Interest Calculation Method Field, Finance Charge Terms Table
Specifies the interest calculation method for this set of finance charge terms. To see the methods you can choose from, click the field.
Finance charges can be calculated using the following methods:
Average Daily Balance
Balance Due
With the balance due method, the finance charge is simply a percentage of the remaining amount:
Balance Due method:
Finance Charge = Overdue Amount * (Interest Rate / 100)
The average daily balance method takes into account how many days the payment is overdue:
Average Daily Balance method:
Finance Charge = Overdue Amount * (Days Overdue / Interest Period)*(Interest Rate/100)
Important
If you choose the Average Daily Balance method, you must also specify the period the interest rate applies to in the Interest Period (Days) field.
Tip
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Parent Tables
| Table | Location |
|---|---|
| Finance Charge Terms Table | Sales and Receivables |
| Finance Charge Terms Table | Sales and Receivables |