculation

Z >Penalty Interest Calculation

Save your entry. Define Number Ranges for Interest Forms

Define the number range here with internal numbering if you want to generate a form after you run the Interest. Prepare

Interest on Arrears Calculation

Click on new items

Enter the Interest Indicator (note the indicator must have been defined for Item Interest Calculation)

Selection of items can be based on the business requirement. Normal business scenario is to calculate interest on

the "Open items and items cleared with a payment". Calendar type:

Choose one from the following

B 30/360

J 30/365

F 28,..,31/360

G 28,..,31/365

Factory Calendar ID: Enter Factory Calendar.

If in you partner account there is a possibility of having contra entry in the open items you can chose to calculate interest

only on the debit items by clicking the check box. If you want to avoid interest collection for small amounts you can do that

by specifying the Amount limit per Currency.

Save you entries.

Prepare Item Interest Calculation

Click on New entries

Check Open Items Check Box

Check radio buttons as required

Ref. Date- here you can mention the base for calculating the due date

1 Value Date (or Baseline Date for Net Payment)

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2 Document Date

3 Posting Date

4 Payment Baseline Date

Calendar type-GFactory Calendar ID-select your factory calendar

If in you partner account there is a possibility of having contra entry in the open items you can chose to calculate interest

only on the debit items by clicking the check box. If you want to avoid interest collection for small amounts you can do that

by specifying the Amount limit per Currency.

If you want to print a debit note or a form that can be sent to Partner you can mention here by checking the check box Print

Form. Check box Post Interest Save your entries

Prepare Account Balance Interest Calculation

Click on New Entries

Enter the Interest indicator

Select the frequency of interest calculation.

Settlement day; if you want to run all the settlements on a particular date in a month you can mention the date here.Calendar Type: G If you want to avoid interest collection for small amounts you can do that by specifying the Amount limit

per Currency.

Interest Calculation

Define Reference Interest Rates

Reference - Give the Code

Long text- Define Time-Based Terms (these should be carried out for all the interest indicators)

Click on new entries

Enter your Interest Indicator

Currency Key

Date from- Effective Date of the interest

Currency

Term: describes the transaction type

Note: Mention both Debit and Credit interest for you Indicator.

Ref. interest rate: Mention you reference created above. Save your entry

Enter Interest Values

Select your Reference as defined above

Enter the Interest Rate Interest Posting

A/R: Calculation of Interest on Arrears

Click on the Create icon to create an account symbol

Click on the Account Button to maintain the accounts for the Account Symbols

Save you entries

Interest on Arrears Calculation (Vendors)

Click on the Create icon to create an account symbol

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Click on the Account Button to maintain the accounts for the Account Symbols

Save you entries

Create- Posting Specifications " Click on the create symbol"

Business Transaction-1000

Enter the Debit and Credit Posting Key and the account symbol as created: Interest Receivd

Accounts

Chart of Accounts

Select Account Symbol for Interest Received

Currency-

GL Account- "Give the Account for interest received"-Revenue account Print

Define Interest Forms (with SAPScript)

You can define you own form here

Assign Forms for Interest Indicators

You can assign the existing form, standard, to you interest indicator here.

Save your entries

Define Sender Details for Interest Forms

If you want to maintain the Sender Details to be printed on the form mention the data here.

Your Configuration is complete here.

Now mention this interest indicator in your GL, Customer and Vendor accounts.

Interest postings can be carried out through T-Code- FINT, F.2A, F.2B, F.2C