When sending out Invoices or Accounts Receivable Statements, Brief Accounting has the option to display any interest owing on a past due balance. When the interest owing is displayed on an invoice, the interest portion is NOT posted to the account. It is displayed on the invoice only for the purpose of showing the client what they owe including the interest amount.
As a general rule, once the full payment is received (including the interest portion), the Interest Invoice can be posted.
Example 1: Payment in Full (including interest owing)
The client has an outstanding invoice for $100.00. An A/R Statement is sent that shows the interest owing to date on the outstanding balance:
The client send a payment for $107.64.
First in A/R, enter an Interest-only invoice for $7.64:
This will create a new balance owing in A/R for the full payment amount:
An A/R Receipt can then be posted for the full amount including the interest:
Example 2: Interest Only Payment
In the same scenario as above, the client sends a payment for the interest portion only ($7.64).
Post the additional invoice for $7.64 as above.
Enter an A/R receipt and select only the interest portion owing:
The original $100 will remain outstanding and interest will again be calculated on the balance on future statements sent to clients.
Example 3: Payment Received for Interest and Part of Outstanding Balance
In the scenario above, the client sends a payment for $50.00. This will be applied to the interest owing, and to a portion of the original balance.
Post the interest invoice as above.
Enter an A/R Receipt for $50.00, applying the $7.64 to the interest invoice, and the remainder to the balance owing:
This payment clears the interest owing and applies the remainder to the original balance owing, leaving an outstanding amount as below in Accounts Receivable:
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