Interest setup (form)

Article
05/05/2014

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

Click Accounts receivable > Setup > Collections > Interest.

Use this form to set up and manage interest codes. Interest codes contain settings that determine when interest is charged and how it is calculated on overdue accounts. You can set up a single interest code and apply it to multiple customer posting profiles or to specific invoice lines. When the interest code details are changed, the posting profiles and invoice lines that use the code automatically implement the changes on new transactions.

Tasks that use this form

Set up interest calculations

Set up interest rates for an interest code

Navigating the form

The following tables provide descriptions for the controls in this form.

Tabs

Tab	Description
Earnings	For the selected interest code, set up calculation rules and specify which ledger account to post interest earnings to. Note You set up this information in the same way for both interest earnings and interest payments. Therefore, these tabs include many of the same tabs, buttons, and fields.
Payments	For the selected interest code, set up calculation rules and specify which ledger account to post interest payments to.

Buttons

Upper pane

Button	Description
New	Create an interest code.
New version	Create a version of the selected interest code. Note If you create a version of an interest code and the version has no expiration date, the expiration date of the previous version is set to the day before the effective date of the new version.
Delete	Delete the selected interest code version. If there is only one version of the interest code, the interest code is deleted.
Language text on interest	Open a form where you can enter a note that describes the interest code on the interest note report in other languages.
Activate	If a future interest code version is selected, change the effective date to the current date. If an expired interest code version is selected, the expiration date is changed to Never. This button is available only if no versions are active.
Current records	Click the arrow button to display the following options: Display the records as of – Enter a date and then click Apply to view all interest codes that were or will be active on the date you entered. Display all records – Select this check box and then click Apply to view all interest code versions for the selected interest code. These options are available only if you are currently viewing only active versions.
Display current	Select Display current to view only active interest code versions. This button is available only if you are currently viewing all expired, active, and future versions, or interest codes that are active on a specified date.

Lower pane

Button	Description
Add	Add a currency record to the currency grid.
Remove	Remove the selected currency record from the currency grid.
Language text on fee	Open a form where you can enter a note that describes the currency fee on the interest note report in other languages.
Ranges	Open the Customer interest range form, where you can enter interest range intervals for the currency.

Fields

Field	Description
Interest code	Enter a code of up to 10 alphanumeric characters.
Description	Enter a description of the interest code.
Interest type	Select the interest type: Single rate – A fixed interest rate is used to calculated interest. The rate is determined by the transaction date. Multiple rate – A variable interest rate is used for the interest calculation period. The rates are determined by the interest calculation period of the transaction.
Grace period	Enter the number of days that is allocated as a grace period from the due date to the date when charges are assessed. For example, if your organization allows a grace period of five days from the due date to the date when payment is received before charging fees and interest, you would enter 5.
Effective	Enter the date when the interest code version becomes active.
Expiration	Enter the last date that the interest code version is active.
Calculate interest every	Enter the unit of time and select the period to use to specify when interest is calculated: Day – Calculate interest each day. Interest for partial months is calculated at a rate of 1/30 of the monthly interest for each day. Month – Calculate interest on the first day of each month. Interest is calculated as 1/1 of the monthly interest rate. Calendar day – Calculate interest each day. Interest for partial months is calculated at a rate of 1/Number of days in the month of the monthly interest for each day. For example, an invoice for 1,000.00 is created on January 1 in a leap year. The due date is February 15. For the interest code, the debit percentage is .5 percent (6 percent annual interest/12 months). Interest is calculated on February 16, which spans two intervals of 15 days. The calculations are as follows: If Day is selected, 1,000.00 * .005 * (30/30) = 5.00. If Month is selected, 1,000.00 * .005 * (1/1) = 5.00. If Calendar day is selected, 1,000.00 * .005 * (14/29 + 16/31) = 4.99.
Ledger posting debit	Enter the ledger account where interest earnings are posted.
Interest by range	Select the type of range to use in the Customer interest range form: None – The interest rate is always the same, regardless of the invoice amount or the number of days or months that have accrued since the invoice was due. If you select this option, the Ranges button is not available. Amount – The interest rate changes as the invoice amount changes. For example, you might select this option if 1 percent interest is charged on invoice amounts that are less than or equal to 1,000 and 2 percent interest is charged on invoice amounts that exceed 1,000. Days – The interest rate changes as the number of overdue days increases. For example, you might select this option if 1 percent interest is charged on invoices that are 15 to 30 days late and 2 percent interest is charged on invoices that are 31 to 60 days late. Months – The interest rate changes as the number of overdue months increases. For example, you might select this option if 1 percent interest is charged on invoices that are one to three months late and 2 percent interest is charged on invoices that are more than three months late. This field is available only if Single rate is selected in the Interest type field.
Calculate interest based on	Select whether the interest calculation is based on a percentage or an amount.
Monthly interest %	Enter the percentage to use in the interest calculation. This amount must be greater than zero. This field is not available if Amount, Days, or Months is selected in the Interest by range field.
Currency	Select the currency that enables the fee. This is used as criteria when the relevant fees are selected. Only customers who have this currency can enable the fee. By default, the accounting currency is selected on the first line of the currency grid. You must define interest terms for the accounting currency for every interest code. If a customer currency is not defined for the interest code, the accounting currency terms are applied, instead. The interest amount on the invoice line is then converted to the customer currency. Note If a value other than None is selected in the Interest by range field, and Amount is selected in the Calculate interest based on field, a range must defined in the Customer interest range form for every currency on the Earnings tab.
Description	The description of the interest code.
Interest amount	Specify the amount of interest that is due for the selected currency. This amount must be greater than zero. This field is available only if None is selected in the Interest by range field and Amount is selected in the Calculate interest based on field.
Minimum interest amount Maximum interest amount	Specify the minimum and maximum amounts of interest that can be due for the selected currency. These limits apply only if the customer currency on the invoice line matches the currency that is defined for the interest code. These fields are not available if Amount is selected in the Calculate interest based on field.
Charge customer when interest exceeds	Enter the maximum amount of interest that the customer can accrue before an interest note is created. For example, if the interest amount is 400.00 and the value in this field is 500.00, an interest note is not generated. A value of zero indicates no minimum limit. Note Although you can enter negative values, the absolute value is used. For example, if you enter -700, 700 is used as the value.
Fee account	Select the ledger account where the fee is posted.
Fee in currency	Enter the currency amount for interest notes that have this currency code.
Item sales tax group	Select the item sales tax group to use to calculate sales tax on interest notes.
Ledger posting credit	Enter the ledger account where interest payments are posted.