Interest is a legitimate return on money invested and chargeable in the business world on loans and also on delayed payments. Interest can be calculated on the basis of Simple or Compound Interest.
Tally.ERP allows you to obtain reports on interest calculated based on the instructions you furnish. Interest figures are typically desired in the following situations:
- On Outstanding Balance amounts.
- Outstanding Bills /Invoices/Transactions (Receivables and Payables)
Interest Calculation is a very useful feature in Tally.ERP. It allows for calculating the interest by various methods. These are :
Step-1 : Activate interest calculation features by Gateway of Tally.ERP > Features (F11)
Simple Method : Interest calculation on outstanding balances.
The example shown below is on the calculation of Bank Interest on Yearly basis :
Step-2 : You will have to alter the existing ledger accounts to permit interest calculation on them.
The same operation will apply when creating a new ledger account.
Interest calculation on outstanding balance is allowed for any ledger account. You simply specify the interest rate and style of calculation. Nothing is required to be done for interest during voucher entry.
Interest calculation on outstanding balances is allowed for any ledger account.
You simply specify the interest rate and style of calculation.
Let's take an example: Interest calculated on Outstanding Balances.
- Go to Gateway of Tally> Accounts Info.> Ledgers> Alter (Single)> IT Excel Care
- Set Activate interest Calculation to Yes.
- On activation, the Interest Parameters must be set. It is the basis on which interest will be calculated for this Ledger account.
- Rate: This is the rate at which the interest has to be calculated. In this case, specify 7%.
- Interest Style: It is the basis on which the rate is applied. Of the four options, select 30-Day Month.
- Accept the screen.
You can now view the amount of interest that could be charged by the Bank.
Report on Interest Calculated on outstanding balances
The Interest Calculations Report can be displayed and printed.
Go to Gateway of Tally> Display> Statements of Accounts> Interest Calculations> Ledger> IT Excel Care
For New Ledgers
On the Ledger creation mode activate the interest calculation option and specify the style of calculation
Gateway of Tally.ERP > Accounts Info > Ledger > Create
There are Four Options :
- 30-day month
- 365-day year
- Calendar month
- Calendar year
Select the one, which is applicable to you, and accept the screen.
You are now ready to view the amount of interest that could be charged by the bank.
Step-2 : Displaying the Report of Interest Calculation in Ledger-wise :
Gateway of Tally.ERP > Display > Statement of Account > Interest Calculations > Ledger > Swayam Computer Education