This chapter provides overviews of processing fees and interest and fee search levels, and discusses how to:
Enter fee and interest tables.
Generate fees and interest.
If invoices remain unpaid after their due date, or if you receive the payments late, you can assess fees on the invoices. The fees that you assess can be based on the invoice aging (the number of days past the due date) or as a flat amount.
The interest that you charge on payments that you receive late can be calculated as:
Simple interest (per month or per year on outstanding balances).
Compound interest.
Interest on fees (simple or compound).
The bill code and automatic accounting instructions (AAIs) that you set up determine whether you charge a late fee or interest. This distinction is important because revenue collected from fees and interest is taxed differently than revenue received from rent. In some cases, you must differentiate the interest that you charge from the interest that you must pay on security deposits, and so on.
The fee and interest programs also control:
Level of detail.
For example, you can define a late fee generally for all the leases and facilities-specifically for a lease, tenant, building, or bill code-or for any combination of those four items.
Timing, period, and frequency.
Grace periods.
For example, charges can be general, such a 25.00 late fee that applies to all tenants, or they can be specific, such as .5 percent per month after a five-day grace period for a specific lease.
Fee and interest information is stored in the Fees and Interest table (F1525B), which controls the generation of the fees. The fee type is a user-defined code (UDC) (15/FY).
The search level identifies the level of detail with which a fee and interest table is associated.
The search level is determined by the four key fields that you set up in the Fee and Interest table:
Lease
Tenant
Building
Bill Code
This chart illustrates the combinations of these fields that make up the 12 valid search levels:
Key Field |
Level 1 |
Level 2 |
Level 3 |
Level 4 |
Level 5 |
Level 6 |
Level 7 |
Level 8 |
Level 9 |
Level 10 |
Level 11 |
Level 12 |
Lease |
X |
X |
X |
X |
||||||||
Tenant |
X |
X |
X |
X |
X |
X |
X |
X |
||||
Building |
X |
X |
X |
X |
X |
X |
||||||
Bill Code |
X |
X |
X |
X |
X |
X |
Notice that as the level increases from 1 to 12, the level of detail becomes more general. With level 1, for example, the search is limited to a specific lease, tenant, building, and bill code (AR account). Level 10, however, limits the search only to a specific building.
Using up to 12 levels, you do not need to define the calculation of fees and interest for every lease, tenant, building, and bill code. You need to set up only the general policy and any exceptions within that policy. Then during the generation, the system selects the most specific fee and interest table, based on its search level, and the key information of the invoice being generated.
For example, suppose you have the same late fee policy for all tenants in all buildings except one. In the one building, you have a second late fee policy for all tenants except one. For the one tenant, you have a third policy. That same tenant has another lease related to the first policy. The first two policies include all the bill codes, and the third policy is associated with heating, ventilation, and air conditioning (bill code HVAC).
In this example, you need to set up only four fee tables (four levels of detail) to satisfy all of the late fee requirements:
Level 12 (all leases, tenants, buildings, and bill codes).
Level 10 (all leases, tenants, and bill codes for a specific building).
Level 2 (all bill codes for a specific lease, tenant, and building).
Level 1 (a specific lease, tenant, building, and bill code).
Examples of Fee Calculations
These examples provide information about the different types of fees that you might assess.
Example: Late Fees (Fixed Amount and Simple Interest)
If the rent is not paid within five days, the tenant is assessed a 50.00 one-time penalty. An additional five days grace is allowed before a simple interest of 12.0 percent is charged on the last open unpaid rent balance. The interest is retroactive to the first day of the month, and it accrues daily. All the charges are based on the due date of the invoice, and the bill code LATE is used to record the income from such charges.
The bill code plus the prefixes RC and PM make up the related AAIs RCLATE and PMLATE.
Example: Simple Interest on a Security Deposit
For the security deposit, a tenant is entitled to earn annual interest on a monthly basis. The interest is simple (noncompounding); and the rate varies, according to the prime rate. Although the lease begins on June 1, 2008, the interest calculation begins two months later on August 1. The interest is based on the general ledger date of the receipt for the security deposit, and the bill code INTR (interest) is used to record the interest.
You use the processing options for Fee and Interest Generation to specify the interest rate because it is variable. The Rate Indc field identifies this rate. The Retr Code field is blank. This code is optional because no grace period exists. The bill code, plus the prefixes RC and PM, make up the related AAIs RCINTR and PMINTR.
Example: Compounding Interest
Only one detail line associated with compounding interest is allowed in a fee and interest table. For the detail line, note that:
The Retr Code field must be blank because no grace period exists.
The BCd/AdjR field must contain a bill code for an adjustment. During the generation, therefore, the system updates the AR Account Ledger table as an adjustment.
The Cmp Flg field must be set to 1.
The adjustment reason, plus the prefix RA, make up the related AAI RAIN.
You use the Fee & Interest Information program (P1525) to set up tables of charges, interest rates, and calculation patterns. Doing so enables you to maintain information associated with the various fees and interest that applies to the organization.
