Invoicing interest for late customer payments in (ARS660)

You can bill a customer interest for late payments, calculated from the due date or the invoice date of the customer's invoices.

Outcome

An interest invoice is created for each payer based on selected paid and unpaid customer invoices. An accounting journal and a customer invoice journal are also printed.

An electronic invoice is created for the interest invoice and it can be reviewed in 'Invoice Header. Open' (CMS500). You can recreate the electronic invoice tables for the penalty interest invoice using the related option 21='Re-create' in (CMS500). Re-creating the electronic invoice tables requires that the proposal remains in (ARS660). During the re-creation process, information is retrieved from the (ARS660) tables FARIIH, FARIID, FARIII, and FARIIV and transferred to the electronic invoice tables.

The information included in the invoice is the invoice number, invoice date, due date, payment date (for the latest partial payment), number of calendar days for the interest calculation, currency, base amount for the interest, interest in currency amount, VAT amounts if used, and opening and closing comments. Other information included is information about the payer, payment term, VAT registration number, reference, credit department reference, and telephone numbers retrieved from 'Customer. Open' (CRS610).

You can review the invoices included in the interest invoice using information category 204 in 'Accounts Receivable. Display Additional Information' (ARS250). The interest invoice itself is displayed in 'Accounts Receivable. Display' (ARS200). Information category 297 is assigned to the interest invoice to indicate the proposal number in (ARS660) used to create the interest invoice.

You can print or send the interest invoice in an email to the customer or payer directly from M3. The email address used from 'Email address. Open' (CRS111) is email type 11 (payer) first and second type 01 (customer).
Note:  You must set the 'Copy' settings in 'Doc Media Control Object. Connect Media' (CRS949) to 0='Not print copies of previously printed document', to not send previews and copies of payment reminders directly to payer email addresses. Previews and copies are created with alternative 6='print reminder' in 'Interest Invoice. Open' (ARS660).

The interest invoicing proposals in (ARS660) are stored in these tables:

  • FARIIH (listing name and status of all proposals)
  • FARIID (listing payers)
  • FARIII (listing invoices)
  • FARIIV (listing VAT details)
  • FSYTXH and FSYTXL (listing text details for the TXIDs that are connected to the records in FARIID and FARIII)

You can include the interest invoice when creating a payment reminder proposal in 'Payment Reminder. Open' (ARS650) or a debt collection assignment in 'Debt Collection. Open' (ARS670).

Before you start

Before you start, you must meet these prerequisites:
  • You must meet the starting conditions listed in Managing customer debts.
  • Define these settings in 'Settings – Account Receivable' (ARS905):
    • Invoice number - interest invoices
    • Multiple users, interest invoice
    • Invoice information for penalty interest invoices: Customs statistical number (assigned to interest invoice lines when sent as an electronic message, if applicable)
  • If applicable, define the customs statistical number to be used for interest invoice lines in 'Customs Statistics Number. Open' (CRS128).
  • You must define FAM function AR50 for interest invoicing in 'FAM Function. Open' (CRS405).
  • You must define accounting rules for accounting event AR50 in 'Accounting Rule. Set (CRS395). The accounting rules for interest invoicing are listed in Accounting Rules for AR - Accounts Receivable.
  • Define the rounding account for accounting rule AR50-190 with VAT account type (AT04) set to 0 on 'Accounting Identity. Open' (CRS630/E).
  • Define these number series in 'Number Series. Open' (CRS165):
    • Number series type 51 sub number series 1, interest invoice number. This number series is used as interest invoice number if parameter '310 Invoice number – interest invoices' is not selected in (ARS905).
    • Number series type 51 sub number series A. This number series is the interest invoice proposal number used in (ARS660).
  • Define interest invoice number series in 'Internal Invoice Series. Open' (MFS165), if parameter '310 Invoice number – interest invoices' is selected in (ARS905).
  • You must define an interest rule for how interest is calculated in 'Interest Invoicing Rule. Open' (CRS460).
  • You must connect the interest rule to each payer in 'Customer. Open' (CRS610/K) and activate it in the adjacent field.
  • Define daily interest rates in 'Interest Rate per Date. Open' (ARS008) if the function is used on interest rules (CRS460).
  • Define the financial charge ID in 'Financial Charge ID. Open' (CMS465) if the charge is connected to interest rules in (CRS460) and interest invoices are sent as electronic messages. The charge description is defined in (CMS465). Descriptions in different languages are defined in 'Language Handling. Open' (CRS830). We recommend to limit the description to 30 characters to prevent truncation in the electronic message.
    Note: The charge description is used only for the electronic message, not for the invoice document (ARS669PF).
  • At least one customer invoice in 'Accounts Receivable. Display' (ARS200) must match that matches the conditions of the interest rule.
  • To use standard texts for opening and closing comments in the interest invoices per language, you must define these in advance in 'Interest Invoicing Rule. Enter Text' (ARS080).

Follow these steps

  1. Create an interest invoicing proposal

    Create a proposal in (ARS660) by using selection criteria. If you are logged on to a blank division, you must select a range of divisions to include in the proposal. You can then decide whether to create just one interest invoice proposal for the invoices in all divisions or one interest invoice proposal for each division by activating or deactivating the 'Split by division' parameter.

    Optionally, select the 'Auto upd prop' parameter to create and update a proposal in the same run. This automated workflow speeds up the process and minimizes your work effort. On the other hand, if this parameter is deactivated, you can make manual adjustments to the proposal before updating it, putting you in full control of the process.

  2. Adjust the proposal

    If needed, adjust the proposal by excluding or deleting payers or invoices to exclude them in the final interest invoice. This is done in (ARS661) and (ARS662), which are accessed in (ARS660).

    You can also add or adjust opening and closing comments to be printed on the interest invoice in (ARS661), which is accessed in (ARS660).

    You can reprint the proposal with print proposal, which is done in (ARS660).

  3. Create final interest invoices

    You can print a preview with the option print interest invoice in (ARS660) before the final interest invoice is created. The final interest invoices, which also create general ledger and account receivable transactions, are done by confirming the proposal in (ARS660).

  4. Sending interest invoices to the payer

    Since the assignment is saved under an information category number, you can review it in (ARS250).

Job scheduling

You can schedule the creation of a proposal in (ARS660) to run regularly. To prepare for this, you must meet the conditions in M3 Business Engine Administrator's Guide for Job Scheduler.

Related topics