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Receivables then determines which debit items should be assessed finance charges. If you set the Charge Finance on Disputed Items field to No, then the dispute amount of the debit item must be zero. Lastly, the Finance Charge field in the Customer Profile Classes window must be set to Yes for the customer of this debit item.
Consider the following example in which a customer has the following debit and credit transactions and you run the dunning program on December 1, 1993. Assume that Days in Period = 30, Interest Rate = 10% for USD and Payment Grace Days = 0.
Class | Number | Currency | Due Date | Amt Due Remaining |
---|---|---|---|---|
Payment (Unapplied) | PMT1 | USD | $-50 | |
Payment (On-Account) | PMT2 | USD | $-20 | |
Credit Memo | CM1 | USD | $-10 | |
Credit Memo | CM2 | USD | $-100 | |
Invoice | INV1 | USD | 01-NOV-93 | $100 |
Invoice | INV2 | USD | 17-NOV-93 | $50 |
Invoice | INV3 | USD | 19-NOV-93 | $350 |
Invoice | INV4 | USD | 24-NOV-93 | $175 |
Table 1 - 47. (Page 2 of 2) |
INV3 | .1 * $320 * 12 = $12.80 30 |
INV4 | .1 * $175 * 7 = $12.80 30 |
Debit Item | Due Date | Dunning As of Date | Days Late | Remaining Amount | Finance Charges |
---|---|---|---|---|---|
INV3 | 19-NOV-93 | 01-DEC-93 | 12 | $320 | $12.80 |
INV4 | 24-NOV-93 | 01-DEC-93 | 7 | $175 | $4.08 |
Receivables lets you define different finance charges interest rates and maximum amounts of finance charges per invoice for different currencies in the Customer Profile Classes window. For each currency, you can also define the minimum customer balance for finance charges as well as the minimum invoice balance for finance charges. Receivables does not calculate finance charges on past due items in currency Y for customer site A if the customer's balance at this site is less than the amount you specified for the Minimum Customer Balance for Finance Charges in currency Y in the customer profile for site A. Similarly, Receivables does not assess finance charges on invoices in currency Y from customer site A which are past due if their respective balances are less than the amount that you specified for the minimum invoice balance for finance charges in the customer profile for site A.
Receivables computes and prints a transaction record of your finance charges for a customer from the last time that you created a statement for this customer on which finance charges appeared. For example, if you do not create a statement for customer site A for one month, Receivables calculates and prints a transaction line with finance charges for two months when you create a statement for customer site A that includes finance charges the following month. If you have never assessed finance charges on an invoice associated with customer site A, Receivables calculates finance charges using the item's due date and the number of receipt grace days that you specified for the credit profile of customer site A. If you calculate finance charges for a debit item that you entered in a foreign currency, Oracle Receivables uses the exchange rate that was entered for the debit item against which the charges are calculated.
Setting Up Receivables to Calculate Finance Charges
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