This section discusses how to set up fee and interest tables.
Form Name |
FormID |
Navigation |
Usage |
Work With Fee and Interest Table |
W1525A |
Fees & Interest menu (G1527), Fee & Interest Information. |
Review and select fee and interest table records. |
Fee and Interest Table |
W1525B |
Click Add on Work With Fee and Interest Table. |
Add and revise fee and interest table records. |
Access the Fee and Interest Table form.
Fee Type |
Enter the fee type. Fee type codes are used to group fee tables together for items such as late or interest charges. Fee types are defined within UDCs (15/FY). |
Amount |
Enter the amount that you want to use as fee or interest amount. Note. You can enter either an amount or a rate, but you cannot enter both. |
Rate |
Enter the percentage that you want to use to assess the fee or interest. Enter the percentage as a decimal value. For example, enter .05 to specify 5 percent. Note. You can enter either an amount or a rate, but you cannot enter both. |
Seq (sequence number) |
Enter the sequence number. The sequence number is used to control the order in which AR Fee and Interest entries are processed and displayed. |
Grace Periods |
Enter the number of grace periods. This value, along with the Grace Period Type, determines the amount of time that the grace period, if any, will be in effect. The grace period is measured from the Start Date (see FISD). For example, if the start date for an invoice is October 1, 2008, the number of grace periods is 10, and the Grace Period Type is 1 day, then no fee or interest would be generated for the invoice until the generation date was past October 11, 2008. |
Grace Period Type |
Enter the amount of time that the grace period covers. For example, if the number of grace periods is eight, then the total grace period could be eight days, eight months, or eight years. Values are: D: Days. M: Months. Y: Years. |
Maximum Periods |
Specify the maximum periods. This value, along with the Maximum Period Type, will be used to determine the amount of time that an individual entry can be applied to an invoice. For example, if the entry is a one-time flat fee, then the Maximum Periods would be 1 and the Maximum Period Type would match whatever the Fee Frequency indicated. If the entry is a monthly rate which is not to be applied more than 12 times, then the Maximum Periods could be 12 and the Maximum Period Type 2 (months) or the Maximum Periods could be 1 and the Maximum Period Type 3 (years). The maximum periods are measured from the start date. If a grace period of 10 days exists, but a maximum of 1 day, the fee will never be billed. The grace period must be less than the maximum period. Any generation period (see AAPF) that starts before the maximum periods are up will be processed. For example, if the entry is a monthly fee and if the Maximum Periods are 90 and the Maximum Period Type is 1 (days), then the first three months will be processed, even if the end of the third month falls outside of the 90 days. |
Maximum Period Type |
Enter a value that specifies the maximum period type. This value, along with the maximum periods, is used to determine the amount of time that an individual entry can be applied to an invoice. Values are: D: Days M: Months Y: Years |
Payment Terms |
Enter a value that specifies the terms of payment, including the percentage of discount available if the invoice is paid by the discount due date. Use a blank code to indicate the most frequently-used payment term. You define each type of payment term on the Payment Terms Revisions form. Examples of payment terms include: Blank: Net 15. 001: 1/10 net 30. 002: 2/10 net 30. 003: Due on the 10th day of every month. 006: Due upon receipt. This code prints on customer invoices. |
Billing Control ID |
Displays the Billing Control ID, which is used to keep track of all the periods that have been generated and posted. For billing generation type 5, the Billing Control ID is stored with the invoice information in the Lease Billings History table (F1511HB) rather than in the Billings Generation Control Master table (F15011B). |
This section provides an overview of generating fees and interest and discusses how to:
Run the Fee & Interest Generation program.
Set processing options for Fee & Interest Generation (R15160).
You use the Fee & Interest Generation program to generate a batch of invoices for fees and interest against accounts receivable invoices and adjustments for interest on security deposits. The program is based on the Customer Ledger table and controlled by the fee tables in the Fees and Interest table (F1525B). You set a processing option to control whether the system creates a batch or only prints a report so that you can preview the information to be processed.
You can calculate interest earned on security deposits. You must first set up the revenue bill code, such as INTR (interest) in a security group. After you calculate the interest earned, you can then generate the accounts payable voucher using the Security Deposit Refund Generation program (R15655) to refund the interest, the security deposit, or both.
Important! You can generate fees and interest for a tenant more than once in the same period until a batch is posted. If you inadvertently generate a batch of fees and interest, and have not yet posted it, you can delete the batch. The system deletes the batch header, the batch transactions, and the corresponding records in the Lease Billings History (F1511HB) table. After you post a batch, you cannot delete it.
This table lists the related tasks that you might perform after you generate fee and interest billing records. You must run the programs that are designated as required to complete the billing generation process.
