Apply Interest Feature
Passare’s Apply Interest feature allows you to calculate interest on one or multiple cases at once, with a few simple steps. Interest on this feature can be calculated using four different methods:
- Average Daily Balance Method - The average balance as of the end of each day during the interest period is calculated and the result is multiplied by a period rate.
Daily Balance Method - The balance as of the end of each day during the interest period is summed and the result is multiplied by a daily periodic interest rate.
Ending Balance Method - The balance on which interest is charged for the period is determined by the balance as of the end of the period.
Previous Balance Method - The balance on which interest is charged for the period is determined by the balance as of the start of the period.
This feature is disabled by default for all organizations. Contact your Customer Success Team if you would like this feature enabled.
Under Admin > Organization > Contract Options you can configure how interest is calculated.
You can set up how many days after the Contract Date or Payment Due Date case balances will begin to accrue interest.
Simply enter a value under the ‘When to Apply (days)’ field and then select the ‘Accrue Interest Post Contract Date’ or ‘Apply Interest Post Payment Due Date’ option.
Selecting one of these options, only dictates what date cases will start accruing interest on and provides a starting date for the interest calculation. You are required to manually apply interest and choose a date to apply interest.
- Example: If you haven’t applied interest for 25 days, Passare will refer back to the last day you applied interest on each case and allow you to apply interest anywhere from that day to today’s date.
Under the ‘Interest Rate (per annum)’ field, enter the default interest rate you want to apply to your cases.
- Note: This rate can be manually changed on a per-case-basis as well.
Under the ‘Transaction Account’ drop-down, select the transaction account that will be tied to interest transactions.
- Note: This is configured in Admin > Accounting > Transactions.
Under the ‘Interest Calculation Method’ section, select the method you want for calculating interest by selecting on the option that best fits your business practices.
Note: In order to apply interest, you must have this feature enabled. Contact your Customer Success Team if you would like this feature enabled.
To apply interest, go to System > Apply Interest.
All cases that have a signed contract (only one signing is required) and matches the criteria you defined in the interest feature setup will appear under this listing.
Check the checkbox to the right of the case(es) that you would like to apply interest to. Once checked, the default Interest Rate, Dollar Amount, and Date to Apply Interest will appear.
You can manually adjust the Interest Rate or the Dollar Amount for that period.
If you manually adjust the Interest Rate or the Dollar Amount, ‘(adjusted)’ will appear to the right of the field title, indicating you have made an adjustment to the pre-populated fields.
The ‘Apply Interest Through’ date lets you indicate what date to calculate interest through.
- Note: The system will automatically default to today’s date; however, it can be changed to a date of your choosing.
You can select multiple cases at once or you can click the checkbox at the top-right corner of the case listing to select all cases and then apply interest to all or multiple cases at once.
Once interest has been calculated on a case, the date it was last applied will appear under the column ‘Interest Last Applied.’
An interest entry is made on the Payments & Adjustments page of each case interest was applied to. Each time you apply interest, a new entry will be added to the Payments & Adjustments page.
- Note: You can delete interest entries from a case through the Payments & Adjustments page.
Going forward, the system will only allow you to apply interest on days that occur after the date indicated in the ‘Interest Last Applied’ column.
HOW IS INTEREST APPLIED AFTER THE FIRST CALCULATION?
Once you apply interest on a case, you can only apply interest on dates going forward.
- For example: Interest is applied from January 1 through January 7; going forward, the system will only allow you apply interest from January 8 onward.
WHO DO I CONTACT IF I HAVE QUESTIONS?
Contact firstname.lastname@example.org with any questions about this feature, or call the toll-free support number: 1-800-692-5111.