Enter interest on outstanding items

If you send reminders then Profit automatically calculates the interest on the outstanding items. Profit does not add the amount of the interest to the outstanding item. When the payment is received, an entry for the interest is made automatically. The entry of payment differences has precedence over the entry of interest.

In the reconciliation, Profit checks if interest has been calculated on the outstanding item. If the amount received is greater than or equal to the amount of (the remainder of) the outstanding item, the message appears that interest on reminders has been applied to this invoice. You can waive the unpaid interest amount.

You have two options:

• Click on: No. Profit then enters the whole amount as interest on reminders on the ledger account specified and reduces the amount to be settled accordingly. In this way, the interest is added as a receivable to the outstanding item.
• Click on: Yes. The interest receivable on the invoice is then removed and is not included in any subsequent reminders.

Example:

What are the effects if you select No when you have an outstanding item of € 1,000 with € 10 interest on reminders:

If you select Yes, an extra amount received is entered as interest on the ledger account defined for this purpose.

Remarks

• If you make use of the option to write off payment differences automatically then this processing has precedence over the entry of interest. With this procedure, the outstanding item is automatically removed.
• Profit displays the message only once per outstanding item: after the choice has been made, any separate interest claim will no longer exist.
• If the amount received is less than the amount of (the remainder of) the outstanding item then this amount is used to settle the outstanding item.  Thus, in this situation, the settlement of the outstanding item has priority over the settlement of the interest.