Task |
Description |
Generating the Billing Edit/Register (Required) |
After you generate fee and interest records, you must run version XJDE0005 of the Billing Edit/Register program (R15300) to validate the transactions in the batch and to change the batch status. |
Invoice Journal Review |
You can review the batch of invoice fee records before you post them, and revise or delete transactions as necessary. |
Receipts Journal Review |
You can review the batch of receipt (adjustment) records before you post them, and revise or delete transactions as necessary. See Processing Options for Receipts Journal Report (R03B311). |
Posting Invoices (Required) |
After you generate the billing edit register, you must post the billing transactions to generate the invoice records. See Posting Invoices and Vouchers for Real Estate Management. |
Posting Receipts (Required) |
After you generate the receipt (adjustment) transactions, you must post them to update the general ledger. See Posting Receipts. |
Printing Invoices |
After you post invoices, you can print and send them to the tenants. |
Printing Statements |
After you post invoices, you can print statements and send them to the tenants. |
Billings Transaction Inquiry |
You can review billing transactions in detail using the Billings Transaction Inquiry program (P15211). |
Tenant Ledger Inquiry |
You can review the invoices generated from billing transactions using the Tenant Ledger Inquiry program (P15222). |
Supplier Ledger Inquiry |
You can review the vouchers generated from billing transactions using the Supplier Ledger Inquiry program (P0411). |
See Also
Refunding Partial and Full Security Deposits
Select Fee & Interest (G1527), Fee & Interest Generation.
Set these processing options to specify the default processing for this report.
Select
These processing options enable you to specify the type of fees to process, the date by which to process them, and the dates to assign to the invoices that the system generates.
1. Fee Type |
Specify the type of fee to process. The value that you specify must exist in UDC 15/FY. |
2. Generation Date |
Specify the date to use to select the invoice records for which you want to generate fees or interest. The system selects only those invoice records with an open amount that have a due date that is on or before the date that you enter. If you leave this processing option blank, the system uses the current date. |
3. G/L Date For Invoices |
Specify the general ledger date to assign to the fee or interest invoice records that the system generates. |
4. Invoice Date |
Specify the date to assign to the fee or interest records that the system generates. If you leave this processing option blank, the system assigns the current date as the invoice date. |
Process
These processing options enable you to specify whether the system updates records prints only a report or, as well as how the system processes the fee and interest records.
1. File Update |
Specify whether the program runs in proof or final mode. Values are: Blank: Proof mode. The system generates only a report. 1: Final mode. The system generates the fee or interest record, updates the appropriate tables, and generates a report. |
2. File Update Method |
Specify whether the system generates one fee record for each invoice or one fee record for each unique bill code that appears on the invoice. Regardless of the value that you specify, the report includes one line for each late fee amount by bill code. Values are: Blank: Generate one fee record for each unique bill code that is entered on the invoice. The system summarizes the fee amount by the bill code if the invoice has multiple pay items for the same bill code. 1: Generate one late fee for the invoice, regardless of the number of pay items or the bill codes. |
3. Late Fee Processing |
Specify whether the system verifies that the Subject to Late Fees option (LTFE) is turned on in the Bill Codes / Adjustment Reasons program (P1512) for the bill code for which the late fee is processed. Values are: Blank: Verify that the option is turned on. The system does not generate late fees for bill codes that do not have the Subject to Late Fees option turned on. 1: Do not verify that the option is turned on. The system generates late fees for all of the bill codes specified, regardless of the setting of the Subject to Late Fees option. |
4. Security Deposit Write-Off Reason Code |
Specify the reason code used to retrieve the offset account for the Receipts Detail record (F03B14) that the system generates for the compounded interest on security deposits. The system retrieves the account from the AAI item RAxx, where xx is the reason code. The system uses this processing option only when you specify to generate compounded interest on security deposits. If the Compound Flag field (COPF) is set to blank, the system ignores this processing option. |
5. Late Fee Write-Off Reason Code |
Specify the reason code that the system uses to retrieve the offset account for the Receipts Detail record (F03B14) that the system generates for the interest on fees. The system retrieves the account from the AAI item RAxx, where xx is the reason code. The system uses this processing option only when you specify to generate fees that are compounded. If the Compound Flag field (COPF) on the Fees and Interests record (F1525B) is set to blank, the system ignores this processing option. |
6. Variable Fee Or Interest Rates |
Specify the rate that the system uses to calculate the fee or interest when the value in the Rate Indicator Code field (RAIF) in the Fee and Interest table (F1525B) is equal to 1, 2, 3, or 4. The system uses the rate from this processing option that corresponds to the value entered in the Rate Indicator field. If the value of the Rate Indicator field is percent, the system ignores this processing option. Type the rate in decimal format. For example type .05 to specify 5 percent. |
Currency
This processing option enables you to specify the date to use to retrieve the exchange rate.
1. Exchange Rate Retrieval Date |
Specify the date that the system uses to retrieve the exchange rate from the Currency Exchange Rates table (F0015) when the system generates the fee in a currency that is different from the currency code assigned to the company. Values are: Blank: General ledger date. 1: Invoice date. |