Interest Invoices

If you enable automatic interest calculation for a supplier and pay an overdue invoice, an invoice for the interest is automatically created and paid.

Caution: You must pay the overdue invoice in a payment process request or through a quick payment.

Setup

To set up automatic interest rate calculation:

• Define interest rates using the Manage Interest Rates task.

• Set the Create Interest Invoices option using the Manage Suppliers task.

• Enable the Create interest invoices option using the Manage Invoice Options task.

Note: You can add, change, or delete an interest rate at any time. If a rate isn't defined, the interest calculation uses a zero rate.

Attributes

This table describes some of the attributes of an interest invoice.

Attribute	Description
Number	The interest invoice number is the overdue invoice number plus the suffix -INTx, where x is the number of interest invoices for that overdue invoice. For example, if the invoice number is 54362, the invoice number for the third interest invoice is 54362-INT3.
Payment terms	The payment terms on an interest invoice are immediate. If immediate terms aren't defined, the payment terms for the interest invoice are the same as the payment terms for the overdue invoice.
Amount	The interest calculation is based on the rate on the Manage Interest Rates page and is in accordance with the United States Prompt Payment Act. The calculation formula compounds interest monthly, up to a maximum of 365 days interest.
Currency	The invoice currency for an interest invoice is the same as the invoice currency on the overdue invoice. The payment currency for an interest invoice is the same as the payment currency on the overdue invoice.