AR: What is the calculation formula used in overdue interest letter?
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Question: What is the calculation formula used in overdue interest letter?
Answer:
The formula used in overdue interest letter report is:
Amount Due * Interest Rate / 100 * Age / 365
Example:
Image 1 shows that debtor with some overdue invoice as at 31st Dec 2017 (Report Filter Date). When click on preview and choose Overdue Interest Letter Report, system will prompt a message for you to key in your interest rate. For this case, key in 10 (10%) and you will get a sample as below:
Image 1
Image 2
Referring to Image 2, there are 2 invoices that is overdue and their respective overdue interest is 39.73 and 6.30. To calculate this amount, use the formula provided at the “answer” section above and plot in the figure:
I000001: 1000 * 10 / 100 * 145 / 365 = 39.73 I000002: 200 * 10 / 100 * 115 / 365 = 6.30
By:JS 170808 P170928
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